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Comprehensive annual financial report County of Contra Costa , California
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County of Contra Costa, California
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year Ended June 30, 2002
Kenneth J. Corcoran, Auditor- Controller
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COUNTY OF CONTRA COSTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
June 30, 2002
Page
Introductory Section
Letter to the Board of Supervisors and Citizens of the County ........................................................................................ i
Public Officials ............................................................................................................................... ............................... ix
Organizational Chart.......................................................................................................................... ............................. x
Certificate of Achievement.................................................................................................................... ........................ xi
Financial Section
Independent Auditor’s Report ............................................................................................................................... ......... 1
Management’s Discussion and Analysis ( Required Supplementary Information) .......................................................... 3
Basic Financial Statements:
Government- wide Financial Statements:
Statement of Net Assets ............................................................................................................................... ....... 17
Statement of Activities ............................................................................................................................... ......... 18
Fund Financial Statements:
Governmental Funds:
Balance Sheet ............................................................................................................................... .................. 20
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ............................ 21
Statement of Revenues, Expenditures and Changes in Fund Balances ........................................................... 22
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balances to the Statement of Activities.................................................................... 23
Proprietary Funds:
Statement of Fund Net Assets......................................................................................................................... 24
Statement of Revenues, Expenses and Changes in Fund Net Assets............................................................... 25
Statement of Cash Flows ............................................................................................................................... . 26
Fiduciary Funds:
Statement of Fiduciary Net Assets .................................................................................................................. 27
Statement of Changes in Fiduciary Net Assets................................................................................................ 28
Notes to the Basic Financial Statements:
Summary of Significant Accounting Policies.................................................................................................. 29
Fund Equity ............................................................................................................................... ..................... 40
Stewardship, Compliance and Accountability................................................................................................. 45
Cash and Investments ............................................................................................................................... ...... 45
Receivables.................................................................................................................... ................................. 49
Interfund Transactions................................................................................................................... ................. 51
Capital Assets ............................................................................................................................... .................. 56
Short- Term Notes Payable........................................................................................................................ ...... 58
Payables....................................................................................................................... ................................... 59
Leases ............................................................................................................................... .............................. 60
Long- Term Obligations ............................................................................................................................... ... 61
Conduit Debt ............................................................................................................................... ................... 66
Net Assets/ Fund Balances ............................................................................................................................... 67
Permanent Fund........................................................................................................................... ................... 68
Employees’ Retirement Plan ........................................................................................................................... 68
Paulson Lawsuit Settlement..................................................................................................................... ....... 70
Patient Service Revenue and Receivables ....................................................................................................... 71
Risk Management ............................................................................................................................... ............ 71
Commitments and Contingencies .................................................................................................................... 73
Subsequent Events ............................................................................................................................... ........... 74
Required Supplementary Information ( other than MD& A):
Budgetary Comparison Schedule - General Fund:
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual................................. 77
Note to Required Supplementary Information...................................................................................................... 80
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds: ............................................................................................................................... 81
Combining Balance Sheet ............................................................................................................................... .... 81
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................. 82
Nonmajor Special Revenue Funds: ........................................................................................................................... 83
Combining Balance Sheet ............................................................................................................................... .... 86
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................. 88
Budgetary Comparison Schedules:
Road Special Revenue Funds .......................................................................................................................... 90
Library Special Revenue Fund ........................................................................................................................ 91
Fire Protection Special Revenue Funds ........................................................................................................... 92
Health and Sanitation Special Revenue Funds ................................................................................................ 93
Service Areas Special Revenue Funds............................................................................................................. 94
Flood Control Special Revenue Funds ............................................................................................................ 96
Law Enforcement Special Revenue Funds ...................................................................................................... 97
Courts and Criminal Justice Special Revenue Funds....................................................................................... 98
Recorder/ Clerk Modernization Special Revenue Funds .................................................................................. 99
Land Development Special Revenue Fund.................................................................................................... 100
Redevelopment Agency Special Revenue Funds........................................................................................... 101
Child Development Special Revenue Fund ................................................................................................... 102
In- Home Supportive Services Public Authority Special Revenue Fund........................................................ 103
Other Special Revenue Funds........................................................................................................................ 104
Nonmajor Debt Service Funds: ............................................................................................................................... 105
Combining Balance Sheet ............................................................................................................................... .. 106
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................................... 108
Budgetary Comparison Schedules:
Recreation and Park Bonds Debt Service Fund ............................................................................................. 110
Storm Drainage Bonds Debt Service Fund.................................................................................................... 111
Redevelopment Agency Debt Service Funds ................................................................................................ 112
Pension Bond Debt Service Fund .................................................................................................................. 113
Nonmajor Capital Projects Funds:......................................................................................................................... . 115
Combining Balance Sheet ............................................................................................................................... .. 116
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................................... 117
Budgetary Comparison Schedules:
Redevelopment Agency Capital Projects Funds............................................................................................ 118
County Facilities Capital Projects Funds....................................................................................................... 119
Nonmajor Permanent Fund ............................................................................................................................... ..... 121
Nonmajor Enterprise Funds: ............................................................................................................................... ... 123
Combining Statement of Net Assets.................................................................................................................... 124
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets............................................... 125
Combining Statement of Cash Flows ................................................................................................................. 126
Internal Service Funds: ............................................................................................................................... ........... 127
Combining Balance Sheet ............................................................................................................................... .. 128
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets............................................... 130
Combining Statement of Cash Flows ................................................................................................................. 132
Fiduciary Funds:......................................................................................................................... ............................ 135
Agency Funds: ............................................................................................................................... ........................ 136
Combining Statement of Changes in Assets and Liabilities............................................................................... 136
Capital Assets Used in the Operation of Governmental Funds: ................................................................................ 139
Schedule of Funding Sources ............................................................................................................................. 141
Schedule by Function and Activity .................................................................................................................... 142
Schedule of Changes By Function and Activity................................................................................................. 144
Statistical Section
Government- wide Information:
Government- wide Expenses by Function................................................................................................................ 147
Government- wide Revenues ............................................................................................................................... ... 148
Fund Information:
General County Revenues by Source...................................................................................................................... 149
General County Expenditures by Function ............................................................................................................. 150
General County Revenues by Source - Constant Dollars........................................................................................ 151
General County Expenditures by Function - Constant Dollars ............................................................................... 152
Assessed Value of Taxable Property....................................................................................................................... 153
General Taxes Levied and Collected...................................................................................................................... 154
Special Assessments Levied and Collected............................................................................................................. 155
Property Tax Rates - Direct and Overlapping Governments................................................................................... 156
Property Taxes - Direct and All Overlapping Governments ................................................................................... 157
Property Tax Levies and Delinquencies.................................................................................................................. 158
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita ...................................... 159
Property Value, Construction and Bank Deposits................................................................................................... 160
Ratio of Annual Debt Service Expenditures for General Bonded Debt
to Total General Expenditures................................................................................................................... ........ 162
Computation of Legal Debt Margin ........................................................................................................................ 163
Computation of Direct and Overlapping Debt ........................................................................................................ 164
Ten Principal Taxpayers...................................................................................................................... ................... 166
Demographics - Population..................................................................................................................... ............... 167
Miscellaneous Statistics ............................................................................................................................... .......... 168
INTRODUCTORY
SECTION
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i
December 20, 2002
Members of the Board of Supervisors and Citizens of Contra Costa County:
The Comprehensive Annual Financial Report ( CAFR) of the County of Contra Costa for the fiscal year of 2001-
2002 is presented in compliance with Section 25253 of the Government Code of the State of California. The
Office of the County Auditor- Controller, which is responsible for both the accuracy of the presented data and the
completeness and fairness of the presentation, including all disclosures, prepared this report. We believe the data,
as presented, are accurate in all material aspects and presented in a manner designed to fairly set forth the
financial position and changes in financial position of the County as measured by the financial activity of its
various funds and component units and that all disclosures necessary to enable the reader to gain the maximum
understanding of the County's financial affairs have been included.
This year our CAFR will be significantly different and improved from those issued in prior years. This is the
result of a major new reporting standard, Governmental Accounting Standards Board ( GASB) Statement No. 34,
Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. In
addition to the fund financial statements and statistical section that we have presented in the past, we will now
present more information to better enable readers to determine the cost of County services and how effectively it
has used its resources. This includes the following:
• Management’s Discussion and Analysis ( MD& A) is a formal narrative by the County’s
management to provide an overview and analysis of the County’s financial activity for the
year and any known facts that may significantly affect future activity. Some of the
information that was previously presented in this Introductory Section is now in the
Management’s Discussion and Analysis.
• Government- wide Financial Statements provide a broad overview of the County’s finances in
a manner similar to a private- sector business. The new statement of net assets presents all of
the assets, including capital and infrastructure assets, net of all liabilities including long- term
debt. In addition to general revenues ( i. e. taxes and investment earnings), the new statement
of activities presents the program revenues and expenses associated with the various
functions of County government, its business- type activities and its component units.
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• Required Supplementary Information ( other than MD& A) consists of the General Fund’s
budgetary comparisons.
The CAFR represents the culmination of all budgeting and accounting activities engaged in by management
during the year, covering all of its financial transactions. The CAFR is organized into three sections:
• The Introductory Section is intended to familiarize the reader with the organizational structure
of the County, the nature and scope of the services it provides, and the specifics of its legal
operating environment.
• The Financial Section includes the independent auditor’s report on the basic financial
statements, MD& A, audited basic financial statements, note disclosures and supporting
statements and schedules necessary to provide readers with a comprehensive understanding
of the County’s financial activities of the past fiscal year.
• The Statistical Section contains comprehensive statistical data for the County relating to its
physical, economic, social and political characteristics.
THE REPORTING ENTITY
The County reporting entity includes all the financial balances and activities of the primary government as well as
all of its component units. Component units are legally separate entities for which the primary government is
financially accountable or other organizations for which the nature and significance of the relationship with the
primary government are such that exclusion would make the enclosed financial statements misleading or
incomplete. For further information on these component units see Note 1. A in the Notes to the Basic Financial
Statements section of this report.
The reporting entity excludes certain separate legal entities which may have “ Contra Costa” in their title, or which
are required to keep their funds in the County Treasury or receive their tax apportionment from the County.
Examples are school districts, the community college district, cities, city redevelopment agencies, the Bay Area
Rapid Transit District, the Metropolitan Transportation Commission, and a variety of special purpose districts for
cemeteries, mosquito abatement, recreation and parks, etc. These entities are autonomous organizations that
handle their own fiscal affairs and for which the Board of Supervisors has no oversight responsibility.
Accordingly, they are not included in the accompanying basic financial statements, except for their assets,
principally cash and investments, which are held by the County Treasurer.
Contra Costa County was incorporated in 1850 as one of the original 27 counties of the State. It is one of nine
counties in the San Francisco- Oakland Bay Area. The County covers about 733 square miles; the western and
northern shorelines are highly industrialized, while the interior sections are suburban/ residential, commercial and
light industrial.
The County has a general law form of government. A five member Board of Supervisors, each elected to four
year terms, serves as the legislative body. A County Administrative Officer is appointed by the Board and runs
the day- to- day business.
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The County provides the full- range of services contemplated by statute. These services include public protection,
highways and streets, sanitation, health and social services, planning and zoning and general administrative
services.
ECONOMIC CONDITIONS AND OUTLOOK
Long- term population and job growth projections remain positive. As of January 1, 2002, the County's
population was estimated at 981,555, an increase of 23.1 percent since 1990. A study prepared by the
Association of Bay Area Governments projects a 36.0 percent increase in population between 2000 and 2040.
The County's October 2002 jobless rate increased from 3.6 percent to 5.1 percent since October 2001. Consistent
with historical performance, it was significantly below the State- wide average of 6.2 percent. The County's
economy is very diverse; major industries include petroleum refining, steel manufacturing, chemicals, electronic
equipment, paper products, services and food processing. The County consistently ranks as a leading county in
both per capita and household income.
Additional information on the County’s economic conditions and outlook is presented in the MD& A and in the
Notes to the Basic Financial Statements.
MAJOR INITIATIVES AND SERVICE EFFORTS AND ACCOMPLISHMENTS
The County continued to explore and initiate ways to improve its operations to provide the most efficient and
effective level of service to the public. The following highlights some of the County’s major
accomplishments, initiatives and service- level efforts for fiscal year 2001- 2002:
• The County has been successful in maintaining favorable bond ratings, which continue to produce
significant taxpayer savings through lower borrowing costs. Debt issuances during the period
included:
o The County sold $ 70 million in Tax and Revenue Anticipation Notes in September 2001.
o Private placement leases were refunded with upfront debt- service savings of $ 280,000.
o The County of Contra Costa Public Financing Authority issued $ 12,650,000 in lease revenue
bonds in June 2002.
• The County continued its efforts to conserve energy and successfully completed ten energy
conservation projects in nine buildings and the Main Detention Facility, which included replacing 15-
30 year- old heating, ventilation and air conditioning ( HVAC) systems and upgrading digital control
systems. The completion of these projects will result in estimated cost savings in excess of $ 200,000
per year. The funding for these projects came from low- interest loans from the California Energy
Commission.
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• The County also continued to explore new ways to save energy and, consistent with the County’s
sustainable building policy, developed the solar 309 KVP Photovoltaic System projects. The $ 2
million project was financed 50 percent by receiving $ 1 million in grant funding from P G & E to
install photovoltaic roof panels at 50 Douglas Drive and the Main Detention Facility. This is the first
installation of photovoltaic panels by the County and is estimated to annually reduce energy costs by
approximately $ 80,000.
• This year the County redesigned its Recommended Budget format to link departmental budgets with
actual performance. The new Recommended Budget format includes performance measures and
workload and outcome indicators. This change increases departmental accountability and assists the
Board of Supervisors in making sound policy and budgetary decisions.
• Because of the County’s continued efforts to assess program costs with actual performance and
benefits, the County secured a three- year grant for performance software for the “ Spirit of Caring”
initiative ( Mental Health Services). This software is expected to generate data about costs, services,
and performance outcomes that will lay the foundation for a cost/ benefit analysis of prevention/ early
intervention efforts ( Contra Costa Futures Initiative).
• The Community Services Department was recognized as a “ Program of Achievement” by the
National Head Start Association, which affirms that a program has successfully performed at a very
high level of quality over a sustained period of time. This recognition was given to Community
Services as the first such award in the history of California and as the second such award in the West
Coast Region IX.
• The County continued to focus on public outreach and information. The County’s Government
Access Channel, CCTV, received nine awards for excellence in cable programming, including two
national Telly awards and seven Western Access Video Excellence ( WAVE) awards.
• Library service throughout the County continued to be enhanced. In 2001- 2002, the Board of
Supervisors provided $ 1.3 million from the County’s General Fund to the Library. This funding
assisted in enabling the following:
o Creating a strong partnership with cities by requiring cities to match the County’s
contribution in order to receive County funds.
o Providing fair and equitable library service throughout the County, including the County
funding the contribution match for unincorporated areas.
o As a result of the County’s efforts and commitment to enhancing library services, the number
of library hours per week increased by 22 percent over the prior year and the libraries were
accessible for additional evening hours.
o For the first time, library circulation reached the 4 million mark; library circulation was not
this high even when libraries were open 60 hours a week.
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o The County Library received a $ 2 million donation from Mirant California, LLC which will
provide $ 400,000 annually over the span of five years. In accepting these funds, the Board of
Supervisors requested the East Region Library Board to develop a service plan utilizing these
funds. The East Region Library Board recommended, and the County’s Board of Supervisors
approved, using these funds to increase library services in East County by purchasing
additional books and implementing after- school library programs.
• The County continued to improve assistance to low- income parents by acquiring a new Head Start
Center in Antioch. This newly acquired campus will allow the County to expand services provided
by Head Start. The Head Start Program is critical in the County’s efforts to assist low- income parents
in becoming successful participants in the work force and/ or move from welfare to work.
• The County continued its commitment to provide excellent health care in a quality environment:
o The Pittsburg Health Center was relocated from a very antiquated building to a newly
renovated Los Medanos Community Clinic in February 2002.
o Construction of a Martinez Ambulatory Care building at the hospital campus in Martinez.
• An excellent quality of health care continued to be provided and expanded. The Contra Costa Health
Plan’s Advice Nurse Program became the first public entity to receive accreditation from the
Utilization Review Accreditation Commission. The program was expanded to provide services under
contract to eight other counties and now covers 245,000 citizens.
FINANCIAL INFORMATION
County management is responsible for establishing and maintaining internal controls designed to ensure that the
assets of the County are protected from loss, theft or misuse, and that accounting data are compiled to allow for
the preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America. Internal controls are designed to provide reasonable, but not absolute, assurance that these
objectives are met. 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 evaluation of costs and benefits requires estimates and
judgments by management.
Budgetary Controls
The objective of the County’s budgetary controls is to ensure compliance with legal provisions embodied in the
annual budget approved by the Board of Supervisors. Budgetary control is maintained at the object level for all
annually budgeted funds; however, the legal level of control is at the department level. Using the County's
automated accounting system, the Auditor- Controller restricts each department's expenditures to the amounts
appropriated by the Board of Supervisors for the year. Increases in budget appropriations must be approved by
the Board of Supervisors as a transfer from the Reserve for Contingencies, as a transfer from another
appropriation, or as an appropriation of new or unanticipated revenue. No department is permitted to spend more
than its available appropriations. Any appropriations remaining in the departments at the end of the fiscal year
automatically lapse and are transferred to fund balance. The year- end fund balance, along with projected
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revenues, becomes available for appropriation the following year. An encumbrance accounting system is used to
facilitate effective budgetary control. An encumbrance reserves a portion of an appropriation at the time a
commitment is made to acquire goods or services. Open encumbrances are reported as reservations of fund
balances at June 30, 2002, and are re- appropriated as part of the following year's budget.
Additional information on budget policy and control is presented in the Note to Required Supplementary
Information on page 80.
General Governmental Functions
The financial activities of the general governmental functions are reported in the General, Special Revenue, Debt
Service, Capital Projects and Permanent Funds. Included in these Funds are the special districts governed by the
Board of Supervisors and the County’s blended component units except for the Housing Authority, which is
included in enterprise operations.
Enterprise Operations
The County’s business- type activities are reported in the Enterprise Funds. These include the County Hospital,
Health Maintenance Organization, Airport, Housing Authority, Sheriff Law Enforcement Training Center and the
Major Risk Medical Insurance Enterprise Funds.
Cash Management
Cash temporarily idle during the year was invested in accordance with California Government Code Section
53600 ( et seq.) which allows investment maximums of 40.0 percent in bankers’ acceptances, 30.0 percent in
negotiable certificates of deposit, and up to 30.0 percent in commercial paper. There is no limit on investments in
collateralized certificates of deposit and U. S. Government issues. The County Treasurer continues to have a more
restrictive investment policy than required by law. The Treasurer’s investment policy was approved by the Board
of Supervisors. In accordance with Government Code Sections 27130- 27137, an investment oversight committee
has reviewed the quarterly investment reports prepared by the Treasurer. The average yield on investments for
the fiscal year ended June 30, 2002, was 3.27 percent.
Debt Administration
The County finances its cash requirements prior to collection of taxes by short- term borrowing. The 2001- 2002
Tax and Revenue Anticipation Notes of $ 70,000,000 received ratings of MIG 1 from Moody's Investors Service
and SP- 1+ from Standard and Poor's Corporation. These are the highest ratings for this type of borrowing. For
long term obligations Standard and Poor's Corporation has given the County an Issuer Credit Rating of AA.
The County has capital lease obligations under lease/ purchase agreements for various County buildings and other
property. Past agreements have been made principally with the Contra Costa County Public Facilities
Corporation, a non- profit public benefit corporation which assists the County in financing public buildings and
facilities. Beginning in fiscal year 1997- 1998, most new agreements have been and will be made with the County
of Contra Costa Public Financing Authority, a joint powers authority consisting of the County and the
Redevelopment Agency.
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Risk Management
The County is self- insured for workers' compensation, general and automobile liability, medical malpractice,
dental, management long- term disability and unemployment insurance. The County maintains excess insurance
policies with private insurers to cover additional losses.
The County's Risk Management office administers claims for the various programs, provides loss prevention
services and minimizes risks through various risk control strategies.
For specific information on coverage see Note 18 in the Notes to the Basic Financial Statements.
Pension Trust Fund Operations
The County participates in and contributes to a cost- sharing, multi- employer defined benefit pension plan that is
governed by the County Employees Retirement Law of 1937 and which is administered by the Contra Costa
County Employees' Retirement Association ( the Association). Financial activities of the plan are reported in the
County’s Pension Trust Fund and a Comprehensive Annual Financial Report is available from the Association.
Additional information about the plan is also presented in Note 15 in the Notes to the Basic Financial Statements
in this report. The Association’s address can be found in Note 1. A.
OTHER INFORMATION
Independent Audit
For over 60 years the policy of the County has been to require an annual audit of the financial statements of the
County by independent certified public accountants. The Board of Supervisors selected the firm of Macias, Gini
& Company LLP to perform the fiscal year 2001- 2002 audit.
Awards
The Government Finance Officers Association of the United States and Canada ( GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to Contra Costa County for its fiscal year 2000- 2001
Comprehensive Annual Financial Report. This was the twentieth consecutive fiscal year the County has received
this award.
In order to be awarded a Certificate of Achievement, the County must publish an easily readable and efficiently
organized Comprehensive Annual Financial Report whose contents conform to program standards. Such a report
must satisfy both accounting principles generally accepted in the United States of America and applicable legal
requirements.
A Certificate of Achievement is valid only for a period of one year. We believe our current report continues to
conform to Certificate of Achievement requirements, and we are submitting it to the GFOA to determine its
eligibility for another certificate.
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Web Site
The County maintains an Internet web site with an increasing amount of information useful to its citizens at
http:// www. co. contra- costa. ca. us. This document is also available there.
Acknowledgments
The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated
services of the entire staff of the Office of the Auditor- Controller. I would like to express my appreciation to all
members of the Office who assisted and contributed to its preparation. I would also like to thank the members of
the Board of Supervisors and the County Administrator for their interest and support in planning and conducting
the financial operations of the County in a responsible and progressive manner.
Respectfully submitted,
Kenneth J. Corcoran
Auditor- Controller
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COUNTY OF CONTRA COSTA
PUBLIC OFFICIALS
June 30, 2002
ELECTED OFFICIALS
Supervisor, District 1 John Gioia
Supervisor, District 2 Gayle B. Uilkema
Supervisor, District 3 Donna Gerber
Supervisor, District 4 Mark De Saulnier
Supervisor, District 5 Federal Glover
Assessor Gus Kramer
Auditor- Controller Kenneth J. Corcoran
Clerk- Recorder Stephen L. Weir
District Attorney- Public Administrator Gary T. Yancey
Sheriff- Coroner Warren E. Rupf
Treasurer- Tax Collector William J. Pollacek
APPOINTED OFFICIALS
County Administrator John Sweeten
County Counsel Silvano Marchesi
County Librarian Anne Cain
County Probation Officer Steve Bautista
Director of Animal Services Michael G. Ross
Director of Building Inspection Carlos Baltodano
Director of Child Support Services Linda M. Dippel
Director of Community Development Dennis Barry
Director of Community Services Tony Colon
Director of Cooperative Extension Shelley Murdock
Director of Employment and Human Services John Cullen
Director of General Services Barton J. Gilbert
Director of Health Services William Walker, MD
Director of Human Resources Leslie T. Knight
Director of Information Technology Steven Steinbrecher
Director of Public Works Maurice Shiu
Agricultural Commissioner- Director of Weights and Measures Edward P. Meyer
Public Defender David Coleman III
Veterans' Services Officer Gary D. Villalba
Chief, Bethel Island Fire Protection District David Wahl
Chief, Contra Costa Fire Protection District Keith Richter
Chief, Crockett- Carquinez Fire Protection District Jerry Littleton, Jr.
Chief, East Diablo Fire Protection District Paul Hein
Chief, Oakley Fire Protection District Bob Pastor
AFFILIATED ORGANIZATIONS
Administrator, Contra Costa County Employees' Retirement Association Patricia Wiegert
Executive Director, Housing Authority of the County of Contra Costa Robert McEwan
President, Contra Costa County Public Facilities Corporation John E. Whalen
Executive Director, Contra Costa Children and Families Commission Brenda Blasingame
Executive Director, County of Contra Costa Public Financing Authority John Sweeten
Executive Director, Contra Costa County Redevelopment Agency John Sweeten
Executive Director, In- Home Supportive Services Public Authority Eldon Luce
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PUBLIC PROTECTION GENERAL
GOVERNMENT
HEALTH AND HUMAN
SERVICES
GROWTH
MANAGEMENT
SPECIAL DISTRICTS
AND AUTHORITIES
AGRICULTURE- WEIGHTS ASSESSOR ( E) COMMUNITY SERVICES BUILDING INSPECTION EMERGENCY MEDICAL SERVICES
AND MEASURES Family and Child Services Housing Rehabilitation
AUDITOR- CONTROLLER ( E) Division Land Information Systems FIRE PROTECTION
ANIMAL SERVICES
COOPERATIVE EXTENSION EMPLOYMENT AND HUMAN COMMUNITY DEVELOPMENT FLOOD CONTROL AND
CHILD SUPPORT SERVICES SERVICES Comprehensive Planning DRAINAGE
COUNTY ADMINISTRATOR Economic Development
DISTRICT ATTORNEY ( E) Affirmative Action HEALTH SERVICES Land Development LIBRARY
Public Administrator Capital Facilities and Debt Substance Abuse Transportation Planning
CCTV/ Public Outreach Mgt. California Children's Services LIGHTING & LANDSCAPE
GRAND JURY Clerk of the Board Health Plan PUBLIC WORKS
Information Technology Hospital & Clinics Airport POLICE
PROBATION Policy and Innovation Inst. Mental Health Flood Control
Revenue Collections Public Health Roads RECREATION & PARK
PUBLIC DEFENDER Risk Management
Training Institute VETERANS' SERVICES SANITATION
SHERIFF- CORONER ( E)
Court Security COUNTY CLERK- RECORDER ( E) STREETS & ROADS
Emergency Services Elections
Institutions
COUNTY COUNSEL
SUPERIOR COURT
( County Responsibilities) GENERAL SERVICES AFFILIATED ORGANIZATIONS
Building and Grounds
Central Services EMPLOYEES' RETIREMENT PUBLIC FINANCING
Communications ASSOCIATION AUTHORITY ( 1)
Fleet Services
General Property HOUSING AUTHORITY ( 1) CONTRA COSTA
Purchasing CHILDREN & FAMILIES
Workfare Programs PUBLIC FACILITIES COMMISSION
CORPORATION
HUMAN RESOURCES IN- HOME SUPPORTIVE SERVICES
REDEVELOPMENT AGENCY ( 1) PUBLIC AUTHORITY ( 1)
LIBRARY
TREASURER- TAX COLLECTOR ( E)
( E = Elected)
1. Authority/ Agency Board is the Board of Supervisors
Organizational Chart of Contra Costa County
COUNTY ADMINISTRATOR
BOARD OF SUPERVISORS ( E)
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FINANCIAL
SECTION
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Partners
Kenneth A. Macias, Managing Partner
Ernest J. Gini
Kevin J. O’Connell
Richard A. Green
Jan A. Rosati
James V. Godsey
Mt. Diablo Plaza
2175 N. California Boulevard
Suite 620
Walnut Creek, CA 94596- 3565
925• 274• 0190
925• 274• 3819 FAX
www. maciasgini. com
OFFICE LOCATIONS
Sacramento • Los Angeles • Fresno • San Francisco Bay Area
1
The Honorable Board of Supervisors
County of Contra Costa
Martinez, California
INDEPENDENT AUDITOR’S REPORT
We have audited the accompanying financial statements of the governmental activities, the business- type activities,
the discretely presented component unit, each major fund, and the aggregate remaining fund information of the
County of Contra Costa, California ( County), as of and for the fiscal year ended June 30, 2002, which collectively
comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the County’s management. Our responsibility is to express opinions on these financial statements
based on our audit. We did not audit the financial statements of the Contra Costa County Housing Authority
( Authority), a blended component unit of the County, which represents 10.8 percent of the assets and 16.3 percent of
the revenues of business- type activities and represents 0.8 percent of the assets and 2.2 percent of the revenues of the
aggregate remaining fund information. Also, we did not audit the financial statements of the Contra Costa Children
and Families Commission ( Commission), a discretely presented component unit of the County, which represents
100.0 percent of the discretely presented component unit opinion unit. Those financial statements were audited by
other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts
included for the Authority and Commission, is based on the reports of the other auditors.
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 General 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 misstatement. 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 the significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors
provide a reasonable basis for our opinions.
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present
fairly, in all material respects, the respective financial position of the governmental activities, the business- type
activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information
of the County as of June 30, 2002, and the respective changes in financial position and cash flows, where applicable,
thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United
States of America.
As discussed in Note 1. B to the basic financial statements, the County adopted the provisions of Governmental
Accounting Standards Board ( GASB) Statement No. 34, Basic Financial Statements – and Management’s
Discussion and Analysis – for State and Local Governments; GASB Statement No. 37, Basic Financial Statements –
and Management’s Discussion and Analysis – for State and Local Governments: Omnibus; GASB Statement No.
38, Certain Financial Statement Note Disclosures; and GASB Interpretation No. 6, Recognition and Measurement
of Certain Liabilities and Expenditures in Governmental Fund Financial Statements, effective July 1, 2001.
In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2002, on
our consideration of the County’s internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction with this report in considering
the results of our audit.
2
The management’s discussion and analysis and general fund budgetary comparison schedule, as listed in the table of
contents, are not a required part of the basic financial statements but are supplementary information required by the
Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and do not express an opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the County’s basic financial statements. The introductory section, combining and individual fund financial
statements and schedules, and statistical section are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining and individual fund financial statements and
schedules have been subjected to the auditing procedures applied by us and the other auditors in the audit of the
basic financial statements and, in our opinion, based on our audit and the reports of other auditors, are fairly stated in
all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical
sections have not been subjected to the auditing procedures applied by us and the other auditors in the audit of the
basic financial statements and, accordingly, we express no opinion on them.
Certified Public Accountants
Walnut Creek, California
December 20, 2002
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
3
MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the County of Contra Costa’s ( County) Comprehensive Annual Financial Report presents a
discussion and analysis of the financial activities of the County for the fiscal year ended June 30, 2002. We
encourage readers to consider the information presented here in conjunction with additional information that we
have furnished in our letter of transmittal.
FINANCIAL HIGHLIGHTS
• The assets of the County exceeded its liabilities at the close of fiscal year 2001- 2002 by $ 895,371,000 ( net
assets). Of this amount, $ 148,090,000 ( unrestricted net assets) may be used to meet the County’s ongoing
obligations to citizens and creditors, $ 270,857,000 is restricted for specific purposes ( restricted net assets) and
$ 476,424,000 is invested in capital assets, net of related debt.
• The County’s total net assets increased by $ 48,623,000 during the fiscal year.
• As June 30, 2002, the County’s governmental funds reported ending fund balances of $ 468,266,000.
Approximately 79.2 percent of this total amount, $ 370,868,000, is unreserved fund balance.
• As of June 30, 2002, unreserved fund balance for the General Fund was $ 115,658,000 or 12.5 percent of total
General Fund expenditures of $ 925,684,000.
• The County’s total debt decreased by $ 9,570,000 or 1.3 percent during fiscal year 2001- 2002.
• The downturn in the equity markets has resulted in reduced state revenues and losses in the investments of the
Contra Costa County Employees’ Retirement Association ( CCCERA).
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the County’s basic financial statements.
The County’s basic financial statements are comprised of three parts: ( 1) Government- wide financial
statements, ( 2) Fund financial statements, and ( 3) Notes to the basic financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
Government- wide Financial Statements
The government- wide financial statements are designed to provide readers with a broad overview of the County’s
finances, in a manner similar to a private- sector business.
The statement of net assets presents information on all of the County’s assets and liabilities, with the difference
between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful
indicator of whether the financial position of the County is improving or deteriorating.
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
4
The statement of activities presents information showing how the County’s net assets changed during the most
recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement
for some items that will only result in cash flows in future fiscal periods, such as revenues pertaining to
uncollected taxes and expenses pertaining to earned but unused vacation and sick leave.
Both of the government- wide financial statements distinguish functions of the County that are principally
supported by taxes and intergovernmental revenues ( governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges ( business- type
activities). The governmental activities of the County include general government, public protection, health and
sanitation, public assistance, education, public ways and facilities and recreation and culture. The business- type
activities of the County include the County Hospital, Health Maintenance Organization, Airport, Housing
Authority, Sheriff Law Enforcement Training Center and Major Risk Medical Insurance.
Fund Financial Statements
The fund financial statements report groupings of related accounts that are used to maintain control over
resources that have been segregated for specific activities and objectives. The County, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal
requirements. All of the funds of the County can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental funds are used to account for essentially the same functions reported as governmental activities in
the government- wide financial statements. However, unlike the government- wide financial statements,
governmental fund financial statements focus on near- term inflows and outflows of resources that are available
for spending as well as on balances of resources that are available for spending at the end of the fiscal year. Such
information may be useful in evaluating a government’s near- term financing requirements.
Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government- wide statements. By doing so, readers may better understand the long-term
impact of the County’s near- term financing decisions. Both the governmental fund balance sheet and the
governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The County maintains 26 individual governmental funds ( e. g. General, special revenue, debt service, capital
projects and permanent) for reporting purposes. Information is presented separately in the governmental fund
balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for
the General Fund, which is considered to be a major fund. Data from the other governmental funds are combined
into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is
provided in the form of combining statements and schedules elsewhere in this report.
The County adopts an annual appropriated budget for its General Fund. A budgetary comparison schedule has
been provided for the General Fund to demonstrate compliance with this budget.
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
5
Proprietary funds used by the County are of two different types: enterprise funds and internal service funds.
Proprietary fund financial statements provide the same type of information as the government- wide financial
statements, only in more detail.
• Enterprise funds are used to report the same functions presented as business- type activities in the
government- wide financial statements. The County uses enterprise funds to account for the operations of
its County Hospital, Health Maintenance Organization, Airport, Housing Authority, Sheriff Law
Enforcement Training Center and Major Risk Medical Insurance.
• Internal service funds are an accounting device used to accumulate and allocate costs internally among
the County’s various functions. The County uses internal service funds to account for its administrative
costs and payment of claims for its various insurance programs to protect County assets and employees.
They have been allocated between the governmental functions and business- type activities in the
government- wide financial statements. Individual fund data for the internal service funds is provided in
the form of combining statements elsewhere in this report.
Fiduciary funds are used to account for resources held for the benefit of entities legally separate from the County
and individuals, which are not part of the reporting entity. The Contra Costa County Employees’ Retirement
Association pension plan, the County’s investment trust fund, private- purpose trust fund and agency funds are
reported under fiduciary funds. Fiduciary funds are not reflected in the government- wide financial statements
because the resources of those funds are not available to support the County’s own programs. The accounting
used for fiduciary funds is much like that used for proprietary funds.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full understanding
of the data provided in the government- wide and fund financial statements.
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report presents certain required
supplementary information concerning the County’s General Fund budget and actual comparisons and progress in
funding its obligation to provide pension benefits to employees.
Combining Statements and Schedules
The combining statements and schedules referred to earlier in connection with nonmajor governmental funds and
internal service funds are presented immediately following the required supplementary information ( other than
MD& A).
Component Units
The blended component units, as described in Note 1. A in the notes to the basic financial statements are included
in all three parts of the County’s basic financial statements. The County and its blended component units
constitute the primary government. In addition to the blended component units, the government- wide financial
statements and the notes to the basic financial statements also include the discretely presented component unit
described in Note 1. A in the notes to the basic financial statements.
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
6
GOVERNMENT- WIDE FINANCIAL ANALYSIS
This is the first year the County has reported its financial activities and balances in accordance with
Governmental Accounting Standards Board ( GASB) Statement No. 34, Basic Financial Statements – and
Management’s Discussion and Analysis – for State and Local Governments. The County has not restated prior
year information for the purpose of providing the comparative data for the Management’s Discussion and
Analysis ( MD& A) because some of that information was not readily available. However, in future years, prior
year information will be available and a comparative analysis of government- wide data will be presented.
Governmental Business- Type
Activities Activities Total
Assets:
Current and other assets $ 1,049,662 125,383 1,175,045
Capital assets 633,982 191,534 825,516
Total Assets 1,683,644 316,917 2,000,561
Liabilities:
Current and other liabilities 183,899 82,365 266,264
Long- term liabilities 671,106 167,820 838,926
Total Liabilities 855,005 250,185 1,105,190
Net Assets:
Invested in capital assets, net of related debt 437,866 38,558 476,424
Restricted 259,481 11,376 270,857
Unrestricted 131,292 16,798 148,090
Total Net Assets $ 828,639 66,732 895,371
COUNTY'S NET ASSETS
June 30, 2002
( In Thousands)
Analysis of Net Assets
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. The
County’s assets exceeded liabilities by $ 895,371,000 at June 30, 2002.
The largest portion of the County’s net assets, $ 476,424,000, or 53.2 percent, reflects its investment in capital
assets ( e. g., land, infrastructure, buildings, machinery, and equipment), less any related debt used to acquire those
assets. The County uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending. Although the County’s investment in its capital assets is reported net of related
debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since
the capital assets themselves cannot be used to liquidate these liabilities.
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
7
An additional portion of the County’s net assets, $ 270,857,000, or 30.3 percent, represents resources that are
subject to external restrictions on how they may be used. The major restriction on net assets, $ 232,651,000, is for
legally segregated taxes, grants and fees. The remaining balance, $ 148,090,000 or 16.5 percent, is unrestricted
net assets and may be used to meet the County’s ongoing obligations to citizens and creditors.
Governmental Business- Type
Activities Activities Total
Revenues:
Program revenues:
Charges for services $ 250,536 290,866 541,402
Operating grants and contributions 544,900 94,474 639,374
Capital grants and contributions 12,573 7,194 19,767
General revenues:
Taxes 238,684 238,684
Grants/ contributions not restricted 77,741 77,741
Investment earnings 27,035 298 27,333
Other 20,158 1,076 21,234
Total revenues 1,171,627 393,908 1,565,535
Expenses:
General government 115,534 115,534
Public protection 365,757 365,757
Health and sanitation 184,109 184,109
Public assistance 328,450 328,450
Education 16,364 16,364
Public ways and facilities 56,197 56,197
Recreation and culture 793 793
Interest on debt 36,340 36,340
County hospital 229,584 229,584
Health maintenance organization 112,386 112,386
Airport 4,323 4,323
Housing authority 65,038 65,038
Major risk medical insurance 931 931
Sheriff law enforcement training center 1,106 1,106
Total expenses 1,103,544 413,368 1,516,912
Change in net assets before transfers 68,083 ( 19,460) 48,623
Transfers ( 11,063) 11,063
Change in net assets 57,020 ( 8,397) 48,623
Net assets, beginning of year 771,619 75,129 846,748
Net assets, end of year $ 828,639 66,732 895,371
COUNTY'S CHANGE IN NET ASSETS
For the Fiscal Year Ended June 30, 2002
( In Thousands)
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
8
Analysis of the Changes in Net Assets
The County’s net assets increased $ 48,623,000 during fiscal year 2001- 2002. Governmental activities increased
net assets by $ 57,020,000; however, business- type activities decreased net assets by $ 8,397,000. The changes are
explained below in the governmental activities and business- type activities discussions.
0
50
100
150
200
250
300
350
400
( in Millions)
General
government
Public
protection
Health and
sanitation
Public
assistance
Education Public ways and
facilities
Recreation and
culture
Interest on debt
Expenses and Program Revenues - Governmental Activities Expenses
Program Revenues
Revenues by Source - Governmental Activities
Capital grants and
contributions
1.1%
Charges for services
21.4%
Operating grants and
contributions
46.5%
Taxes
20.4%
Grants/ contributions not
restricted
6.6%
Investment earnings
2.3% Other
1.7%
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
9
Governmental activities increased the County’s net assets by $ 57,020,000, which was partially offset by a
reduction in net assets from business- type activities.
• Property taxes increased as a result of a 10.5 percent increase in assessed valuation. This was due to strength
in the real estate market and construction activity in a period of historically low interest rates.
• Grants and contributions were up due to increased State funding for public safety services, family income
maintenance and other social services. There was also increased Federal funding for childcare, highway
construction and family support services.
-
50
100
150
200
250
( in Millions)
County hospital Health maintenance
organization
Airport Housing authority Major risk medical
insurance
Sheriff law
enforcement
training center
Expenses and Program Revenues - Business- type Activites
Expenses
Program Revenues
Revenues by Source - Business- type Activities
Charges for services
73.8%
Operating grants and
contributions
24.0%
Other
2.2%
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
10
Business- type activities decreased the County’s net assets by $ 8,397,000. Expenses exceeded program revenues
in the County Hospital, Health Maintenance Organization, Airport, Housing Authority and Sheriff Law
Enforcement Training Center.
• The cost of medical services and supplies exceeded the increases in funding sources for the costs.
• The Sheriff Law Enforcement Training Center began operation in fiscal year 2001- 2002 and incurred
start- up costs that were not yet recovered.
FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS
The County uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements.
As noted earlier, this is the first year the County has reported its financial activities and balances in accordance
with GASB Statement No. 34. To comply with this Statement, many of the financial balances and activities
previously reported in trust and agency funds were reclassified and are now reported in governmental funds. The
County has not restated prior year information for the purpose of providing the comparative data for the
Management’s Discussion and Analysis ( MD& A) because some of that information was not readily available.
However, in future years, that prior year information will be available and a comparative analysis of County fund
data will be presented. The following is an analysis of the activities of the County’s funds for fiscal year 2001-
2002 as reported in the fund- basis statements.
Governmental Funds
The focus of the County’s governmental funds is to provide information on near- term inflows, outflows, and
balances of resources that are available for spending. Such information is useful in assessing the County’s
financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s
net resources available for spending at the end of the fiscal year. Types of government funds reported by the
County include the General, special revenue, debt service, capital projects and permanent funds.
As of June 30, 2002, the County’s governmental funds reported combined ending fund balances of $ 468,266,000,
an increase of $ 20,227,000 in comparison with the prior year. Approximately $ 370,868,000, or 79.2 percent of
these fund balances, constitutes unreserved fund balances, which are available for spending at the County’s
discretion. The remainder of fund balances is reserved to indicate that it is not available for new spending
because it has already been committed: ( 1) for encumbrances - to liquidate contracts and purchase orders of the
prior period ($ 57,608,000), ( 2) to reflect advances due from other funds and inventories ($ 6,893,000), ( 3) to pay
debt service ($ 27,464,000), or ( 4) for miscellaneous other restricted purposes ($ 5,433,000).
The General Fund is the primary operating fund of the County. At June 30, 2002, unreserved fund balance of the
General Fund was $ 115,658,000, while total fund balance reached $ 169,402,000. As a measure of the General
Fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund
expenditures. Unreserved fund balance represents 12.5 percent of total General Fund expenditures, while total
fund balance represents 18.3 percent.
In the Public Financing Authority Debt Service Fund, which is reported as part of the nonmajor governmental
funds, capital outlay expenditures exceeded proceeds from the issuance of debt in fiscal year 2001- 2002 by
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
11
approximately $ 12,000,000. This resulted in a similar reduction in fund balance. It is not unusual to have timing
differences between funding and expenditures for capital projects.
Proprietary Funds
As mentioned earlier, the County’s proprietary fund financial statements provide the same type of information
found in the government- wide financial statements, but in more detail.
Net assets at June 30, 2002, were $ 20,858,000 for the County Hospital Enterprise Fund, $ 5,458,000 for the
Health Maintenance Organization Enterprise Fund and $ 48,611,000 for the other enterprise funds. As a result of
operations during the year, net assets of the County Hospital Enterprise Fund decreased by $ 4,562,000, net assets
of the Health Maintenance Organization Enterprise Fund increased by $ 99,000 and the net assets of the other
enterprise funds decreased by $ 2,571,000.
Net assets of the internal service funds were a deficit of $ 11,830,000. As a result of operations during the year,
net assets of the Workers’ Compensation Insurance County General Internal Service Fund decreased by
$ 11,799,000, the net assets of the Workers’ Compensation Insurance Fire Protection Internal Service Fund
decreased by $ 2,167,000 and the net assets of the other internal service funds increased by $ 394,000. The County
accelerated its Workers’ Compensation claim processing to reduce the future effects of rising medical treatment
costs but this resulted in the actuary further increasing the reserve for benefits and claim expense. See Note 3 in
the notes to the basic financial statements for further information.
GENERAL FUND BUDGETARY HIGHLIGHTS
The County’s final budget differs from the original budget in that it contains carry- forward appropriations for
various programs and projects, and supplemental appropriations approved during the fiscal year. Total budgeted
revenues were increased $ 138,116,000 or 15.5 percent, in the final budget. Actual revenues were less than final
budgeted revenues by $ 43,114,000, or 4.2 percent. Total budgeted expenditures were increased $ 141,434,000 or
14.7 percent, in the final budget. Actual expenditures were less than final budgeted expenditures by
$ 179,058,000, or 16.2 percent. Significant factors affecting these changes were as follows:
Original Budget vs. Final Budget
Revenue Variances
• Budgeted Intergovernmental revenues were increased because of additional state and federal grants.
State grant increases were for Medi- Cal health care, family income maintenance, public safety services,
other social services and miscellaneous State aid. Federal grant increases were for of childcare, highway
construction and family support.
• Budgeted Charges for services and Other revenues were increased to include additional funding for
remodeling and construction projects.
Expenditure Appropriation Variances
• The Final Budget for General Government - Building Maintenance was increased to reclassify interfund
charges as expenditures, which were previously recorded as transfers.
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
12
• The Final Budget for General Government - Plant Acquisition included additional appropriations for
building and improvement projects that were funded during the year.
• The Final Budget for Public Assistance - Community Development was increased for greater than
expected affordable housing construction and acquisition activity under HUD Block Grants.
• The Final Budget for Public Assistance - Employment and Human Services Department ( EHSD) Child
and Family Services was increased due to additional spending requirements for Foster Care and Aid To
Adoption programs.
• The Final Budget for Public Ways and Facilities - Road Construction was increased for projects
identified and funded during the year.
Final Budget vs. Actual Amounts
Revenue Variances
• Property taxes were greater than expected as real estate valuations were stronger than anticipated and
projected, given the recession.
• Licenses, permits and franchise fees revenue included gas surcharge payments received from Pacific Gas
and Electric Company ( PG& E). These payments were greater than budgeted, as the increase in energy
prices was not anticipated.
• Intergovernmental revenues were less than budgeted because the budgeted revenues included full
funding of capital projects and these projects were not completed during the year. State reimbursements
to the Employment and Human Services Department were less than expected.
• Charges for services revenues were less than budgeted because some County construction projects were
not completed during the year, as planned. The related funding for construction services from other
County funds and external sources was not realized.
• Other revenue was less than budgeted because some County construction projects were not completed
during the year, as planned. The related funding for other construction costs from other County funds
and external sources was not realized.
Expenditure Variances
• The Final Budget for General Government - Employee Benefits included appropriations to fund
employee benefits, improve the countywide payroll system, and manage the employee benefit programs
that were less than anticipated.
• The Final Budget for General Government - Plant Acquisition included appropriations for various
building improvement and construction projects that were not completed during the year.
• The Final Budget for Public Assistance - EHSD Workforce Services included appropriations based on
expected Intergovernmental revenues that were not realized.
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
13
• The Final Budget for Public Ways and Facilities - Public Works included appropriations for the design,
construction and maintenance of County roads that were not completed during the year.
• The Final Budget for Public Ways and Facilities - Road Construction included appropriations for
construction of the State Route 4 Bypass project that was not completed during the year.
CAPITAL ASSET AND LONG- TERM DEBT ACTIVITY
Capital Assets
Capital assets for the governmental and business- type activities are presented below to illustrate changes from the
prior year:
2001 2001 2001
2002 as restated 2002 as restated 2002 as restated
Infrastructure $ 239,221 227,837 239,221 227,837 5.0 %
Land and easements 60,108 59,997 10,464 10,464 70,572 70,461 0.2
Structures and improvements 238,772 232,544 130,564 136,806 369,336 369,350
Equipment 42,379 41,284 13,967 18,795 56,346 60,079 ( 6.2)
Construction in progress 53,502 22,810 36,539 25,051 90,041 47,861 88.1
Total $ 633,982 584,472 191,534 191,116 825,516 775,588 6.4 %
Percent
Change
Governmental activities Business- type activities Total
Increase/
( Decrease)
COUNTY'S CHANGES IN CAPITAL ASSETS
( Net of Depreciation)
( In Thousands)
The County’s investment in capital assets for its governmental and business type activities as of June 30, 2002,
amounted to $ 825,516,000 ( net of accumulated depreciation). This investment in capital assets includes land,
buildings and systems, improvements, machinery and equipment, park facilities, roads, highways, drainage
systems, and bridges. The total increase in the County’s investment in capital assets for fiscal year 2001- 2002
was 6.4 percent ( an 8.5 percent increase for governmental activities and a 0.2 percent increase for business- type
activities).
Major capital asset events during fiscal year 2001- 2002 included the following:
• Construction in progress on two office buildings for the Employment and Human Services Department in
Antioch amounted to $ 12,110,000 for the year.
• Construction in progress on a 242- bed expansion of Juvenile Hall amounted to $ 10,386,000 for the year.
• Construction in progress on a new five- courtroom Family Law Center amounted to $ 6,491,000 for the year.
• Construction in progress on roads amounted to $ 8,070,000 for the year.
• Construction in progress on drainage systems amounted to $ 14,187,000 for the year.
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
14
• Construction in progress on hospital ambulatory care clinics amounted to $ 9,778,000 for the year.
At June 30, 2002, the County had construction commitments totaling $ 36,063,000 as described in Note 19. E in
the notes to the basic financial statements. Additional information on the County’s capital assets can be found in
Note 7 in the notes to the basic financial statements.
Long- Term Debt
Long- term debt for the governmental and business- type activities are presented below to illustrate changes from
the prior year:
2002 2001 2002 2001 2002 2001
Capital lease obligations $ 16,238 8,988 2,146 2,748 18,384 11,736 56.6 %
Certificates of participation 58,665 61,465 132,550 135,940 191,215 197,405 ( 3.1)
Pension obligation bonds 281,425 297,340 281,425 297,340 ( 5.4)
Notes payable 6 984 1,044 984 1,050 ( 6.3)
Other bonds payable 8,055 8,505 8,055 8,505 ( 5.3)
Lease revenue bonds 111,420 102,245 31,760 32,010 143,180 134,255 6.6
Tax allocation bonds 54,525 55,360 54,525 55,360 ( 1.5)
Special assessment debt 18,589 20,276 18,589 20,276 ( 8.3)
Total $ 548,917 554,185 167,440 171,742 716,357 725,927 ( 1.3) %
Percent
Change
Governmental activities Business- type activities Total ( Decrease)
Increase/
( In Thousands)
COUNTY'S OUTSTANDING DEBT
Capital Lease Obligations, Certificates of Participation, Pension Obligation Bonds, Notes Payable, Other Bonds Payable,
Lease Revenue Bonds, Tax Allocation Bonds and Special Assessment Debt
At June 30, 2002, the County had total long- term debt outstanding of $ 716,357,000. The County’s legal debt
limit was $ 4,674,510,000. The County’s total debt decreased by $ 9,570,000, or 1.3 percent, during fiscal year
2001- 2002.
In June 2002, the County of Contra Costa Public Financing Authority issued $ 12,650,000 in lease revenue bonds
to finance various capital projects of the County.
The County’s credit ratings for pension obligation bonds are AA- by Standard & Poors and Aa3 by Moody’s
Investors Service. Its credit ratings for lease revenue bonds and certificates of participation are AA- by Standard
& Poors and A1 by Moody’s Investors Service.
Additional information of the County’s long- term debt can be found in Note 11 in the notes to the basic financial
statements.
KNOWN FACTS, DECISIONS AND CONDITIONS THAT ARE EXPECTED TO HAVE A
SIGNIFICANT EFFECT ON FINANCIAL POSITION OR RESULTS OF OPERATIONS
• The State has suffered from the economic slowdown, and the threat of terrorist activities. Due in part to its
diversity, the County’s economy has been fairly resiliant, as evidenced by only a 1.5 percent increase in
COUNTY OF CONTRA COSTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2002
15
unemployment since October 2001. However, governmental revenues have been hit harder than the overall
economy. The State benefited substantially from income taxes received from capital gains and stock options
during the market rise in the late 1990’ s to 2001. In fiscal year 2000- 2001, State revenue from this source
peaked at $ 17.7 billion, which amounted to nearly 25 percent of State General Fund revenue. One year later,
this revenue fell $ 8.2 billion to $ 9.5 billion. As a result of this and other factors, the State is addressing a $ 35
billion shortfall of projected revenues compared to expenditures for the 18- month period of January 1, 2003,
through June 30, 2004. This is expected to lead to a significant, but undetermined, reduction of County
revenue. The County receives approximately 20 percent of its revenues from taxes and a significant portion
of the remainder is provided by the State.
• To attract and maintain a high quality workforce the County must provide salaries and benefits competitive
with other potential employers such as the State, other governmental entities and the private sector. In
recognition of this fact, the Board of Supervisors and most of the employee organizations agreed to extend
their current labor agreements another three years, with new cost- of- living adjustments and an enhanced
retirement benefit. The cost- of- living adjustments range from five to six percent for the first year and from
three to five percent for each of the second and third years covered by the agreement. The new retirement
benefit is commonly known as “ 3 percent at 50” ( for safety members) and “ 2 percent at 55” ( for general
members). A further explanation of the retirement benefit can be found in Note 15 in the notes to the basic
financial statements.
• As a result of decisions in various lawsuits affecting retirement benefits and the enhanced benefits noted
above, the Unfunded Actuarial Accrued Liability ( UAAL) for the County is estimated to be $ 406,000,000 as
of December 31, 2001. In addition, approximately $ 473,000,000 of retirement investment losses attributable
to the County had not been recognized as of June 30, 2002. These factors will result in higher costs to the
County in future years.
• General Fund subsidies to the County Hospital and Health Maintenance Organization increased $ 6,249,000
from the prior year to $ 31,401,000 and $ 4,811,000, respectively. State budget cuts are expected and costs
continue to rise more rapidly than revenue. Even with cost containment efforts in place, similar subsidies are
expected to recur in fiscal year 2002- 2003.
• All of these factors were considered in preparing the County’s budget for fiscal year 2002- 2003.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the County’s finances for all those with an
interest in the County’s finances. Questions concerning any of the information provided in this report or requests
for additional financial information should be addressed to the Office of the County Auditor- Controller, 625
Court Street, Room 103, Martinez, CA 94553- 1282.
17
Component
Unit
Children and
Governmental Business- type Familes First
Activities Activities Total Commission
Assets:
Cash and investments $ 476,700 78,035 554,735 38,939
Receivables ( net) 148,952 45,316 194,268 2,088
Inventories 1,872 1,167 3,039
Internal balances 16,108 ( 16,108)
Due from fiduciary funds 13,934 13,934
Due from component unit 354 354
Notes receivable 36,525 1,659 38,184
Prepaid items and deposits 2,625 3,938 6,563 19
Land held for resale 1,286 1,286
Prepaid pension asset 278,723 278,723
Restricted cash and investments 72,583 11,376 83,959
Capital assets:
Nondepreciable 113,610 47,003 160,613
Depreciable, net 520,372 144,531 664,903
Total Assets 1,683,644 316,917 2,000,561 41,046
Liabilities:
Short term notes payable 70,000 70,000
Accounts payable and accrued liabilities 68,817 43,543 112,360 169
Accrued interest payable 3,888 1,379 5,267
Due to fiduciary funds 385 385
Due to primary government 354
Welfare program advances 4,864 4,864
Deferred revenue 36,330 37,058 73,388
Long- term liabilities:
Due within one year 51,241 6,207 57,448
Due in more than one year 619,865 161,613 781,478
Total Liabilities 855,005 250,185 1,105,190 523
Net Assets:
Invested in capital assets, net of related debt 437,866 38,558 476,424
Restricted for:
Legally segregated taxes, grants and fees 232,651 232,651
Debt service 24,751 11,376 36,127
Permanent Fund:
Expendable 353 353
Nonexpendable 1,726 1,726
Children's programs 33,558
Unrestricted 131,292 16,798 148,090 6,965
Total Net Assets $ 828,639 66,732 895,371 40,523
See accompanying notes to the basic financial statements.
Primary Government
COUNTY OF CONTRA COSTA
STATEMENT OF NET ASSETS
JUNE 30, 2002
( In Thousands)
18
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Function/ Program Activities:
Primary Government:
Governmental activities:
General government $ 115,534 73,680 19,682
Public protection 365,757 100,344 119,742 76
Health and sanitation 184,109 51,533 80,561
Public assistance 328,450 1,648 308,577
Education 16,364 738 3,152
Public ways and facilities 56,197 22,557 13,134 12,497
Recreation and culture 793 36 52
Interest on debt 36,340
Total Governmental Activities 1,103,544 250,536 544,900 12,573
Business- type activities:
County hospital 229,584 178,040 31,886 7,194
Health maintenance organization 112,386 105,157 2,757
Airport 4,323 3,002 130
Housing authority 65,038 3,536 59,459
Major risk medical insurance 931 931
Sheriff law enforcement training center 1,106 200 242
Total Business- type Activities 413,368 290,866 94,474 7,194
Total Primary Government $ 1,516,912 541,402 639,374 19,767
Component Unit:
Children and Families First Commission $ 4,696 16,643
GENERAL REVENUES:
Taxes:
Property
Sales
Other
Grants/ contributions not restricted
Investment earnings
Other
TRANSFERS
Total general revenues and transfers
Change in net assets
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
COUNTY OF CONTRA COSTA
STATEMENT OF ACTIVITIES
See accompanying notes to the basic financial statements.
Program Revenues
FOR THE FISCAL YEAR ENDED JUNE 30, 2002
( In Thousands)
19
Business-
Governmental type Component
Activities Activities Total Unit
( 22,172) ( 22,172)
( 145,595) ( 145,595)
( 52,015) ( 52,015)
( 18,225) ( 18,225)
( 12,474) ( 12,474)
( 8,009) ( 8,009)
( 705) ( 705)
( 36,340) ( 36,340)
( 295,535) ( 295,535)
( 12,464) ( 12,464)
( 4,472) ( 4,472)
( 1,191) ( 1,191)
( 2,043) ( 2,043)
( 664) ( 664)
( 20,834) ( 20,834)
( 295,535) ( 20,834) ( 316,369)
11,947
$
211,376 211,376
11,616 11,616
15,692 15,692
77,741 77,741
27,035 298 27,333 733
20,158 1,076 21,234
( 11,063) 11,063
352,555 12,437 364,992 733
57,020 ( 8,397) 48,623 12,680
771,619 75,129 846,748 27,843
$ 828,639 66,732 895,371 40,523
Net ( Expenses) Revenues and
Changes in Net Assets
20
Other
General Funds Total
Assets:
Cash and investments $ 59,033 340,306 399,339
Accounts receivable and accrued revenue ( net) 135,481 11,656 147,137
Inventories 1,872 1,872
Due from other funds 66,311 12,075 78,386
Due from component unit 354 354
Advances to other funds 138 4,883 5,021
Notes receivable 29,246 7,279 36,525
Prepaid items and deposits 1,801 413 2,214
Land held for resale 1,286 1,286
Restricted cash and investments 72,583 72,583
Total Assets $ 366,819 377,898 744,717
Liabilities and Fund Balances
Liabilities:
Short term notes payable $ 70,000 70,000
Accounts payable and accrued liabilities 56,267 12,550 68,817
Due to other funds 18,482 34,475 52,957
Welfare program advances 4,864 4,864
Advances from other funds 5,021 5,021
Deferred revenue 47,804 26,988 74,792
Total Liabilities 197,417 79,034 276,451
Fund Balances:
Reserved for:
Encumbrances 50,342 7,266 57,608
Inventories 1,872 1,872
Advances to other funds 138 4,883 5,021
Prepaid items and deposits 1,392 413 1,805
Land held for resale 1,286 1,286
Housing projects 616 616
Debt service 27,464 27,464
Nonexpendable permanent funds 1,726 1,726
Unreserved, reported in:
General fund 115,658 115,658
Special revenue funds 176,792 176,792
Debt service funds 29,092 29,092
Capital projects funds 48,973 48,973
Permanent fund 353 353
Total Fund Balances 169,402 298,864 468,266
Total Liabilities and Fund Balances $ 366,819 377,898 744,717
See accompanying notes to the basic financial statements.
COUNTY OF CONTRA COSTA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2002
( In Thousands)
21
COUNTY OF CONTRA COSTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2002
( In Thousands)
Fund balances - total governmental funds ( page 20) $ 468,266
Amounts reported for governmental activities in the
statement of net assets are different because:
The pension assets resulting from contributions in excess of the annual
required contribution in 2001 are not financial resources and therefore
not reported in the funds. 278,723
Capital assets used in governmental activities are not financial resources
and therefore are not reported in the governmental funds. 633,982
Accrued revenue, which is not available soon enough to pay for the
current period's expenditures, is deferred in the governmental funds. 1,937
Notes receivable are not available to pay current- period expenditures
and, therefore, are deferred in the governmental funds. 36,525
Internal service funds are used by management to charge the costs of
self insurance to individual funds. The assets and liabilities of these
funds, except for the medical liability insurance fund, are included
as governmental activities in the statement of net assets. ( 3,639)
Interest on long- term debt is recognized as it accrues, regardless of when
it is due. ( 3,888)
Costs of issuance on 2002 lease revenue bond are not recognized as current
year expenditures and are deferred. $ 412
Current year amortization of costs of issuance on 2002 lease revenue bond. ( 1) 411
Long- term liabilities, including bonds payable, are not due and payable
in the current period and therefore are not reported in the governmental
funds.
Certificates of participation ( 58,665)
Lease revenue bonds ( 111,420)
Tax allocation bonds ( 54,525)
Special assessment bonds ( 18,589)
Other bonds payable ( 8,055)
Pension obligation bonds ( 281,425)
Capital lease obligations ( 16,238)
Compensated absences ( 34,761) ( 583,678)
Net assets of governmental activities ( page 17) $ 828,639
See accompanying notes to the basic financial statements.
22
General Other
Fund Funds Total
Revenues:
Taxes $ 200,571 122,064 322,635
Licenses, permits and franchise fees 23,782 11,495 35,277
Fines, forfeitures and penalties 14,508 4,017 18,525
Use of money and property 10,527 13,237 23,764
Intergovernmental 506,352 39,372 545,724
Charges for services 155,713 40,875 196,588
Other revenue 74,613 19,667 94,280
Total Revenues 986,066 250,727 1,236,793
Expenditures:
Current:
General government 128,375 1,976 130,351
Public protection 254,070 123,941 378,011
Health and sanitation 172,613 9,551 182,164
Public assistance 315,112 22,561 337,673
Education 205 16,162 16,367
Public ways and facilities 45,679 43,151 88,830
Recreation and culture 1,099 1,099
Debt service:
Principal 25,110 25,110
Bond issuance cost 412 412
Interest 2,215 34,092 36,307
Capital outlay 7,415 24,821 32,236
Total Expenditures 925,684 302,876 1,228,560
Excess ( Deficiency) of Revenues Over
( Under) Expenditures 60,382 ( 52,149) 8,233
Other Financing Sources ( Uses):
Transfers in 23,568 48,662 72,230
Transfers out ( 76,347) ( 6,946) ( 83,293)
Proceeds from the sale of real estate 500 500
Proceeds from issuance of debt 12,650 12,650
Capital lease financing 9,907 9,907
Total Other Financing Sources ( Uses) ( 42,872) 54,866 11,994
Net Change in Fund Balances 17,510 2,717 20,227
Fund Balances at Beginning of Year, as Previously Reported 144,607 257,017 401,624
Adjustments to beginning fund balances 7,285 39,130 46,415
Fund Balances at Beginning of Year, as Restated 151,892 296,147 448,039
Fund Balances at End of Year $ 169,402 298,864 468,266
See accompanying notes to the basic financial statements.
COUNTY OF CONTRA COSTA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2002
( In Thousands)
23
COUNTY OF CONTRA COSTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2002
( In Thousands)
Net change in fund balances - total governmental funds ( page 22) $ 20,227
Amounts reported for governmental activities in the
statement of activities are different because:
Revenues that were deferred in the governmental funds because they were
unavailable are reported as current revenue. 12,953
Governmental funds report capital outlay as expenditures. However, in
the statement of activities, the cost of those assets is allocated over
their estimated useful lives and reported as depreciation expense.
Expenditures for capital assets $ 88,677
Less loss on sale/ retirement of capital assets ( 3,753)
Less current year depreciation ( 35,414) 49,510
Some income reported in the governmental funds was previously
reported in the statement of activities and therefore is not reported
as current income. ( 500)
Long- term debt proceeds provide current financial resources to governmental
funds, but issuing debt increases long- term liabilities in the statement of
net assets. Repayment of bond principal is an expenditure in the
governmental funds, but the repayment reduces long- term liabilities in
the statement of net assets.
Proceeds from lease revenue bonds ( 12,650)
Deferral of bond issuance cost 412
Principal payments 27,768
Issuance of capital lease ( 9,907) 5,623
Some expenses reported in the statement of activities do not require the
use of current financial resources and therefore are not reported as
expenditures in governmental funds.
Change in long- term compensated absences ( 3,601)
Amortization of pension asset ( 14,835)
Amortization of bond issuance cost ( 1)
Change in accrued interest payable ( 142) ( 18,579)
Internal service funds are used by management to charge the costs of
certain activities to individual funds. The net revenue of the internal
service funds is reported with governmental activities. ( 12,214)
Change in net assets of governmental activities ( page 19) $ 57,020
See accompanying notes to the basic financial statements.
24
Health Internal
County Maintenance Service
Hospital Organization Other Total Funds
Assets:
Current assets:
Cash and investments $ 39,045 21,760 13,726 74,531 80,865
Accounts receivable and accrued revenue ( net) 41,243 901 3,172 45,316 1,815
Inventories 1,158 9 1,167
Due from other funds 11,131 3,816 97 15,044 1,820
Notes receivable 1,659 1,659
Prepaid items and deposits 3,589 158 191 3,938
Total Current Assets 96,166 26,635 18,854 141,655 84,500
Restricted cash and investments 11,376 11,376
Capital assets:
Nondepreciable 32,762 14,241 47,003
Depreciable, net 113,762 94 30,675 144,531
Total Assets $ 254,066 26,729 63,770 344,565 84,500
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities $ 25,796 15,306 2,441 43,543
Accrued interest payable 1,325 54 1,379
Due to other funds 20,382 5,690 1,393 27,465 1,275
Deferred revenue 29,352 7,706 37,058
Current portion of long- term liabilities 4,209 27 709 4,945 19,079
Total Current Liabilities 81,064 21,023 12,303 114,390 20,354
Noncurrent portion of long- term liabilities:
Capital lease obligations 1,546 1,546
Certificates of participation, net 115,343 115,343
Compensated absences 5,689 248 391 6,328
Claims payable 75,976
Bonds and notes payable, net 31,112 919 32,031
Total Noncurrent Liabilities 152,144 248 2,856 155,248 75,976
Total Liabilities 233,208 21,271 15,159 269,638 96,330
Net Assets ( Deficit):
Invested in capital assets,
net of related debt ( 3,508) 94 41,972 38,558
Restricted for debt service 11,376 11,376
Unrestricted ( Deficit) 12,990 5,364 6,639 24,993 ( 11,830)
Total Net Assets ( Deficit) 20,858 5,458 48,611 74,927 ( 11,830)
Total Liabilities and Net Assets $ 254,066 26,729 63,770 84,500
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds. ( 8,195)
Net assets of business- type activities ( page 17) $ 66,732
See accompanying notes to the basic financial statements.
COUNTY OF CONTRA COSTA
JUNE 30, 2002
Enterprise Funds
( In Thousands)
PROPRIETARY FUNDS
STATEMENT OF FUND NET ASSETS
25
COUNTY OF CONTRA COSTA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
Health Internal
County Maintenance Service
Hospital Organization Other Total Funds
Operating Revenues:
Charges for services $ 178,040 105,157 7,669 290,866 31,429
Other revenue 1,074 1,074 1,036
Total Operating Revenues 178,040 105,157 8,743 291,940 32,465
Operating Expenses:
Salaries and employee benefits 134,768 6,199 1,494 142,461
Services and supplies 64,662 105,977 2,346 172,985 9,618
Benefit and claim expense 42,706
Other charges 9,503 62,253 71,756
Depreciation 6,530 14 4,839 11,383
Total Operating Expenses 215,463 112,190 70,932 398,585 52,324
Operating loss ( 37,423) ( 7,033) ( 62,189) ( 106,645) ( 19,859)
Nonoperating Revenues ( Expenses)
State and federal grants 31,886 2,757 59,831 94,474 10
Investment income 294 294 3,277
Interest expense ( 9,977) ( 437) ( 10,414)
Total Nonoperating Revenues ( Expenses) 21,909 2,757 59,688 84,354 3,287
Loss before Capital
Contributions and Transfers ( 15,514) ( 4,276) ( 2,501) ( 22,291) ( 16,572)
Capital contributions 7,194 7,194
Transfers in 32,626 4,811 37,437 3,000
Transfers out ( 28,868) ( 436) ( 70) ( 29,374)
Change in Net Assets ( 4,562) 99 ( 2,571) ( 7,034) ( 13,572)
Total Net Assets at Beginning of the Year,
as Previously Reported 23,566 5,286 51,825 80,677 2,497
Adjustments to beginning net assets 1,854 73 ( 643) 1,284 ( 755)
Total Net Assets at Beginning of the Year,
as Restated 25,420 5,359 51,182 81,961 1,742
Total Net Assets at End of Year $ 20,858 5,458 48,611 74,927 ( 11,830)
Reconciliation of enterprise funds change in net assets to statement of activities:
Change in net assets of enterprise funds. $ ( 7,034)
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds. ( 1,363)
Change in net assets of business- type activities ( page 19) $ ( 8,397)
See accompanying notes to the basic financial statements.
FOR THE YEAR ENDED JUNE 30, 2002
Enterprise Funds
( In Thousands)
26
Health Internal
County Maintenance Service
Hospital Organization Other Total Funds
Cash Flows from Operating Activities:
Cash received from customers/ other funds $ 172,775 114,140 15,805 302,720 30,253
Cash payment to suppliers for goods and services ( 78,053) ( 106,600) ( 61,132) ( 245,785) ( 38,300)
Cash payment to employees for services ( 133,811) ( 6,192) ( 7,639) ( 147,642)
Net Cash Provided by ( Used for) Operating Activities ( 39,089) 1,348 ( 52,966) ( 90,707) ( 8,047)
Cash Flows from Noncapital Financing Activities:
State and federal grants 31,886 2,757 59,831 94,474 10
Transfers received 32,626 4,811 37,437 3,000
Transfers paid ( 28,868) ( 436) ( 70) ( 29,374)
Due to other funds 772 772 72
Net Cash Provided by Noncapital Financing Activities 35,644 7,132 60,533 103,309 3,082
Cash Flows from Capital and Related Financing Activities:
Capital contributions 7,194 7,194
Acquisition and construction of capital assets ( 11,843) ( 2,217) ( 14,060)
Interest paid ( 8,652) ( 205) ( 8,857)
Lease purchase obligation principal payment ( 2) ( 600) ( 602)
Principal paid on bonds and certificates ( 3,390) ( 3,390)
Payment on other non- current obligations ( 250) ( 60) ( 310)
Net Cash Used for Capital and Related Financing Activities ( 16,943) ( 3,082) ( 20,025)
Cash Flows from Investing Activities:
Interest received on investments 294 294 3,277
Investments, net ( 321) ( 321)
Net Cash Used for Investing Activities ( 27) ( 27) 3,277
Net Increase ( Decrease) in Cash and Cash Equivalents ( 20,388) 8,480 4,458 ( 7,450) ( 1,688)
Cash and Cash Equivalents at Beginning of Year 70,809 13,280 9,268 93,357 82,553
Cash and Cash Equivalents at End of Year $ 50,421 21,760 13,726 85,907 80,865
Reconciliation of Operating Loss to Net Cash
Used for Operating Activities:
Operating loss $ ( 37,423) ( 7,033) ( 62,189) ( 106,645) ( 19,859)
Adjustments to Reconcile Operating Loss
to Net Cash Provided by ( Used for) Operating Activities:
Depreciation 6,530 14 4,839 11,383
Changes in operating assets and liabilities:
Decrease ( increase) in:
Accounts receivable and accrued revenue, net ( 14,593) 3,170 ( 1,565) ( 12,988) ( 528)
Inventories ( 95) 8 ( 87)
Due from other funds 1,289 5,813 5 7,107 ( 1,684)
Prepaid items and deposits 147 50 197
Increase ( decrease) in:
Accounts payable and accrued liabilities 7,698 1,479 101 9,278 15,034
Employee benefits payable 414 5 91 510
Due to other funds ( 11,095) ( 2,100) ( 231) ( 13,426) ( 1,010)
Deferred revenue 8,039 5,925 13,964
Net Cash Provided by ( Used for) Operating Activities $ ( 39,089) 1,348 ( 52,966) ( 90,707) ( 8,047)
Noncash capital financing activities ( Hospital)
Accrued Interest $ 1,325
Bond deferral/ OIP amortization 702
Capital asset adjustment 2,137
See accompanying notes to the basic financial statements.
FOR THE FISCAL YEAR ENDED JUNE 30, 2002
Enterprise Funds
COUNTY OF CONTRA COSTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
( In Thousands)
27
Private-
Pension Investment Purpose Agency
Trust Trust Trust Funds
Assets:
Cash and investments $ 2,718,985 833,589 9,148 $ 129,591
Receivables 46,606 128 11,747
Due from other funds 1,884 1,339 5 9,797
Taxes receivables 127,473
Prepaid items and deposits 344
Capital assets, net 574
Total Assets 2,768,393 834,928 9,281 $ 278,608
Liabilities:
Warrants outstanding 56,186 40,133
Accounts payable and accrued liabilities 63,396 212 34,521
Employee benefits payable 268
Due to other funds 1,492 3 25,343
Deferred revenue 28
Unapportioned taxes 81,959
Tax loss guarantees 27,032
Due to other agencies 69,620
Total Liabilities 63,664 57,678 243 $ 278,608
Net Assets:
Held for:
Employees' pension benefits 2,704,729
Participation in individually directed
investment accounts 777,250 9,038
Total Net Assets $ 2,704,729 777,250 9,038
See accompanying notes to the basic financial statements.
( In Thousands)
COUNTY OF CONTRA COSTA
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
JUNE 30, 2002*
* Pension Trust Fund reported as of December 31, 2001.
28
Private-
Pension Investment Purpose
Trust Trust Trust
Additions:
Employer contributions $ 55,182
Employee contributions 18,681
Contributions to investment accounts 2,612,446
Intergovernmental 700
Other revenue 4,387
Net investment income ( loss) ( 105,084) 29,722 176
Investment expense ( 9,448)
Total Additions ( 40,669) 2,642,168 5,263
Deductions:
Benefits paid 138,533
Refunds of contributions 858
Distribution from investment accounts 2,622,933
Administrative and other expenses 3,745 2,567
Prepayment discount 2,920
Other 607 3,505
Membership withdrawal 10,791
Total Deductions 157,454 2,622,933 6,072
Change in Net Assets ( 198,123) 19,235 ( 809)
Net Assets Held In Trust at Beginning of Year,
as Previously Reported 2,931,262 758,015
Prior period adjustment ( 28,410) 9,847
Net Assets Held In Trust at Beginning of Year,
as Restated 2,902,852 758,015 9,847
Net Assets Held In Trust at End of Year $ 2,704,729 777,250 9,038
* Pension Trust Fund reported for Year Ended December 31, 2001.
( In Thousands)
See accompanying notes to the basic financial statements.
COUNTY OF CONTRA COSTA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2002*
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
29
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the County of Contra Costa ( the County) conform to accounting principles
generally accepted in the United States of America as applicable to governmental entities. The following
is a summary of the more significant policies:
A. Definition of Reporting Entity
The County is a political subdivision created by the State of California. As such, it can exercise
powers specified by the Constitution and statutes of the State. The County is governed by a five
member elected Board of Supervisors ( the Board). The Board is responsible for the legislative and
executive control of the County. The County provides various services on a countywide basis
including law and justice, education, detention, social, health, hospital, fire protection, road
construction, road maintenance, transportation, park and recreation facilities, elections and records,
communications, planning, zoning, and tax collection.
The governmental reporting entity consists of the County ( Primary Government) and its component
units. Component units are legally separate organizations for which the Board is financially
accountable or other organizations whose nature and relationship with the County are such that
exclusion would cause the County’s financial statements to be misleading or incomplete. Financial
accountability is defined as the appointment of a voting majority of the component unit’s board, and
( i) either the County’s ability to impose its will on the organization or ( ii) there is potential for the
organization to provide a financial benefit to or impose a financial burden on the County.
The basic financial statements include both blended and discretely presented component units. The
blended component units, although legally separate entities are, in substance, part of the County’s
operations and so data from these units are combined with data of the primary government. The
discretely presented component unit, on the other hand, is reported in a separate column in the
government- wide financial statements to emphasize it is legally separate from the government.
For financial reporting purposes, the County’s basic financial statements include all financial
activities that are controlled by or are dependent upon actions taken by the County’s Board.
Blended Component Units
Housing Authority of the County of Contra Costa
The Housing Authority of the County of Contra Costa ( Housing Authority) was established to
provide housing for the County’s low and moderate income residents. Its board members are the
same as the County Board of Supervisors. The financial activities of the Housing Authority are
reported as an Enterprise Fund. The fiscal year of the Housing Authority ends on March 31st and its
financial activities are reported as of that date.
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
30
Contra Costa County Redevelopment Agency
The Contra Costa County Redevelopment Agency ( RDA) was established for the purpose of
redeveloping certain areas of the County designated as project areas. Its board members are the same
as the County Board of Supervisors. The financial activities of the RDA are included in the special
revenue, debt service and capital projects funds which are reported as nonmajor governmental funds.
Contra Costa County Public Facilities Corporation
The Contra Costa County Public Facilities Corporation ( PFC) was established to provide financing
for the acquisition, construction, improvement and remodeling of public buildings and facilities for
the County. The County appoints a voting majority of the governing board and is able to impose its
will on the Corporation. The activities of the Corporation are included in a debt service fund which is
reported as part of the nonmajor governmental funds and in the County Hospital Enterprise Fund.
County of Contra Costa Public Financing Authority
The County of Contra Costa Public Financing Authority ( PFA) is a joint powers authority consisting
of the County and the RDA. The PFA was established to provide for the financing of public
improvements, obligations, working capital and liability or other insurance programs of the County
and the RDA. The members of the County Board of Supervisors also serve as the Directors of the
PFA. The activities of the PFA are included in a debt service fund which is reported as part of the
nonmajor governmental funds and in the County Hospital Enterprise Fund.
Contra Costa County Employees’ Retirement Association
The Contra Costa County Employees’ Retirement Association ( CCCERA) was established to provide
retirement benefits to employees of the County and other member agencies. The CCCERA provides
a majority of its services for the benefit of the County and, therefore, is reported as a pension trust
fund in the basic financial statements. The fiscal year of the CCCERA ends on December 31st and its
financial activities are reported as of that date.
In- Home Supportive Services Public Authority
The Contra Costa County Board of Supervisors, pursuant to Welfare and Institutions Code Section
12301.6, established the In- Home Supportive Services Public Authority ( IHSS). This Authority
provides screening, training and referral of in- home supportive service providers and assists recipients
in finding qualified persons to assist eligible individuals who are unable to care for themselves at
home. The activities of the IHSS are included in a special revenue fund which is reported as part of
the nonmajor governmental funds.
Special Districts and Service Areas
The County has 41 agencies referred to as County Special Districts and Service Areas. Each is
established by the County for the purpose of providing specific services in a defined geographic area.
Their board members are the same as the County Board of Supervisors. These agencies and the
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
31
Special Revenue Fund in which each is included are: Fire Protection - Bethel Island Fire Protection
District, Contra Costa Fire Protection District, Crockett- Carquinez Fire Protection District, East
Diablo Fire Protection District, Oakley Fire Protection District; Flood Control - Flood Control
District, Storm Drainage District, Storm Drain Maintenance District No. 4 and Storm Drain District
No. Z- 16; Health and Sanitation - Sanitation Districts Nos. 5 and 6; Service Areas - Service Areas D-
2, EMS- 1, L- 100, LIB- 2, LIB- 10, LIB- 12, LIB- 13, M- 1, M- 8, M- 16, M- 17, M- 20, M- 23, M- 25, M-
26, M- 27, M- 28, M- 29, M30, R- 4, R- 7, R- 9, R- 10, RD- 4 and Discovery Bay West Parking District;
Law Enforcement - Service Areas P- 1, P- 2, P- 5 and P- 6; Other Special Revenue - Contra Costa
County Water Agency. These special revenue funds are reported as nonmajor governmental funds.
Discretely Presented Component Unit
Children and Families First Commission
The Contra Costa Children and Families First Commission ( the Commission) was established to
implement the provisions of Proposition 10, adopted by the voters in 1998. Proposition 10 added
Division 108 ( commencing with Section 130100) to the Health and Safety Code. It provides for a
State tax on the sale of tobacco products and also provides that this revenue be spent for early
childhood development programs by the Commission. The County Board of Supervisors appoints all
nine members ( and nine alternate members) of the Commission and is able to impose its will on the
Commission. Two members of the Board of Supervisors serve on the Commission. The Commission
provides most of its services directly to the citizens of the County. The financial activity of the
Commission is reported in separate columns on the government- wide financial statements.
Complete audited financial statements for each of the individual component units are issued
separately and may be obtained at the unit's administrative offices as follows:
Housing Authority of the County of Contra Costa
3133 Estudillo Street, Martinez, CA 94553
Contra Costa County Public Facilities Corporation
1220 Morello Ave., Suite 100, Martinez, CA 94553
County of Contra Costa Public Financing Authority
651 Pine Street, 6th Floor, Martinez, CA 94553
Contra Costa County Redevelopment Agency
651 Pine Street, 5th Floor North Wing, Martinez, CA 94553
Contra Costa County Employees’ Retirement Association
1355 Willow Way, Suite 221, Concord, CA 94520
Contra Costa Children and Families First Commission
1340 Arnold Drive, Suite 125, Martinez, CA 94553
In- Home Supportive Services Public Authority
40 Douglas Drive, Martinez, CA 94553
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
32
B. New Accounting Pronouncements Implemented During the Year
New Reporting Model: GASB Statement No. 34
In June 1999, The Governmental Accounting Standards Board ( GASB) issued Statement No. 34,
Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local
Governments. GASB Statement No. 34 provides for the most significant change in financial
reporting in over twenty years with changes to governmental financial reporting, including changes in
the basic financial statements. This new governmental reporting model is effective for the County
beginning with fiscal year 2001- 2002, the period covered by these statements.
GASB Statement No. 34, requires the presentation of government- wide financial statements and fund
financial statements. The new government- wide financial statements are prepared using the accrual
basis of accounting and the economic resources measurement focus. The government- wide financial
statements include the reporting of long- term liabilities and capital assets such as buildings, roads,
drainage facilities, and other infrastructure within the governmental and the business- type activities.
Depreciation expenses and accumulated depreciation, which were not previously reported for
governmental funds, are also displayed on the government- wide financial statements. The capital
assets and related depreciation also include the costs and depreciation of infrastructure assets, which
were not previously capitalized and depreciated.
The fund financial statements for the governmental funds continue to be prepared under the modified
accrual basis of accounting. Fund financial statements are shown separately for specific major
governmental funds, and in total for all other nonmajor governmental funds.
Effects of New Pronouncements
The following summarizes recent GASB pronouncements and their impact, if any, on the financial
statements:
GASB Statement No. 34 establishes new financial reporting requirements for all governments,
nationwide. The main purpose is to provide more understandable and useful governmental financial
reports to a wider range of users and enhance the comparability of financial statements.
Under GASB Statement No. 34, the County’s basic financial statements present the following
components in addition to the fund financial statements and other required supplementary
information:
• Management’s Discussion and Analysis ( MD& A) - The MD& A is the new easily readable
narrative that introduces the basic financial statements and provides an analytical overview of the
County’s financial activities. The narrative should include currently known facts, decisions or
conditions that are expected to have a significant effect on the financial position or changes in
financial position.
• Government- wide Financial Statements – These financial statements report the financial position
and operating results of the County as an economic entity, excluding the information about
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
33
fiduciary activities, and are prepared using the economic resources measurement focus and the
accrual basis of accounting. The government- wide financial statements include the statement of
net assets and the statement of activities.
GASB Statement No. 37
In June 2001, GASB issued Statement No. 37, Basic Financial Statements – and Management’s
Discussion and Analysis – for State and Local Governments: Omnibus – an Amendment of GASB
Statements No. 21, Accounting for Escheat Property and No. 34. This statement is effective for the
same period as GASB Statement No. 34 and either clarifies or modifies certain provision in GASB
Statements No. 21 and No. 34. It establishes guidance in the following areas: reporting of escheat
property, topics for discussion in the MD& A, program revenue classifications, the minimum level of
detail required for business- type activities in the statement of activities, etc.
GASB Statement No. 38
In June 2001, the GASB issued Statement No. 38, Certain Financial Statement Note Disclosures.
This statement modifies, adds and deletes various note disclosure requirements. Those requirements
address revenue recognition policies, debt service requirements, receivable and payable balances,
interfund transfers and balances, and short- term debt.
GASB Interpretation No. 6
In March 2000, the GASB issued Interpretation No. 6, Recognition and Measurement of Certain
Liabilities and Expenditures in Governmental Fund Financial Statements. This interpretation
clarifies the application of standards for modified accrual recognition of certain liabilities and
expenditures in areas where differences have arisen, or potentially could arise, in interpretation and
practice.
The County has implemented GASB Statement Nos. 34, 37 and 38 and Interpretation No. 6 and these
statements are presented according to those requirements. A summary of the adjustments required to
implement these statements is presented in Note 2.
C. Basis of Presentation
Government- Wide Financial Statements
GASB Statement No. 34 mandates the presentation of two basic government- wide financial
statements, the Statement of Net Assets and the Statement of Activities. The statement of net assets
and statement of activities display information about the primary government ( the County) and its
component units. These statements include the financial activities of the overall government, except
for fiduciary activities. Eliminations have been made to minimize the double counting of internal
activities. These statements distinguish between the governmental and business- type activities of the
County and between the County and its discretely presented component unit. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
34
separately from business- type activities, which rely to a significant extent on fees charged to external
parties.
The statement of net assets reports the County’s financial and capital resources, including
infrastructure, as well as the County’s long- term obligations. The difference between the County’s
assets and liabilities is its net assets. Net assets represent the resources that the County has available
for use in providing services after its debts are settled.
The statement of activities presents a comparison between direct expenses and program revenues for
each function of the governmental activities and each segment of the business- type activities. Direct
expenses are those that are specifically associated with a program or function and, therefore, are
clearly identifiable to a particular function. Program revenues include 1) charges paid by the
recipients of goods or services offered by the programs, including fines and forfeitures, and 2) grants
and contributions that are restricted to meeting the operational or capital requirements of a particular
program. Revenues that are not classified as program revenues, including all taxes, are presented as
general revenues.
When an expense is incurred for purposes for which both restricted and unrestricted net assets are
available, management has discretion as to which resources to apply. Generally, restricted resources
are depleted before unrestricted. However, when prudent, unrestricted resources may be used first.
Fund Financial Statements
The fund financial statements provide information about the County’s funds, including fiduciary
funds and blended component units. Separate statements for each fund category – governmental,
proprietary and fiduciary – are presented. The emphasis of fund financial statements is on major
governmental and enterprise funds, each displayed in a separate column. All remaining governmental
and enterprise funds are separately aggregated and reported as nonmajor funds.
The County reports the General Fund as a major governmental fund. The General Fund is used to
account for all revenues and expenditures necessary to carry out basic governmental activities of the
County that are not accounted for through other funds. In addition to general administration, the
General Fund includes such activities as public protection, health and sanitation, public assistance,
education, and public ways and facilities.
The County reports the following major enterprise funds:
• The County Hospital ( the Hospital) accounts for hospital operations involved in providing health
services to County residents. Revenues are principally fees for patient services, payments from
Federal and State programs such as Medicare, Medi- Cal and Short- Doyle, realignment revenues
and subsidies from the General Fund.
• The Health Maintenance Organization accounts for the operations of the County’s prepaid health
plan. Revenues are primarily capitation payments by Medicare and Medi- Cal, premiums by
private citizens and realignment revenues.
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
35
The County reports the following additional fund types:
• Internal Service Funds account for the County’s self- insurance programs – employee dental
insurance, employee medical insurance, long- term disability, workers’ compensation, automotive
liability insurance, general liability insurance, state unemployment insurance, medical liability
insurance and special district property insurance, on a cost- reimbursement basis.
• The Pension Trust Fund accumulates contributions from the County, its employees and other
participating employers, and earnings from the fund’s investments. Disbursements are made
from the fund for retirement, disability and death benefits ( based on a defined benefit formula)
and administrative expenses. This fund includes all assets of the CCCERA.
• The Investment Trust Fund accounts for the assets of legally separate entities who make directed
investments through the County Treasurer. These entities include school and community college
districts, other special districts governed by local boards, regional boards and authorities and pass
through funds for tax collections for cities. These funds represent the assets, primarily cash and
investments, and the related liability of the County to disburse these monies on demand.
• The Private- Purpose Trust Fund accounts for assets held in trust for the City of Oakley related to
its redevelopment project area, as well as assets held in trust for others.
• The Agency Funds account for assets held by the County as an agent for various local
governments.
D. Basis of Accounting
The government- wide, proprietary fund and fiduciary fund financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting. Revenues are recorded
when earned and expenses are recorded at the time liabilities are incurred, regardless of when the
related cash flows take place. Nonexchange transactions, in which the County is giving ( or receiving)
value without directly receiving ( or giving) equal value in exchange, include property and sales taxes,
grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in
the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the
underlying transactions take place. Revenues from grants, entitlements and donations are recognized
in the fiscal year in which all eligibility requirements have been satisfied.
For its business- type activities and enterprise funds, the County has elected under GASB Statement
No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities
That Use Proprietary Fund Accounting, to apply all applicable GASB pronouncements as well as any
applicable pronouncements of the Financial Accounting Standards Board, the Accounting Principles
Board or any Accounting Research Bulletins issued on or before November 30, 1989, unless those
pronouncements conflict with or contradict GASB pronouncements. The GASB periodically updates
its codification of the existing Governmental Accounting and Financial Reporting Standards which,
along with subsequent GASB pronouncements ( Statements and Interpretations), constitutes
accounting principles generally accepted in the United States of America for governmental units. The
COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2002
36
County has elected not to follow subsequent private- sector guidance of the Financial Accounting
Standards Board after November 30, 1989.
Proprietary fund operating
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Description
| Rating | |
| Title | Comprehensive annual financial report County of Contra Costa , California |
| Subject | Finance, Public--California--Contra Costa County--Periodicals.; Contra Costa County (Calif.)--Appropriations and expenditures--Periodicals. |
| Description | Annual; Description based on: 2002.; Harvested from the web on 5/31/07 |
| Creator | Contra Costa County (Calif.). Auditor-Controller. |
| Publisher | Office of the Auditor-Controller] |
| Type | Text |
| Identifier | http://digitalarchive.oclc.org/request?id%3Doclcnum%3A177177985 |
| Language | eng |
| Relation | http://www.co.contra-costa.ca.us/depart/auditor/index.html?cafr |
| Title-Alternative | Financial report; Comprehensive annual financial report fiscal year ended June 30 |
| Format-Extent | v. : digital, PDF files. |
| Relation-Requires | Mode of access: Internet.; System requirements: Adobe Acrobat Reader. |
| PDI.Title | Financial Report. 2001-2002. |
| PDI.Date | 2002 |
| Full Text | County of Contra Costa, California COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2002 Kenneth J. Corcoran, Auditor- Controller THIS PAGE INTENTIONALLY BLANK REPLACE THIS PAGE WITH A BLANK SHEET AFTER FINAL PRINT COUNTY OF CONTRA COSTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS June 30, 2002 Page Introductory Section Letter to the Board of Supervisors and Citizens of the County ........................................................................................ i Public Officials ............................................................................................................................... ............................... ix Organizational Chart.......................................................................................................................... ............................. x Certificate of Achievement.................................................................................................................... ........................ xi Financial Section Independent Auditor’s Report ............................................................................................................................... ......... 1 Management’s Discussion and Analysis ( Required Supplementary Information) .......................................................... 3 Basic Financial Statements: Government- wide Financial Statements: Statement of Net Assets ............................................................................................................................... ....... 17 Statement of Activities ............................................................................................................................... ......... 18 Fund Financial Statements: Governmental Funds: Balance Sheet ............................................................................................................................... .................. 20 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ............................ 21 Statement of Revenues, Expenditures and Changes in Fund Balances ........................................................... 22 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities.................................................................... 23 Proprietary Funds: Statement of Fund Net Assets......................................................................................................................... 24 Statement of Revenues, Expenses and Changes in Fund Net Assets............................................................... 25 Statement of Cash Flows ............................................................................................................................... . 26 Fiduciary Funds: Statement of Fiduciary Net Assets .................................................................................................................. 27 Statement of Changes in Fiduciary Net Assets................................................................................................ 28 Notes to the Basic Financial Statements: Summary of Significant Accounting Policies.................................................................................................. 29 Fund Equity ............................................................................................................................... ..................... 40 Stewardship, Compliance and Accountability................................................................................................. 45 Cash and Investments ............................................................................................................................... ...... 45 Receivables.................................................................................................................... ................................. 49 Interfund Transactions................................................................................................................... ................. 51 Capital Assets ............................................................................................................................... .................. 56 Short- Term Notes Payable........................................................................................................................ ...... 58 Payables....................................................................................................................... ................................... 59 Leases ............................................................................................................................... .............................. 60 Long- Term Obligations ............................................................................................................................... ... 61 Conduit Debt ............................................................................................................................... ................... 66 Net Assets/ Fund Balances ............................................................................................................................... 67 Permanent Fund........................................................................................................................... ................... 68 Employees’ Retirement Plan ........................................................................................................................... 68 Paulson Lawsuit Settlement..................................................................................................................... ....... 70 Patient Service Revenue and Receivables ....................................................................................................... 71 Risk Management ............................................................................................................................... ............ 71 Commitments and Contingencies .................................................................................................................... 73 Subsequent Events ............................................................................................................................... ........... 74 Required Supplementary Information ( other than MD& A): Budgetary Comparison Schedule - General Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual................................. 77 Note to Required Supplementary Information...................................................................................................... 80 Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: ............................................................................................................................... 81 Combining Balance Sheet ............................................................................................................................... .... 81 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................. 82 Nonmajor Special Revenue Funds: ........................................................................................................................... 83 Combining Balance Sheet ............................................................................................................................... .... 86 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................. 88 Budgetary Comparison Schedules: Road Special Revenue Funds .......................................................................................................................... 90 Library Special Revenue Fund ........................................................................................................................ 91 Fire Protection Special Revenue Funds ........................................................................................................... 92 Health and Sanitation Special Revenue Funds ................................................................................................ 93 Service Areas Special Revenue Funds............................................................................................................. 94 Flood Control Special Revenue Funds ............................................................................................................ 96 Law Enforcement Special Revenue Funds ...................................................................................................... 97 Courts and Criminal Justice Special Revenue Funds....................................................................................... 98 Recorder/ Clerk Modernization Special Revenue Funds .................................................................................. 99 Land Development Special Revenue Fund.................................................................................................... 100 Redevelopment Agency Special Revenue Funds........................................................................................... 101 Child Development Special Revenue Fund ................................................................................................... 102 In- Home Supportive Services Public Authority Special Revenue Fund........................................................ 103 Other Special Revenue Funds........................................................................................................................ 104 Nonmajor Debt Service Funds: ............................................................................................................................... 105 Combining Balance Sheet ............................................................................................................................... .. 106 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................................... 108 Budgetary Comparison Schedules: Recreation and Park Bonds Debt Service Fund ............................................................................................. 110 Storm Drainage Bonds Debt Service Fund.................................................................................................... 111 Redevelopment Agency Debt Service Funds ................................................................................................ 112 Pension Bond Debt Service Fund .................................................................................................................. 113 Nonmajor Capital Projects Funds:......................................................................................................................... . 115 Combining Balance Sheet ............................................................................................................................... .. 116 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................................... 117 Budgetary Comparison Schedules: Redevelopment Agency Capital Projects Funds............................................................................................ 118 County Facilities Capital Projects Funds....................................................................................................... 119 Nonmajor Permanent Fund ............................................................................................................................... ..... 121 Nonmajor Enterprise Funds: ............................................................................................................................... ... 123 Combining Statement of Net Assets.................................................................................................................... 124 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets............................................... 125 Combining Statement of Cash Flows ................................................................................................................. 126 Internal Service Funds: ............................................................................................................................... ........... 127 Combining Balance Sheet ............................................................................................................................... .. 128 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets............................................... 130 Combining Statement of Cash Flows ................................................................................................................. 132 Fiduciary Funds:......................................................................................................................... ............................ 135 Agency Funds: ............................................................................................................................... ........................ 136 Combining Statement of Changes in Assets and Liabilities............................................................................... 136 Capital Assets Used in the Operation of Governmental Funds: ................................................................................ 139 Schedule of Funding Sources ............................................................................................................................. 141 Schedule by Function and Activity .................................................................................................................... 142 Schedule of Changes By Function and Activity................................................................................................. 144 Statistical Section Government- wide Information: Government- wide Expenses by Function................................................................................................................ 147 Government- wide Revenues ............................................................................................................................... ... 148 Fund Information: General County Revenues by Source...................................................................................................................... 149 General County Expenditures by Function ............................................................................................................. 150 General County Revenues by Source - Constant Dollars........................................................................................ 151 General County Expenditures by Function - Constant Dollars ............................................................................... 152 Assessed Value of Taxable Property....................................................................................................................... 153 General Taxes Levied and Collected...................................................................................................................... 154 Special Assessments Levied and Collected............................................................................................................. 155 Property Tax Rates - Direct and Overlapping Governments................................................................................... 156 Property Taxes - Direct and All Overlapping Governments ................................................................................... 157 Property Tax Levies and Delinquencies.................................................................................................................. 158 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita ...................................... 159 Property Value, Construction and Bank Deposits................................................................................................... 160 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures................................................................................................................... ........ 162 Computation of Legal Debt Margin ........................................................................................................................ 163 Computation of Direct and Overlapping Debt ........................................................................................................ 164 Ten Principal Taxpayers...................................................................................................................... ................... 166 Demographics - Population..................................................................................................................... ............... 167 Miscellaneous Statistics ............................................................................................................................... .......... 168 INTRODUCTORY SECTION THIS PAGE INTENTIONALLY BLANK REPLACE THIS PAGE WITH A BLANK SHEET AFTER FINAL PRINT i December 20, 2002 Members of the Board of Supervisors and Citizens of Contra Costa County: The Comprehensive Annual Financial Report ( CAFR) of the County of Contra Costa for the fiscal year of 2001- 2002 is presented in compliance with Section 25253 of the Government Code of the State of California. The Office of the County Auditor- Controller, which is responsible for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, prepared this report. We believe the data, as presented, are accurate in all material aspects and presented in a manner designed to fairly set forth the financial position and changes in financial position of the County as measured by the financial activity of its various funds and component units and that all disclosures necessary to enable the reader to gain the maximum understanding of the County's financial affairs have been included. This year our CAFR will be significantly different and improved from those issued in prior years. This is the result of a major new reporting standard, Governmental Accounting Standards Board ( GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. In addition to the fund financial statements and statistical section that we have presented in the past, we will now present more information to better enable readers to determine the cost of County services and how effectively it has used its resources. This includes the following: • Management’s Discussion and Analysis ( MD& A) is a formal narrative by the County’s management to provide an overview and analysis of the County’s financial activity for the year and any known facts that may significantly affect future activity. Some of the information that was previously presented in this Introductory Section is now in the Management’s Discussion and Analysis. • Government- wide Financial Statements provide a broad overview of the County’s finances in a manner similar to a private- sector business. The new statement of net assets presents all of the assets, including capital and infrastructure assets, net of all liabilities including long- term debt. In addition to general revenues ( i. e. taxes and investment earnings), the new statement of activities presents the program revenues and expenses associated with the various functions of County government, its business- type activities and its component units. ii • Required Supplementary Information ( other than MD& A) consists of the General Fund’s budgetary comparisons. The CAFR represents the culmination of all budgeting and accounting activities engaged in by management during the year, covering all of its financial transactions. The CAFR is organized into three sections: • The Introductory Section is intended to familiarize the reader with the organizational structure of the County, the nature and scope of the services it provides, and the specifics of its legal operating environment. • The Financial Section includes the independent auditor’s report on the basic financial statements, MD& A, audited basic financial statements, note disclosures and supporting statements and schedules necessary to provide readers with a comprehensive understanding of the County’s financial activities of the past fiscal year. • The Statistical Section contains comprehensive statistical data for the County relating to its physical, economic, social and political characteristics. THE REPORTING ENTITY The County reporting entity includes all the financial balances and activities of the primary government as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable or other organizations for which the nature and significance of the relationship with the primary government are such that exclusion would make the enclosed financial statements misleading or incomplete. For further information on these component units see Note 1. A in the Notes to the Basic Financial Statements section of this report. The reporting entity excludes certain separate legal entities which may have “ Contra Costa” in their title, or which are required to keep their funds in the County Treasury or receive their tax apportionment from the County. Examples are school districts, the community college district, cities, city redevelopment agencies, the Bay Area Rapid Transit District, the Metropolitan Transportation Commission, and a variety of special purpose districts for cemeteries, mosquito abatement, recreation and parks, etc. These entities are autonomous organizations that handle their own fiscal affairs and for which the Board of Supervisors has no oversight responsibility. Accordingly, they are not included in the accompanying basic financial statements, except for their assets, principally cash and investments, which are held by the County Treasurer. Contra Costa County was incorporated in 1850 as one of the original 27 counties of the State. It is one of nine counties in the San Francisco- Oakland Bay Area. The County covers about 733 square miles; the western and northern shorelines are highly industrialized, while the interior sections are suburban/ residential, commercial and light industrial. The County has a general law form of government. A five member Board of Supervisors, each elected to four year terms, serves as the legislative body. A County Administrative Officer is appointed by the Board and runs the day- to- day business. iii The County provides the full- range of services contemplated by statute. These services include public protection, highways and streets, sanitation, health and social services, planning and zoning and general administrative services. ECONOMIC CONDITIONS AND OUTLOOK Long- term population and job growth projections remain positive. As of January 1, 2002, the County's population was estimated at 981,555, an increase of 23.1 percent since 1990. A study prepared by the Association of Bay Area Governments projects a 36.0 percent increase in population between 2000 and 2040. The County's October 2002 jobless rate increased from 3.6 percent to 5.1 percent since October 2001. Consistent with historical performance, it was significantly below the State- wide average of 6.2 percent. The County's economy is very diverse; major industries include petroleum refining, steel manufacturing, chemicals, electronic equipment, paper products, services and food processing. The County consistently ranks as a leading county in both per capita and household income. Additional information on the County’s economic conditions and outlook is presented in the MD& A and in the Notes to the Basic Financial Statements. MAJOR INITIATIVES AND SERVICE EFFORTS AND ACCOMPLISHMENTS The County continued to explore and initiate ways to improve its operations to provide the most efficient and effective level of service to the public. The following highlights some of the County’s major accomplishments, initiatives and service- level efforts for fiscal year 2001- 2002: • The County has been successful in maintaining favorable bond ratings, which continue to produce significant taxpayer savings through lower borrowing costs. Debt issuances during the period included: o The County sold $ 70 million in Tax and Revenue Anticipation Notes in September 2001. o Private placement leases were refunded with upfront debt- service savings of $ 280,000. o The County of Contra Costa Public Financing Authority issued $ 12,650,000 in lease revenue bonds in June 2002. • The County continued its efforts to conserve energy and successfully completed ten energy conservation projects in nine buildings and the Main Detention Facility, which included replacing 15- 30 year- old heating, ventilation and air conditioning ( HVAC) systems and upgrading digital control systems. The completion of these projects will result in estimated cost savings in excess of $ 200,000 per year. The funding for these projects came from low- interest loans from the California Energy Commission. iv • The County also continued to explore new ways to save energy and, consistent with the County’s sustainable building policy, developed the solar 309 KVP Photovoltaic System projects. The $ 2 million project was financed 50 percent by receiving $ 1 million in grant funding from P G & E to install photovoltaic roof panels at 50 Douglas Drive and the Main Detention Facility. This is the first installation of photovoltaic panels by the County and is estimated to annually reduce energy costs by approximately $ 80,000. • This year the County redesigned its Recommended Budget format to link departmental budgets with actual performance. The new Recommended Budget format includes performance measures and workload and outcome indicators. This change increases departmental accountability and assists the Board of Supervisors in making sound policy and budgetary decisions. • Because of the County’s continued efforts to assess program costs with actual performance and benefits, the County secured a three- year grant for performance software for the “ Spirit of Caring” initiative ( Mental Health Services). This software is expected to generate data about costs, services, and performance outcomes that will lay the foundation for a cost/ benefit analysis of prevention/ early intervention efforts ( Contra Costa Futures Initiative). • The Community Services Department was recognized as a “ Program of Achievement” by the National Head Start Association, which affirms that a program has successfully performed at a very high level of quality over a sustained period of time. This recognition was given to Community Services as the first such award in the history of California and as the second such award in the West Coast Region IX. • The County continued to focus on public outreach and information. The County’s Government Access Channel, CCTV, received nine awards for excellence in cable programming, including two national Telly awards and seven Western Access Video Excellence ( WAVE) awards. • Library service throughout the County continued to be enhanced. In 2001- 2002, the Board of Supervisors provided $ 1.3 million from the County’s General Fund to the Library. This funding assisted in enabling the following: o Creating a strong partnership with cities by requiring cities to match the County’s contribution in order to receive County funds. o Providing fair and equitable library service throughout the County, including the County funding the contribution match for unincorporated areas. o As a result of the County’s efforts and commitment to enhancing library services, the number of library hours per week increased by 22 percent over the prior year and the libraries were accessible for additional evening hours. o For the first time, library circulation reached the 4 million mark; library circulation was not this high even when libraries were open 60 hours a week. v o The County Library received a $ 2 million donation from Mirant California, LLC which will provide $ 400,000 annually over the span of five years. In accepting these funds, the Board of Supervisors requested the East Region Library Board to develop a service plan utilizing these funds. The East Region Library Board recommended, and the County’s Board of Supervisors approved, using these funds to increase library services in East County by purchasing additional books and implementing after- school library programs. • The County continued to improve assistance to low- income parents by acquiring a new Head Start Center in Antioch. This newly acquired campus will allow the County to expand services provided by Head Start. The Head Start Program is critical in the County’s efforts to assist low- income parents in becoming successful participants in the work force and/ or move from welfare to work. • The County continued its commitment to provide excellent health care in a quality environment: o The Pittsburg Health Center was relocated from a very antiquated building to a newly renovated Los Medanos Community Clinic in February 2002. o Construction of a Martinez Ambulatory Care building at the hospital campus in Martinez. • An excellent quality of health care continued to be provided and expanded. The Contra Costa Health Plan’s Advice Nurse Program became the first public entity to receive accreditation from the Utilization Review Accreditation Commission. The program was expanded to provide services under contract to eight other counties and now covers 245,000 citizens. FINANCIAL INFORMATION County management is responsible for establishing and maintaining internal controls designed to ensure that the assets of the County are protected from loss, theft or misuse, and that accounting data are compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. Internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. 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 evaluation of costs and benefits requires estimates and judgments by management. Budgetary Controls The objective of the County’s budgetary controls is to ensure compliance with legal provisions embodied in the annual budget approved by the Board of Supervisors. Budgetary control is maintained at the object level for all annually budgeted funds; however, the legal level of control is at the department level. Using the County's automated accounting system, the Auditor- Controller restricts each department's expenditures to the amounts appropriated by the Board of Supervisors for the year. Increases in budget appropriations must be approved by the Board of Supervisors as a transfer from the Reserve for Contingencies, as a transfer from another appropriation, or as an appropriation of new or unanticipated revenue. No department is permitted to spend more than its available appropriations. Any appropriations remaining in the departments at the end of the fiscal year automatically lapse and are transferred to fund balance. The year- end fund balance, along with projected vi revenues, becomes available for appropriation the following year. An encumbrance accounting system is used to facilitate effective budgetary control. An encumbrance reserves a portion of an appropriation at the time a commitment is made to acquire goods or services. Open encumbrances are reported as reservations of fund balances at June 30, 2002, and are re- appropriated as part of the following year's budget. Additional information on budget policy and control is presented in the Note to Required Supplementary Information on page 80. General Governmental Functions The financial activities of the general governmental functions are reported in the General, Special Revenue, Debt Service, Capital Projects and Permanent Funds. Included in these Funds are the special districts governed by the Board of Supervisors and the County’s blended component units except for the Housing Authority, which is included in enterprise operations. Enterprise Operations The County’s business- type activities are reported in the Enterprise Funds. These include the County Hospital, Health Maintenance Organization, Airport, Housing Authority, Sheriff Law Enforcement Training Center and the Major Risk Medical Insurance Enterprise Funds. Cash Management Cash temporarily idle during the year was invested in accordance with California Government Code Section 53600 ( et seq.) which allows investment maximums of 40.0 percent in bankers’ acceptances, 30.0 percent in negotiable certificates of deposit, and up to 30.0 percent in commercial paper. There is no limit on investments in collateralized certificates of deposit and U. S. Government issues. The County Treasurer continues to have a more restrictive investment policy than required by law. The Treasurer’s investment policy was approved by the Board of Supervisors. In accordance with Government Code Sections 27130- 27137, an investment oversight committee has reviewed the quarterly investment reports prepared by the Treasurer. The average yield on investments for the fiscal year ended June 30, 2002, was 3.27 percent. Debt Administration The County finances its cash requirements prior to collection of taxes by short- term borrowing. The 2001- 2002 Tax and Revenue Anticipation Notes of $ 70,000,000 received ratings of MIG 1 from Moody's Investors Service and SP- 1+ from Standard and Poor's Corporation. These are the highest ratings for this type of borrowing. For long term obligations Standard and Poor's Corporation has given the County an Issuer Credit Rating of AA. The County has capital lease obligations under lease/ purchase agreements for various County buildings and other property. Past agreements have been made principally with the Contra Costa County Public Facilities Corporation, a non- profit public benefit corporation which assists the County in financing public buildings and facilities. Beginning in fiscal year 1997- 1998, most new agreements have been and will be made with the County of Contra Costa Public Financing Authority, a joint powers authority consisting of the County and the Redevelopment Agency. vii Risk Management The County is self- insured for workers' compensation, general and automobile liability, medical malpractice, dental, management long- term disability and unemployment insurance. The County maintains excess insurance policies with private insurers to cover additional losses. The County's Risk Management office administers claims for the various programs, provides loss prevention services and minimizes risks through various risk control strategies. For specific information on coverage see Note 18 in the Notes to the Basic Financial Statements. Pension Trust Fund Operations The County participates in and contributes to a cost- sharing, multi- employer defined benefit pension plan that is governed by the County Employees Retirement Law of 1937 and which is administered by the Contra Costa County Employees' Retirement Association ( the Association). Financial activities of the plan are reported in the County’s Pension Trust Fund and a Comprehensive Annual Financial Report is available from the Association. Additional information about the plan is also presented in Note 15 in the Notes to the Basic Financial Statements in this report. The Association’s address can be found in Note 1. A. OTHER INFORMATION Independent Audit For over 60 years the policy of the County has been to require an annual audit of the financial statements of the County by independent certified public accountants. The Board of Supervisors selected the firm of Macias, Gini & Company LLP to perform the fiscal year 2001- 2002 audit. Awards The Government Finance Officers Association of the United States and Canada ( GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Contra Costa County for its fiscal year 2000- 2001 Comprehensive Annual Financial Report. This was the twentieth consecutive fiscal year the County has received this award. In order to be awarded a Certificate of Achievement, the County must publish an easily readable and efficiently organized Comprehensive Annual Financial Report whose contents conform to program standards. Such a report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. A Certificate of Achievement is valid only for a period of one year. We believe our current report continues to conform to Certificate of Achievement requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. viii Web Site The County maintains an Internet web site with an increasing amount of information useful to its citizens at http:// www. co. contra- costa. ca. us. This document is also available there. Acknowledgments The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated services of the entire staff of the Office of the Auditor- Controller. I would like to express my appreciation to all members of the Office who assisted and contributed to its preparation. I would also like to thank the members of the Board of Supervisors and the County Administrator for their interest and support in planning and conducting the financial operations of the County in a responsible and progressive manner. Respectfully submitted, Kenneth J. Corcoran Auditor- Controller ix COUNTY OF CONTRA COSTA PUBLIC OFFICIALS June 30, 2002 ELECTED OFFICIALS Supervisor, District 1 John Gioia Supervisor, District 2 Gayle B. Uilkema Supervisor, District 3 Donna Gerber Supervisor, District 4 Mark De Saulnier Supervisor, District 5 Federal Glover Assessor Gus Kramer Auditor- Controller Kenneth J. Corcoran Clerk- Recorder Stephen L. Weir District Attorney- Public Administrator Gary T. Yancey Sheriff- Coroner Warren E. Rupf Treasurer- Tax Collector William J. Pollacek APPOINTED OFFICIALS County Administrator John Sweeten County Counsel Silvano Marchesi County Librarian Anne Cain County Probation Officer Steve Bautista Director of Animal Services Michael G. Ross Director of Building Inspection Carlos Baltodano Director of Child Support Services Linda M. Dippel Director of Community Development Dennis Barry Director of Community Services Tony Colon Director of Cooperative Extension Shelley Murdock Director of Employment and Human Services John Cullen Director of General Services Barton J. Gilbert Director of Health Services William Walker, MD Director of Human Resources Leslie T. Knight Director of Information Technology Steven Steinbrecher Director of Public Works Maurice Shiu Agricultural Commissioner- Director of Weights and Measures Edward P. Meyer Public Defender David Coleman III Veterans' Services Officer Gary D. Villalba Chief, Bethel Island Fire Protection District David Wahl Chief, Contra Costa Fire Protection District Keith Richter Chief, Crockett- Carquinez Fire Protection District Jerry Littleton, Jr. Chief, East Diablo Fire Protection District Paul Hein Chief, Oakley Fire Protection District Bob Pastor AFFILIATED ORGANIZATIONS Administrator, Contra Costa County Employees' Retirement Association Patricia Wiegert Executive Director, Housing Authority of the County of Contra Costa Robert McEwan President, Contra Costa County Public Facilities Corporation John E. Whalen Executive Director, Contra Costa Children and Families Commission Brenda Blasingame Executive Director, County of Contra Costa Public Financing Authority John Sweeten Executive Director, Contra Costa County Redevelopment Agency John Sweeten Executive Director, In- Home Supportive Services Public Authority Eldon Luce x PUBLIC PROTECTION GENERAL GOVERNMENT HEALTH AND HUMAN SERVICES GROWTH MANAGEMENT SPECIAL DISTRICTS AND AUTHORITIES AGRICULTURE- WEIGHTS ASSESSOR ( E) COMMUNITY SERVICES BUILDING INSPECTION EMERGENCY MEDICAL SERVICES AND MEASURES Family and Child Services Housing Rehabilitation AUDITOR- CONTROLLER ( E) Division Land Information Systems FIRE PROTECTION ANIMAL SERVICES COOPERATIVE EXTENSION EMPLOYMENT AND HUMAN COMMUNITY DEVELOPMENT FLOOD CONTROL AND CHILD SUPPORT SERVICES SERVICES Comprehensive Planning DRAINAGE COUNTY ADMINISTRATOR Economic Development DISTRICT ATTORNEY ( E) Affirmative Action HEALTH SERVICES Land Development LIBRARY Public Administrator Capital Facilities and Debt Substance Abuse Transportation Planning CCTV/ Public Outreach Mgt. California Children's Services LIGHTING & LANDSCAPE GRAND JURY Clerk of the Board Health Plan PUBLIC WORKS Information Technology Hospital & Clinics Airport POLICE PROBATION Policy and Innovation Inst. Mental Health Flood Control Revenue Collections Public Health Roads RECREATION & PARK PUBLIC DEFENDER Risk Management Training Institute VETERANS' SERVICES SANITATION SHERIFF- CORONER ( E) Court Security COUNTY CLERK- RECORDER ( E) STREETS & ROADS Emergency Services Elections Institutions COUNTY COUNSEL SUPERIOR COURT ( County Responsibilities) GENERAL SERVICES AFFILIATED ORGANIZATIONS Building and Grounds Central Services EMPLOYEES' RETIREMENT PUBLIC FINANCING Communications ASSOCIATION AUTHORITY ( 1) Fleet Services General Property HOUSING AUTHORITY ( 1) CONTRA COSTA Purchasing CHILDREN & FAMILIES Workfare Programs PUBLIC FACILITIES COMMISSION CORPORATION HUMAN RESOURCES IN- HOME SUPPORTIVE SERVICES REDEVELOPMENT AGENCY ( 1) PUBLIC AUTHORITY ( 1) LIBRARY TREASURER- TAX COLLECTOR ( E) ( E = Elected) 1. Authority/ Agency Board is the Board of Supervisors Organizational Chart of Contra Costa County COUNTY ADMINISTRATOR BOARD OF SUPERVISORS ( E) xi FINANCIAL SECTION THIS PAGE INTENTIONALLY BLANK REPLACE THIS PAGE WITH A BLANK SHEET AFTER FINAL PRINT Partners Kenneth A. Macias, Managing Partner Ernest J. Gini Kevin J. O’Connell Richard A. Green Jan A. Rosati James V. Godsey Mt. Diablo Plaza 2175 N. California Boulevard Suite 620 Walnut Creek, CA 94596- 3565 925• 274• 0190 925• 274• 3819 FAX www. maciasgini. com OFFICE LOCATIONS Sacramento • Los Angeles • Fresno • San Francisco Bay Area 1 The Honorable Board of Supervisors County of Contra Costa Martinez, California INDEPENDENT AUDITOR’S REPORT We have audited the accompanying financial statements of the governmental activities, the business- type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Contra Costa, California ( County), as of and for the fiscal year ended June 30, 2002, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Contra Costa County Housing Authority ( Authority), a blended component unit of the County, which represents 10.8 percent of the assets and 16.3 percent of the revenues of business- type activities and represents 0.8 percent of the assets and 2.2 percent of the revenues of the aggregate remaining fund information. Also, we did not audit the financial statements of the Contra Costa Children and Families Commission ( Commission), a discretely presented component unit of the County, which represents 100.0 percent of the discretely presented component unit opinion unit. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Authority and Commission, is based on the reports of the other auditors. 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 General 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 misstatement. 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 the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County as of June 30, 2002, and the respective changes in financial position and cash flows, where applicable, thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1. B to the basic financial statements, the County adopted the provisions of Governmental Accounting Standards Board ( GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments; GASB Statement No. 37, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments: Omnibus; GASB Statement No. 38, Certain Financial Statement Note Disclosures; and GASB Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements, effective July 1, 2001. In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2002, on our consideration of the County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. 2 The management’s discussion and analysis and general fund budgetary comparison schedule, as listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and do not express an opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules have been subjected to the auditing procedures applied by us and the other auditors in the audit of the basic financial statements and, in our opinion, based on our audit and the reports of other auditors, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied by us and the other auditors in the audit of the basic financial statements and, accordingly, we express no opinion on them. Certified Public Accountants Walnut Creek, California December 20, 2002 COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 3 MANAGEMENT’S DISCUSSION AND ANALYSIS This section of the County of Contra Costa’s ( County) Comprehensive Annual Financial Report presents a discussion and analysis of the financial activities of the County for the fiscal year ended June 30, 2002. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. FINANCIAL HIGHLIGHTS • The assets of the County exceeded its liabilities at the close of fiscal year 2001- 2002 by $ 895,371,000 ( net assets). Of this amount, $ 148,090,000 ( unrestricted net assets) may be used to meet the County’s ongoing obligations to citizens and creditors, $ 270,857,000 is restricted for specific purposes ( restricted net assets) and $ 476,424,000 is invested in capital assets, net of related debt. • The County’s total net assets increased by $ 48,623,000 during the fiscal year. • As June 30, 2002, the County’s governmental funds reported ending fund balances of $ 468,266,000. Approximately 79.2 percent of this total amount, $ 370,868,000, is unreserved fund balance. • As of June 30, 2002, unreserved fund balance for the General Fund was $ 115,658,000 or 12.5 percent of total General Fund expenditures of $ 925,684,000. • The County’s total debt decreased by $ 9,570,000 or 1.3 percent during fiscal year 2001- 2002. • The downturn in the equity markets has resulted in reduced state revenues and losses in the investments of the Contra Costa County Employees’ Retirement Association ( CCCERA). OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the County’s basic financial statements. The County’s basic financial statements are comprised of three parts: ( 1) Government- wide financial statements, ( 2) Fund financial statements, and ( 3) Notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government- wide Financial Statements The government- wide financial statements are designed to provide readers with a broad overview of the County’s finances, in a manner similar to a private- sector business. The statement of net assets presents information on all of the County’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 4 The statement of activities presents information showing how the County’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused vacation and sick leave. Both of the government- wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues ( governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges ( business- type activities). The governmental activities of the County include general government, public protection, health and sanitation, public assistance, education, public ways and facilities and recreation and culture. The business- type activities of the County include the County Hospital, Health Maintenance Organization, Airport, Housing Authority, Sheriff Law Enforcement Training Center and Major Risk Medical Insurance. Fund Financial Statements The fund financial statements report groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities and objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government- wide financial statements. However, unlike the government- wide financial statements, governmental fund financial statements focus on near- term inflows and outflows of resources that are available for spending as well as on balances of resources that are available for spending at the end of the fiscal year. Such information may be useful in evaluating a government’s near- term financing requirements. Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government- wide statements. By doing so, readers may better understand the long-term impact of the County’s near- term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains 26 individual governmental funds ( e. g. General, special revenue, debt service, capital projects and permanent) for reporting purposes. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, which is considered to be a major fund. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements and schedules elsewhere in this report. The County adopts an annual appropriated budget for its General Fund. A budgetary comparison schedule has been provided for the General Fund to demonstrate compliance with this budget. COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 5 Proprietary funds used by the County are of two different types: enterprise funds and internal service funds. Proprietary fund financial statements provide the same type of information as the government- wide financial statements, only in more detail. • Enterprise funds are used to report the same functions presented as business- type activities in the government- wide financial statements. The County uses enterprise funds to account for the operations of its County Hospital, Health Maintenance Organization, Airport, Housing Authority, Sheriff Law Enforcement Training Center and Major Risk Medical Insurance. • Internal service funds are an accounting device used to accumulate and allocate costs internally among the County’s various functions. The County uses internal service funds to account for its administrative costs and payment of claims for its various insurance programs to protect County assets and employees. They have been allocated between the governmental functions and business- type activities in the government- wide financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. Fiduciary funds are used to account for resources held for the benefit of entities legally separate from the County and individuals, which are not part of the reporting entity. The Contra Costa County Employees’ Retirement Association pension plan, the County’s investment trust fund, private- purpose trust fund and agency funds are reported under fiduciary funds. Fiduciary funds are not reflected in the government- wide financial statements because the resources of those funds are not available to support the County’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the Basic Financial Statements The notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided in the government- wide and fund financial statements. Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information concerning the County’s General Fund budget and actual comparisons and progress in funding its obligation to provide pension benefits to employees. Combining Statements and Schedules The combining statements and schedules referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information ( other than MD& A). Component Units The blended component units, as described in Note 1. A in the notes to the basic financial statements are included in all three parts of the County’s basic financial statements. The County and its blended component units constitute the primary government. In addition to the blended component units, the government- wide financial statements and the notes to the basic financial statements also include the discretely presented component unit described in Note 1. A in the notes to the basic financial statements. COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 6 GOVERNMENT- WIDE FINANCIAL ANALYSIS This is the first year the County has reported its financial activities and balances in accordance with Governmental Accounting Standards Board ( GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. The County has not restated prior year information for the purpose of providing the comparative data for the Management’s Discussion and Analysis ( MD& A) because some of that information was not readily available. However, in future years, prior year information will be available and a comparative analysis of government- wide data will be presented. Governmental Business- Type Activities Activities Total Assets: Current and other assets $ 1,049,662 125,383 1,175,045 Capital assets 633,982 191,534 825,516 Total Assets 1,683,644 316,917 2,000,561 Liabilities: Current and other liabilities 183,899 82,365 266,264 Long- term liabilities 671,106 167,820 838,926 Total Liabilities 855,005 250,185 1,105,190 Net Assets: Invested in capital assets, net of related debt 437,866 38,558 476,424 Restricted 259,481 11,376 270,857 Unrestricted 131,292 16,798 148,090 Total Net Assets $ 828,639 66,732 895,371 COUNTY'S NET ASSETS June 30, 2002 ( In Thousands) Analysis of Net Assets As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. The County’s assets exceeded liabilities by $ 895,371,000 at June 30, 2002. The largest portion of the County’s net assets, $ 476,424,000, or 53.2 percent, reflects its investment in capital assets ( e. g., land, infrastructure, buildings, machinery, and equipment), less any related debt used to acquire those assets. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 7 An additional portion of the County’s net assets, $ 270,857,000, or 30.3 percent, represents resources that are subject to external restrictions on how they may be used. The major restriction on net assets, $ 232,651,000, is for legally segregated taxes, grants and fees. The remaining balance, $ 148,090,000 or 16.5 percent, is unrestricted net assets and may be used to meet the County’s ongoing obligations to citizens and creditors. Governmental Business- Type Activities Activities Total Revenues: Program revenues: Charges for services $ 250,536 290,866 541,402 Operating grants and contributions 544,900 94,474 639,374 Capital grants and contributions 12,573 7,194 19,767 General revenues: Taxes 238,684 238,684 Grants/ contributions not restricted 77,741 77,741 Investment earnings 27,035 298 27,333 Other 20,158 1,076 21,234 Total revenues 1,171,627 393,908 1,565,535 Expenses: General government 115,534 115,534 Public protection 365,757 365,757 Health and sanitation 184,109 184,109 Public assistance 328,450 328,450 Education 16,364 16,364 Public ways and facilities 56,197 56,197 Recreation and culture 793 793 Interest on debt 36,340 36,340 County hospital 229,584 229,584 Health maintenance organization 112,386 112,386 Airport 4,323 4,323 Housing authority 65,038 65,038 Major risk medical insurance 931 931 Sheriff law enforcement training center 1,106 1,106 Total expenses 1,103,544 413,368 1,516,912 Change in net assets before transfers 68,083 ( 19,460) 48,623 Transfers ( 11,063) 11,063 Change in net assets 57,020 ( 8,397) 48,623 Net assets, beginning of year 771,619 75,129 846,748 Net assets, end of year $ 828,639 66,732 895,371 COUNTY'S CHANGE IN NET ASSETS For the Fiscal Year Ended June 30, 2002 ( In Thousands) COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 8 Analysis of the Changes in Net Assets The County’s net assets increased $ 48,623,000 during fiscal year 2001- 2002. Governmental activities increased net assets by $ 57,020,000; however, business- type activities decreased net assets by $ 8,397,000. The changes are explained below in the governmental activities and business- type activities discussions. 0 50 100 150 200 250 300 350 400 ( in Millions) General government Public protection Health and sanitation Public assistance Education Public ways and facilities Recreation and culture Interest on debt Expenses and Program Revenues - Governmental Activities Expenses Program Revenues Revenues by Source - Governmental Activities Capital grants and contributions 1.1% Charges for services 21.4% Operating grants and contributions 46.5% Taxes 20.4% Grants/ contributions not restricted 6.6% Investment earnings 2.3% Other 1.7% COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 9 Governmental activities increased the County’s net assets by $ 57,020,000, which was partially offset by a reduction in net assets from business- type activities. • Property taxes increased as a result of a 10.5 percent increase in assessed valuation. This was due to strength in the real estate market and construction activity in a period of historically low interest rates. • Grants and contributions were up due to increased State funding for public safety services, family income maintenance and other social services. There was also increased Federal funding for childcare, highway construction and family support services. - 50 100 150 200 250 ( in Millions) County hospital Health maintenance organization Airport Housing authority Major risk medical insurance Sheriff law enforcement training center Expenses and Program Revenues - Business- type Activites Expenses Program Revenues Revenues by Source - Business- type Activities Charges for services 73.8% Operating grants and contributions 24.0% Other 2.2% COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 10 Business- type activities decreased the County’s net assets by $ 8,397,000. Expenses exceeded program revenues in the County Hospital, Health Maintenance Organization, Airport, Housing Authority and Sheriff Law Enforcement Training Center. • The cost of medical services and supplies exceeded the increases in funding sources for the costs. • The Sheriff Law Enforcement Training Center began operation in fiscal year 2001- 2002 and incurred start- up costs that were not yet recovered. FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS The County uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. As noted earlier, this is the first year the County has reported its financial activities and balances in accordance with GASB Statement No. 34. To comply with this Statement, many of the financial balances and activities previously reported in trust and agency funds were reclassified and are now reported in governmental funds. The County has not restated prior year information for the purpose of providing the comparative data for the Management’s Discussion and Analysis ( MD& A) because some of that information was not readily available. However, in future years, that prior year information will be available and a comparative analysis of County fund data will be presented. The following is an analysis of the activities of the County’s funds for fiscal year 2001- 2002 as reported in the fund- basis statements. Governmental Funds The focus of the County’s governmental funds is to provide information on near- term inflows, outflows, and balances of resources that are available for spending. Such information is useful in assessing the County’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Types of government funds reported by the County include the General, special revenue, debt service, capital projects and permanent funds. As of June 30, 2002, the County’s governmental funds reported combined ending fund balances of $ 468,266,000, an increase of $ 20,227,000 in comparison with the prior year. Approximately $ 370,868,000, or 79.2 percent of these fund balances, constitutes unreserved fund balances, which are available for spending at the County’s discretion. The remainder of fund balances is reserved to indicate that it is not available for new spending because it has already been committed: ( 1) for encumbrances - to liquidate contracts and purchase orders of the prior period ($ 57,608,000), ( 2) to reflect advances due from other funds and inventories ($ 6,893,000), ( 3) to pay debt service ($ 27,464,000), or ( 4) for miscellaneous other restricted purposes ($ 5,433,000). The General Fund is the primary operating fund of the County. At June 30, 2002, unreserved fund balance of the General Fund was $ 115,658,000, while total fund balance reached $ 169,402,000. As a measure of the General Fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 12.5 percent of total General Fund expenditures, while total fund balance represents 18.3 percent. In the Public Financing Authority Debt Service Fund, which is reported as part of the nonmajor governmental funds, capital outlay expenditures exceeded proceeds from the issuance of debt in fiscal year 2001- 2002 by COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 11 approximately $ 12,000,000. This resulted in a similar reduction in fund balance. It is not unusual to have timing differences between funding and expenditures for capital projects. Proprietary Funds As mentioned earlier, the County’s proprietary fund financial statements provide the same type of information found in the government- wide financial statements, but in more detail. Net assets at June 30, 2002, were $ 20,858,000 for the County Hospital Enterprise Fund, $ 5,458,000 for the Health Maintenance Organization Enterprise Fund and $ 48,611,000 for the other enterprise funds. As a result of operations during the year, net assets of the County Hospital Enterprise Fund decreased by $ 4,562,000, net assets of the Health Maintenance Organization Enterprise Fund increased by $ 99,000 and the net assets of the other enterprise funds decreased by $ 2,571,000. Net assets of the internal service funds were a deficit of $ 11,830,000. As a result of operations during the year, net assets of the Workers’ Compensation Insurance County General Internal Service Fund decreased by $ 11,799,000, the net assets of the Workers’ Compensation Insurance Fire Protection Internal Service Fund decreased by $ 2,167,000 and the net assets of the other internal service funds increased by $ 394,000. The County accelerated its Workers’ Compensation claim processing to reduce the future effects of rising medical treatment costs but this resulted in the actuary further increasing the reserve for benefits and claim expense. See Note 3 in the notes to the basic financial statements for further information. GENERAL FUND BUDGETARY HIGHLIGHTS The County’s final budget differs from the original budget in that it contains carry- forward appropriations for various programs and projects, and supplemental appropriations approved during the fiscal year. Total budgeted revenues were increased $ 138,116,000 or 15.5 percent, in the final budget. Actual revenues were less than final budgeted revenues by $ 43,114,000, or 4.2 percent. Total budgeted expenditures were increased $ 141,434,000 or 14.7 percent, in the final budget. Actual expenditures were less than final budgeted expenditures by $ 179,058,000, or 16.2 percent. Significant factors affecting these changes were as follows: Original Budget vs. Final Budget Revenue Variances • Budgeted Intergovernmental revenues were increased because of additional state and federal grants. State grant increases were for Medi- Cal health care, family income maintenance, public safety services, other social services and miscellaneous State aid. Federal grant increases were for of childcare, highway construction and family support. • Budgeted Charges for services and Other revenues were increased to include additional funding for remodeling and construction projects. Expenditure Appropriation Variances • The Final Budget for General Government - Building Maintenance was increased to reclassify interfund charges as expenditures, which were previously recorded as transfers. COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 12 • The Final Budget for General Government - Plant Acquisition included additional appropriations for building and improvement projects that were funded during the year. • The Final Budget for Public Assistance - Community Development was increased for greater than expected affordable housing construction and acquisition activity under HUD Block Grants. • The Final Budget for Public Assistance - Employment and Human Services Department ( EHSD) Child and Family Services was increased due to additional spending requirements for Foster Care and Aid To Adoption programs. • The Final Budget for Public Ways and Facilities - Road Construction was increased for projects identified and funded during the year. Final Budget vs. Actual Amounts Revenue Variances • Property taxes were greater than expected as real estate valuations were stronger than anticipated and projected, given the recession. • Licenses, permits and franchise fees revenue included gas surcharge payments received from Pacific Gas and Electric Company ( PG& E). These payments were greater than budgeted, as the increase in energy prices was not anticipated. • Intergovernmental revenues were less than budgeted because the budgeted revenues included full funding of capital projects and these projects were not completed during the year. State reimbursements to the Employment and Human Services Department were less than expected. • Charges for services revenues were less than budgeted because some County construction projects were not completed during the year, as planned. The related funding for construction services from other County funds and external sources was not realized. • Other revenue was less than budgeted because some County construction projects were not completed during the year, as planned. The related funding for other construction costs from other County funds and external sources was not realized. Expenditure Variances • The Final Budget for General Government - Employee Benefits included appropriations to fund employee benefits, improve the countywide payroll system, and manage the employee benefit programs that were less than anticipated. • The Final Budget for General Government - Plant Acquisition included appropriations for various building improvement and construction projects that were not completed during the year. • The Final Budget for Public Assistance - EHSD Workforce Services included appropriations based on expected Intergovernmental revenues that were not realized. COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 13 • The Final Budget for Public Ways and Facilities - Public Works included appropriations for the design, construction and maintenance of County roads that were not completed during the year. • The Final Budget for Public Ways and Facilities - Road Construction included appropriations for construction of the State Route 4 Bypass project that was not completed during the year. CAPITAL ASSET AND LONG- TERM DEBT ACTIVITY Capital Assets Capital assets for the governmental and business- type activities are presented below to illustrate changes from the prior year: 2001 2001 2001 2002 as restated 2002 as restated 2002 as restated Infrastructure $ 239,221 227,837 239,221 227,837 5.0 % Land and easements 60,108 59,997 10,464 10,464 70,572 70,461 0.2 Structures and improvements 238,772 232,544 130,564 136,806 369,336 369,350 Equipment 42,379 41,284 13,967 18,795 56,346 60,079 ( 6.2) Construction in progress 53,502 22,810 36,539 25,051 90,041 47,861 88.1 Total $ 633,982 584,472 191,534 191,116 825,516 775,588 6.4 % Percent Change Governmental activities Business- type activities Total Increase/ ( Decrease) COUNTY'S CHANGES IN CAPITAL ASSETS ( Net of Depreciation) ( In Thousands) The County’s investment in capital assets for its governmental and business type activities as of June 30, 2002, amounted to $ 825,516,000 ( net of accumulated depreciation). This investment in capital assets includes land, buildings and systems, improvements, machinery and equipment, park facilities, roads, highways, drainage systems, and bridges. The total increase in the County’s investment in capital assets for fiscal year 2001- 2002 was 6.4 percent ( an 8.5 percent increase for governmental activities and a 0.2 percent increase for business- type activities). Major capital asset events during fiscal year 2001- 2002 included the following: • Construction in progress on two office buildings for the Employment and Human Services Department in Antioch amounted to $ 12,110,000 for the year. • Construction in progress on a 242- bed expansion of Juvenile Hall amounted to $ 10,386,000 for the year. • Construction in progress on a new five- courtroom Family Law Center amounted to $ 6,491,000 for the year. • Construction in progress on roads amounted to $ 8,070,000 for the year. • Construction in progress on drainage systems amounted to $ 14,187,000 for the year. COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 14 • Construction in progress on hospital ambulatory care clinics amounted to $ 9,778,000 for the year. At June 30, 2002, the County had construction commitments totaling $ 36,063,000 as described in Note 19. E in the notes to the basic financial statements. Additional information on the County’s capital assets can be found in Note 7 in the notes to the basic financial statements. Long- Term Debt Long- term debt for the governmental and business- type activities are presented below to illustrate changes from the prior year: 2002 2001 2002 2001 2002 2001 Capital lease obligations $ 16,238 8,988 2,146 2,748 18,384 11,736 56.6 % Certificates of participation 58,665 61,465 132,550 135,940 191,215 197,405 ( 3.1) Pension obligation bonds 281,425 297,340 281,425 297,340 ( 5.4) Notes payable 6 984 1,044 984 1,050 ( 6.3) Other bonds payable 8,055 8,505 8,055 8,505 ( 5.3) Lease revenue bonds 111,420 102,245 31,760 32,010 143,180 134,255 6.6 Tax allocation bonds 54,525 55,360 54,525 55,360 ( 1.5) Special assessment debt 18,589 20,276 18,589 20,276 ( 8.3) Total $ 548,917 554,185 167,440 171,742 716,357 725,927 ( 1.3) % Percent Change Governmental activities Business- type activities Total ( Decrease) Increase/ ( In Thousands) COUNTY'S OUTSTANDING DEBT Capital Lease Obligations, Certificates of Participation, Pension Obligation Bonds, Notes Payable, Other Bonds Payable, Lease Revenue Bonds, Tax Allocation Bonds and Special Assessment Debt At June 30, 2002, the County had total long- term debt outstanding of $ 716,357,000. The County’s legal debt limit was $ 4,674,510,000. The County’s total debt decreased by $ 9,570,000, or 1.3 percent, during fiscal year 2001- 2002. In June 2002, the County of Contra Costa Public Financing Authority issued $ 12,650,000 in lease revenue bonds to finance various capital projects of the County. The County’s credit ratings for pension obligation bonds are AA- by Standard & Poors and Aa3 by Moody’s Investors Service. Its credit ratings for lease revenue bonds and certificates of participation are AA- by Standard & Poors and A1 by Moody’s Investors Service. Additional information of the County’s long- term debt can be found in Note 11 in the notes to the basic financial statements. KNOWN FACTS, DECISIONS AND CONDITIONS THAT ARE EXPECTED TO HAVE A SIGNIFICANT EFFECT ON FINANCIAL POSITION OR RESULTS OF OPERATIONS • The State has suffered from the economic slowdown, and the threat of terrorist activities. Due in part to its diversity, the County’s economy has been fairly resiliant, as evidenced by only a 1.5 percent increase in COUNTY OF CONTRA COSTA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2002 15 unemployment since October 2001. However, governmental revenues have been hit harder than the overall economy. The State benefited substantially from income taxes received from capital gains and stock options during the market rise in the late 1990’ s to 2001. In fiscal year 2000- 2001, State revenue from this source peaked at $ 17.7 billion, which amounted to nearly 25 percent of State General Fund revenue. One year later, this revenue fell $ 8.2 billion to $ 9.5 billion. As a result of this and other factors, the State is addressing a $ 35 billion shortfall of projected revenues compared to expenditures for the 18- month period of January 1, 2003, through June 30, 2004. This is expected to lead to a significant, but undetermined, reduction of County revenue. The County receives approximately 20 percent of its revenues from taxes and a significant portion of the remainder is provided by the State. • To attract and maintain a high quality workforce the County must provide salaries and benefits competitive with other potential employers such as the State, other governmental entities and the private sector. In recognition of this fact, the Board of Supervisors and most of the employee organizations agreed to extend their current labor agreements another three years, with new cost- of- living adjustments and an enhanced retirement benefit. The cost- of- living adjustments range from five to six percent for the first year and from three to five percent for each of the second and third years covered by the agreement. The new retirement benefit is commonly known as “ 3 percent at 50” ( for safety members) and “ 2 percent at 55” ( for general members). A further explanation of the retirement benefit can be found in Note 15 in the notes to the basic financial statements. • As a result of decisions in various lawsuits affecting retirement benefits and the enhanced benefits noted above, the Unfunded Actuarial Accrued Liability ( UAAL) for the County is estimated to be $ 406,000,000 as of December 31, 2001. In addition, approximately $ 473,000,000 of retirement investment losses attributable to the County had not been recognized as of June 30, 2002. These factors will result in higher costs to the County in future years. • General Fund subsidies to the County Hospital and Health Maintenance Organization increased $ 6,249,000 from the prior year to $ 31,401,000 and $ 4,811,000, respectively. State budget cuts are expected and costs continue to rise more rapidly than revenue. Even with cost containment efforts in place, similar subsidies are expected to recur in fiscal year 2002- 2003. • All of these factors were considered in preparing the County’s budget for fiscal year 2002- 2003. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the County’s finances for all those with an interest in the County’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the County Auditor- Controller, 625 Court Street, Room 103, Martinez, CA 94553- 1282. 17 Component Unit Children and Governmental Business- type Familes First Activities Activities Total Commission Assets: Cash and investments $ 476,700 78,035 554,735 38,939 Receivables ( net) 148,952 45,316 194,268 2,088 Inventories 1,872 1,167 3,039 Internal balances 16,108 ( 16,108) Due from fiduciary funds 13,934 13,934 Due from component unit 354 354 Notes receivable 36,525 1,659 38,184 Prepaid items and deposits 2,625 3,938 6,563 19 Land held for resale 1,286 1,286 Prepaid pension asset 278,723 278,723 Restricted cash and investments 72,583 11,376 83,959 Capital assets: Nondepreciable 113,610 47,003 160,613 Depreciable, net 520,372 144,531 664,903 Total Assets 1,683,644 316,917 2,000,561 41,046 Liabilities: Short term notes payable 70,000 70,000 Accounts payable and accrued liabilities 68,817 43,543 112,360 169 Accrued interest payable 3,888 1,379 5,267 Due to fiduciary funds 385 385 Due to primary government 354 Welfare program advances 4,864 4,864 Deferred revenue 36,330 37,058 73,388 Long- term liabilities: Due within one year 51,241 6,207 57,448 Due in more than one year 619,865 161,613 781,478 Total Liabilities 855,005 250,185 1,105,190 523 Net Assets: Invested in capital assets, net of related debt 437,866 38,558 476,424 Restricted for: Legally segregated taxes, grants and fees 232,651 232,651 Debt service 24,751 11,376 36,127 Permanent Fund: Expendable 353 353 Nonexpendable 1,726 1,726 Children's programs 33,558 Unrestricted 131,292 16,798 148,090 6,965 Total Net Assets $ 828,639 66,732 895,371 40,523 See accompanying notes to the basic financial statements. Primary Government COUNTY OF CONTRA COSTA STATEMENT OF NET ASSETS JUNE 30, 2002 ( In Thousands) 18 Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Function/ Program Activities: Primary Government: Governmental activities: General government $ 115,534 73,680 19,682 Public protection 365,757 100,344 119,742 76 Health and sanitation 184,109 51,533 80,561 Public assistance 328,450 1,648 308,577 Education 16,364 738 3,152 Public ways and facilities 56,197 22,557 13,134 12,497 Recreation and culture 793 36 52 Interest on debt 36,340 Total Governmental Activities 1,103,544 250,536 544,900 12,573 Business- type activities: County hospital 229,584 178,040 31,886 7,194 Health maintenance organization 112,386 105,157 2,757 Airport 4,323 3,002 130 Housing authority 65,038 3,536 59,459 Major risk medical insurance 931 931 Sheriff law enforcement training center 1,106 200 242 Total Business- type Activities 413,368 290,866 94,474 7,194 Total Primary Government $ 1,516,912 541,402 639,374 19,767 Component Unit: Children and Families First Commission $ 4,696 16,643 GENERAL REVENUES: Taxes: Property Sales Other Grants/ contributions not restricted Investment earnings Other TRANSFERS Total general revenues and transfers Change in net assets NET ASSETS, BEGINNING OF YEAR NET ASSETS, END OF YEAR COUNTY OF CONTRA COSTA STATEMENT OF ACTIVITIES See accompanying notes to the basic financial statements. Program Revenues FOR THE FISCAL YEAR ENDED JUNE 30, 2002 ( In Thousands) 19 Business- Governmental type Component Activities Activities Total Unit ( 22,172) ( 22,172) ( 145,595) ( 145,595) ( 52,015) ( 52,015) ( 18,225) ( 18,225) ( 12,474) ( 12,474) ( 8,009) ( 8,009) ( 705) ( 705) ( 36,340) ( 36,340) ( 295,535) ( 295,535) ( 12,464) ( 12,464) ( 4,472) ( 4,472) ( 1,191) ( 1,191) ( 2,043) ( 2,043) ( 664) ( 664) ( 20,834) ( 20,834) ( 295,535) ( 20,834) ( 316,369) 11,947 $ 211,376 211,376 11,616 11,616 15,692 15,692 77,741 77,741 27,035 298 27,333 733 20,158 1,076 21,234 ( 11,063) 11,063 352,555 12,437 364,992 733 57,020 ( 8,397) 48,623 12,680 771,619 75,129 846,748 27,843 $ 828,639 66,732 895,371 40,523 Net ( Expenses) Revenues and Changes in Net Assets 20 Other General Funds Total Assets: Cash and investments $ 59,033 340,306 399,339 Accounts receivable and accrued revenue ( net) 135,481 11,656 147,137 Inventories 1,872 1,872 Due from other funds 66,311 12,075 78,386 Due from component unit 354 354 Advances to other funds 138 4,883 5,021 Notes receivable 29,246 7,279 36,525 Prepaid items and deposits 1,801 413 2,214 Land held for resale 1,286 1,286 Restricted cash and investments 72,583 72,583 Total Assets $ 366,819 377,898 744,717 Liabilities and Fund Balances Liabilities: Short term notes payable $ 70,000 70,000 Accounts payable and accrued liabilities 56,267 12,550 68,817 Due to other funds 18,482 34,475 52,957 Welfare program advances 4,864 4,864 Advances from other funds 5,021 5,021 Deferred revenue 47,804 26,988 74,792 Total Liabilities 197,417 79,034 276,451 Fund Balances: Reserved for: Encumbrances 50,342 7,266 57,608 Inventories 1,872 1,872 Advances to other funds 138 4,883 5,021 Prepaid items and deposits 1,392 413 1,805 Land held for resale 1,286 1,286 Housing projects 616 616 Debt service 27,464 27,464 Nonexpendable permanent funds 1,726 1,726 Unreserved, reported in: General fund 115,658 115,658 Special revenue funds 176,792 176,792 Debt service funds 29,092 29,092 Capital projects funds 48,973 48,973 Permanent fund 353 353 Total Fund Balances 169,402 298,864 468,266 Total Liabilities and Fund Balances $ 366,819 377,898 744,717 See accompanying notes to the basic financial statements. COUNTY OF CONTRA COSTA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2002 ( In Thousands) 21 COUNTY OF CONTRA COSTA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 2002 ( In Thousands) Fund balances - total governmental funds ( page 20) $ 468,266 Amounts reported for governmental activities in the statement of net assets are different because: The pension assets resulting from contributions in excess of the annual required contribution in 2001 are not financial resources and therefore not reported in the funds. 278,723 Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. 633,982 Accrued revenue, which is not available soon enough to pay for the current period's expenditures, is deferred in the governmental funds. 1,937 Notes receivable are not available to pay current- period expenditures and, therefore, are deferred in the governmental funds. 36,525 Internal service funds are used by management to charge the costs of self insurance to individual funds. The assets and liabilities of these funds, except for the medical liability insurance fund, are included as governmental activities in the statement of net assets. ( 3,639) Interest on long- term debt is recognized as it accrues, regardless of when it is due. ( 3,888) Costs of issuance on 2002 lease revenue bond are not recognized as current year expenditures and are deferred. $ 412 Current year amortization of costs of issuance on 2002 lease revenue bond. ( 1) 411 Long- term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the governmental funds. Certificates of participation ( 58,665) Lease revenue bonds ( 111,420) Tax allocation bonds ( 54,525) Special assessment bonds ( 18,589) Other bonds payable ( 8,055) Pension obligation bonds ( 281,425) Capital lease obligations ( 16,238) Compensated absences ( 34,761) ( 583,678) Net assets of governmental activities ( page 17) $ 828,639 See accompanying notes to the basic financial statements. 22 General Other Fund Funds Total Revenues: Taxes $ 200,571 122,064 322,635 Licenses, permits and franchise fees 23,782 11,495 35,277 Fines, forfeitures and penalties 14,508 4,017 18,525 Use of money and property 10,527 13,237 23,764 Intergovernmental 506,352 39,372 545,724 Charges for services 155,713 40,875 196,588 Other revenue 74,613 19,667 94,280 Total Revenues 986,066 250,727 1,236,793 Expenditures: Current: General government 128,375 1,976 130,351 Public protection 254,070 123,941 378,011 Health and sanitation 172,613 9,551 182,164 Public assistance 315,112 22,561 337,673 Education 205 16,162 16,367 Public ways and facilities 45,679 43,151 88,830 Recreation and culture 1,099 1,099 Debt service: Principal 25,110 25,110 Bond issuance cost 412 412 Interest 2,215 34,092 36,307 Capital outlay 7,415 24,821 32,236 Total Expenditures 925,684 302,876 1,228,560 Excess ( Deficiency) of Revenues Over ( Under) Expenditures 60,382 ( 52,149) 8,233 Other Financing Sources ( Uses): Transfers in 23,568 48,662 72,230 Transfers out ( 76,347) ( 6,946) ( 83,293) Proceeds from the sale of real estate 500 500 Proceeds from issuance of debt 12,650 12,650 Capital lease financing 9,907 9,907 Total Other Financing Sources ( Uses) ( 42,872) 54,866 11,994 Net Change in Fund Balances 17,510 2,717 20,227 Fund Balances at Beginning of Year, as Previously Reported 144,607 257,017 401,624 Adjustments to beginning fund balances 7,285 39,130 46,415 Fund Balances at Beginning of Year, as Restated 151,892 296,147 448,039 Fund Balances at End of Year $ 169,402 298,864 468,266 See accompanying notes to the basic financial statements. COUNTY OF CONTRA COSTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2002 ( In Thousands) 23 COUNTY OF CONTRA COSTA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2002 ( In Thousands) Net change in fund balances - total governmental funds ( page 22) $ 20,227 Amounts reported for governmental activities in the statement of activities are different because: Revenues that were deferred in the governmental funds because they were unavailable are reported as current revenue. 12,953 Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Expenditures for capital assets $ 88,677 Less loss on sale/ retirement of capital assets ( 3,753) Less current year depreciation ( 35,414) 49,510 Some income reported in the governmental funds was previously reported in the statement of activities and therefore is not reported as current income. ( 500) Long- term debt proceeds provide current financial resources to governmental funds, but issuing debt increases long- term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long- term liabilities in the statement of net assets. Proceeds from lease revenue bonds ( 12,650) Deferral of bond issuance cost 412 Principal payments 27,768 Issuance of capital lease ( 9,907) 5,623 Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Change in long- term compensated absences ( 3,601) Amortization of pension asset ( 14,835) Amortization of bond issuance cost ( 1) Change in accrued interest payable ( 142) ( 18,579) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of the internal service funds is reported with governmental activities. ( 12,214) Change in net assets of governmental activities ( page 19) $ 57,020 See accompanying notes to the basic financial statements. 24 Health Internal County Maintenance Service Hospital Organization Other Total Funds Assets: Current assets: Cash and investments $ 39,045 21,760 13,726 74,531 80,865 Accounts receivable and accrued revenue ( net) 41,243 901 3,172 45,316 1,815 Inventories 1,158 9 1,167 Due from other funds 11,131 3,816 97 15,044 1,820 Notes receivable 1,659 1,659 Prepaid items and deposits 3,589 158 191 3,938 Total Current Assets 96,166 26,635 18,854 141,655 84,500 Restricted cash and investments 11,376 11,376 Capital assets: Nondepreciable 32,762 14,241 47,003 Depreciable, net 113,762 94 30,675 144,531 Total Assets $ 254,066 26,729 63,770 344,565 84,500 Liabilities and Net Assets Liabilities: Current liabilities: Accounts payable and accrued liabilities $ 25,796 15,306 2,441 43,543 Accrued interest payable 1,325 54 1,379 Due to other funds 20,382 5,690 1,393 27,465 1,275 Deferred revenue 29,352 7,706 37,058 Current portion of long- term liabilities 4,209 27 709 4,945 19,079 Total Current Liabilities 81,064 21,023 12,303 114,390 20,354 Noncurrent portion of long- term liabilities: Capital lease obligations 1,546 1,546 Certificates of participation, net 115,343 115,343 Compensated absences 5,689 248 391 6,328 Claims payable 75,976 Bonds and notes payable, net 31,112 919 32,031 Total Noncurrent Liabilities 152,144 248 2,856 155,248 75,976 Total Liabilities 233,208 21,271 15,159 269,638 96,330 Net Assets ( Deficit): Invested in capital assets, net of related debt ( 3,508) 94 41,972 38,558 Restricted for debt service 11,376 11,376 Unrestricted ( Deficit) 12,990 5,364 6,639 24,993 ( 11,830) Total Net Assets ( Deficit) 20,858 5,458 48,611 74,927 ( 11,830) Total Liabilities and Net Assets $ 254,066 26,729 63,770 84,500 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. ( 8,195) Net assets of business- type activities ( page 17) $ 66,732 See accompanying notes to the basic financial statements. COUNTY OF CONTRA COSTA JUNE 30, 2002 Enterprise Funds ( In Thousands) PROPRIETARY FUNDS STATEMENT OF FUND NET ASSETS 25 COUNTY OF CONTRA COSTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS Health Internal County Maintenance Service Hospital Organization Other Total Funds Operating Revenues: Charges for services $ 178,040 105,157 7,669 290,866 31,429 Other revenue 1,074 1,074 1,036 Total Operating Revenues 178,040 105,157 8,743 291,940 32,465 Operating Expenses: Salaries and employee benefits 134,768 6,199 1,494 142,461 Services and supplies 64,662 105,977 2,346 172,985 9,618 Benefit and claim expense 42,706 Other charges 9,503 62,253 71,756 Depreciation 6,530 14 4,839 11,383 Total Operating Expenses 215,463 112,190 70,932 398,585 52,324 Operating loss ( 37,423) ( 7,033) ( 62,189) ( 106,645) ( 19,859) Nonoperating Revenues ( Expenses) State and federal grants 31,886 2,757 59,831 94,474 10 Investment income 294 294 3,277 Interest expense ( 9,977) ( 437) ( 10,414) Total Nonoperating Revenues ( Expenses) 21,909 2,757 59,688 84,354 3,287 Loss before Capital Contributions and Transfers ( 15,514) ( 4,276) ( 2,501) ( 22,291) ( 16,572) Capital contributions 7,194 7,194 Transfers in 32,626 4,811 37,437 3,000 Transfers out ( 28,868) ( 436) ( 70) ( 29,374) Change in Net Assets ( 4,562) 99 ( 2,571) ( 7,034) ( 13,572) Total Net Assets at Beginning of the Year, as Previously Reported 23,566 5,286 51,825 80,677 2,497 Adjustments to beginning net assets 1,854 73 ( 643) 1,284 ( 755) Total Net Assets at Beginning of the Year, as Restated 25,420 5,359 51,182 81,961 1,742 Total Net Assets at End of Year $ 20,858 5,458 48,611 74,927 ( 11,830) Reconciliation of enterprise funds change in net assets to statement of activities: Change in net assets of enterprise funds. $ ( 7,034) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. ( 1,363) Change in net assets of business- type activities ( page 19) $ ( 8,397) See accompanying notes to the basic financial statements. FOR THE YEAR ENDED JUNE 30, 2002 Enterprise Funds ( In Thousands) 26 Health Internal County Maintenance Service Hospital Organization Other Total Funds Cash Flows from Operating Activities: Cash received from customers/ other funds $ 172,775 114,140 15,805 302,720 30,253 Cash payment to suppliers for goods and services ( 78,053) ( 106,600) ( 61,132) ( 245,785) ( 38,300) Cash payment to employees for services ( 133,811) ( 6,192) ( 7,639) ( 147,642) Net Cash Provided by ( Used for) Operating Activities ( 39,089) 1,348 ( 52,966) ( 90,707) ( 8,047) Cash Flows from Noncapital Financing Activities: State and federal grants 31,886 2,757 59,831 94,474 10 Transfers received 32,626 4,811 37,437 3,000 Transfers paid ( 28,868) ( 436) ( 70) ( 29,374) Due to other funds 772 772 72 Net Cash Provided by Noncapital Financing Activities 35,644 7,132 60,533 103,309 3,082 Cash Flows from Capital and Related Financing Activities: Capital contributions 7,194 7,194 Acquisition and construction of capital assets ( 11,843) ( 2,217) ( 14,060) Interest paid ( 8,652) ( 205) ( 8,857) Lease purchase obligation principal payment ( 2) ( 600) ( 602) Principal paid on bonds and certificates ( 3,390) ( 3,390) Payment on other non- current obligations ( 250) ( 60) ( 310) Net Cash Used for Capital and Related Financing Activities ( 16,943) ( 3,082) ( 20,025) Cash Flows from Investing Activities: Interest received on investments 294 294 3,277 Investments, net ( 321) ( 321) Net Cash Used for Investing Activities ( 27) ( 27) 3,277 Net Increase ( Decrease) in Cash and Cash Equivalents ( 20,388) 8,480 4,458 ( 7,450) ( 1,688) Cash and Cash Equivalents at Beginning of Year 70,809 13,280 9,268 93,357 82,553 Cash and Cash Equivalents at End of Year $ 50,421 21,760 13,726 85,907 80,865 Reconciliation of Operating Loss to Net Cash Used for Operating Activities: Operating loss $ ( 37,423) ( 7,033) ( 62,189) ( 106,645) ( 19,859) Adjustments to Reconcile Operating Loss to Net Cash Provided by ( Used for) Operating Activities: Depreciation 6,530 14 4,839 11,383 Changes in operating assets and liabilities: Decrease ( increase) in: Accounts receivable and accrued revenue, net ( 14,593) 3,170 ( 1,565) ( 12,988) ( 528) Inventories ( 95) 8 ( 87) Due from other funds 1,289 5,813 5 7,107 ( 1,684) Prepaid items and deposits 147 50 197 Increase ( decrease) in: Accounts payable and accrued liabilities 7,698 1,479 101 9,278 15,034 Employee benefits payable 414 5 91 510 Due to other funds ( 11,095) ( 2,100) ( 231) ( 13,426) ( 1,010) Deferred revenue 8,039 5,925 13,964 Net Cash Provided by ( Used for) Operating Activities $ ( 39,089) 1,348 ( 52,966) ( 90,707) ( 8,047) Noncash capital financing activities ( Hospital) Accrued Interest $ 1,325 Bond deferral/ OIP amortization 702 Capital asset adjustment 2,137 See accompanying notes to the basic financial statements. FOR THE FISCAL YEAR ENDED JUNE 30, 2002 Enterprise Funds COUNTY OF CONTRA COSTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS ( In Thousands) 27 Private- Pension Investment Purpose Agency Trust Trust Trust Funds Assets: Cash and investments $ 2,718,985 833,589 9,148 $ 129,591 Receivables 46,606 128 11,747 Due from other funds 1,884 1,339 5 9,797 Taxes receivables 127,473 Prepaid items and deposits 344 Capital assets, net 574 Total Assets 2,768,393 834,928 9,281 $ 278,608 Liabilities: Warrants outstanding 56,186 40,133 Accounts payable and accrued liabilities 63,396 212 34,521 Employee benefits payable 268 Due to other funds 1,492 3 25,343 Deferred revenue 28 Unapportioned taxes 81,959 Tax loss guarantees 27,032 Due to other agencies 69,620 Total Liabilities 63,664 57,678 243 $ 278,608 Net Assets: Held for: Employees' pension benefits 2,704,729 Participation in individually directed investment accounts 777,250 9,038 Total Net Assets $ 2,704,729 777,250 9,038 See accompanying notes to the basic financial statements. ( In Thousands) COUNTY OF CONTRA COSTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2002* * Pension Trust Fund reported as of December 31, 2001. 28 Private- Pension Investment Purpose Trust Trust Trust Additions: Employer contributions $ 55,182 Employee contributions 18,681 Contributions to investment accounts 2,612,446 Intergovernmental 700 Other revenue 4,387 Net investment income ( loss) ( 105,084) 29,722 176 Investment expense ( 9,448) Total Additions ( 40,669) 2,642,168 5,263 Deductions: Benefits paid 138,533 Refunds of contributions 858 Distribution from investment accounts 2,622,933 Administrative and other expenses 3,745 2,567 Prepayment discount 2,920 Other 607 3,505 Membership withdrawal 10,791 Total Deductions 157,454 2,622,933 6,072 Change in Net Assets ( 198,123) 19,235 ( 809) Net Assets Held In Trust at Beginning of Year, as Previously Reported 2,931,262 758,015 Prior period adjustment ( 28,410) 9,847 Net Assets Held In Trust at Beginning of Year, as Restated 2,902,852 758,015 9,847 Net Assets Held In Trust at End of Year $ 2,704,729 777,250 9,038 * Pension Trust Fund reported for Year Ended December 31, 2001. ( In Thousands) See accompanying notes to the basic financial statements. COUNTY OF CONTRA COSTA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2002* COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 29 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the County of Contra Costa ( the County) conform to accounting principles generally accepted in the United States of America as applicable to governmental entities. The following is a summary of the more significant policies: A. Definition of Reporting Entity The County is a political subdivision created by the State of California. As such, it can exercise powers specified by the Constitution and statutes of the State. The County is governed by a five member elected Board of Supervisors ( the Board). The Board is responsible for the legislative and executive control of the County. The County provides various services on a countywide basis including law and justice, education, detention, social, health, hospital, fire protection, road construction, road maintenance, transportation, park and recreation facilities, elections and records, communications, planning, zoning, and tax collection. The governmental reporting entity consists of the County ( Primary Government) and its component units. Component units are legally separate organizations for which the Board is financially accountable or other organizations whose nature and relationship with the County are such that exclusion would cause the County’s financial statements to be misleading or incomplete. Financial accountability is defined as the appointment of a voting majority of the component unit’s board, and ( i) either the County’s ability to impose its will on the organization or ( ii) there is potential for the organization to provide a financial benefit to or impose a financial burden on the County. The basic financial statements include both blended and discretely presented component units. The blended component units, although legally separate entities are, in substance, part of the County’s operations and so data from these units are combined with data of the primary government. The discretely presented component unit, on the other hand, is reported in a separate column in the government- wide financial statements to emphasize it is legally separate from the government. For financial reporting purposes, the County’s basic financial statements include all financial activities that are controlled by or are dependent upon actions taken by the County’s Board. Blended Component Units Housing Authority of the County of Contra Costa The Housing Authority of the County of Contra Costa ( Housing Authority) was established to provide housing for the County’s low and moderate income residents. Its board members are the same as the County Board of Supervisors. The financial activities of the Housing Authority are reported as an Enterprise Fund. The fiscal year of the Housing Authority ends on March 31st and its financial activities are reported as of that date. COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 30 Contra Costa County Redevelopment Agency The Contra Costa County Redevelopment Agency ( RDA) was established for the purpose of redeveloping certain areas of the County designated as project areas. Its board members are the same as the County Board of Supervisors. The financial activities of the RDA are included in the special revenue, debt service and capital projects funds which are reported as nonmajor governmental funds. Contra Costa County Public Facilities Corporation The Contra Costa County Public Facilities Corporation ( PFC) was established to provide financing for the acquisition, construction, improvement and remodeling of public buildings and facilities for the County. The County appoints a voting majority of the governing board and is able to impose its will on the Corporation. The activities of the Corporation are included in a debt service fund which is reported as part of the nonmajor governmental funds and in the County Hospital Enterprise Fund. County of Contra Costa Public Financing Authority The County of Contra Costa Public Financing Authority ( PFA) is a joint powers authority consisting of the County and the RDA. The PFA was established to provide for the financing of public improvements, obligations, working capital and liability or other insurance programs of the County and the RDA. The members of the County Board of Supervisors also serve as the Directors of the PFA. The activities of the PFA are included in a debt service fund which is reported as part of the nonmajor governmental funds and in the County Hospital Enterprise Fund. Contra Costa County Employees’ Retirement Association The Contra Costa County Employees’ Retirement Association ( CCCERA) was established to provide retirement benefits to employees of the County and other member agencies. The CCCERA provides a majority of its services for the benefit of the County and, therefore, is reported as a pension trust fund in the basic financial statements. The fiscal year of the CCCERA ends on December 31st and its financial activities are reported as of that date. In- Home Supportive Services Public Authority The Contra Costa County Board of Supervisors, pursuant to Welfare and Institutions Code Section 12301.6, established the In- Home Supportive Services Public Authority ( IHSS). This Authority provides screening, training and referral of in- home supportive service providers and assists recipients in finding qualified persons to assist eligible individuals who are unable to care for themselves at home. The activities of the IHSS are included in a special revenue fund which is reported as part of the nonmajor governmental funds. Special Districts and Service Areas The County has 41 agencies referred to as County Special Districts and Service Areas. Each is established by the County for the purpose of providing specific services in a defined geographic area. Their board members are the same as the County Board of Supervisors. These agencies and the COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 31 Special Revenue Fund in which each is included are: Fire Protection - Bethel Island Fire Protection District, Contra Costa Fire Protection District, Crockett- Carquinez Fire Protection District, East Diablo Fire Protection District, Oakley Fire Protection District; Flood Control - Flood Control District, Storm Drainage District, Storm Drain Maintenance District No. 4 and Storm Drain District No. Z- 16; Health and Sanitation - Sanitation Districts Nos. 5 and 6; Service Areas - Service Areas D- 2, EMS- 1, L- 100, LIB- 2, LIB- 10, LIB- 12, LIB- 13, M- 1, M- 8, M- 16, M- 17, M- 20, M- 23, M- 25, M- 26, M- 27, M- 28, M- 29, M30, R- 4, R- 7, R- 9, R- 10, RD- 4 and Discovery Bay West Parking District; Law Enforcement - Service Areas P- 1, P- 2, P- 5 and P- 6; Other Special Revenue - Contra Costa County Water Agency. These special revenue funds are reported as nonmajor governmental funds. Discretely Presented Component Unit Children and Families First Commission The Contra Costa Children and Families First Commission ( the Commission) was established to implement the provisions of Proposition 10, adopted by the voters in 1998. Proposition 10 added Division 108 ( commencing with Section 130100) to the Health and Safety Code. It provides for a State tax on the sale of tobacco products and also provides that this revenue be spent for early childhood development programs by the Commission. The County Board of Supervisors appoints all nine members ( and nine alternate members) of the Commission and is able to impose its will on the Commission. Two members of the Board of Supervisors serve on the Commission. The Commission provides most of its services directly to the citizens of the County. The financial activity of the Commission is reported in separate columns on the government- wide financial statements. Complete audited financial statements for each of the individual component units are issued separately and may be obtained at the unit's administrative offices as follows: Housing Authority of the County of Contra Costa 3133 Estudillo Street, Martinez, CA 94553 Contra Costa County Public Facilities Corporation 1220 Morello Ave., Suite 100, Martinez, CA 94553 County of Contra Costa Public Financing Authority 651 Pine Street, 6th Floor, Martinez, CA 94553 Contra Costa County Redevelopment Agency 651 Pine Street, 5th Floor North Wing, Martinez, CA 94553 Contra Costa County Employees’ Retirement Association 1355 Willow Way, Suite 221, Concord, CA 94520 Contra Costa Children and Families First Commission 1340 Arnold Drive, Suite 125, Martinez, CA 94553 In- Home Supportive Services Public Authority 40 Douglas Drive, Martinez, CA 94553 COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 32 B. New Accounting Pronouncements Implemented During the Year New Reporting Model: GASB Statement No. 34 In June 1999, The Governmental Accounting Standards Board ( GASB) issued Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. GASB Statement No. 34 provides for the most significant change in financial reporting in over twenty years with changes to governmental financial reporting, including changes in the basic financial statements. This new governmental reporting model is effective for the County beginning with fiscal year 2001- 2002, the period covered by these statements. GASB Statement No. 34, requires the presentation of government- wide financial statements and fund financial statements. The new government- wide financial statements are prepared using the accrual basis of accounting and the economic resources measurement focus. The government- wide financial statements include the reporting of long- term liabilities and capital assets such as buildings, roads, drainage facilities, and other infrastructure within the governmental and the business- type activities. Depreciation expenses and accumulated depreciation, which were not previously reported for governmental funds, are also displayed on the government- wide financial statements. The capital assets and related depreciation also include the costs and depreciation of infrastructure assets, which were not previously capitalized and depreciated. The fund financial statements for the governmental funds continue to be prepared under the modified accrual basis of accounting. Fund financial statements are shown separately for specific major governmental funds, and in total for all other nonmajor governmental funds. Effects of New Pronouncements The following summarizes recent GASB pronouncements and their impact, if any, on the financial statements: GASB Statement No. 34 establishes new financial reporting requirements for all governments, nationwide. The main purpose is to provide more understandable and useful governmental financial reports to a wider range of users and enhance the comparability of financial statements. Under GASB Statement No. 34, the County’s basic financial statements present the following components in addition to the fund financial statements and other required supplementary information: • Management’s Discussion and Analysis ( MD& A) - The MD& A is the new easily readable narrative that introduces the basic financial statements and provides an analytical overview of the County’s financial activities. The narrative should include currently known facts, decisions or conditions that are expected to have a significant effect on the financial position or changes in financial position. • Government- wide Financial Statements – These financial statements report the financial position and operating results of the County as an economic entity, excluding the information about COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 33 fiduciary activities, and are prepared using the economic resources measurement focus and the accrual basis of accounting. The government- wide financial statements include the statement of net assets and the statement of activities. GASB Statement No. 37 In June 2001, GASB issued Statement No. 37, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments: Omnibus – an Amendment of GASB Statements No. 21, Accounting for Escheat Property and No. 34. This statement is effective for the same period as GASB Statement No. 34 and either clarifies or modifies certain provision in GASB Statements No. 21 and No. 34. It establishes guidance in the following areas: reporting of escheat property, topics for discussion in the MD& A, program revenue classifications, the minimum level of detail required for business- type activities in the statement of activities, etc. GASB Statement No. 38 In June 2001, the GASB issued Statement No. 38, Certain Financial Statement Note Disclosures. This statement modifies, adds and deletes various note disclosure requirements. Those requirements address revenue recognition policies, debt service requirements, receivable and payable balances, interfund transfers and balances, and short- term debt. GASB Interpretation No. 6 In March 2000, the GASB issued Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements. This interpretation clarifies the application of standards for modified accrual recognition of certain liabilities and expenditures in areas where differences have arisen, or potentially could arise, in interpretation and practice. The County has implemented GASB Statement Nos. 34, 37 and 38 and Interpretation No. 6 and these statements are presented according to those requirements. A summary of the adjustments required to implement these statements is presented in Note 2. C. Basis of Presentation Government- Wide Financial Statements GASB Statement No. 34 mandates the presentation of two basic government- wide financial statements, the Statement of Net Assets and the Statement of Activities. The statement of net assets and statement of activities display information about the primary government ( the County) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business- type activities of the County and between the County and its discretely presented component unit. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 34 separately from business- type activities, which rely to a significant extent on fees charged to external parties. The statement of net assets reports the County’s financial and capital resources, including infrastructure, as well as the County’s long- term obligations. The difference between the County’s assets and liabilities is its net assets. Net assets represent the resources that the County has available for use in providing services after its debts are settled. The statement of activities presents a comparison between direct expenses and program revenues for each function of the governmental activities and each segment of the business- type activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods or services offered by the programs, including fines and forfeitures, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, management has discretion as to which resources to apply. Generally, restricted resources are depleted before unrestricted. However, when prudent, unrestricted resources may be used first. Fund Financial Statements The fund financial statements provide information about the County’s funds, including fiduciary funds and blended component units. Separate statements for each fund category – governmental, proprietary and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as nonmajor funds. The County reports the General Fund as a major governmental fund. The General Fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the County that are not accounted for through other funds. In addition to general administration, the General Fund includes such activities as public protection, health and sanitation, public assistance, education, and public ways and facilities. The County reports the following major enterprise funds: • The County Hospital ( the Hospital) accounts for hospital operations involved in providing health services to County residents. Revenues are principally fees for patient services, payments from Federal and State programs such as Medicare, Medi- Cal and Short- Doyle, realignment revenues and subsidies from the General Fund. • The Health Maintenance Organization accounts for the operations of the County’s prepaid health plan. Revenues are primarily capitation payments by Medicare and Medi- Cal, premiums by private citizens and realignment revenues. COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 35 The County reports the following additional fund types: • Internal Service Funds account for the County’s self- insurance programs – employee dental insurance, employee medical insurance, long- term disability, workers’ compensation, automotive liability insurance, general liability insurance, state unemployment insurance, medical liability insurance and special district property insurance, on a cost- reimbursement basis. • The Pension Trust Fund accumulates contributions from the County, its employees and other participating employers, and earnings from the fund’s investments. Disbursements are made from the fund for retirement, disability and death benefits ( based on a defined benefit formula) and administrative expenses. This fund includes all assets of the CCCERA. • The Investment Trust Fund accounts for the assets of legally separate entities who make directed investments through the County Treasurer. These entities include school and community college districts, other special districts governed by local boards, regional boards and authorities and pass through funds for tax collections for cities. These funds represent the assets, primarily cash and investments, and the related liability of the County to disburse these monies on demand. • The Private- Purpose Trust Fund accounts for assets held in trust for the City of Oakley related to its redevelopment project area, as well as assets held in trust for others. • The Agency Funds account for assets held by the County as an agent for various local governments. D. Basis of Accounting The government- wide, proprietary fund and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the County is giving ( or receiving) value without directly receiving ( or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. For its business- type activities and enterprise funds, the County has elected under GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, to apply all applicable GASB pronouncements as well as any applicable pronouncements of the Financial Accounting Standards Board, the Accounting Principles Board or any Accounting Research Bulletins issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements ( Statements and Interpretations), constitutes accounting principles generally accepted in the United States of America for governmental units. The COUNTY OF CONTRA COSTA NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2002 36 County has elected not to follow subsequent private- sector guidance of the Financial Accounting Standards Board after November 30, 1989. Proprietary fund operating |
| OCLC number | 177177985 |
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