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City of Santa Cruz, California
Santa Cruz Coastline
COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2006
Cover by Natalia Duarte
City of Santa Cruz State of California
Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2006
Prepared by Sandra Benoit Cheryl Fyfe Kathryn Mintz Ray Galindo Ralph Reader
Tori Hannah Raymond Chin Kim Wigley
Charlene Pringle Shelley Horrow Natalia Duarte
City of Santa Cruz Comprehensive Annual Financial Report For the year ended June 30, 2006 Table of Contents
INTRODUCTORY SECTION
Page
Transmittal Letter ................................................................................................................................................... i Map of Santa Cruz...............................................................................................................................................vii Organization Chart ........................................................................................................................................... viii Directory of City Officials of the City of Santa Cruz....................................................................................... ix FINANCIAL SECTION Independent Auditors’ Report........................................................................................................................... 1 Management’s Discussion and Analysis ......................................................................................................... 3 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets..........................................................................................................................20 Statement of Activities and Changes in Net Assets ...........................................................................22 Fund Financial Statements: Government Fund Financial Statements: Balance Sheet .....................................................................................................................................28 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets................................................................29 Statement of Revenues, Expenditures and Changes in Fund Balances ....................................30 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Assets ..............................................................31 Proprietary Fund Financial Statements: Statement of Net Assets ...................................................................................................................34 Statement of Revenues, Expenses and Changes in Net Assets ..................................................38 Statement of Cash Flows..................................................................................................................40 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Assets .................................................................................................46 Statement of Changes in Fiduciary Net Assets.............................................................................47 Index to Notes to Basic Financial Statements ............................................................................................49 Notes to Basic Financial Statements ............................................................................................................51
City of Santa Cruz Comprehensive Annual Financial Report For the year ended June 30, 2005 Table of Contents, Continued
FINANCIAL SECTION, Continued
Page
Required Supplementary Information: Budgetary Information....................................................................................................................................94 Budgetary Comparison Schedule – General Fund ...............................................................................98 Reconciliation of Net Changes in Fund Balances – Budgetary to GAAP Basis: General Fund .......................................................................................................................................99 Budgetary Comparison Schedule – Redevelopment Agency ............................................................100 Reconciliation of Net Changes in Fund Balances – Budgetary to GAAP Basis: Redevelopment Agency .....................................................................................................................101 Defined Benefit Pension Plan .........................................................................................................................103 Supplementary Information: Non-Major Governmental Funds: Combining Balance Sheet.........................................................................................................................108 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................110 Schedule of Budget and Actual Revenues – General Fund .................................................................112 Schedule of Budget and Actual Expenditures and Other Financing Uses for Legally Adopted Appropriations by Department – General Fund .............................................114 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: Police Special Revenue Fund.............................................................................................................116 State Highway Special Revenue Fund .............................................................................................117 Traffic Impact Fee Fund .....................................................................................................................118 Parks and Recreation Fund................................................................................................................119 Housing and Community Development Fund...............................................................................120 Transportation Development Act.....................................................................................................121 General Obligation Bond Debt Service ............................................................................................122 General Capital Improvement Projects............................................................................................123 Reconciliation of Net Changes in Fund Balances – Budgetary to GAAP Basis: Non-Major Governmental Funds .....................................................................................................124 Internal Service Funds: Combining Statement of Net Assets.......................................................................................................126 Combining Statement of Activities and Changes in Net Assets.........................................................127 Combining Statement of Cash Flows .....................................................................................................128
City of Santa Cruz Comprehensive Annual Financial Report For the year ended June 30, 2005 Table of Contents, Continued
FINANCIAL SECTION, Continued
Page
Private-Purpose Trust Funds: Combining Statement of Fiduciary Net Assets .....................................................................................130 Combining Statement of Changes in Fiduciary ....................................................................................131 Agency Funds: Combining Statement of Fiduciary Net Assets .....................................................................................134 Combining Statement of Changes in Assets and Liabilities................................................................135 STATISTICAL SECTION (Unaudited) Net Assets by Component..................................................................................................................................... 139 Changes in Net Assets ........................................................................................................................................... 140 Fund Balances of Governmental Funds .............................................................................................................. 142 Changes in Fund Balances of Governmental Funds ......................................................................................... 145 Governmental Activities Tax Revenue by Source ............................................................................................. 146 General Governmental Tax Revenue by Source ................................................................................................ 148 Assessed Value of Taxable Property.................................................................................................................... 149 Direct and Overlapping Property Tax Rates ...................................................................................................... 150 Principal Property Tax Owners ............................................................................................................................ 151 Property Tax Levies and Collections ................................................................................................................... 153 Ratios of Outstanding Debt by Type .................................................................................................................. 154 Ratios of General Bonded Debt Outstanding ..................................................................................................... 156 Computation of Direct and Overlapping Debt .................................................................................................. 157 Legal Debt Margin Information ........................................................................................................................... 158 Pledged-Revenue Coverage.................................................................................................................................. 160 Demographics and Economic Statistics............................................................................................................... 162 Principal Employers............................................................................................................................................... 163 Full-Time City Government Employees by Function/Program ..................................................................... 164 Operating Indicators by Function/Program ...................................................................................................... 165 Capital Asset Statistics by Function/Program ................................................................................................... 166
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809 Center Street, Room 8, Santa Cruz, CA 95060 831 420-5052 Fax: 831 420-5051 www.ci.santa-cruz.ca.us
October 27, 2006
To the Honorable Mayor, Members of the City Council and Citizens of the City of Santa Cruz, California:
Comprehensive Annual Financial Report In accordance with the City Charter, the Comprehensive Annual Financial Report of the City of Santa Cruz for the fiscal year ended June 30, 2006 is submitted for your information and review. Various financing covenants and regulations associated with restricted funding sources also require the City of Santa Cruz, California (City) to publish a complete set of financial statements presented in conformance with generally accepted accounting principles (GAAP) and audited by a firm of licensed certified public accountants. Pursuant to the requirements noted above, we hereby issue the Comprehensive Annual Financial Report of the City of Santa Cruz, California for the fiscal year ended June 30, 2006. This report consists of management's representations concerning the finances of the City of Santa Cruz. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Santa Cruz has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the City of Santa Cruz's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Santa Cruz's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Caporicci & Larson, a firm of licensed certified public accountants, has audited the City of Santa Cruz's financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Santa Cruz for the fiscal year ended June 30, 2006, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial presentation. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Santa Cruz’s financial statements for the fiscal year ended June 30, 2006, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report.
i
The independent audit of the financial statements of the City of Santa Cruz was part of a broader, federally mandated "Single Audit" designed to meet the needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of Santa Cruz’s separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Santa Cruz's MD&A can be found immediately following the report of the independent auditors. Profile of the Government The City of Santa Cruz, incorporated in 1866, is located on the northern part of the Monterey Bay approximately 74 miles south of San Francisco and 30 miles from San Jose. The City of Santa Cruz was first founded in 1769 by the Spanish explorer Don Gaspar de Portola, who, along with Father Junipero Serra, began land based settlement in the area. Santa Cruz is the county seat for the County of Santa Cruz, and is a charter city which operates under the provisions of a voter-approved charter. The City has an area of 12 square miles and an estimated population of 56,925 as of January 2006. Santa Cruz is the home to the University of California, Santa Cruz (UCSC) which first opened in 1965 and has a current enrollment of over 15,000 students. UCSC has received worldwide recognition in the past few years for its high quality academic programs and sponsored research programs such as the California Institute for Quantitative Biomedical Research (QB3), the Center for Information Technology Research in the Interest of Society (CITRIS), and the Laboratory for Adaptive Optics. The major industries include agriculture, tourism, manufacturing, food processing, and technology. Like other cities in California, the City of Santa Cruz has limited ability to set tax rates. The State Constitution establishes a maximum rate for property tax and limits the growth of assessed value. Prop 13 sets the limit for increases of the property tax rate to 2% per year, but upon sale, full value becomes the assessed value. The property tax collected is allocated among the jurisdictions in the City's tax rate areas based on criteria established by the state legislature. The rates and tax base of two of the City's other major general revenues , sales and use tax and motor vehicle in lieu fees (VLF), are also controlled by the legislature. Changes to existing local taxes and any new taxes require voter approval. Taxes used for general purposes are subject to approval by a simple majority of voters while taxes levied for specific purposes require a twothirds majority of voters. Assessments must be approved by a two-thirds vote with voting rights apportioned based on the amount of the assessment. In addition, fees for facilities and services are subject to requirements that they not be set at levels that exceed the reasonable costs of providing services. As a result, fund balances generated by differences between fee revenue and related expense are retained and designated for services and facilities that benefit fee payers. The City of Santa Cruz has operated under the council-manager form of government since its incorporation in 1866. Policy-making and legislative authority are vested in a seven member governing council consisting of the Mayor and six Council Members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, approving nominees to commissions, and hiring the City Manager, City Clerk and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council Members serve four-year staggered terms, with either three or four Council Members elected every two years. The Mayor is selected by a majority of the City Council and serves a one year term. The Mayor and Council Members are elected at large and all are subject to two term limits. ii
The City of Santa Cruz provides a broad range of services including police and fire protection, construction and maintenance of streets, parks, flood control and other infrastructure, a wharf facility, recreational and cultural activities including a performing arts center and human services programs. It also operates municipal utilities for water, wastewater, storm water, refuse collection, recycling and landfill disposal in addition to self supporting enterprise operations for parking facilities and a golf course. The water utility provides water service beyond the municipal boundaries and has a total service population of approximately 90,000. Certain infrastructure construction and community development activities are provided through a legally separate redevelopment agency. The Council sits as the agency's board and it functions, in essence, as a department of the City. Therefore, the City of Santa Cruz Redevelopment Agency has been included as an integral part of the City of Santa Cruz’s financial statements. Many major public services delivered within the City's boundaries, including education, and public transportation are provided by other agencies. The City of Santa Cruz is not financially accountable for the operations of the franchisees or these government agencies. As required by the City Charter, an annual budget is adopted by the City Council no later than the first regular meeting in July for the fiscal year beginning July first. As part of the budget process, all City departments submit budget requests for the next fiscal year. These requests are reviewed, and a final City Manager recommended budget showing estimated revenues and expenditures of the City is prepared. This proposed budget is transmitted to the City Council and made available to the public for review. Study sessions and a public hearing are conducted before final adoption of the budget by the City Council. The City Manager is authorized to approve appropriation transfers within any department up to a specified amount; however, any new appropriation or appropriation transfer between departments requires approval by the City Council. Several supplemental appropriations were necessary during the year and are reflected in the budget amounts in the financial statements. Expenditures may not legally exceed appropriations at the department level. The Council reviews budget results at the mid-year review and at budget adoption. Redevelopment budgets are adopted annually along with an annual report. The ongoing review and long range planning focus for financial management provides numerous opportunities to identify and respond to changes in revenues and expenditures and in community priorities. Factors Affecting Financial Condition We think that the information presented in the financial statements is best understood when it is considered from the broader perspective of the context within which the City of Santa Cruz operates. Economic Conditions and Outlook The City of Santa Cruz’s economic growth began to slow during the FY 2002 fiscal year and declined significantly through FY 2004. Tax revenues have begun to show positive growth in FY 2005 and FY 2006. However, significant labor cost increases and a continued sluggish economy have resulted in projecting a potential budget deficit for FY 2007. The local economy is linked to a large degree to the economy of the nearby Silicon Valley region, whose growth continues to lag. Over the last four year period, ending with fiscal year 2006, there has been substantial growth in assessed value of real property. The assessed value is approximately $5.7 billion which is an increase of $500.0 or 9.6% over FY 2005. Property Tax revenues are up $5.9 million or 36% over the previous year.
iii
An important event affecting City revenues took place in August 2005. At a special election called by the City Council, voters approved, by a 58% majority, continuation of a franchise tax on municipal utilities. This tax was previously charged as a type of fee which had been deemed invalid in recent court cases without voter approval. Another significant event that took place in recent years was the approval of a ¼ cent transactions and use tax by the voters. On October 8, 2003, the California Governor approved SB 566 which authorized cities to seek voter approval to levy a transactions and use tax in multiples of 0.25%. City Council authorized submitting Measure F, the ¼ cent sales tax measure, to the voters in March, 2003. This is a five-year general tax which was approved by a 69% majority and is effective July 1, 2006. In November 2006, the voters approved Measure H, making the Measure F ¼ cent sales tax permanent and approving an additional ¼ cent sales tax to become effective April 1, 2007. Historical Trend Information Property Tax The historical trend for property tax has been very positive showing substantial growth given the assessed value of property is approximately $5.7 billion with growth in this year of 9.6%. Property Tax revenues are up $5.9 million or 36% over the previous year.
City of Santa Cruz Property Tax 25.0
22.4
$ Millions
20.0 15.0
12.2
13.3
14.9
15.6
15.8
16.5 Series1
10.0 5.0 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
iv
Sales & Use Tax, Local Transactions and Use Tax and Supplemental Property Tax In-Lieu of Sales Tax In the 2005 and 2006 fiscal years revenues have begun to trend significantly upward. Sales tax increased $.3 million in FY 06 over FY 05. Sales tax in 1997 was $10.3 million and it was not until Fiscal Year 2005 that the City again reached that level for sales tax. Sluggish sales tax in the years between 1997 and 2005 was a result of many things, including, a downturn in the economy of the Silicon Valley, decline of the technology sector within the City, relocation of a number of businesses outside the City, and the September 11 tragedy which significantly reduced the tourist trade.
City of Santa Cruz, Sales Tax Trends 14.0 11.4
12.0 $ Millions
10.0
8.9
9.8
9.1
8.3
11.7
9.1
8.0 Series1
6.0 4.0 2.0 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
Transient Occupancy Tax Transient Occupancy Tax declined after 2001 for many of the reasons cited and consistent with the decline in sales and use tax. However, the transient occupancy tax has not recovered and based on the forecast for growth in hotel rooms, occupancy, and room rates this revenue has remained basically flat. The slight increase in recent years can be attributed to a small increase in room rates.
$ Millions
City of Santa Cruz, Transient Occupancy Tax Trends 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 -
3.9 3.5 3.1
2.9
3.0
3.1
3.4
Series1
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
v
Utility Users Tax The utility users tax is the third largest revenue source for the City, coming after property tax and sales tax. The utility users tax is comprised of a tax on eight utilities; electric, wired telecom, wireless telecom, natural gas, cable, water, wastewater, and refuse (the last three being municipal utilities). Modest increases over the last four years can be attributed to a number of factors. Generally speaking, there have been declines in electric and wired telecom while wireless telecom, gas, and cable have increased. The most significant factor for the rise in overall revenues point to the water, wastewater, and refuse municipal utilities and the increase tax revenues due to recent customer rate increases.
$ Millions
City of Santa Cruz, Utility User Tax Trends 8.4 8.2 8.0 7.8 7.6 7.4 7.2 7.0 6.8 6.6
8.3
8.2
8.1 7.6
7.6
7.6 Series1
7.2
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
Risk management. The City of Santa Cruz uses a program of self-insurance for workers’ compensation and general liability claims, and employs a professional risk manager, supplemented by a professional claim administration firm, to minimize losses. The City is self-insured for workers' compensation up to $500,000 per occurrence. Santa Cruz participates in a multi-agency joint powers authority to provide excess insurance coverage for liability coverage. The joint powers authority and the City rely on estimates prepared by professional actuaries to set aside funds adequate to meet potential future losses. Excess coverage purchased through the joint powers authority covers claims in excess of $1,000,000 for general liability claims. As reflected in the financial statements, the Risk Management internal service fund had deficit net assets as of June 30, 2006 of $4.3 million due to accrued claims liabilities. A deficit balance of $4.8 million related to workers’ compensation activities was offset by surplus balances of $0.4 million related to group health insurance activities and a surplus of 0.2 million related to liability insurance activities, resulting in a total net asset deficit balance of $4.3 million. Significant contributing factors to rising workers’ compensation costs and claims liabilities include both an increased benefit structure resulting from recent State legislation, and cost increases in the excess insurance market that are being passed along to public agencies. At the same time, the self-insured retention per occurrence has increased from $250,000 to $500,000. Health care costs. The City contracts with CalPERS for employee health care coverage. Under this program, employer premiums increased 10% for fiscal year 2006. A similar or even greater increase is projected for fiscal year 2007. In addition, public agencies have been told by CalPERS to expect additional increases in future years.
vi
State budget. California faced budget deficits in previous years. noteworthy changes in state/local finance law. •
This imbalance created a number of
The “Triple Flip” In FY 04, the State of California issued State Deficit Reduction bonds under Proposition 57. Wall Street wanted a dedicated revenue stream. The State of California then devised a method to secure the dedicated revenue stream called the “Triple Flip”. 1.
The State would take 25% of the local government 1% sales tax (Cities and Counties). This is to continue for nine (9) years, beginning in FY 2004-05.
2.
In January (6 months into the fiscal year), the State would require the Counties to take property tax which was earmarked for schools and pay back the first 6 months of the sales tax takeaway to the local governments, the State will then have the counties pay the estimated next 6 months in May. The difference between the estimated and actual sales tax in one year will be corrected in the next year payments.
3.
Then the State, using State General Fund monies, would pay back the schools.
The Sales Tax taken by the State in FY 06 was $2.0 million and it was repaid by the County in the form of “Property Tax in Lieu of Sales Tax. Santa Cruz County pays the City in December and April our estimated 6 month payments. •
VLF-Property Tax Swap for FY 2006 was $3,7 million. In 1999, the state began reducing the vehicle license fee (VLF) rate charged to vehicle owners – and backfilling city and county revenue losses from this tax reduction with state subventions. The FY 2005 state budget package permanently replaced the VLF backfill by shifting an equal amount of K-14 property taxes to cities and counties. Increased state aid offsets K-14 school district revenue losses.
•
FY 2004-05 Property Tax Shift. The FY 2004-05 state budget package included a $1.3 billion shift of property taxes (called ERAF III) from noneducational local agencies (cities, counties, special districts, and redevelopment agencies) to K-14 school districts. Unlike the two permanent property tax shifts enacted in the 1990’s, this tax shift sunsets in FY 2006-07.
•
Proposition 1A. In 2004, state voters amended the State Constitution to prohibit the state from permanently reallocating the property tax in any county noneducation local agencies to K-14 school districts. Also, this measure generally requires a two-thirds vote of the Legislature to change the distribution of property taxes amount noneducation local agencies.
Cash management and policies Cash temporarily idle during the year was invested in obligations of the U.S. Treasury and agencies of the federal government, and the State Treasurer's, Local Agency Investment Pool (LAIF). Maturities of the investments range from one day to five years, with an average maturity of 342 days. The average yield on investments not held by fiscal agents was 3.68%. Investment income includes appreciation in the fair value of investments. Increases in fair value during the current year, however, do not necessarily represent trends that will continue; nor is it always possible to realize such amounts. It is the City’s policy to hold investments to maturity; therefore, gains and losses due to temporary market value fluctuations are rarely realized.
vii
Major Initiatives The City of Santa Cruz operates four municipal utilities, including water, wastewater, storm water, and refuse collection/landfill operations. The Water Department has not made any major capital improvements for the past 10 to 15 years while a new water supply project was being developed. Now, in order to address the pressing needs of an aging infrastructure and the need for a new water supply, the Water Department has embarked upon an ambitious program of capital improvements that will span the next 4 years and will cost approximately $53 million, to be financed partially through the issuance of new debt. Major distribution and supply projects are planned, including a desalination plant. The National Marine Sanctuary Program (NMSP), an agency of the National Oceanic and Atmospheric Administration (NOAA), and the City of Santa Cruz are partnering to design and construct the Monterey Bay National Marine Sanctuary Education Center. The Education Center in the City of Santa Cruz will function as the Monterey Bay National Marine Sanctuary’s premier visitor center. The site was chosen after the NMSP studied 23 locations along California’s Central Coast, settling on the City’s ¾-acre “Fun Spot” property in the Santa Cruz beach area, visited by an estimated 3 million people per year. Formal design will commence in FY 2007. The City will continue to use Development Impact fees to enhance and upgrade park facilities. These fees will also be used for improvements to the greenbelt. During these tough economic times the Parks and Recreation Department will continue to seek grants and bond monies to renovate and upgrade outdated facilities. The development of Depot Park and the Multi Modal Station is an example of a successful partnership between numerous agencies. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Santa Cruz for its comprehensive annual financial report for the fiscal year ended June 30, 2004. This was the 23rd consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for one year only. Due to staff turnover, the City was unable to prepare the FY 2005 Comprehensive Annual Financial Report (CAFR) in the timeframe required to present the CAFR for the award for that year. We believe that our current comprehensive annual financial report (CAFR) to meets the Certificate of Achievement Program’s requirements. Acknowledgements The Finance Department takes great pride in the preparation of this report. The professionalism, commitment and effort of the entire staff of the Finance Department have made this presentation possible. We would like to express our appreciation to all the members of the other departments who assisted and contributed to the preparation of this report. We also want to thank the partners and staff of our auditors for their assistance and support. We wish to also express our sincere thanks to the City Manager, the Mayor and the City Council Members for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Santa Cruz's financial operations. Respectfully submitted,
Sandra Benoit Director of Finance viii
ix
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DIRECTORY OF CITY OFFICIALS CITY OF SANTA CRUZ Mayor Cynthia Mathews Vice Mayor Emily Reilly
Councilmember Mike Rotkin
Councilmember Ryan Coonerty
Councilmember Tim Fitzmaurice
Councilmember Ed Porter
Councilmember Tony Madrigal
City Manager, Richard C. Wilson
Assistant City Manager .....................................................................Martín Bernal Chief of Fire ......................................................................................Ron Oliver Chief of Police...................................................................................Howard Skerry City Attorney .....................................................................................John G. Barisone City Clerk ..........................................................................................Lesile Cook Director of Finance............................................................................Sandra Benoit Director of Human Resources ...........................................................Adela Gonzalez Director of Libraries ..........................................................................Anne M. Turner Director of Parks and Recreation ......................................................Dannettee E. Shoemaker Director of Planning and Community Development.........................Greg Larson Director of Public Works and City Engineer ....................................Mark Dettle Director of Redevelopment Agency..................................................Ceil Cirillo Director of Water Department...........................................................Bill Kocher
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INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council of the City of Santa Cruz Santa Cruz, California We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Santa Cruz, California (City), as of and for the year ended June 30, 2006, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in the United States 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 significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2006, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with generally accepted accounting principles in the United States. As described in Note 1 to the basic financial statements, the City adopted the Governmental Accounting Standards Board Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and Insurance Recoveries, No. 44, Economic Condition Reporting: The Statistical Section (an amendment of NCGA Statement 1), No. 46, Net Assets Restricted by Enabling Legislation, and No. 47, Accounting for Termination Benefits. In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2006 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. 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.
To the Honorable Mayor and Members of the City Council of the City of Arcadia Arcadia, California Page 2 The accompanying Required Supplementary Information, such as Management’s Discussion and Analysis, budgetary comparison information and other information as listed in the table of contents, is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. 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 express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Supplementary Information is presented for purpose of additional analysis and is not a required part of the basic financial statements. The Supplementary Information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
Irvine, California October 27, 2006
2
MANAGEMENT’S DISCUSSION AND ANALYSIS
3
Management's Discussion and Analysis As management of the City of Santa Cruz we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City of Santa Cruz for the fiscal year ended June 30, 2006. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on page i of this report.
Financial Highlights – Primary Government (in $ millions) •
Government-Wide Highlights: Net Assets - The assets of the City of Santa Cruz exceeded its liabilities at the close of the fiscal year by $416.6. Of total Net Assets, $98.0 or 23.5% was reported as unrestricted net assets and may be used to meet the government’s ongoing obligations to citizens and creditors. Restricted net assets of $12.1 may be used for the City’s ongoing obligations related to programs with external restrictions. The remaining $306.5 represents the City’s investment in capital assets, less any related outstanding debt used to acquire those assets. Changes in Net Assets - The City’s total net assets increased by $11.0 or 2.7% in fiscal year 2006. The increase in Net Assets represents the degree to which revenues exceed expenses.
•
Fund Highlights: Governmental Funds – Governmental funds include general, special revenue, debt service, and capital projects funds. As of the close of fiscal year 2006, the City’s governmental funds, including the Redevelopment Agency Fund, reported a combined ending fund balance of $46.9, which is an increase of $3.1 from the prior year. Approximately 67% of this amount, or $31.4, represents the unreserved fund balance available for appropriation. 52.3% of the unreserved fund balance, or $16.4, has been designated for various purposes. General Fund – Total fund balance of the General Fund on June 30, 2006 was $22.8, an increase of $2.8 or 13.8% from the prior year. 81% of the total fund balance, or $18.5, was unreserved. Of the unreserved fund balance, $7.1, or approximately 38.5%, is designated for various purposes. The designations include $5.3 for the city public trust, and varying amounts for other activities. The remaining unreserved balance of $11.4, or 61.5% of unreserved fund balance, is undesignated.
Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information 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 City’s finances, in a manner similar to a private-sector business. They are comprised of the statement of net assets and statement of activities and changes in net assets. The statement of net assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. 4
The statement of activities and changes in net assets presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., interest expense due but unpaid). Both of the above government-wide financial statements distinguish functions of the City 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 City include general government, public safety, public works, parks and recreation, library, transit, social services and community and economic development. The business-type activities of the City include the four municipal utilities: water, wastewater, storm water, and refuse and landfill operation; and also the self-supporting golf course and parking enterprises. Blended Component Units – Component units are legally separate entities that meet certain criteria and would be misleading if their data were not included in this report. This report includes two separate legal entities in this category; The City of Santa Cruz Redevelopment Agency, and The Santa Cruz Public Improvement Financing Corporation. In this report all component units are blended with the primary government because the governing boards are substantively the same as the primary government, and the component units serve the primary government exclusively. The government-wide financial statements can be found on pages 22-23 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The fund financial statements provide detail information about each of the City’s most significant funds, called major funds. The concept of major funds, and the determination of which are major funds, was established by GASB 34 and replaces the concept of combining like funds and presenting them in total. Instead, each major fund is presented individually, with all nonmajor funds summarized and presented in a single column. Individual fund data on the nonmajor funds is presented in the form of combining statements and schedules on pages 107 through 111 of this report. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term 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 financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
5
The City has nine governmental funds, of which two are considered major funds for presentation purposes. Each major fund is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the City’s two major funds – the General Fund and the Redevelopment Agency Fund. Data from the other seven governmental funds are combined into a single, aggregated presentation. The basic governmental fund financial statements can be found on pages 28 through 31 of this report. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements on pages 108 through 109 of this report. Proprietary Funds – The City maintains two different types of proprietary funds – enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the four municipal utilities; water, wastewater, storm water, and refuse and landfill operation; and also the selfsupporting golf and parking enterprises. Internal service funds are used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its equipment operations and maintenance, stores inventory, telecommunications, and risk management activities. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the governmental-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The fund financial statements for the proprietary funds provide separate information for the four municipal utilities; water, wastewater, storm water, and refuse and landfill operation; and also the selfsupporting golf course and parking enterprises. Conversely, the internal service funds are combined into a single aggregated column in the proprietary fund statements. Individual fund data for the internal service funds is provided in the form of combining statements on pages 127 - 129 of this report. The basic proprietary fund financial statements can be found on page 34 - 43 of this report. Fiduciary Funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 49 - 96 of this report. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Santa Cruz’s progress in funding its obligation to provide pension benefits to its employees, as well as providing a budgetary comparison schedule for the General Fund and the Redevelopment Agency Fund. Required supplementary information can be found on pages 92 - 96 of this report. Additional budgetary schedules for the General Fund and the combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information. Combining and individual statements and schedules can be found on pages XX-XX of this report.
6
Government-Wide Financial Analysis (in $ millions) Net Assets. As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Santa Cruz, combined net assets (governmental and businesstype activities) totaled $416.6 at the close of the fiscal year ending June 30, 2006. By far the largest portion of the City’s net assets $306.5 or 73.6% reflects its investment in capital assets (e.g., land, streets, bridges, water and sewer lines, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’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. An additional portion of the City’s net assets $12.1 or 2.9% represents resources that are subject to external restrictions on how they may be used. The remaining $98.0 or 23.5% of the City’s net assets, are “unrestricted,” and may be used to meet the government’s ongoing obligations to citizens and creditors.
City of Santa Cruz's Net Assets (amounts expressed in $ millions) Governmental Activities 2006 2005 Current assets
$
53.3
$
Business-Type Activities 2006 2005 45.7
$
56.4
$
Total 2006 55.7
$
2005
109.7
$
101.4
6.8
8.6
33.3
21.6
40.1
30.2
Capital assets
154.7
151.8
249.9
248.3
404.6
400.1
Total assets
214.8
206.1
339.6
325.6
554.4
531.7
Current liabilities
11.9
9.0
11.5
10.3
23.4
19.3
Noncurrent liabilities
29.1
29.3
85.3
77.4
114.4
106.7
Total liabilities
41.0
38.3
96.8
87.7
137.8
126.0
142.2
139.0
164.3
180.0
306.5
319.0
Restricted
12.1
10.1
-
0.7
12.1
10.8
Unrestricted
19.4
18.7
78.5
57.1
97.9
75.8
Noncurrent assets
Net assets: Invested in capital assets, net of related debt
Total net assets
$
173.8
$
167.8
$
242.8
$
237.8
$
416.6
$
405.6
Changes in Net Assets. The City’s net assets increased by $11.0 or 2.7%, from the prior fiscal year. The City’s expenses cover a range of services. Further analysis is provided within the governmental and business-type activity sections.
7
City of Santa Cruz Changes in Net Assets (amounts expressed in $ millions) Governmental Activities 2006 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues General revenues: Property taxes Sales and use taxes Franchise taxes Transient occupancy taxes Utility users taxes Admissions taxes Other taxes Total taxes Unrestricted grants and contributions Unrestricted investment earnings Gain (loss) on sale of assets Miscellaneous
$
Total revenues Expenses: General government Public safety Parks and recreation Library Public works Transit Community and economic development Social services Interest and charges on long term debt Water Wastewater Refuse Parking Storm water Golf course
Business-Type Activities
2005
24.7 2.1 2.5 29.3
$
22.2 2.8 5.1 30.1
2006
$
51.2 2.5 53.7
Total
2005
$
48.2 0.4 6.4 55.0
2006
$
2005
75.9 2.1 5.0 83.0
$
70.4 3.2 11.5 85.1
22.4 11.7 2.1 3.4 8.3 1.7 2.4 52.0 1.1 1.4 0.5
16.5 11.4 3.5 3.0 8.1 1.6 2.1 46.2 4.6 0.8 0.7
2.1 0.1 0.5
1.5 0.1
22.4 11.7 2.1 3.4 8.3 1.7 2.4 52.0 1.1 3.5 0.1 1.0
16.5 11.4 3.5 3.0 8.1 1.6 2.1 46.2 4.6 2.3 0.8
84.3
82.4
56.4
56.6
140.7
139.0
9.8 27.2 11.7 9.2 9.0 0.6 7.4 2.6 0.9 -
9.9 27.2 11.9 8.9 7.8 0.6 7.8 1.7 1.1 -
15.2 16.2 12.7 3.0 1.9 2.3
14.6 15.5 14.6 2.6 2.1 1.8
9.8 27.2 11.7 9.2 9.0 0.6 7.4 2.6 0.9 15.2 16.2 12.7 3.0 1.9 2.3
9.9 27.2 11.9 8.9 7.8 0.6 7.8 1.7 1.1 14.6 15.5 14.6 2.6 2.1 1.8
78.4
76.9
51.3
51.2
129.7
128.1
Increase (decrease) in net assets before transfers
5.9
5.5
5.1
5.4
11.0
10.9
Transfers
0.1
0.1
(0.1)
(0.1)
-
-
Change in net assets
6.0
5.6
5.0
5.3
11.0
10.9
Net assets, beginning of year Prior period adjustment (Note 15)
167.8 -
162.2 -
237.8 -
232.5 -
405.6 -
394.7 -
Net assets, beginning of year (as restated)
167.8
Total expenses
Net assets - end of year
$
173.8
8
162.2 $
167.8
237.8 $
242.8
232.5 $
237.8
405.6 $
416.6
394.7 $
405.6
Governmental Activities. Governmental activities increased the City’s net assets by $6.0. A comparison of the cost of services by function for the City’s governmental activities is shown below, along with the revenues used to cover the net expenses of the governmental activities. Governmental Activities (amounts expressed in $ millions) 2006
2005
Expenses net of program revenues: General government
$
Public safety
(5.1)
$
(6.1)
(23.7)
(23.1)
Parks and recreation
(8.2)
(8.7)
Library
(0.7)
(0.8)
Public works
(2.9)
0.9
Transit
0.9
-
Community and economic development
(5.9)
(6.2)
Social services
(2.6)
(1.7)
Interest and fiscal charges on long-term debt
(0.9)
(1.0)
Total expenses net of program revenues governmental activities
(49.1)
(46.7)
Property taxes
22.4
16.5
Sales and use taxes
11.7
11.4
Franchise taxes
2.1
3.5
Transient occupancy taxes
3.4
3.0
Utility users taxes
8.3
8.1
Admission taxes
1.7
1.6
Other taxes
2.4
2.1
52.0
46.2
Unrestricted grants and contributions
1.1
4.6
Unrestricted investment earnings
1.4
0.8
Gain on sale of assets
0.0
0.0
Miscellaneous
0.5
0.6
General revenues and transfers: General revenues:
Total taxes
Transfers Total general revenues and transfers $
Change in governmental activities net assets
0.1
0.1
55.1
52.3
6.0
$
5.6
Governmental Expenses. Total governmental activity expenses were $78.4 in fiscal year 2006. The largest expenses were incurred for public safety, parks and recreation, and general government. These expenses do not include capital outlays, which are now reflected in the City’s capital assets. Governmental Revenues. Per GASB 34, program revenues are derived directly from the program itself or from parties outside the reporting government’s taxpayers or citizenry. They reduce the net cost of the function to be financed from the government’s general revenues. Total program revenues from governmental activities were $29.3 in fiscal year 2006. Governmental program revenues derive primarily from charges for services, which include licenses and permits, planning fees, developer fees, recreation charges, traffic and other fines and forfeitures, charges to the Library Joint Powers Authority for personnel services provided, and several other revenues. Program revenues under the operating grants and contributions category include revenues restricted for specific purposes, such as gasoline tax and other federal, state and local grants. Program revenues in the capital grants and contributions category also include federal, state and local grants, but are restricted specifically to be used for capital projects or acquisitions. 9
General revenues are all other revenues not categorized as program revenues, and include all taxes, unrestricted grants, contributions and investment earnings, gains on sales of capital assets, and other miscellaneous revenues. Total general revenues from governmental activities were $55.1 in fiscal year 2006. Taxes of $52.0 comprised 94.4% of the City’s general revenues for fiscal year 2006. The largest single source of general revenues received during fiscal year 2006 was $22.4 of property taxes, or 40.8% of general revenues, followed by $11.7 of sales and use taxes, or 21.3% of general revenues. The largest sources of other taxes are, utility user’s taxes, transient occupancy, franchise and admissions taxes.
EXPENSES & REVENUES GOVERNMENTAL ACTIVITIES, FY 2006
30 25
$ Millions
20 15 10 5
Revenues
10
Tr C an om si m t un ity D ev So In el te ci . re al st Se on rv ic Lo es ng Te rm De bt
W or ks
Li br ar y
ec re at io n
Pu bl ic
&
R
Sa fe ty s
Pu bl ic
Pa rk
G
en er al G
ov er nm
en t
0
Expense
REVENUES BY SOURSE GOVERNMENTAL ACTIVITIES FT 2006
10% Utility User Tax
2% Admission Tax
4% Transient Occupancy Tax
3% Other Taxes 30% Charges for Services
3% Franchise Tax 14% Sales & Use Tax
28% Property Tax
3% Operating Grants 3% Capital Grants
Business Type Activities. Net assets for business-type activities were $242.8, an increase of $5.0 from the prior fiscal year. Total program revenues for business-type activities were $53.7. The largest program revenues were charges for services of $51.2. Other program revenues included capital grants and contributions of $2.5. Total expenses for the business-type activities were $51.3 during fiscal year 2006.
EXPENSES & REVENUES BUSINESS ACTIVITIES, FY 2006
25
$ Millions
20 15
10 5 0 Water
Waste Water
Refuse
Revenues
11
Parking
Storm Water
Expense
Golf Course
REVENUES BY SOURSE BUSINESS ACTIVITIES FT 2006
6% Capital Grants
3% General Revenues
2% Operating Grants
89% Charges for Services
Financial Analysis of Individual Funds (in $ millions) As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds - The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $46.9 which is an increase of $3.1 or 7.1% over the previous year. Approximately $31.4 of the fund balance is unreserved fund balance, which is available for spending at the government’s discretion. Unreserved fund balance increased by $2.2 or 7.6% over the previous year. It should, however, be noted that 52.3% of the unreserved fund balance, or $16.4, has been designated for various purposes, such as debt service, capital projects, public art, police programs and the City Public Trust, leaving $15.0 unreserved and undesignated. The remainder of fund balance $15.5 is reserved to indicate that it is not available for spending because it has already been legally committed. General Fund – Total fund balance of the General Fund on June 30, 2006 was $22.8, an increase of $2.8 or 13.8% over the prior year. Approximately 81% of this amount, or $18.5, was unreserved. Of the unreserved fund balance, $7.1, or 38.5% has been designated for specific uses. The designations include $5.3 for the City Public Trust, and $1.4 for Accrued Compensated Absences (such as, vacations), and varying amounts for other activities, such as unemployment insurance, housing, parks and recreation programs, and equipment and facilities maintenance. The remaining unreserved balance of $11.4, or 61.6% of unreserved fund balance, is undesignated and represents an increase of $2.6 or 30.1% over the previous year. As a measure of the general fund’s liquidity, it may be useful to compare unreserved fund balance, the undesignated portion of the unreserved fund balance, ant the total fund balance to total fund expenditures. Unreserved fund balance ($18.5) represents 28.5% of total general fund expenditures ($65.0), including transfers out. Unreserved and undesignated fund balance ($11.4) represents 17.5% of total expenditures, and total fund balance ($22.8) represents 35% of total fund expenditures ($65.0). The 17.5% percent of total expenditures that is represented by the undesignated, unreserved fund balance ($11.4) exceeds the City Council’s targeted minimum reserve level of 10% of the operating budget for the General Fund. 12
Redevelopment Agency Fund – The City of Santa Cruz Redevelopment Agency is responsible for redevelopment of areas identified under the Community Redevelopment Law as being blighted. The Agency’s operations are funded primarily by the issuance of debt, which is expected to be repaid out of property tax increment revenue generated by increases in property assessed values in the redevelopment areas. At the end of fiscal year 2006, the total fund balance of the Redevelopment Agency Fund was $14.3, a decrease of $.1 from the prior year, or .9%. Of that amount, $6.3 is reserved to indicate that it is not available for spending because it has already been legally committed. The remainder of the unreserved fund balance of $ 8.0 is designated for either debt service or capital projects and represents an increase of $1.5 or 22.5% over the previous year. The Redevelopment Agency Fund had revenues of $10.9, including $10.3 of property tax increment revenue. Expenditures in this fund amounted to $14.2 which is an increase of $5.6 over the previous year due to increases in capital expenditures within the project areas. Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. They include both enterprise funds and internal service funds. For the government-wide financial statements, the internal service funds are consolidated with governmental activities, and the enterprise funds comprise the business-type activities. As discussed in the business-type activities section previously, the City’s net assets increased by $5.0 as a result of operations in the enterprise funds. Net assets ($3.3 negative) in the internal service funds increased by $1.8 over prior year ($5.2 negative). The increases are due to decreases in expenditures in risk management and increases in charges to departments for risk management.
General Fund Budgetary Highlights. The final amended general fund budget, including transfers out and advances, totaled $66.3 and included amendments to the original budget resulting in a $519K increase in operating expenditure appropriations. The principal amendments can be summarized as follows: Operating Appropriations Increases. Significant Appropriations Increases: • • • • • • • •
Minimum Wage Study, $28,000 Public Opinion Survey - Measure F, $36,000 Consultant - Community Design Background, $20,300 Consulting Services - Special District Establishment (Beach Area), $45,000 State Operating Grants - Cal Trans Agreement (Revenue receipt), $130,000 August 30 Special Election, $74,828 State Grant - Route 1/17 Police Officer, $42,000 Electronic Records Management System, $156,907
These appropriations were offset by additional estimated revenue of $2.6, mostly due to increases in taxes of $1.9 and increase in intergovernmental revenues of $0.6
13
Capital Assets and Debt Administration (in $ millions) Capital Assets. The City’s investment in capital assets for its governmental and business- type activities as of June 30, 2006, amounts to $404.6, net of accumulated depreciation of $258.7. This investment in capital assets includes land, land improvements, infrastructure, buildings, machinery and equipment, lease improvements, software, and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the City such as roads, bridges, streets and sidewalks, drainage systems, lighting systems and similar items. The total additions to the City’s investment in capital assets for the current fiscal year, after restatements and deletions, were $4.6, net of accumulated depreciation. Major capital asset additions during the current fiscal included the following: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
RDA Land Purchase – Salz Tannery, $6,3 Water System Improvements, $7.5 Bike Path, $.1 Vehicles and heavy equipment – General Fund, $.3 Sewer Improvements, $.7 Sewer Vehicles (trucks), $.6 Recycling Center Improvements, $1.1 Refuse Trucks, $1.2 Storm Drain Improvements, $.3 Golf Course Improvements, $2.9
Changes in capital assets from the prior year (as restated) are shown in the following table. Additional information on the City’s capital assets can be found in Note 5 on pages XX-XX of this report. Capital Assets (net of depreciation) (amounts expressed in $ millions) Governmental Activities
Business-Type Activities
June 30
June 30
2006 Land
$
2005
50.5
$
2006
44.2
$
Total 2005
11.9
$
2006
11.9
$
2005
62.4
$
56.1
Construction in progress
5.1
2.5
10.4
13.4
15.5
Land improvements
4.0
4.2
3.3
1.0
7.3
15.9 5.2
Infrastructure
65.0
69.4
106.6
101.5
171.6
170.9
Buildings
26.5
27.2
107.9
110.7
134.4
137.9
Machinery and equipment
3.0
3.3
9.5
9.4
12.5
12.7
Lease improvements
0.4
0.5
0.1
0.1
0.5
0.6
Software
0.2
0.4
0.2
0.3
0.4
0.7
Totals
$
154.7
$
151.7
$
249.9
$
248.3
$
404.6
$
400.0
Debt Administration (in millions) Long Term Debt - At the end of the current fiscal year, the City had $127.7 in long term debt outstanding compared to $116.7 last year, an increase of $11.0 or 9.4%. Increases to claims and judgments payable, landfill closure costs, lease obligations, and tax allocation bonds were offset by decreases in a variety of other bonds, notes, loans, and leases payable. The debt associated with governmental activities increased by $2.3 or 6.7% from $33.7 to $36.0. Business-type activity debt was increased by $8.7 or 10.5% from $83.0 to $91.7. Major increase in debt during the year included the issuance of Water Revenue Bonds.
14
The City currently has $7.1 in outstanding general obligation debt. This debt was approved by voters in November 1998 and authorized an ad valorem tax override for acquisition of open space property, improvements to fire stations, acquisition of a fire administrative headquarters building, and construction of a community park. This tax override is currently assessed at $9 per $100,000 of assessed value. The largest single debt obligation of the City is a note payable to the State of California for the construction of secondary treatment improvements at the City's wastewater treatment plant. As of June 30, 2006 the outstanding balance on this note was $37.8. The chart below illustrates the changes in bonds, notes, loans and leases payable for the year ending June 30, 2006. Bonds, Notes, Loans and Leases Payable (amounts expressed in $ millions) Governmental Activities
Business-Type Activities
June 30 2006 Certificates of participation
$
4.2
Revenue bonds payable
June 30 2005
2006
$
4.4
$
Total 2005
20.9
$
2006
28.7
$
2005
25.1
$
33.1
-
-
23.3
4.7
23.3
4.7
General obligation bonds
7.1
7.2
-
-
7.1
7.2
Notes payable
41.5
4.2
1.3
37.8
40.2
42.0
Notes payable-County-RDA
-
-
-
-
-
-
Tax allocation bonds payable
5.1
5.2
-
-
5.1
5.2
Capital lease obligations
1.2
1.8
3.1
3.1
4.3
4.9
Other long-term liabilities
1.0
1.0
-
-
1.0
1.0
$
Totals
22.8
$
20.9
$
85.1
$
76.7
$
107.9
$
97.6
The City of Santa Cruz also has significant liabilities for claims and judgments, compensated absences (accrued vacation pay), and landfill closure and postclosure costs. The amounts and changes of these liabilities are shown below. Claims and Judgments, Compensated Absences, and Landfill Closure Costs Payable (amounts expressed in $ millions) June 30 2006 Claims and Judgements
$
June 30, 2006 2005
11.0
$
10.5
$
Increase
Percent
Due in less
Due in more
(Decrease)
Change
than one year
than one year
$
$
0.5
4.8%
3.0
8.0
Compensated absences
2.9
2.9
-
0.0%
1.9
1.0
Closure and post closure landfill costs
5.8
5.4
0.4
7.4%
-
5.8
0.4
4.8%
Totals
$
8.7
$
8.3
$
$
1.9
$
6.8
Additional information on the City of Santa Cruz’s long term debt can be found in Note 6 to the financial statements. Economic Climate The City of Santa Cruz, and Santa Cruz County for that matter, is closely tied to the regional economy of the nine-county San Francisco Bay Area and to Silicon Valley in particular. Fiscal Year 2006 showed signs of recovery at the national level, along with the Bay Area and Silicon Valley. Local private employers include a diverse array of manufacturing, business services, retail, hotel and food services, and biotechnology companies. In addition to the local private employers, the local economy also benefits from the University of California Santa Cruz. The University is a major employer, and has potential spin-off benefits from federal and state funded scientific research ventures including biomedical research, technology research, and adaptive optics. 15
The state, and the bay area in particular, experienced modest growth in jobs, personal income, and tourism in 2006 and the economy is expected to continue to improve during 2006, albeit modestly. However, the bay area regional economic opportunities and challenges including continued job growth, housing prices, interest rates, state and national economic issues will, of course, moderate the rate of improvement.
Requests for Information This financial report is designed to provide a general overview of the City’s finances for all of its citizens, taxpayers, customers, investors and creditors. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the City of Santa Cruz, Finance Department, 809 Center Street, Room 8, Santa Cruz, CA 95060.
16
BASIC FINANCIAL STATEMENTS
17
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18
GOVERNMENT-WIDE FINANCIAL STATEMENTS
19
City of Santa Cruz Statement of Net Assets June 30, 2006
Primary Government Governmental
Business-Type
Activities
Activities
Total
ASSETS Current assets: Cash and cash equivalents
$
Restricted cash and cash equivalents Interest receivable Taxes receivable Accounts receivable - net Due from other governments
41,279,889
$
45,636,664
$
86,916,553
2,963,869
2,765,752
5,729,621
682,729
950,933
1,633,662
3,936,698
-
3,936,698
959,308
5,130,015
6,089,323
1,389,967
676,898
2,066,865
Notes receivable - due within one year
220,401
25,962
246,363
Loans receivable - due within one year
87,376
-
87,376 1,120,316
-
1,120,316
Prepaid items
Intergovernmental receivable - due within one year
216,801
94,570
311,371
Inventories
249,288
-
249,288
1,351,477
30,000
1,381,477
53,337,803
56,431,110
109,768,913
339,768
13,984,480
14,324,248
Notes receivable - due in more than one year
4,853,840
401,058
5,254,898
Loans receivable - due in more than one year
1,213,636
-
1,213,636
-
16,660,168
16,660,168
Deferred charges
294,093
2,250,124
2,544,217
Long-term internal balances
(25,130)
25,130
-
50,452,567
11,931,526
62,384,093
5,393,352
3,956,018
9,349,370
Deposits Total current assets Noncurrent assets: Restricted investments
Intergovernmental receivable - due in more than one year
Capital assets: Land Land improvements Infrastructure
167,322,095
180,436,253
347,758,348
Buildings
35,421,568
160,134,334
195,555,902
Machinery and equipment
10,279,605
20,026,950
30,306,555
724,114
70,000
794,114
Software
Lease improvements
1,056,070
555,258
1,611,328
Construction in progress
5,108,592
10,436,904
15,545,496
275,757,963
387,547,243
663,305,206
(121,022,337)
(137,683,979)
(258,706,316)
Total capital assets, net
154,735,626
249,863,264
404,598,890
Total noncurrent assets
161,411,833
283,184,224
444,596,057
Total assets
214,749,636
339,615,334
554,364,970
Total capital assets Less accumulated depreciation
See accompanying Notes to Basic Financial Statements.
20
City of Santa Cruz Statement of Net Assets, Continued June 30, 2005
Primary Government Governmental
Business-Type
Activities
Activities
Total
LIABILITIES Current liabilities: Accounts payable and other current liabilities
$
Intergovernmental payable
3,767,770
$
3,651,379
$
7,419,149
52
-
52
Interest payable
243,029
1,378,739
1,621,768
Deferred revenue
823,128
56,451
879,579
Deposits payable
134,221
41,611
175,832
Claims and judgments payable - due within one year
3,039,471
-
3,039,471
Compensated absences payable - due within one year
1,405,557
501,062
1,906,619
Bonds, notes, loans and leases payable - due within one year
1,119,055
5,857,679
6,976,734
10,532,283
11,486,921
22,019,204
7,967,819
Total current liabilities Noncurrent liabilities: Claims and judgments payable - due in more than one year
7,967,819
-
Compensated absences payable - due in more than one year
702,778
250,532
953,310
21,768,918
79,290,887
101,059,805
-
5,751,407
5,751,407
Total noncurrent liabilities
30,439,515
85,292,826
115,732,341
Total liabilities
40,971,798
96,779,747
137,751,545
142,469,186
164,275,405
306,744,591
Capital projects
4,256,664
-
4,256,664
Debt service
4,361,282
-
4,361,282
Public safety
82,648
-
82,648
Parks and recreation
92,338
-
92,338
Bonds, notes, loans and leases payable - due in more than one year Landfill closure costs
NET ASSETS Invested in capital assets, net of related debt Restricted for:
Community and economic development Unrestricted Total net assets
3,339,305
-
3,339,305
19,176,415
78,560,182
97,736,597
$
173,777,838
$
242,835,587
$
416,613,425
Assets - Liab.& Net Assets $
-
$
-
$
-
Bal. Sheet Net Assets - IS Net Assets $
-
$
-
$
-
See accompanying Notes to Basic Financial Statements.
21
City of Santa Cruz Statement of Activities and Changes in Net Assets For the year ended June 30, 2006
Program Revenues
Functions/Programs
Charges for Services
Expenses
Operating
Capital
Grants and Contributions
Grants and Contributions
Total
Primary government: Governmental activities: General government
$
9,755,194
$
4,662,211
$
-
$
-
$
4,662,211
Public safety
27,227,214
3,041,137
239,005
206,123
3,486,265
Parks and recreation
11,715,023
3,191,193
81,133
194,513
3,466,839
Library
9,179,637
8,478,112
-
-
8,478,112
Public works
9,047,430
4,253,232
1,284,078
624,214
6,161,524
624,214
66,643
-
1,474,715
1,541,358
Community and economic development
8,285,308
996,327
521,321
-
1,517,648
Social services
1,693,267
-
-
-
-
883,866
-
-
-
-
78,411,153
24,688,855
2,125,537
2,499,565
29,313,957
Water
15,204,565
19,480,617
-
460,731
19,941,348
Wastewater
16,192,904
13,079,711
-
1,456,986
14,536,697
Refuse
12,700,841
13,525,848
11,000
-
13,536,848
Parking
2,960,225
2,654,549
-
25,015
2,679,564
Storm water
1,925,661
869,490
-
535,628
1,405,118
Golf course
2,325,920
1,608,752
4,704
2,075
1,615,531
Transit
Interest and fiscal charges on long-term debt Total governmental activities Business-type activities:
Total business-type activities Total primary government
51,310,116 $
129,721,269
51,218,967 $
75,907,822
15,704 $
2,141,241
2,480,435 $
General Revenues: Taxes: Property taxes Sales and use taxes Franchise taxes Transient occupancy taxes Utility users taxes Admission taxes Other taxes Total taxes Unrestricted grants and contributions Unrestricted investment earnings Gain on sale of assets Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets - beginning of year Net assets - end of year See accompanying Notes to Basic Financial Statements.
22
4,980,000
53,715,106 $
83,029,063
Net (Expense) Revenue and Changes in Net Assets Governmental Activities
Business-Type Activities
$
$
(5,092,983)
$
(5,092,983)
(23,740,949)
-
(23,740,949)
(8,248,184)
-
(8,248,184)
(701,525)
-
(701,525)
(2,885,906)
-
(2,885,906)
917,144
$
-
Total
-
917,144
(6,767,660)
-
(6,767,660)
(1,693,267)
-
(1,693,267)
(883,866)
-
(883,866)
(49,097,196)
-
(49,097,196)
-
4,736,783
4,736,783
-
(1,656,207)
(1,656,207)
-
836,007
836,007
-
(280,661)
(280,661)
-
(520,543)
(520,543)
-
(710,389)
(710,389)
-
2,404,990
2,404,990
(49,097,196)
2,404,990
(46,692,206)
22,384,981
-
22,384,981
11,738,917
-
11,738,917
2,136,686
-
2,136,686
3,385,148
-
3,385,148
8,304,371
-
8,304,371
1,715,133
-
1,715,133
2,303,363
-
2,303,363
51,968,599
-
51,968,599
1,121,274
-
1,121,274
1,380,087
2,079,379
3,459,466
24,318
91,920
116,238
487,841 67,517
508,500 (67,517)
996,341 -
55,049,636
2,612,282
57,661,918
5,952,440
5,017,272
10,969,712
167,825,398
237,818,315
405,643,713
173,777,838
$
242,835,587
$
416,613,425
23
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24
FUND FINANCIAL STATEMENTS
25
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26
Governmental Fund Financial Statements General Fund - The General Fund is used to account for sources and uses of financial resources traditionally associated with governments, and which are not required to be accounted for in another fund. Redevelopment Agency Fund - The Redevelopment Agency fund is used to account for all the activities of the City of Santa Cruz Redevelopment Agency. This includes the accumulation of resources for and the payment of interest and principal on debt issued to finance redevelopment activities, and general redevelopment operations. Other Governmental Funds - Other Governmental funds is the aggregate of all the non-major governmental funds.
27
City of Santa Cruz Balance Sheet Governmental Funds June 30, 2006
Major Funds
Other
Total
General
Redevelopment
Governmental
Governmental
Fund
Agency
Funds
Funds
ASSETS Cash and cash equivalents
$
Interest receivable
19,778,125
$
7,503,391
$
7,456,718
$
34,738,234
146,611
126,321
351,641
624,573
3,006,225
314,939
615,534
3,936,698
Accounts receivable - net
796,486
-
131,128
927,614
Due from other governments
276,046
-
1,113,921
1,389,967
Taxes receivable
Due from other funds
80,237
-
-
80,237
205,218
-
1,844
207,062
Cash and cash equivalents
-
2,958,834
5,035
2,963,869
Investments
-
62,249
277,519
339,768
-
3,021,083
282,554
3,303,637
Prepaid items Restricted assets:
Total restricted assets Deposits
202,050
-
-
202,050
Notes receivable - net
330,775
3,714,571
1,028,895
5,074,241
Loans receivable - net Advances to other funds
-
-
1,301,012
1,301,012
957,838
96,501
-
1,054,339
-
120,000
-
120,000
Inventory of land held for resale - net Total assets
$
25,779,611
$
14,896,806
$
12,283,247
$
52,959,664
$
2,641,189
$
146,069
$
515,464
$
3,302,722
LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Due to other funds
-
-
68,559
68,559
-
-
52
52
Deferred revenue
204,645
-
1,299,235
1,503,880
Deposits payable
131,085
2,984
-
134,069
-
449,468
630,001
1,079,469
2,976,919
598,521
2,513,311
6,088,751
Reserved
4,327,113
6,339,360
4,809,176
15,475,649
Unreserved, designated:
7,120,993
7,958,925
1,336,867
16,416,785
Intergovernmental payable
Advances from other funds Total liabilities Fund Balances:
Unreserved, undesignated, reported in: General fund
11,354,586
-
-
11,354,586
Special revenue funds
-
-
3,341,962
3,341,962
Capital projects funds
-
-
281,931
281,931
22,802,692
14,298,285
9,769,936
46,870,913
Total fund balances Total liabilities and fund balances
$
25,779,611
See accompanying Notes to Basic Financial Statements.
28
$
14,896,806
$
12,283,247
$
52,959,664
City of Santa Cruz
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets June 30, 2006 Total Fund Balances - All Governmental Funds
$
46,870,913
Amounts reported for Governmental Activities in the Statement of Net Assets were different because: Capital assets used in governmental activities are not current financial resources. Therefore, they are not reported in the governmental funds. Except for the internal service funds reported below, the capital assets are adjusted as follows: Non-depreciable
GovernmentWide Statement of Net Assets
Internal Service Funds
$
$
Depreciable, net
55,561,159 99,174,467
$
Total capital assets
154,735,626
$
-
55,561,159
(273,255)
98,901,212
(273,255)
154,462,371
Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the governmental funds.
(243,029)
Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and equipment management, to individual funds. The assets and liabilities of the Internal Service Funds are included in governmental activities in the statement of net assets. Equipment Operations Fund
486,525
Stores Services Fund
226,658
Telecommunications Fund
217,555
Risk Management Fund
(4,256,330)
Total internal service funds
(3,325,592)
Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. Noncurrent liabilities were not due and payable in the current period. Therefore, they are not reported in the governmental funds. Except for the internal service funds reported above, the long-term liabilities are adjusted as follows. Compensated absences payable - due within one year
680,752 GovernmentWide Statement of Net Assets
Internal Service Funds
$
$
(1,405,557)
-
(1,405,557)
Compensated absences payable - due in more than one year
(702,778)
13,602
(689,176)
Bonds, notes, loans and leases payable - due within one year
(1,119,055)
21,036
(1,098,019)
(21,768,918)
-
(21,768,918)
34,638
(24,961,670)
Bonds, notes, loans and leases payable - due in more than one year Total long-term liabilities
$
(24,996,308)
$
Certain transactions related to debt issuance and refunding are reported as expenditures and other financing sources/uses in the governmental funds. For the statement of net assets, the net amount of these transactions is capitalized as deferred charges, and will be amortized as an adjustment to interest expense over the remaining life of the debt. Net Assets of Governmental Activities
294,093 $
See accompanying Notes to Basic Financial Statements.
29
173,777,838
City of Santa Cruz Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2006
Major Funds Other
Total
General
Redevelopment
Governmental
Governmental
Fund
Agency
Funds
Funds
REVENUES: Taxes
$
Licenses and permits
39,495,863
$
615,448
Intergovernmental
10,323,206
$
2,216,660
-
-
$
52,035,729 615,448
1,073,997
-
4,622,240
5,696,237
Charges for services
19,062,464
-
284,999
19,347,463
Fines and forfeitures
1,962,697
-
2,538
1,965,235
Use of money and property
2,541,909
471,523
220,727
3,234,159
216,721
147,053
686,151
1,049,925
64,969,099
10,941,782
8,033,315
83,944,196
Other revenues Total revenues EXPENDITURES: General government Public safety
9,666,858
-
-
9,666,858
26,837,330
-
101,299
26,938,629
Parks and recreation
9,402,529
-
-
9,402,529
Library
9,250,499
-
-
9,250,499
Public works
3,565,397
-
593,519
4,158,916
-
-
624,214
624,214
Community and economic development
1,000,492
6,978,325
457,651
8,436,468
Social services
1,566,695
-
126,572
1,693,267
Capital outlay
765,851
6,282,979
4,872,959
11,921,789
204,928
513,612
431,237
1,149,777
48,264
409,555
463,698
921,517
-
-
-
-
62,308,843
14,184,471
7,671,149
84,164,463
2,660,256
(3,242,689)
Transit
Debt service: Principal Interest and fiscal charges Bond issuance costs Total expenditures REVENUES OVER (UNDER) EXPENDITURES
362,166
(220,267)
OTHER FINANCING SOURCES (USES): Proceeds from asset disposition
25,256
-
-
25,256
-
3,100,000
100,000
3,200,000
99,894
-
761,363
861,257
(19,509)
-
(738,661)
(758,170)
Proceeds from long-term debt issued Transfers in Transfers out Total other financing sources (uses)
105,641
Net change in fund balances
3,100,000
2,765,897
(142,689)
122,702
3,328,343
484,868
3,108,076
9,285,068
43,762,837
FUND BALANCES: Beginning of year End of year
20,036,795 $
22,802,692
See accompanying Notes to Basic Financial Statements.
30
14,440,974 $
14,298,285
$
9,769,936
$
46,870,913
City of Santa Cruz Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Assets For the year ended June 30, 2006 Net Change in Fund Balances - All Governmental Funds
$
3,108,076
Amounts reported for governmental activities in the Statement of Activities and Changes in Net Assets were different because: Governmental funds report capital outlays 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. This is the amount by which depreciation exceeded capital outlays in the current period, excluding the internal service funds, which are reported below.
3,063,302
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and capital contributions) is to increase net assets.
(938)
Revenues considered "unavailable" at the end of the previous fiscal year were collected during the current year and are reported as revenues in the governmental funds. These revenues were previously included in the statement of activities.
(17,811)
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.
16,306
Certain costs related to issuing new debt and refunding existing debt are reported as expenditures and financing uses in the governmental funds, but are capitalized in the statement of net assets, and will be amortized over the remaining life of the debt.
(11,311)
Proceeds of long-term debt and payments to refunding bond escrow agents are reported as financing sources/uses in governmental funds. In the statement of net assets, however, issuing or refinancing debt affects noncurrent liabilities.
(3,163,916)
Repayment of principal is an expenditure in governmental funds, but reduces noncurrent liabilities in the statement of net assets.
1,149,777
Debt service principal payments are reclassified as "Community and economic development" expense in the Government-Wide Statement of Activities.
84,323
Accrued but unpaid and accreted interest on long-term debt is reported in the statement of activities, but does not require the use of current financial resources. Therefore, it is not reported as an expenditure in the governmental funds.
(120,310)
Internal service funds are used by management to charge the costs of certain activities, such as insurance and equipment management, to individual funds. The net revenue of the internal service funds is reported with governmental activities. Change in Net Assets of Governmental Activities
1,844,942 $
See accompanying Notes to Basic Financial Statements.
31
5,952,440
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32
Proprietary Fund Financial Statements Water - Accounts for the activities of the City's water utility, which provides water delivery services to the residents of the City and some residents of the County. Wastewater - Accounts for the activities of the City's wastewater utility, which provides wastewater collection and treatment services to the residents of the City and some residents of the County. Refuse - Accounts for the activities of the City's refuse utility, which provides refuse pick-up services, recycling services, and a sanitary landfill for residents of the City. Parking - Accounts for the activities of the Downtown Parking District, which provides parking facilities in the downtown area. Storm Water - Accounts for storm water utility fees on properties within the City limits. These fees provide funding for flood control improvements associated with the U.S. Army Corps of Engineers San Lorenzo River Flood Control project, storm water pollution prevention programs, and measures to comply with the U.S. Environmental Protection Agency Non-Point Pollution Discharge Emissions Standards Program (NPDES). Golf Course - Accounts for the activities of the Delaveaga Golf Course, which provides recreational facilities to the public. Internal Service Funds - These funds are used to provide goods and services by one department or agency to other departments or agencies of the City on a cost reimbursement basis.
33
City of Santa Cruz Statement of Net Assets Proprietary Funds June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
ASSETS Current assets: Cash and cash equivalents
$
25,506,424
$
8,146,550
$
7,601,120
$
2,544,649
Restricted cash and cash equivalents
146,152
378,311
1,948,584
20,273
Interest receivable
319,954
508,498
73,853
26,929
3,517,726
825,433
653,056
33,375
-
375,793
11,000
12,751
Accounts receivable - net Due from other governments Notes receivable - due within one year
-
25,962
-
-
Intergovernmental receivable - due within one year
-
1,120,316
-
-
32,366
17,619
35,503
3,495
Inventories
Prepaid items
-
-
-
-
Deposits
-
-
-
30,000
29,522,622
11,398,482
10,323,116
2,671,472
12,000,000
-
1,058,100
491,129
401,058
-
-
-
-
16,160,263
-
-
Total current assets Noncurrent assets: Restricted investments Notes receivable - due in more than one year Intergovernmental receivable - due in more than one year Advances to other funds
21,630
100,001
-
-
446,203
284,213
330,974
212,239
3,654,410
1,371,330
98,575
4,979,102
71,900
910,270
-
280,701
54,010,317
51,085,388
19,746,219
805,464
Buildings
9,117,940
126,672,607
2,709,094
20,398,375
Machinery and equipment
5,832,199
3,623,937
9,768,770
163,866
-
70,000
-
-
249,431
196,557
99,336
9,934
Deferred charges Capital assets: Land Land improvements Infrastructure
Lease improvements Software Construction in progress
7,024,800
Less accumulated depreciation
429,186
2,318,333
333,757
(34,614,606)
(65,267,707)
(18,012,630)
(6,734,606)
Total capital assets (net of accumulated depreciation)
45,346,391
119,091,568
16,727,697
20,236,593
Total noncurrent assets
58,215,282
135,636,045
18,116,771
20,939,961
Total assets
87,737,904
147,034,527
28,439,887
23,611,433
See accompanying Notes to Basic Financial Statements.
34
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
1,837,921
$
Total
-
$
Service Funds
45,636,664
$
6,541,655
329
272,103
2,765,752
-
20,299
1,400
950,933
58,156 31,694
37,057
63,368
5,130,015
269,754
7,600
676,898
-
-
-
25,962
-
-
-
1,120,316
-
190
5,397
94,570
9,739
-
-
-
129,288
-
-
30,000
1,149,427
2,165,550
349,868
56,431,110
7,919,959
-
435,251
13,984,480
-
-
-
401,058
-
499,905
-
16,660,168
-
439,293
-
560,924
-
832,867
143,628
2,250,124
-
8,822
1,819,287
11,931,526
242,277
2,450,870
3,956,018
-
54,554,503
234,362
180,436,253
-
-
1,236,318
160,134,334
-
6,421
631,757
20,026,950
1,148,847
-
-
70,000
-
-
-
555,258
336,296
330,828
-
10,436,904
-
(11,663,944)
(1,390,486)
(137,683,979)
(1,211,888)
43,478,907
4,982,108
249,863,264
273,255
45,250,972
5,560,987
283,720,018
273,255
47,416,522
5,910,855
340,151,128
8,193,214
(Continued)
35
City of Santa Cruz Statement of Net Assets, Continued Proprietary Funds June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
LIABILITIES Current liabilities: Accounts payable and other current liabilities
$
2,000,966
Due to other funds Interest payable
$
611,800
$
676,657
$
162,415
-
-
-
50,408
127,576
972,787
134,092
Deferred revenue
622
-
37,440
-
Deposits payable
20,449
47
253
20,862
Claims and judgments payable
-
-
-
-
Compensated absences payable
218,955
114,023
141,729
8,070
due in less than one year
393,767
2,599,040
2,266,230
201,337
Total current liabilities
2,762,335
4,297,697
3,256,401
443,092 96,501
Bonds, notes, loans and leases payable
Noncurrent liabilities: Advances from other funds
-
-
-
Claims and judgments payable
-
-
-
-
Compensated absences payable
109,478
57,012
70,864
4,035
12,846,733
38,850,560
11,489,100
6,145,000
-
-
5,751,407
-
Bonds, notes, loans and leases payable due in more than one year Landfill closure costs Total noncurrent liabilities
12,956,211
38,907,572
17,311,371
6,245,536
Total liabilities
15,718,546
43,205,269
20,567,772
6,688,628
Invested in capital assets, net of related debt
32,105,891
77,641,968
2,972,367
13,890,256
Unrestricted
39,913,467
26,187,290
4,899,748
3,032,549
NET ASSETS
Total net assets
$
72,019,358
See accompanying Notes to Basic Financial Statements.
36
$
103,829,258
$
7,872,115
$
16,922,805
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
86,774
$
-
$
Total
112,767
$
Service Funds
3,651,379
$
465,048
-
-
11,678
59,962
33,914
1,378,739
-
-
18,389
56,451
-
-
-
41,611
152
-
-
-
3,039,471
1,331
16,954
501,062
-
160,000
237,305
5,857,679
21,036
308,067
419,329
11,486,921
3,537,385
-
439,293
535,794
-
-
-
-
7,967,819
666
8,477
250,532
13,602
5,940,000
4,019,494
79,290,887
-
-
-
5,751,407
-
5,940,666
4,467,264
85,828,620
7,981,421
6,248,733
4,886,593
97,315,541
11,518,806
37,378,907
286,016
164,275,405
3,788,882
738,246
78,560,182
41,167,789
$
1,024,262
$
242,835,587
252,219 (3,577,811) $
(3,325,592)
(Concluded)
37
City of Santa Cruz Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For the year ended June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
OPERATING REVENUES: Charges for services
$
19,480,617
$
13,079,711
$
13,525,848
$
2,654,549
Use of property
6,450
-
-
147,015
Other revenues
221,100
2,070
46,471
49,971
19,708,167
13,081,781
13,572,319
2,851,535
6,671,445
4,302,400
5,532,163
918,508
Total operating revenues OPERATING EXPENSES: Personnel services Services, supplies, and other charges
6,734,037
6,384,713
4,692,936
1,230,474
Depreciation and amortization
1,649,079
4,267,555
1,896,004
489,528
Total operating expenses
15,054,561
14,954,668
12,121,103
2,638,510
Operating income (loss)
4,653,606
(1,872,887)
1,451,216
213,025
NONOPERATING REVENUES (EXPENSES): Intergovernmental Investment earnings Interest expense and fiscal charges
-
283,786
11,000
25,015
855,653
681,315
270,588
71,143
(147,572)
(1,232,551)
(542,932)
(311,805)
Debt issuance costs
(2,432)
(5,685)
(36,806)
(9,910)
Gain (loss) on sale of capital assets
15,515
5,775
69,035
1,595
Total nonoperating revenues (expenses) Income (loss) before contributions and transfers
721,164
(267,360)
5,374,770
(2,140,247)
Capital contributions
460,731
Transfers out
(31,638)
Total contributions and transfers
1,173,200 (7,541)
429,093
Change in net assets
(229,115)
1,165,659
5,803,863
(974,588)
(223,962)
1,222,101
(10,937)
-
-
(14,908)
(6,388)
(14,908)
(6,388)
1,207,193
(17,325)
NET ASSETS: Beginning of year End of year
66,215,495 $
72,019,358
See accompanying Notes to Basic Financial Statements.
38
104,803,846 $
103,829,258
6,664,922 $
7,872,115
16,940,130 $
16,922,805
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
869,490
$
1,608,752
$
51,218,967
Service Funds
$
9,204,143
-
920
154,385
-
-
188,888
508,500
121,266
869,490
1,798,560
51,881,852
9,325,409
89,463
854,481
18,368,460
1,291,931
244,176
1,062,891
20,349,227
6,225,352
1,317,062
172,066
9,791,294
85,599
1,650,701
2,089,438
48,508,981
7,602,882
3,372,871
1,722,527
(781,211)
(290,878)
535,628
4,704
860,133
-
26,507
19,788
1,924,994
161,413
(265,614)
(226,001)
(2,726,475)
(3,428)
(9,346)
(10,481)
(74,660)
-
-
-
91,920
-
287,175
(211,990)
75,912
157,985
(494,036)
(502,868)
3,448,783
1,880,512
1,636,006
-
-
2,075
(6,360)
(682)
(6,360)
1,024,262
(35,570)
5,017,272
1,525,737 $
(35,570)
1,568,489
(501,475)
41,668,185 41,167,789
(67,517)
1,393
(500,396)
$
Total
1,844,942
237,818,315 $
242,835,587
(5,170,534) $
(3,325,592)
39
City of Santa Cruz Combining Statement of Cash Flows Proprietary Funds For the year ended June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers and users
$
Cash received from interfund services provided
18,710,565
$
566,367
12,828,339
$
23,025
13,509,946
$
-
2,616,476 29,391
Cash payments to suppliers for goods and services
(7,531,499)
(8,011,836)
(6,565,783)
(1,541,637)
Cash payments to employees for services
(6,632,478)
(4,314,881)
(5,516,543)
(931,127)
1,536,566
1,221,360
2,369,403
36,851
95,015
93,927
90,090
25,061
195,184
(15,549)
10,968
193,491
3,898,081
428,506
Cash payments for interfund services used Cash payments to other governments Cash received from (payments to) others Net cash provided (used) by operating activities
6,939,720
1,824,385
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out
(31,638)
(7,541)
(14,908)
(6,388)
Advances from other funds
-
-
-
(61,356)
Receipts from other governments
-
1,125,242
-
21,215
(31,638)
1,117,701
(14,908)
Net cash provided (used) by noncapital financing activities
(46,529)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital contributions
-
-
Purchase and construction of capital assets
(4,922,609)
460,731
(1,657,655)
(4,215,642)
(30,536)
Principal paid on capital debt
11,875,132
(2,500,949)
(1,188,742)
(177,980)
(1,311,537)
(595,632)
(322,955)
Interest paid on capital debt
1,173,200
(29,683)
Proceeds from sales of capital assets
15,515
5,775
69,035
1,595
Net cash provided (used) by capital and related financing activities
7,399,086
(4,291,166)
(5,930,981)
(529,876)
CASH FLOWS FROM INVESTING ACTIVITIES: Advances to other funds Proceeds from sales and maturities of investments Purchase of investments Interest receivables Investment income received Net cash provided (used) by investing activities
7,927
11,121
-
-
-
404,491
19,664
2,826
(12,000,000)
-
-
-
-
-
-
-
748,891
708,894
280,732
69,976
1,124,506
300,396
72,802
(11,243,182)
Net increase (decrease) in cash and cash equivalents
3,063,986
(224,574)
(1,747,412)
(75,097)
CASH AND CASH EQUIVALENTS: Beginning of year
22,588,590
End of year
$
See accompanying Notes to Basic Financial Statements.
40
25,652,576
8,749,435 $
8,524,861
11,297,116 $
9,549,704
2,640,019 $
2,564,922
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
867,710
$
1,625,908
$
Service Funds
50,158,944
$
-
(1,298,926)
(25,233,629)
(5,995,108)
(93,308)
(852,507)
(18,340,844)
(1,038,872)
64,800
146,982
5,375,962
121,266
9,148
1,266
314,507
-
184,411
568,315
-
13,462,038
2,315,165
564,212
618,783
204,346
(283,948)
(190)
(192,866)
(6,360)
(682)
9,023,533
(67,517)
(35,570)
-
439,293
377,937
-
652,516
28,333
1,827,306
-
646,156
466,944
2,137,726
(35,570)
1,636,006
-
-
2,075
(317,860)
(227,623)
(11,371,925)
(574,292)
(141,104)
7,292,065
(54,005)
(298,588)
(237,940)
(2,796,335)
(3,428)
-
-
(1,190,740)
(604,592)
(5,148,269)
(57,433)
(439,293)
-
(420,245)
-
-
887,177
-
91,920
-
454,671
5,525
-
-
(12,000,000)
-
-
-
-
(25,813)
21,672
27,299
1,857,464
161,413
37,050
32,824
(9,675,604)
135,600
56,678
(297,690)
1,781,572 $
Total
1,838,250
569,793 $
272,103
$
775,891
2,357,762
47,626,525
4,183,893
48,402,416
$
6,541,655
(Continued)
41
City of Santa Cruz Combining Statement of Cash Flows, Continued Proprietary Funds For the year ended June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income (loss)
$
4,653,606
$
(1,872,887)
$
1,451,216
$
213,025
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Estimated closure/postclosure costs
1,649,079
4,267,555
1,896,004
489,528
-
-
300,433
-
(212,494)
(274,710)
(31,539)
(8,792)
28,427
19,455
30,591
2,818
278,330
-
-
(30,000)
Changes in assets and liabilities: Accounts receivable Prepaid items Inventories Deposits
-
-
-
Notes and loans receivable
-
46,316
-
(219,251)
Accounts payable and other current liabilities
555,789
(311,836)
286,213
Due to/from other funds
(35,503)
(32,366)
(17,619)
Deferred revenue
-
-
15,384
(3,495) -
Deposits payable
110
8,809
47
253
Claims and judgments payable
-
-
-
-
Compensated absences payable
10,540
(31,936)
(14,971)
(15,437)
Total adjustments
2,286,114
Net cash provided (used) by operating activities
$
See accompanying Notes to Basic Financial Statements.
42
6,939,720
3,697,272 $
1,824,385
2,446,865 $
3,898,081
215,481 $
428,506
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
(781,211)
$
(290,878)
$
Service Funds
3,372,871
$
1,722,527
1,317,062
172,066
9,791,294
85,599
-
-
300,433
-
(1,780)
(1,233)
(530,548)
144
5,470
86,905
(4,591)
-
-
278,330
(19,340)
-
-
(30,000)
81,781
-
-
46,316
-
34,176
(87,787)
257,304
172,394
(190)
20,386
(5,397)
(94,570)
-
18,389
33,773
-
-
9,219
152
-
-
-
287,835
(3,989)
(3,496)
(59,289)
1,345,423 $
Total
564,212
98,012 $
(192,866)
3,198 -
(34,776)
10,089,167 $
13,462,038
592,638 $
2,315,165
(Concluded)
43
This page intentionally left blank.
44
Fiduciary Fund Financial Statements Private - Purpose Trust Funds: Private-purpose trust funds are used to report the trust arrangements under which the principal and income benefit the Library Joint Powers Authority. Agency Funds: Agency funds are used to account for resources held by the City in a custodial capacity. These funds account for the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments.
45
City of Santa Cruz Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2006
PrivatePurpose
Agency
Trust Funds
Funds
ASSETS Cash and cash equivalents
$
Investments
518,986
$
-
1,486,630 89,494
Receivables: Interest receivable Taxes receivable Accounts receivable Due from other governments Total assets
4,983
14,260
-
563,684
-
527,368
-
16,467
$
523,969
$
2,697,903
$
-
$
774,450
LIABILITIES Accounts payable and other current liabilities Due to other governments
-
1,110,680
Deferred revenue
-
15,024
Deposits payable
-
517,771
Payable to bondholders
-
279,978
Total liabilities
-
NET ASSETS Held in trust for library programs
$
See accompanying Notes to Basic Financial Statements.
46
523,969
$
2,697,903
City of Santa Cruz Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the year ended June 30, 2006
PrivatePurpose Trust Funds ADDITIONS: Investment earnings
$
Total additions
15,435 15,435
DEDUCTIONS: Library programs
12,055
Total deductions
12,055
Change in net assets
3,380
NET ASSETS: Beginning of year
520,589
End of year
$
See accompanying Notes to Basic Financial Statements.
47
523,969
This page intentionally left blank.
48
City of Santa Cruz Index to Notes to the Basic Financial Statements For the year ended June 30, 2006
Page Note 1 - Summary of Significant Accounting Policies..................................................................................51 A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. P. Q. R. S.
Reporting Entity..............................................................................................................................51 Basis of Accounting and Measurement Focus............................................................................51 Use of Restricted/Unrestricted Net Assets.................................................................................54 Cash, Cash Equivalents and Investments ...................................................................................54 Restricted Cash and Investments with Fiscal Agents................................................................54 Prepaid Items ..................................................................................................................................54 Inventories .......................................................................................................................................55 Interfund Transactions...................................................................................................................55 Capital Assets..................................................................................................................................55 Interest Payable...............................................................................................................................56 Deferred Revenue ...........................................................................................................................56 Compensated Absences .................................................................................................................56 Bond Premiums, Discounts, and Issuance Costs .......................................................................57 Long-Term Debt..............................................................................................................................57 Net Assets ........................................................................................................................................57 Fund Balances – Reservations and Designations .......................................................................57 Property Taxes ................................................................................................................................58 Use of Estimates..............................................................................................................................58 Implementation of New Governmental Accounting Standard Board Pronouncements .....58
Note 2 - Cash Deposits and Investments .........................................................................................................59 A. Cash Deposits..................................................................................................................................60 B. Investments .....................................................................................................................................60 C. Risk Disclosures ..............................................................................................................................62 Note 3 – Receivables ............................................................................................................................................64 Note 4 – Interfund Balances and Transactions ...............................................................................................66 A. Government-Wide Financial Statements ....................................................................................66 B. Fund Financial Statements ............................................................................................................66 Note 5 – Capital Assets ........................................................................................................................................68 A. Government-Wide Financial Statements ....................................................................................68 B. Fund Financial Statements ............................................................................................................71
49
City of Santa Cruz Index to Notes to the Basic Financial Statements, Continued For the year ended June 30, 2006
Page Note 6 – Long-Term Debt....................................................................................................................................71 A. Governmental Activities Long-Term Debt .................................................................................71 B. Proprietary Fund Obligations .......................................................................................................77 C. Defeased Debt .................................................................................................................................83 Note 7 – Risk Management and Self Insurance..............................................................................................83 Note 8 – Landfill Closure and Postclosure Costs ...........................................................................................86 Note 9 – Retirement Plans...................................................................................................................................87 A. Pension Plan ....................................................................................................................................87 Note 10 – Post-Employment Retirement Benefits ..........................................................................................88 Note 11 – Commitments and Contingencies ...................................................................................................88 Note 12 – Operating Leases ................................................................................................................................90 Note 13 – Reserved and Designated Fund Balances ......................................................................................91 Note 14 – Deficit Net Assets ...............................................................................................................................92 Note 15 – Subsequent Events .............................................................................................................................92
50
City of Santa Cruz Notes to Basic Financial Statements For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of the City of Santa Cruz, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below. A. Reporting Entity The City was incorporated as a town in 1866 under the laws of the State of California. It became a City in 1876. The City is a charter city administered under a council/manager form of government. The financial statements present the City and its component units (legally separate entities for which the City is considered to be financially accountable). Component units include those entities for which the City may have governing authority or is in a relationship of financial benefit or burden. Component units also include entities that are fiscally dependent upon the City. The financial activities of these entities are integrally related to those of the City and, therefore, blended with those of the City. Blending involves aggregating/merging component unit data and data from the City at the combined financial statement level. Based on the above criteria, the accompanying financial statements include the financial activities of the following entities as blended component units. Separate financial statements of these entities can be obtained from the Finance Department of the City. City of Santa Cruz Redevelopment Agency - The City of Santa Cruz Redevelopment Agency (Agency) was formed in 1956 to improve social, physical and economic conditions of the City by constructing a series of commercial, residential and public buildings in the downtown area. The City's Council members are the Agency's Directors and have full accountability for the Agency's fiscal matters. Santa Cruz Public Improvement Financing Corporation - The Santa Cruz Public Improvement Financing Corporation (Corporation) is a non-profit benefit corporation organized and operated under the laws of the State of California. The primary purpose of the Corporation is to serve as a financing vehicle for the City. The City Council has final responsibility for the operations of the Corporation. B. Basis of Accounting and Measurement Focus The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Government - Wide Financial Statements The City’s Government-Wide Financial Statements include a Statement of Net Assets and a Statement of Activities and Changes in Net Assets. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. 51
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Government - Wide Financial Statements, Continued These basic financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Certain types of transactions are reported as program revenues for the City in three categories: Charges for services ¾ Operating grants and contributions ¾ Capital grants and contributions ¾
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those representing balances between the governmental activities and the businesstype activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Assets, internal service fund transactions have been eliminated; however, those transactions between governmental and businesstype activities have not been eliminated. The following interfund activities have been eliminated: Due to/from other funds Advances to/from other funds ¾ Transfers in/out ¾ ¾
For its business type activities, the City applies all applicable GASB pronouncements currently in effect, as well as Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the Committee on Accounting Procedure that do not conflict with or contradict GASB pronouncements. Governmental Fund Financial Statements Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets as presented in these statements to the net assets presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria. All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. 52
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Governmental Fund Financial Statements, Continued Revenues are recorded when received in cash, except for that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. Deferred revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Deferred revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when the government has a legal claim to the resources, the deferred revenue is removed from the Balance Sheet and revenue is recognized. The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34. Proprietary Fund Financial Statements Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of Revenues, Expenses and Changes in Net Assets, and a Statement of Cash Flows for each major proprietary fund. A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Net Assets presents increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts. In accordance with GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Government Entities that Use Proprietary Fund Accounting, the City applies all GASB pronouncements currently in effect as well as FASB Statements and Interpretations, APB Opinions and ARB of the Committee on Accounting Procedure that do not conflict with or contradict GASB pronouncements. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.
53
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Net Assets and a Statement of Changes in Fiduciary Net Assets. The City's fiduciary funds represent agency funds and private-purpose trust funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The agency funds are accounted for using the accrual basis of accounting. The private-purpose trust funds are used to account for resources legally held in trust for special purposes. C. Use of Restricted/Unrestricted Net Assets When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the City’s policy is to apply restricted net assets first. D. Cash, Cash Equivalents and Investments Cash and cash equivalents are considered to be amounts in demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. For purposes of both the balance sheet and statements of cash flows, cash and cash equivalents includes not only currency on hand, but deposits in the City’s cash and investment pool. These deposits have the same characteristics for the participating funds as demand deposit accounts, in that the funds may deposit additional cash at any time and also effectively withdraw cash at any time without prior notice or penalty. Cash and cash equivalents also include restricted cash and money market funds held by fiscal agents. Investments include unpooled investments in securities having original maturities greater than three months. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, both these investments and investments included in the City’s cash and investment pool are stated at fair value, which is based on a quoted market price. This includes all investments except the City’s investment in the California Local Agency Investment Fund (LAIF). LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The City valued its investments in LAIF as of June 30, 2006, by multiplying its account balance with LAIF times a fair value factor determined by LAIF (.998185821). This fair value factor was determined by dividing the total aggregate fair value for all LAIF participants by total aggregate amortized cost. E. Restricted Cash and Investments with Fiscal Agents Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. F. Prepaid Items Certain payments applicable to future accounting periods are recorded as prepaid items. Prepaid items do not reflect current appropriable resources and, thus, an equivalent portion of fund balance is reserved. 54
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued G. Inventories Inventories consist of material and supplies which are stated at cost using the first-in, first-out method. Inventories are recognized as expenditures when consumed rather than when purchased. H. Interfund Transactions Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the long-term portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-Wide Financial Statements as “internal balances.” I.
Capital Assets Capital assets are defined by the City as assets having an estimated useful life in excess of one year, and an initial, individual cost in excess of the capitalization thresholds described below: Infrastructure Land improvements Buildings and lease improvements Machinery and equipment Software (if qualified)
$
25,000 10,000 10,000 5,000 5,000
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair market value on the date donated. Assets acquired under capital leases are capitalized in accordance with generally accepted accounting principles. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest accrued during capital assets construction, if any, is capitalized for the businesstype activities and proprietary funds as part of the asset cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s useful life are not capitalized. Capital assets are reported in the applicable governmental or business-type activities in the Government-Wide Financial Statements. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows: Land improvements Buildings and lease improvements Water tanks and water mains Underground sewer lines Other infrastructure Machinery and equipment Software ( if qualified)
55
20 years 15-50 years 30-50 years 50 years 5-100 years 5-20 years 5 years
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued I.
Capital Assets, Continued Assets are grouped by asset type into one of the following accounts – land, land improvements, infrastructure assets (e.g. roads, bridges, sidewalks, and similar items), buildings (and improvements), machinery and equipment, lease improvements, software, and construction in progress. For all infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for infrastructure reporting. Estimated historical costs were developed in one of three ways: (1) historical records; (2) standard unit costs appropriate for the construction/acquisition date; or (3) present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation, defined as the total depreciation from the date of construction/acquisition to the current date on a straight line, unrecovered cost method was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the estimated historical cost.
J.
Interest Payable In the Government-Wide Financial Statements, interest payable on long-term debt is recognized as the liability is incurred for governmental fund types and proprietary fund types. In the Fund Financial Statements, propriety fund types recognize the interest payable when the liability is incurred.
K. Deferred Revenue In the Government-Wide Financial Statements, deferred revenue is recognized for transactions for which revenue has not yet been earned. Typical transactions recorded as deferred revenues in the Government-Wide Financial Statements are long-term assessments, long-term loans receivable, and prepaid charges for services. In the Fund Financial Statements, deferred revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records deferred revenue for transactions for which revenues have not been earned, or for which funds are not available to meet current financial obligations. Typical transactions for which deferred revenue is recorded are grants received but not yet earned or available, interest on interfund advances receivable, long-term assessments and loans receivable. L. Compensated Absences The City has accumulated unpaid regular vacation leave (for all departments) which is accounted for in accordance with GAAP. The maximum accumulation of vacation leave is limited to the total number of hours accruable during two years. Employees are paid 100% of their accumulated vacation pay when they terminate their employment for any reason. Employees are allowed a partial payoff of accumulated sick leave up to a certain maximum amount.
56
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued M. Bond Premiums, Discounts, and Issuance Costs For governmental type activities, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as other financing sources net of the applicable premium or discount. Issuance costs, whether or not withheld from the actual net proceeds received, are reported as debt service expenditures. For business type activities, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using a straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs and costs in excess of net assets acquired are reported as other assets in the accompanying financial statements. N. Long-Term Debt Government-Wide Financial Statements - Long-term debt and other long-term obligations are reported as liabilities in the appropriate activities. Fund Financial Statements - With the exception of advances from other funds, the governmental fund financial statements do not present long-term liabilities. However, the long term debt is shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets. O. Net Assets In the Government-Wide Financial Statements, net assets are classified in the following categories: Invested in Capital Assets, net of Related Debt – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets. Restricted Net Assets – This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments. Unrestricted Net Assets – This amount is all net assets that do not meet the definition of “invested in capital assets, net of related debt” or “restricted net assets.” P. Fund Balances - Reservations and Designations In the Fund Financial Statements, governmental funds report reservations of fund balances for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balances represent tentative management plans that are subject to change.
57
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Q. Property Taxes Assessed property values are determined annually by the County Assessor as of March 1, and become a lien on real property at July 1. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. The County bills and collects property taxes and remits them to the City under the State authorized method of apportioning taxes whereby all local agencies, including cities, receive from the county their respective shares of the amount of ad valorem taxes collected. Property tax revenues are recognized when levied provided the measurement and availability criteria have been met. R. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. S. Implementation of New Governmental Accounting Standards Board (GASB) Pronouncements The City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements: •
GASB Statement No. 42 Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries establishes accounting and financial reporting standards for impairment of capital assets. A capital asset is considered impaired when its service utility has declined significantly and unexpectedly. This Statement also clarifies and establishes accounting requirements for insurance recoveries.
•
GASB Statement No. 44 Economic Condition Reporting: The Statistical Section (an amendment of NCGA Statement 1) guides the preparation of the statistical section. The statistical section presents detailed information, typically in ten-year trends, that assists users in utilizing the basic financial statements, notes to basic financial statements, and required supplementary information to assess the economic condition of a government.
•
GASB Statement No. 46 Net Assets Restricted by Enabling Legislation addresses selected issues and amends GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments. The Statement enhances the usefulness and comparability of net asset information and clarifies the meaning of legal enforceability. The Statement also specified accounting and financial reporting requirements for restricted net assets.
•
GASB Statement No. 47 Accounting for Termination Benefits provides accounting guidance for state and local governmental employers regarding benefits (such as early-retirement incentives and severance benefits) provided to employees that are terminated. The Statement requires recognition of the cost of involuntary termination benefits in the period in which a government becomes obligated to provide benefits to terminated employees. 58
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS The following is a summary of cash, cash equivalents, and investments, including restricted cash and investments with fiscal agents at June 30, 2006: Government-Wide Statement of Net Assets Governmental Business-Type Activities Activities Total Unrestricted assets: Cash and cash equivalents Investments
$
Total unrestricted assets Restricted assets: Cash and cash equivalents Investments with fiscal agents Total restricted assets Grand Total
41,279,889 -
$
$
86,916,553 -
$
Total
2,005,616 89,494
$
88,922,169 89,494
41,279,889
45,636,664
86,916,553
2,095,110
89,011,663
2,963,869 339,768
2,765,752 13,984,480
5,729,621 14,324,248
-
5,729,621 14,324,248
3,303,637 $
45,636,664 -
Statement of Fiduciary Net Assets
44,583,526
16,750,232 $
62,386,896
20,053,869 $
106,970,422
$
2,095,110
20,053,869 $
109,065,532
The City pools its available cash for investment purposes. Investment income from this pool is allocated to each fund based on its proportionate share of the pool. Cash and investments not pooled include bond proceeds held by fiscal agents, and other amounts required to be segregated by bond indentures or other regulations. Investment income from cash and investments with fiscal agents is credited directly to the related fund. Cash, cash equivalents, and investments consisted of the following at June 30, 2006: Cash and cash equivalents: Pooled cash deposits Outstanding checks Other deposits and cash held by City Certificates of deposit Money market mutual funds available for debt service Federal securities State local agency investment fund
$
Total cash and cash equivalents
1,418,548 (2,794,655) 45,301 596,000 6,018 52,090,817 37,560,140 88,922,169
Restricted cash and cash equivalents: Pooled cash deposits Other cash deposits Money market mutual funds held by fiscal agents State local agency investment fund
573,732 74,481 1,825,806 3,255,602
Total restricted cash and cash equivalents
5,729,621
Investments: Federal securities Federal securities held by fiscal agents Investment contracts held by fiscal agents
89,494 2,324,248 12,000,000
Total investments
14,413,742
Total cash, cash equivalents, and investments
59
$
109,065,532
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued A. Cash Deposits At June 30, 2006, the carrying amounts of the City’s cash deposits were ($681,319), net of outstanding checks in the amount of $2,794,655. Bank balances before reconciling items were $1,306,277. The total bank balance was collateralized or insured with securities held by the pledging financial institutions in the City’s name as discussed below. The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure city deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $100,000 by the Federal Deposit Insurance Corporation. B. Investments The investments made by the City treasurer are limited to those allowable under State statutes as incorporated into the City’s Investment Policy, dated May 31, 2006, which is more conservative than that allowed by State statute. The scope of the investment policy includes all activities of the City and the following reporting entities: ¾ ¾ ¾
City of Santa Cruz City of Santa Cruz Redevelopment Agency Santa Cruz Public Improvement Financing Corporation
Under provisions of this policy, the City is authorized to invest in the following types of investments: ¾ ¾ ¾ ¾ ¾ ¾
Money Market accounts deposited with a nationally or state-chartered bank. Bonds issued by the City. Purchases of this type shall not exceed five years to maturity. U.S. Treasury bills, notes, bonds, or certificates of indebtedness, or those securities backed by the full faith and credit of the U.S. Government with maturities not exceeding five years. Obligations, participations, or other instruments of, or issued by, a Federal Agency or a United States Government-Sponsored Enterprise with maturities not to exceed five years. Bankers’ acceptances with a term not to exceed 180 days maturity and 40 percent of the City’s portfolio. Nonnegotiable and nontransferable certificates of deposit issued by a nationally or statechartered bank, state or federal association, or by a state-licensed branch of a foreign bank. Purchases of these certificates of deposit may not exceed 30% of the City’s portfolio, and purchases in a single issuer in this category shall not exceed 5% of the fair value of the portfolio. 60
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued B. Investments, Continued State of California Local Agency Investment Fund as long as the total amount of City and Agency combined funds invested does not exceed the limit set by LAIF. ¾ Shares of beneficial interest issued by diversified management companies investing in authorized securities and obligations (e.g., money market mutual funds). ¾ Repurchase agreements with primary dealers of the Federal Reserve with specific terms and conditions. The market value of securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities and shall be valued daily by the third party custodial agent. Securities that can be pledged for collateral consist only of investments permitted within this policy with a maximum maturity of five years. Purchases shall not exceed 90 days to maturity and 15% of the fair value of the portfolio. ¾
Bond proceeds held by fiscal agents to be used only for specific capital outlay, payments of certain longterm debt and maintaining required reserves are invested in accordance with the requirements and restrictions of the City’s investment policy and as permitted by specific State statutes, applicable City ordinance or resolution, and bond indenture requirements. The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2006, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities: Structured Notes: debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options. Asset-Backed Securities: generally mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, Collateralized Mortgage Obligations) or credit card receivables. As of June 30, 2006, the City had $40,815,742 invested in LAIF accounts, which had invested 2.567% of the pool investments in structured notes and asset-backed securities. The City’s share of structured notes and asset-backed securities due to its holdings in LAIF amounted to approximately .960% of investments at June 30, 2006.
61
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued C. Risk Disclosures Interest Rate Risk - In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the weighted average maturity of its investment portfolio to two and-one half (2 ½) years or less. The City is in 100% compliance with this provision of the investment policy. At June 30, 2006, the City had the following investment maturities: Investment Type U.S. Treasuries
$
U.S. Agencies U.S. Treasury Money Market Mutual Funds
Fair Value
Maturity (Days)
8,211,931
290
45,610,035
443
1,831,824
1
596,000
1,545
Local Agency Investment Fund
40,815,742
152
Guaranteed Investment Contract
12,000,000
640
Certificates of Deposit
$
Total Fair Value
109,065,532
Portfolio Weighted Average Maturity (Days)
342
Portfolio Weighted Average Maturity (Years)
0.94
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations. Investments in callable bonds are investments that, although having clearly defined maturities, allow for the issuer to redeem or call such bonds earlier than their respective maturity dates. The investor must then replace the called bonds with investments that may have lower yield than the original bonds. As a result, the fair value of the callable bonds is highly sensitive to changes in interest rates. As of June 30, 2006, the City held $2,000,000 in callable securities, which amounted to approximately 2% of investments at June 30, 2006. The investment policy limits the purchase of callable U.S. Agency instruments to discreet calls and those that pay 100% of the principal at the redemption date. In addition, purchases of callable U.S. Agency instruments are not to exceed 30% of the value of the portfolio. The City is in compliance with these provisions of the investment policy. Credit Risk - State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. The City’s investments are rated as follows:
U.S. Agencies Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association U.S. Treasury Money Market Mutual Funds Blackrock Provident - Treasury Trust Fund Fidelity - Treasury Portfolio Goldman Sachs - Financial Square Treasury Obligations Goldman Sachs - Treasury Instruments Guaranteed Investment Contract Trinity Plus Funding Company External Pool State of California - Local Agency Investment Fund
62
Moody's
Standard & Poor's
Aaa Aaa Aaa Aaa
AAA AAA AAA AAA
Not Rated Aaa Aaa Aaa
AAAm AAA AAAm AAAm
Aaa
AAA
Not Rated
Not Rated
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued C. Risk Disclosures, Continued The City’s investment policy requires that the management company of mutual funds must have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations. The investment in Blackrock Provident U.S. Treasury Money Market Mutual Fund is rated by only one nationally recognized statistical rating organization. Blackrock Provident U.S. Treasury Money Market Mutual Fund is approved by the National Association of Investors Corporation. Concentration of Credit Risk - The City’s investment policy states that not more than 25% of the portfolio shall be invested in any one entity or any one instrument to protect the City from concentration of credit risk, with the following exceptions: U.S. Treasury Obligations and the external investment pool (State of California – Local Agency Investment Fund). In addition, purchases of mutual funds must not exceed 20% of the value of the portfolio. Purchases in a single mutual fund may not exceed 10% of the value of the portfolio. The City is in compliance with these provisions of the investment policy. The following chart presents investments in any one issuer (other than U.S. Treasury securities and external investment pools) that represent 5% or more of total investments at June 30, 2006: Investment Type
Amount Invested
Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association Guaranteed Investment Contract Total
Percentage of Investments
$
7,337,037 13,656,534 11,495,765 13,120,699 12,000,000
6.69% 12.44% 10.47% 11.95% 10.93%
$
57,610,035
52.48%
The following chart presents the City’s investments in money market mutual funds by issuer at June 30, 2006: U.S. Treasury Money Market Mutual Funds
Amount Invested
Blackrock Provident - Treasury Trust Fund Fidelity - Treasury Portfolio Goldman Sachs - Treasury Only Goldman Sachs - Financial Square Treasury Obligations Total
Percentage of Investments
$
75,501 108,175 429,292 1,218,856
0.07% 0.10% 0.39% 1.11%
$
1,831,824
1.67%
Custodial Credit Risk - For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Of the City’s total cash and investment balance at June 30, 2006, $14,324,248 is held by fiscal agents, not in the name of the City, and invested as follows: $12,000,000 in a guaranteed investment contract and $2,324,248 in federal agency securities.
63
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
3. RECEIVABLES Government-Wide Statements The following is a summary of receivables net of allowances for uncollectible amounts at June 30, 2006: Government-Wide Statement of Net Assets
Interest receivable
Governmental
Business-Type
Activities
Activities
$
Taxes receivable Accounts receivable, net
682,729
$
Statement of Fiduciary
Total
950,933
$
1,633,662
Net Assets $
Total
19,243
3,936,698
-
3,936,698
563,684
$
1,652,905 4,500,382
959,308
5,130,015
6,089,323
527,368
6,616,691
Due from other governments
1,389,967
676,898
2,066,865
16,467
2,083,332
Notes receivable
5,074,241
427,020
5,501,261
-
5,501,261
Loans receivable
1,301,012
-
1,301,012
-
1,301,012
-
17,780,484
17,780,484
-
17,780,484
Intergovernmental receivable Total
$
13,343,955
$
24,965,350
$
38,309,305
$
1,126,762
$
39,436,067
Fund Financial Statements At June 30, 2006, the Fund Financial Statements show the following notes, loans and intergovernmental receivables: Notes Receivable - in the General Fund of $330,775 (net of an allowance for uncollectible amounts of $368,899) consist of a note from Neary Lagoon Partners in the amount of $78,800; a promissory note from Santa Cruz Shaffer Road Investors for housing developments in the amount of $134,575; a loan to the River Street Shelter for repairs in the amount of $16,500; a loan to First Night Santa Cruz for $20,000; Harvey West Assessment District notes in the amount of $91,915; employee computer loans in the amount of $17,784; various notes for housing improvement activities in the Housing In-Lieu program of $270,099; and $70,000 in loans to two borrowers participating in the Accessory Dwelling Unit Loan Program. Some notes are secured by a deed of trust. The employee computer loan program provides two-year loans to employees with a simple interest rate of 5%, payable through payroll deductions. The Redevelopment Agency Fund notes receivable balance of $3,714,571 (net of an allowance of $303,548) represents loans for low/moderate income housing projects. There are two types of loan repayment for these notes: due upon sale or transfer and lump sum payment at maturity. Interest rates range from 0% to 7%. The notes are all secured by a deed of trust. The $26,824 note receivable in the Public Works special revenue fund pertains to traffic impact fees owed to the City by an individual (“promissor”) who renovated residential property for commercial purposes. Any default results in the forfeiture of building permits issued to the promissor. Notes receivable in the Parks and Recreation special revenue fund of $368,848 pertain to a promissory note for housing developments – development impact fees. There is no interest on this promissory note. Loan repayment is deferred to a future date when monthly repayment will begin. The note is secured by a personal guarantee from Santa Cruz Shaffer Road Investors, LP, a California limited partnership. 64
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
3. RECEIVABLES, Continued Fund Financial Statements, Continued The notes receivable in the Housing and Community Development special revenue fund of $633,223 (net of an allowance of $1,344,517) consist of loans for buildings damaged in the 1989 earthquake. There are two types of loan repayments: monthly repayment and deferred to a future date when monthly repayment will begin. The interest rate on these notes is 3%. The notes are all secured by a deed of trust. Notes receivable in the enterprise funds are made up of three notes totaling $427,020. $25,962 is due from the County of Santa Cruz for its share of improvements to the City's wastewater treatment plant with annual payments scheduled through the year 2006 at an interest rate of 6.3%. This note is unsecured. The remaining two notes, both due from Neary Lagoon Partners, total $401,058 for water system connection fees pertaining to a low-moderate income housing project. These notes do not bear interest, and repayment is deferred until 2019. Loans Receivable - in other governmental funds of $1,301,012 (net of an allowance of $5,200,318) consist of loans for rehabilitation of low/moderate income housing. The loans are made with Federal funds from the Department of Housing and Urban Development (HUD). The City administers these funds for HUD. There are four types of loan repayment schedules: monthly installments, due upon sale or transfer, deferred to a future date when monthly repayment will begin, and no repayment if the property remains in use for low/moderate income housing for a specified time period. Interest rates range from 0% to 7%. The loans are all secured by a deed of trust on the property being rehabilitated. Intergovernmental Receivables - in the enterprise funds total $17,780,484 and are comprised of various amounts due from local, state, and federal governmental agencies. $499,905 of the total pertains to reimbursements resulting from various construction and improvement projects. The remaining $17,280,579 ($1,120,316 due within one year and $16,160,263 due in more than one year) is owed by the County of Santa Cruz for its share of a State Water Resources Board loan for wastewater treatment plant upgrades. Payments of interest and principal from the County of Santa Cruz are due in annual installments of $1,604,172, at an interest rate of 2.8%, with the final payment due August 1, 2018. Allowance for uncollectible notes and loans - When considerable uncertainty exists as to the collectibility of a note (as determined by management) due to the terms of the loan or other factors, it is offset by an allowance for uncollectible notes.
65
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
4. INTERFUND BALANCES AND TRANSACTIONS A. Government-Wide Financial Statements Long-Term Internal Balances At June 30, 2006, the City had the following long-term internal balances: Internal Balances Payable Business-Type Activities Internal Balances Receivable Governmental Activities
$
25,130
This balance consists of the net amount of long-term advances between the Redevelopment Agency Fund and the Water, Wastewater and Parking enterprise funds. The advances are due to fund various projects. Transfers The City had the following transfers for the year ending June 30, 2006: Transfers In Governmental Activities Transfers Out Business-Type Activities
$
67,517
Transfers are made from the enterprise funds to the General Capital Improvement capital projects fund to finance a share of project expenses or debt service costs for projects from which those funds receive benefit. B. Funds Financial Statements The City had the following due to/from other funds as of June 30, 2006: Due to Other Funds
Due from Other Funds General Total
Fund General Fund Non-Major Governmental Funds Internal Service Funds Total
66
$
68,559 11,678
$
68,559 11,678
$
80,237
$
80,237
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
4. INTERFUND BALANCES AND TRANSACTIONS B. Funds Financial Statements, Continued The outstanding balances between funds result mainly from a timing difference between when interest revenues are earned and when they are received for amounts which are transferred from the earning fund to the General Fund. Long-Term Advances
Advances from Other Funds
The City had the following long-term advances as of June 30, 2006: Advances to Other Funds General Fund Redevelopment Agency Fund Other Governmental Funds Parking Enterprise Fund Golf Course Enterprise Fund Total
Redevelopment Agency Fund
Water Enterprise Fund
Wastewater Enterprise Fund
Storm Water Enterprise Fund
Total
$
427,838 530,000 -
$
96,501 -
$
21,630 -
$
100,001 -
$
439,293
$
449,468 630,001 96,501 439,293
$
957,838
$
96,501
$
21,630
$
100,001
$
439,293
$
1,615,263
Long-term advances were made 1) from the General Fund and the Water enterprise fund to the Redevelopment Agency Fund to finance redevelopment projects, 2) from the General Fund to the Housing and Community Development special revenue fund as a deposit for matching grant funds, 3) from the Wastewater enterprise fund to the General Capital Improvement capital projects fund to finance a project at the City’s corporation yard, and 4) from the Redevelopment Agency Fund to the Parking enterprise fund to finance two parking capital improvements projects. 5) from the Storm Water Enterprise Fund to the Golf Course Enterprise Fund to cover current financial need. Transfers In/Out The City had the following transfers for the year ending June 30, 2006: Transfers In Non-Major Governmental Funds
General
Transfers Out
Fund General Fund Other Governmental Funds Enterprise Funds: Water Wastewater Refuse Parking Storm Water Golf Course Internal Service Funds Total
$
64,324
$
99,894
67
Total $
31,638 7,541 14,908 6,388 6,360 682 -
35,570 $
19,509 674,337
$
761,363
19,509 738,661 31,638 7,541 14,908 6,388 6,360 682 35,570
$
861,257
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
4. INTERFUND BALANCES AND TRANSACTIONS, Continued B. Funds Financial Statements, Continued Transfers In/Out, Continued Transfers are used to 1) move interest revenues from the earning fund to the General Fund, 2) move revenues from the General Fund and other funds to the General Capital Improvement capital projects fund for financing various capital projects, and 3) to move unrestricted tax revenues from the General Capital Improvement capital projects fund to the General Fund as an operating subsidy.
5. CAPITAL ASSETS A. Government-Wide Financial Statements At June 30, 2006 the City’s capital assets consisted of the following: Governmental
Business-Type
Activities
Activities
Total
Capital Assets: Capital assets, not being depreciated: Land
$
Construction in progress Subtotal, capital assets, not being depreciated
50,452,567
$
11,931,526
$
62,384,093
5,108,592
10,436,904
15,545,496
55,561,159
22,368,430
77,929,589
Capital assets, being depreciated: Land improvements
5,393,352
3,956,018
9,349,370
167,322,095
180,436,253
347,758,348
Buildings
35,421,568
160,134,334
195,555,902
Machinery and equipment
10,279,605
20,026,950
30,306,555
Infrastructure
Lease improvements
724,114
70,000
794,114
1,056,070
555,258
1,611,328
Subtotal, capital assets, being depreciated
220,196,804
365,178,813
585,375,617
Total capital assets
275,757,963
387,547,243
663,305,206
Software
Less accumulated depreciation: Land improvements
(1,394,671)
Infrastructure
(675,258)
(2,069,929)
(102,361,142)
(73,818,113)
(176,179,255)
Buildings
(8,950,969)
(52,271,065)
(61,222,034)
Machinery and equipment
(7,210,260)
(10,573,668)
(17,783,928)
Lease improvements
(296,913)
(11,434)
(308,347)
Software
(808,382)
(334,441)
(1,142,823)
(121,022,337)
(137,683,979)
(258,706,316)
Total accumulated depreciation Total capital assets, net
$
68
154,735,626
$
249,863,264
$
404,598,890
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
5. CAPITAL ASSETS, Continued A. Government-Wide Financial Statements, Continued The following is a summary of capital assets for governmental activities:
Balance
Balance
July 1, 2005
Additions
Deletions
June 30, 2006
Governmental Activities: Capital assets, not being depreciated: Land
$
Construction in progress
44,188,313
$
6,264,254
$
-
$
50,452,567
2,519,948
3,089,359
(500,715)
5,108,592
46,708,261
9,353,613
(500,715)
55,561,159
5,290,639
102,713
-
5,393,352
167,207,541
114,554
-
167,322,095
-
35,421,568
Subtotal, capital assets, not being depreciated Capital assets, being depreciated: Land improvements Infrastructure Buildings
35,421,568
-
Machinery and equipment
10,156,196
485,231
Lease improvements
(361,822)
10,279,605
724,114
-
-
724,114
1,056,070
-
-
1,056,070
being depreciated
219,856,128
702,498
(361,822)
220,196,804
Total capital assets
266,564,389
10,056,111
(862,537)
275,757,963
Software Subtotal, capital assets,
Less accumulated depreciation: Land improvements
(1,110,161)
(284,510)
-
(1,394,671)
(97,782,746)
(4,578,396)
-
(102,361,142)
Buildings
(8,183,899)
(767,070)
-
(8,950,969)
Machinery and equipment
(6,841,294)
(729,850)
360,884
(7,210,260)
Infrastructure
Lease improvements
(222,999)
(73,914)
-
(296,913)
Software
(664,427)
(143,955)
-
(808,382)
(114,805,526)
(6,577,695)
360,884
(121,022,337)
Total accumulated depreciation Total capital assets, net
$
151,758,863
69
$
3,478,416
$
(501,653)
$
154,735,626
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
5. CAPITAL ASSETS, Continued A. Government-Wide Financial Statements, Continued Depreciation expense of the governmental activities for the year ended June 30, 2006 was $6,577,695 and was distributed among City departments as follows: General government: City Council City Clerk Human Resources Finance Non-Departmental Internal service funds
$
Total general government
6,780 10,156 23,758 202,924 157,877 85,599 487,094
Public safety: Police Fire
386,069 270,115
Total public safety
656,184
Parks and Recreation Library Public Works Planning and Community Development Redevelopment
2,105,325 26,800 3,214,844 12,734 74,714
Total depreciation expense
$
6,577,695
The following is a summary of capital assets for business-type activities: Balance July 1, 2005
Additions
Deletions
Balance June 30, 2006
Business-type Activities: Capital assets, not being depreciated: Land Construction in process Subtotal, capital assets, not being depreciated
$
11,891,526 13,362,141
$
40,000 2,462,038
$
(5,387,275)
$
11,931,526 10,436,904
25,253,667
2,502,038
(5,387,275)
22,368,430
1,510,635 171,294,779 159,491,728 19,382,706 70,000 555,258
2,445,383 9,177,694 642,606 2,147,939 -
(36,220) (1,503,695) -
3,956,018 180,436,253 160,134,334 20,026,950 70,000 555,258
Subtotal, capital assets, being depreciated
352,305,106
14,413,622
(1,539,915)
365,178,813
Total capital assets
377,558,773
16,915,660
(6,927,190)
387,547,243
(502,764) (69,781,307) (48,757,886) (10,002,160) (8,634) (223,389)
(172,494) (4,073,032) (3,513,179) (1,918,739) (2,800) (111,052)
36,226 1,347,231 -
(675,258) (73,818,113) (52,271,065) (10,573,668) (11,434) (334,441)
Capital assets, being depreciated: Land improvements Infrastructure Buildings Machinery and equipment Lease improvements Software
Less accumulated depreciation: Land improvements Infrastructure Buildings Machinery and equipment Lease improvements Software Total accumulated depreciation Total capital assets, net
(129,276,140) $ 248,282,633
70
(9,791,296) $
7,124,364
1,383,457 $
(5,543,733)
(137,683,979) $ 249,863,264
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
5. CAPITAL ASSETS, Continued B. Funds Financial Statements Business-type activities depreciation expense for the year ended June 30, 2006 is as follows: Water
$
1,649,080
Wastewater
4,267,556
Refuse
1,896,004
Parking
489,528
Storm Water
1,317,062
Golf Course
172,066
Total depreciation expense
$
9,791,296
The funds financial statements do not present general government capital assets consequently, they are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets.
6. LONG-TERM DEBT A. Governmental Activities Long-Term Debt Classification
Compensated absences Claims and judgments
Balance
Accreted
July 1, 2005
Interest
$
2,098,095
$
Additions -
$
10,240
Amount
Amount
Balance
Due Within
Due in More
Retirements
June 30, 2006
One Year
Than One Year
$
$
-
2,108,335
$
1,405,557
$
702,778
10,719,455
-
456,172
(168,337)
11,007,290
3,039,471
7,967,819
Certificates of participation
4,377,108
-
-
(137,985)
4,239,123
142,984
4,096,139
General obligation bonds
7,183,381
120,310
-
(177,616)
7,126,075
185,577
6,940,498
Notes payable
1,334,942
-
3,100,000
(229,916)
4,205,026
292,463
3,912,563
Tax allocation bonds payable
5,245,000
-
-
(120,000)
5,125,000
120,000
5,005,000
Capital lease obligations
1,766,635
-
-
(518,722)
1,247,913
282,285
965,628
Other long-term liabilities
1,029,804
-
18,900
(103,868)
944,836
95,746
849,090
3,585,312
$ (1,456,444)
$ 36,003,598
Total
$ 33,754,420
$
120,310
$
$
5,564,083
$
30,439,515
Compensated absences and Claims and judgments As shown in the table above, the total amount outstanding at June 30, 2006 was $2,108,335 for compensated absences and $11,007,290 for claims and judgments. In prior years, compensated absences have been liquidated by the general fund. Claims and judgments are paid by the separate internal service funds for each liability.
71
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Certificates of Participation Certificates of Participation payable at June 30, 2006, are comprised of the following individual issues: Redevelopment Agency certificates of participation are part of the $2,080,000 Golf and Redevelopment Agency Certificates described under enterprise debt. The outstanding balance relating to the Agency at June 30, 2006 was $229,123. The Agency amount due within one year is $52,984 and amount due in more than one year is $176,139. For more information refer to the City of Santa Cruz Redevelopment Agency Basic Financial Statements. The City issued certificates in April 2001, in the amount of $4,415,000, to be used for the Civic Center Improvement Project. The certificates provide funds to finance the acquisition, construction and improvement of the project. The obligation of the City to make the lease payments does not constitute a debt of the City or the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State or any political subdivision thereof is obligated to levy or pledge any form of taxation. Annual payments are $75,000 - $270,000. The certificates bear interest at 4.6% - 5% and are payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2001. Principal is payable annually on April 1 through the year 2031. The balance outstanding at June 30, 2006 was $4,010,000. The amount due within one year is $90,000 and amount due in more than one year is $3,920,000. The annual debt service requirements on the certificates of participation at June 30, 2006, were as follows: For the Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2031 Total
Principal $
$
Interest
142,984 150,849 153,713 161,577 105,000 600,000 750,000 955,000 1,220,000 4,239,123
$
$
72
204,707 198,448 191,844 185,052 177,835 812,125 658,315 452,750 189,250 3,070,326
Total $
$
347,691 349,297 345,557 346,629 282,835 1,412,125 1,408,315 1,407,750 1,409,250 7,309,449
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued General Obligation Bonds In March 1999, the City issued $6,998,473 in general obligation bonds. The proceeds were used to upgrade fire stations, acquire open space property, and construct a community park and a fire administration facility. Annual payments ranging from $142,625 to $354,010 began September 1, 2000, and continue through September 1, 2029; interest ranges from 3.5% to 8.0%. The bonds are subject to early redemption at the option of the City beginning in 2008. The bonds are secured by and will be paid with annual ad valorem tax levies on all property subject to taxation within the City. The bonds were issued in two series. Series A consisted of $4,500,000 of general obligation bonds, and Series B consisted of $2,498,473 of general obligation bonds - capital appreciation bonds. During fiscal year ended June 30, 2006, $177,616 principal payments were made on the bonds. The balance outstanding of Series A bonds at June 30, 2006 was $4,110,000. The carrying value of the Series B bonds was increased to $3,016,075 in order to reflect the accreted interest due at June 30, 2006. The total balance outstanding at June 30, 2006 was $7,126,075. The annual debt service requirements on the general obligation bonds at June 30, 2006, were as follows: For the Year Ending June 30, 2007
Principal $
Interest
185,577
$
Total
229,873
$
415,450
2008
193,004
233,546
426,550
2009
199,781
237,617
437,398
2010
205,937
241,998
447,935
2011
208,582
244,570
453,152
2012-2016
1,115,553
1,291,607
2,407,160
2017-2021
1,266,608
1,396,378
2,662,986
2022-2026
1,455,681
1,480,569
2,936,250
2027-2030
1,358,082
1,205,417
2,563,499
Sub-total
6,188,805
6,561,575
12,750,380
937,270
-
937,270
Accreted Interest Total
$
7,126,075
$
73
6,561,575
$
13,687,650
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Notes Payable In July 2001, the Redevelopment Agency received HELP Loan funds, from the State of California, to be used to finance the acquisition, development, demolition of existing structures, and the construction of a multifamily rental apartment complex in the Beach Target Area. There is no amortization schedule for this note. The proceeds for the note are to be repaid by July 2011 with an interest rate of 3%. The balance outstanding at June 30, 2006, was $1,105,026. In March 2006, the Redevelopment Agency received loan funds from Salz Leather, Inc., to be used to finance the acquisition of land. There is no amortization schedule for this note. The proceeds of the note are to be repaid by March 2009 with an interest rate of 5%. The balance outstanding at June 30, 2006 was $3,100,000. Tax Allocation Bonds In October 2004, The Redevelopment Agency issued $5,245,000 in tax allocation bonds. The proceeds were used, together with other funds, to redeem, on December 1, 2004, all of the Agency’s outstanding 1996 Merged Earthquake Recovery and Reconstruction Project Area Tax Allocation Refunding Bonds, in the amount of $2,505,000, and to raise additional funds for programs, projects and activities related to the Redevelopment Project. Annual principal payments of $120,000 - $305,000 will be made through October, 2031; interest ranges from 2.50% to 4.625%. The 2004 Tax Allocation Bonds will be secured by a pledge of and first lien of the tax increment revenues derived from the Redevelopment Project, net of certain amounts which are payable to other taxing agencies. The balance outstanding at June 30, 2006 was $5,125,000. The annual debt service requirements on the tax allocation bonds at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2031 2032
$
120,000 125,000 130,000 130,000 135,000 750,000 905,000 1,115,000 1,395,000 320,000
$
206,016 202,954 199,766 196,516 192,866 891,759 734,053 522,792 240,820 7,400
$
326,016 327,954 329,766 326,516 327,866 1,641,759 1,639,053 1,637,792 1,635,820 327,400
Total
$
5,125,000
$
3,394,942
$
8,519,942
74
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Lease Obligations In December 1998, the City acquired a new telecommunications system under a capital lease agreement payable in semi-annual installments of $87,706 through December 2005. The interest rate is 4.85%. This lease has been allocated to the General Fund, all enterprise funds, the Equipment Services Internal Service Fund, and the Agency. The lease has been fully paid-off as of June 30, 2006. In August 1999, the City acquired a new information technology system under a capital lease agreement payable in semi-annual installments of $138,444 through August 2005 with an interest rate of 5%. The lease has been allocated to the General Fund, the Water, Wastewater and Refuse enterprise funds, and the Agency. The lease has been fully paid-off as of June 30, 2006. In August 2001, the City acquired miscellaneous vehicles, equipment and computer software under a capital lease agreement payable in semi-annual installments of $331,597 though August 2006, with an interest rate of 4.46%. This lease has been allocated to the General Fund, the Water, Wastewater, Refuse and Parking enterprise funds, and the Agency. The balance outstanding at June 30, 2006 was $141,924. In June 2002, the City acquired land under a capital lease agreement with Zion’s First National Bank in the amount of $765,000. The agreement is payable in semi-annual installments of $61,362 through 2021, with a 4.88% interest rate through January 2007 and a variable interest rate thereafter. From January 2007 through January 2021, the interest is to be recomputed, for each interest period, based on 90% of the current Index Rate. The balance outstanding at June 30, 2006 was $642,113. In July 2004, the City entered into a five year capital lease agreement to obtain financing in the amount of $580,000 for the purchase of a seventy-five foot aerial fire truck to replace a 1979 Crown Telesquirt unit. The annual installment payment of $125,781 begins in August 2005 and ends in August 2009. Interest is at the rate of 3.33% and the payments will be made from the General Fund. The balance outstanding at June 30, 2006 was $463,876. The annual debt service requirements on the capital leases at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011 2012-2016 2017-20211
$
282,285 145,500 150,834 156,369 36,331 210,045 266,549
$
50,346 41,642 36,309 30,774 25,031 96,764 40,261
$
332,631 187,142 187,143 187,143 61,362 306,809 306,810
Total
$
1,247,913
$
321,127
$
1,569,040
75
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Other Long-Term Liabilities The Redevelopment Agency is obligated under three separate Owner Participation Agreements (OPA), for various portions of the $1,250,000 Chestnut Street Special Assessment District Debt. Under the first OPA the Agency owes $265,860 as of June 30, 2006. Under the second OPA, the Agency owes $31,690. Under a third OPA the Agency assumed responsibility for an additional 48.68% of the Special Assessment Debt contingent upon the availability of tax increment. The Agency is liable for principal in the amount of $647,286 and interest, currently estimated at $67,334. The total of $944,836 will be paid with annual installments through 2011, as follows: For the Year Ending June 30, 2007 2008 2009 2010 2011 2011-2015 Total
Principal $
$
Interest
95,746 154,632 166,757 176,009 188,134 163,558 944,836
$
$
48,733 40,353 31,633 22,177 12,261 1,606 156,763
Total $
$
144,479 194,985 198,390 198,186 200,395 165,164 1,101,599
Conduit Debt During the fiscal year 2003, the Agency issued variable rate demand multifamily housing revenue bonds to provide funding for loans made to Santa Cruz Shaffer Road Investors L.P., and 1010 Pacific Investors L.P. (both California limited partnerships). The revenue bonds were used to finance a portion of the costs of building a 206-unit multifamily residential development and for the rehabilitation and equipping of a 113-unit multifamily residential development within the city limits. The housing facilities are to be occupied by persons of low and very low income, to the extent required by federal tax law. The bonds were issued under a Trust Indenture, dated July 1, 2002 between the Agency, and Wells Fargo Bank, National Association, as trustee. For the Shaffer Road Apartments, the Agency issued 2002 Series A bonds and 2002 Series A-T in the amounts of $29,925,000 and $2,750,000 respectively. For the 1010 Pacific Avenue Apartments, 2002 Series B bonds in the amount of $21,650,000 were issued. The amount outstanding as of June 30, 2006 is $54,325,000. The bonds mature on August 15, 2035. The bonds and interest are limited obligations of the Agency, payable solely from the “trust estate” which is specifically assigned and pledged to such purposes to the extent provided in the Official Statements. The trust estate includes the Agency’s interest in the loans made to the developer, including rights to receive payments on the loans, and rights to certain bond proceeds and related revenues. The Official Statements contain more information regarding the trust estate.
76
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations A summary of long-term debt transactions of the City for the enterprise funds for the year ended June 30, 2006, is as follows:
Balance July 1, 2005 Compensated absences Landfill closure costs Certificates of participation Revenue bonds payable Notes payable Lease obligations Total
$
810,883 5,450,974 28,662,892 4,680,000 40,240,469 3,108,344
$ 82,953,562
Additions $
Retirements
300,433 23,265,000 1,298,193
$
$ 24,863,626
Balance June 30, 2006
Classification Amount Amount Due Within Due in More One Year then One Year
(59,289) (7,747,015) (4,680,000) (2,418,132) (1,261,185)
751,594 5,751,407 20,915,877 23,265,000 37,822,337 3,145,352
$
501,062 1,732,015 665,000 2,485,044 975,620
$
250,532 5,751,407 19,183,862 22,600,000 35,337,293 2,169,732
$ (16,165,621)
$ 91,651,567
$
6,358,741
$ 85,292,826
Compensated absences As shown in the table above, the total amount outstanding at June 30, 2006 was $751,594 for compensated absences. In prior years, compensated absences have been liquidated primarily by the enterprise funds. Landfill closure costs As shown in the table above, the total amount outstanding at June 30, 2006 was $5,751,407 for landfill closure costs. Refer to Note 8 for landfill closure details. Certificates of Participation Certificates of Participation payable at June 30, 2006, are comprised of the following individual issues: Santa Cruz Golf and Redevelopment Agency Certificates, issued in November, 1998, in the amount of $2,080,000, was used to refinance an issue used for improvements to the City's golf course and projects within the City's redevelopment plan areas. Annual payments of $125,000 to $215,000 will be made through May 2010; interest ranges from 3.5% to 4.25%. Annual debt service is covered by lease payments made by the City and secured by covenants made by the City in a lease with the Corporation. The balance outstanding relating to the Golf Course fund at June 30, 2006, was $570,877. Santa Cruz Parking Certificates issued in November 1998, in the amount of $7,955,000, were used for the construction of a second parking structure in the downtown area. The certificates are a liability of the Parking Enterprise Fund. Annual payments are $155,000 - $445,000. The certificates bear interest at 3.5% to 4.9%. Interest is payable semi-annually on May 1 and November 1 and principal is payable annually on May 1 through the year 2019. The balance outstanding at June 30, 2006, was $6,345,000.
77
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Certificates of Participation, Continued Santa Cruz Storm Water Certificates, issued in October 1999, in the amount of $6,665,000 was issued to finance the City’s share of the San Lorenzo River Flood control and Beautification Project and to repay the Wastewater Enterprise Fund for earlier loans to rehabilitate and retrofit bridges across the San Lorenzo River. Annual payment of $105,000 to $250,000 will be made through October 2019; interest ranges from 4.0% to 5.6%. This has been refinance by the 2005 Storm Water Revenue Refunding bonds. The balance outstanding at June 30, 2006, was zero. Santa Cruz Refuse Certificates, issued in October 1999, in amount of $4,345,000, were issued to repay the Wastewater Enterprise Fund for earlier loans to construct a tunnel at the City’s landfill and a leachate line from the landfill to the City’s sewer treatment plant. Annual payments of $100,000 to $245,000 will be made through October 2020; interest ranges from 4.0% to 5.625%. The balance outstanding at June 30, 2006, was $3,705,000. Santa Cruz Refuse Certificates issued in March 2001, in the amount of $7,500,000, were used in the purchase of certain property and improvements, and to finance the acquisition, construction and improvement of the project. The installment payments are payable solely from and secured by a first pledge of certain revenues of the City’s Refuse Enterprise Fund. Annual payments are $45,000 to $720,000. The certificates bear interest at 3.5% to 4.875%. Interest represented by the certificates will be payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2001. Principal is payable annually on October 1 through the year 2021. The certificates are subject to optional and mandatory prepayment. The balance outstanding at June 30, 2006, was $5,615,000. Santa Cruz Refuse Certificates, issued in May 2004, in the amount of $1,590,000 was used to refinance the Santa Cruz Landfill Certificates issued in 1993. Annual payments of $495,000 to $545,000 will be made through 2008: Interest ranges from 4.0 % to 5.375%. The City is obligated, subject to abatement, under the Agreement to pay the certificate payments from any source of legally available funds. The City is currently liable and may become liable on other obligations payable from general revenues, some of which may have priority over the lease payments. The balance outstanding relating to the Refuse Fund at June 30, 2006, was $1,070,000. Santa Cruz Golf Agency Certificates issued in May 2004, in the amount of $3,700,000 was used to finance the acquisition and construction of improvements to the DeLaveaga Golf Course. Annual payments of $ 90,000 to $ 260,000 will be made through 2029; interest ranges from 4.0% to 5.375%. The City is obligated, subject to abatement, under the Agreement to pay the certificate payments from any source of legally available funds. The City is currently liable and may become liable on other obligations payable from general revenues, some of which may have priority over the lease payments. The balance outstanding relating to the Golf Course Fund at June 30, 2006 was $3,610,000.
78
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Certificates of Participation, Continued The annual debt service requirements on the certificates of participation at June 30, 2006, were as follows: For the Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2030 Total
Principal $
$
Interest $
1,732,015 1,799,151 1,306,287 823,424 670,000 3,805,000 4,855,000 4,320,000 1,605,000 20,915,877
$
974,620 904,064 830,535 786,839 751,332 3,274,930 2,243,012 643,586 146,374 10,555,292
Total $
$
2,706,635 2,703,215 2,136,822 1,610,263 1,421,332 7,079,930 7,098,012 4,963,586 1,751,374 31,471,169
Annual principal and interest requirements for the certificates of participation are apportioned to the various funds based on the percentage share of certificate proceeds. Revenue Bonds Payable 2005 Waste Water Revenue Refunding Bonds, issued in November 2005, in the amount of $4,715,000 was used to refinance the Series B Sewer Revenue Bonds issued in February 1994. Annual payments of $200,000 to $350,000 will be made through November 2023; interest ranges from 3.0% to 4.50%. Annual debt service is payable solely from and secured by a lien on net revenues of the sewer system. The balance outstanding at June 30, 2006, was $4,715,000. 2005 Storm Water Revenue Refunding Bonds, issued in September 2005, in the amount of $6,100,000 was used to refinance the Santa Cruz Storm Water Certificates issued in October 1999. Annual payments of $160,000 to $385,000 will be made through October 2029; interest ranges from 3.0% to 4.375%. The bonds are special obligations of the City payable solely from the revenues received by the City from the ownership and operation of the Storm Water Enterprise. All revenues are irrevocably pledged to the payment of the bonds. The balance outstanding at June 30, 2006, was $6,100,000. The 2006 Water Revenue Bonds issued in May 2006, in the amount of $12,450,000 was used to finance construction of a new transmission main connecting the Graham Hill Water Treatment Plant to the Bay Street Reservoir. Annual payments of $220,000 to $555,000 will be made through March 2036; interest ranges from 4.0% to 4.625%. The bonds are special obligations of the City payable from the Net Revenues received by the City from the ownership and operation of the City’s Water System. The balance outstanding at June 30, 2006, was $12,450,000.
79
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Revenue Bonds Payable, Continued The annual debt service requirements on the revenue bonds at June 30, 2006, were as follows: Ending June 30,
Principal
2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-20226 2027-2031 2032-2037
$
Total
$
Interest
665,000 590,000 615,000 635,000 660,000 3,645,000 4,385,000 4,645,000 4,105,000 3,320,000 23,265,000
$
$
871,358 939,455 917,605 895,830 874,017 3,998,114 3,215,982 2,212,753 1,283,281 482,529 15,690,924
Total $
$
1,536,358 1,529,455 1,532,605 1,530,830 1,534,017 7,643,114 7,600,982 6,857,753 5,388,281 3,802,529 38,955,924
Under conditions of the various revenue bond covenants, the Wastewater Enterprise Fund is required to provide adequate cash and maintain adequate revenues to cover future bond payments. Cash and investments set aside for this purpose is shown in the financial statements as restricted cash and investments. Under condition of the storm water revenue refunding bond covenant, the Storm Water Enterprise Fund is required to maintain adequate revenues to cover future bond payments. Under conditions of the water revenue bond covenant, the Water Enterprise Fund is required to maintain adequate revenues to cover future bond payments. Notes Payable State of California loans for the construction of a water main line north of the City. Proceeds for the note were received in September 1995, to be repaid in semi-annual installments of $46,679, including interest at 2.973%, through April 2016. This debt is recorded in the Water Enterprise Fund. The balance outstanding at June 30, 2006, was $767,774. State of California loans for the construction of secondary treatment improvements at the City's wastewater treatment plant. Loan proceeds were received as the City incurred project expenditures. Repayment began August 1999. Annual payments of $3,417,099, including interest at 2.8%, will be made through August 2018. This debt is recorded in the Wastewater Enterprise Fund. The balance outstanding at June 30, 2006, was $36,721,230.
80
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Notes Payable, Continued State of California loans for the construction of certain solid waste facilities to assist them to achieve or improve compliance with state minimum standards. Proceeds were received in March 2001, and the loan is to be repaid in $33,333 annual payments of principal through 2016. No interest is due on the principal balance of the loan outstanding. This debt is recorded in the Refuse Enterprise Fund. The balance outstanding at June 30, 2006, was $333,333. The annual debt service requirements on the notes at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011 2012-2016 2017-2021
$
2,485,044 2,553,788 2,624,583 2,697,247 2,771,988 15,010,137 9,679,550
$
1,050,498 981,752 910,958 838,295 763,553 2,621,150 547,043
$
3,535,542 3,535,540 3,535,541 3,535,542 3,535,541 17,631,287 10,226,593
Total
$
37,822,337
$
7,713,249
$
45,535,586
Lease Obligations The City leases equipment in the Refuse, Water, Wastewater, Parking, and Golf Course funds under various capital lease agreements payable in semi-annual and annual installments through August 2006 with interest rates ranging from 4.5% to 5.9%. In December 2003, the City entered into an equipment lease agreement in the amount of $656,182 payable in sixty months. The payments are due in ten consecutive semi-annual payments, and each payment includes 3.13% interest per year on the unpaid principal. In November 2002, the City entered into another equipment lease in the amount of $1,038,840 payable in sixty months. The payments are due in ten consecutive semi-annual payments, and each payment includes 3.26% interest per year on the unpaid balance. The combined Refuse, Water, Wastewater, Parking, and Golf Course funds balance outstanding at June 30, 2006, was $537,130. In December 1998, the City acquired a new telecommunications system under a capital lease agreement payable in semi-annual installments of $87,706 through December 2005 with an interest rate of 4.85%. This lease has been allocated to the General Fund, all enterprise funds, the Equipment Operations internal service fund, and the Agency. The lease has been paid-off as of June 30, 2006. In August 1999, the City acquired a new information technology system under a capital lease agreement payable in semi-annual installments of $114,770 through August 2005 with an interest rate of 5%. The lease has been allocated to the General Fund, the Water, Wastewater, and Refuse enterprise funds, and the Agency. The lease has been paid-off as of June 30, 2006. 81
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Lease Obligations, Continued In August 2001, the City acquired miscellaneous vehicles, equipment and computer software under a capital lease agreement payable in semi-annual installments of $331,597 through August 2006, with an interest rate of 4.46%. This lease has been allocated to the General Fund, the Water, Wastewater, Refuse and Parking enterprise funds, and the agency. The balance outstanding at June 30, 2006 was $182,415. In January 2005, The City acquired four refuse trucks under a capital lease agreement payable in semiannual installments of $88,482 through February 2009 with an annual interest rate of 3.04%. This lease has been allocated to the Refuse fund. The balance outstanding at June 30, 2006, was $503,758. In April 2005, the City acquired twenty-five receptacles, three recycling trucks and a truck retrofit under a capital lease agreement payable in semi-annual installments of $85,636 through May 2010 with an annual interest rate of 3.70%. This lease has been allocated to the Refuse Fund. The balance outstanding at June 30, 2006, was $631,403. In May 2006, the City acquired one front loader and five side loader under a capital lease agreement payable in semi-annual installments of $135,798 though June 2011 with an annual interest rate of 4.16% allocated to the Refuse fund. The balance outstanding is $1,214,724. In December 2005, the City entered into a capital lease agreement for lease rental of two fairway mowers. The lease is payable in quarterly installments of $9,584 through December 2010 with an annual interest rate of 3.90%. The lease has been allocated to the Golf Course Fund. The Balance outstanding at June 30, 2006 was $75,922. The annual debt service requirements on the lease obligations at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011
$
1,088,453 753,527 593,244 437,389 272,739
$
106,277 $ $ 67,280 43,654 23,506 8,245
1,194,730 820,807.00 636,898.00 460,895.00 280,984.00
Total
$
3,145,352
$
248,962
3,394,314
82
$
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued C. Defeased Debt On September 29, 2005, the City issued $6,100,000 in Storm Water Revenue Refunding Bonds. $6,100,000 (par value) of these revenue refunding bonds, with an interest rate of 4%, were used to advance refund $6,090,000 of outstanding 1999 Storm Water Enterprise Certificate of Participations with an average interest rate of 5.60%. The net proceeds of $6,008,439 (after payment of $313,585 in underwriting fees and other issuance costs),plus an additional $456,578 of 1999 Storm Water Enterprise Certificate of Participation Reserve Fund monies were deposited in an irrevocable trust with an agent and invested in a federal money market fund to provide for debt service payments on the 1999 certificates, which will be called on October 1, 2007. As a result, the 1999 Storm Water Certificate of Participation are considered to be defeased and the liability for those certificates has been removed from the Storm Water enterprise fund statement of net assets. The City completed an advance refunding to reduce its total debt service payments by $939,477, which resulted in an economic gain (difference between present value of the old and new debt service payments) of $462,440. On November 22, 2005, the City issued $4,715,000 in Wastewater Revenue Refunding Bonds. $4,715,000 (par value) of these revenue refunding bonds, with an interest rate of 4.10%, were used to advance refund $4,530,000 of outstanding 1994 Sewer Revenue Bonds with an average interest rate of 5.65%. The net proceeds of $4,518,464 (after payment of $197,000 in underwriting fees and other issuance costs), plus an additional $411,370 of 1994 Reserve Fund monies were deposited in an irrevocable trust with an agent and invested in a federal money market fund to provide for debt service payments on the 1994 revenue bonds, which will be called on December 22, 2005. As a result, the 1994 Wastewater revenue bonds are considered to be defeased and the liability for those bonds has been removed from the Wastewater enterprise fund statement of net assets. The City completed an advanced refunding to reduce its total debt service payments by $199,665, which resulted in an economic gain (difference between present value of the old and new debt service payments) of $645,380.
7. RISK MANAGEMENT AND SELF-INSURANCE The City has an established Risk Management Fund (an internal service fund) to account for a self-insurance program. Under this program, the City is completely self-insured for unemployment insurance, vision, and dental insurance claims. For the period ending June 30, 2006, the City was self-insured for workers' compensation up to $500,000 per occurrence and for general liability up to $1,000,000 per occurrence. Claims in excess of these amounts are insured. The City has contracted with outside administrators to administer the programs. There were no significant reductions in insurance coverage. Settlements have not exceeded insurance coverage in any of the past three fiscal years.
83
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
7. RISK MANAGEMENT AND SELF-INSURANCE, Continued In January 1997, the City joined the Authority for California Cities Excess Liability (ACCEL). The Authority for California Cities Excess Liability (ACCEL) is a joint powers authority organized under the provisions of Section 6500 et. seq. of the California Government code. ACCEL was founded in 1986 to provide mediumsized California cities self-funding for catastrophic losses. There are currently 12 members. ACCEL operates a liability program which is subject to an annual independent financial audit and biennial actuarial study. ACCEL is governed by a twelve member Board of Directors. Each member agency appoints a representative to the Board of Directors. Each member of the Board of Directors has a single vote for policy and charter changes. ACCEL is funded by its member participants and, at the discretion of its Board of Directors, may assess the members for additional premiums (in an unlimited amount) in the event ACCEL assets at any time are insufficient to discharge its liabilities. For the fiscal year 2005-2006, the deposit rate was $0.60 per one-hundred dollars of payroll. ACCEL selffunded $2,000,000 excess of a $1,000,000 member self-insured retention, and purchased a $20,000,000 commercial excess insurance policy, providing a total limit of $23,000,000 per occurrence. In addition to the $23,000,000 program limits, two members purchased optional limits of $10,000,000, and two members purchased another optional $10,000,000. Members were also charged administrative costs in equal amounts. The City of Santa Cruz elected to pay the $360,000 administrative fee from pooled deposits. ACCEL’s day-to-day operations are administered by Driver Alliant Insurance Services contracted by ACCEL to provide accounting, risk consulting, insurance brokerage, and program administration services. Driver’s responsibility also includes the administration of policies as set forth by the ACCEL Joint Powers Authority Agreement, By-laws, and by the Board of Directors. The authority provides coverage above each member’s self-insured retention (SIR), subject to aggregate limit. Historically, nine members have $500,000 SIRS and two members have $1,000,000 SIRS. ACCEL provided an optional coverage of $500,000 excess of $500,000 per occurrence through 1989-90, however this coverage is no longer available. Prior to July 1, 1990, ACCEL pooled losses incurred by its members up to $10,000,000. Effective July 1, 1990, ACCEL created a reinsurance pool within the $9,000,000 excess of $1,000,000 layer by purchasing $5,000,000 excess of $5,000,000 coverage. On July 1, 1997, ACCEL further reduced its exposure and purchased coverage of $17,000,000 excess of $3,000,000 coverage. Due to favorable market conditions, ACCEL purchased coverage of $19,000,000 excess of $1,000,000 effective July 1, 1998. Six members with SIR of $500,000 purchased additional coverage of $500,000 excess of $500,000 (including the City of Santa Cruz). As of July 1, 2000, nine members purchased insurance of $19,500,000 excess of $1,000,000. ACCEL was fully insured through June 30, 2003. As of July 1, 2003, the Authority purchased a reinsurance covering $20,000,000 excess of $2,000,000 and pooled losses in the layer $1,000,000 excess of $1,000,000. All members have SIR of $1,000,000. ACCEL members may participate in the purchase of other insurance, such as excess worker’s compensation and excess liability over $12 million per occurrence where risk is not transferred to the pool. Effective September 1, 2003, ACCEL purchased excess insurance for all losses in excess of $2,000,000 per occurrence. ACCEL does not administer claims for these programs; therefore, no revenue or expense is reflected in ACCEL’s financial statements. 84
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
7. RISK MANAGEMENT AND SELF-INSURANCE, Continued ACCEL has a retrospective rating plan whereby all premiums collected, together with related investment income earned, in excess of pooled losses and loss expenses for each program year will be returned to members beginning five years after the end of the program year. Losses and loss expenses are allocated to each member based on a weighted actual loss formula. At the June 2006 Board of Directors meeting, a retrospectively rated refund was made available for distribution to the members for program years 2 through 15 in the amount of $10,435,477. Members could elect to have all or a portion of their refund, or choose retain the funds in the respective program year in the member city. The City of Santa Cruz’ retrospective rated refund is $550,058. Summary audited financial information for ACCEL as of and for the year ended June 30, 2006, is as follows: Assets Cash and investments Other assets
$
22,951,718 467,313
Total assets
$
23,419,031
$
9,506,000 13,374,872 441,621
Liabilities and Net Assets Unpaid claims liability retrospectively rated refunds liability Other liabilities Total liabilities Net assets
23,322,493 96,538
Total liabilities and net assets
$
23,419,031
$
5,721,090 634,010 359,500 -
Revenues Premiums earned Investment income Administrative fees Retro Assessment Total revenues
6,714,600 Expenses
Loss provision and premiums paid General and administrative
$
Total expenses
6,340,757 343,936 6,684,693
Net income/ (loss) Net assets, beginning of year
29,907 66,631
Net assets, end of year
$
96,538
Complete financial statements for ACCEL can be obtained from Driver Alliant Insurance Services, 600 Montgomery Street, 9th Floor, San Francisco, CA 94111.
85
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
7. RISK MANAGEMENT AND SELF-INSURANCE, Continued Risk Management Fund revenues are primarily premium charges received from other funds and are planned to match expenses of insurance premiums for coverage in excess of self-insured amounts, estimated payments resulting from self-insurance programs, and operating expenses. Department charges are based on historical experience. Claims known to be payable and the estimated liability for the balance, based on a case-by-case review of all claims is recorded as claims payable. An additional estimate of the amount to be paid for claims incurred, but not reported, is also recorded as claims payable. Changes in the Risk Management Fund's claims liability amount for the years ended June 30, 2004 through 2006 are as follows: CLAIMS PAYABLE
June 30, 2004
$
Beginning
Claims
Balance
Incurred
11,007,290
$
7,217,089
Ending Payments $
Balance
(3,848,258)
$
14,376,121
June 30, 2005
14,376,121
3,350,942
(2,463,787)
15,263,276
June 30, 2006
10,719,455
2,686,917
(2,399,082)
11,007,290
The General Fund and Redevelopment Agency Fund typically have been used in prior years to liquidate the liability for claims and judgments.
8. LANDFILL CLOSURE AND POSTCLOSURE COSTS In accordance with requirements established by the California Integrated Waste Management Board, the City has recognized a portion of the landfill's closure and postclosure care (closure) costs. These cost estimates are based on the amount of landfill used to date. The total estimated costs are as follows: Total estimated closure costs Total estimated postclosure costs Total estimated closure and postclosure costs
$
4,393,999 8,524,739
$
12,918,738
The City has increased the landfill’s capacity through excavations and plans to continue excavating in future years to increase capacity. This effort has also increased the estimates of the closure and postclosure costs. At June 30, 2006, the estimated landfill closure cost liabilities of $5,751,407 and estimated annual landfill closure cost of $300,433 were calculated as follows: Total estimated closure and postclosure costs
$
Percent of used capacity to total capacity
12,918,738 44.52%
Estimate landfill closure and postclosure cost liability
5,751,422
Miscellaneous adjustments
(15)
Estimated total closure and postclosure costs liability
5,751,407
Previous closure costs accrued
5,450,974
Fiscal year 2006 expense for closure and postclosure costs
86
$
300,433
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
8. LANDFILL CLOSURE AND POSTCLOSURE COSTS, Continued The landfill has an estimated remaining capacity of 5,816,715 cubic yards and has a current projected closure date of January 2038. Based upon the requirements of the California Integrated Waste Management Board, the City set aside $166,558 to fund future closure and post closure costs for the year ended June 30, 2006. All cash is invested. The market value of the invested cash at June 30, 2006 was $3,172,777, and is available to provide for closure and postclosure costs. Total funds accumulated as of June 30, 2006, are comprised as follows: Closure
$
Postclosure
1,314,425 1,858,352
Total
$
3,172,777
The City has also estimated corrective action costs of $361,265 for a reasonable foreseeable landfill release. This amount is based on a March 1995 Hydrogeologic Summary for Support of Financial Assurance Mechanism report which is adjusted annually for inflation. Sufficient funds to cover these potential costs are available in the Refuse Fund’s unrestricted cash account. The estimated closure and corrective action costs are current estimates based on data provided by an independent consultant and are subject to changes in inflation, technological advancements, or regulatory changes. 9. RETIREMENT PLANS A. Pension Plan Plan Description The City contributes to the California Public Employees' Retirement System (PERS); an agent multiple-employer defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS’ annual financial report may be obtained from their Executive Office located at 400 P Street, Sacramento, CA 95814. Funding Policy City employees are required to contribute 9% for safety employees and 7% for all other employees of their annual covered salary. The City employer is required to contribute at an actuarially determined rate; the fiscal year 2006 rate is 13.835% for miscellaneous employees, 32.616% for police safety employees, and 38.181% for fire safety employees of annual covered payroll. There is a cost sharing agreement with miscellaneous employees whereby the employee is required to pay the employer share above 6.354%, a portion on a pre-tax basis and a portion on a post-tax basis. The contribution requirements of City employees and the City employer are established and may be amended by PERS. 87
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
9. RETIREMENT PLANS, Continued A. Pension Plan, Continued Annual Pension Cost For fiscal year 2006, the City’s annual pension cost of $6,330,030 for PERS was equal to the City’s required and actual contributions. The required contribution was determined as part of the June 30, 2004, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumption included (a) 7.75% investment rate of return (net of administrative expenses); (b) projected salary increases ranging from 3.25% to 14.45% depending on age, service, and type of employment, and (c) 2% per year cost-of-living adjustments. Both (a) and (b) included an inflation component of 3.0%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a three-year period. PERS unfunded actuarial accrued liability (or surplus) is being amortized as a level percentage of projected payroll on a closed basis. The amortization period at June 30, 2004 was 17 years for public safety police employees, 17 years for public safety fire employees, and 30 years for miscellaneous employees for prior and current service unfunded liability. Fiscal Year Ended June 30, 2004 June 30, 2005 June 30, 2006
Annual Pension Cost (APC) $
Percentage of APC Contributed
4,729,159 6,175,176 6,330,030
100% 100% 100%
Net Pension Obligation $
-
10. POST-EMPLOYMENT RETIREMENT BENEFITS The City pays a portion of its retiree’s health insurance premium. All part-time and full-time regular employees that meet certain requirements (continuous service with the City and minimum age) are eligible. As of June 30, 2006, there were 143 employees eligible. The benefit will be provided until the retiree becomes eligible for Medicare. The benefit is provided through the memorandum of understanding (MOU) the City has entered into with each bargaining unit. The retirees are paid monthly by the City per the amount specified in each MOU. The City paid $104,952 in post-employment retirement benefits to 65 participants for the year ended June 30, 2006.
11. COMMITMENTS AND CONTINGENCIES The City participates in a number of Federal assisted grant programs, of which the principal grants are the Disaster Assistance Program, Community Development Block Grant, HOME grant program, various Department of Justice and Department of Transportation grant programs. These programs are subject to program compliance audits by the grantors or their representatives. The amount, if any, of expenditures, which may be disallowed by the granting agencies upon audit, cannot be determined at this time although the City expects such amounts to be immaterial. 88
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
11. COMMITMENTS AND CONTINGENCIES, Continued The California Legislature granted tidal and submerged lands in trust to the City to be used for a number of statewide purposes in furtherance of navigation, commerce and fisheries. In accordance with this legislation, revenues derived from the Wharf are required to be used for purposes permitted under the grant statute. There are a number of lawsuits presently against the City. While the ultimate outcome of these lawsuits is not determinable, in the opinion of the City Attorney and City management, recovery from the City, if any, would not have a material effect on the accompanying financial statements. The following schedule summarizes the major contractual commitments of the City as of June 30, 2006: Major Commitments and Contracts for Professional Services: Utility Billing Software Implementation
$
Refuse Trucks Purchase Agreement
136,345 1,214,728
Belz Treatment Plant Rehabiliation Review
303,085 1,654,158
Total major professional services Major Commitments and Contracts for Capital Projects: Skate Park Construction Contract
988,359
Construction for Restroom Facility at Lighthouse Field State Beach
854,000
Design Services for Sewer System Master Plan
235,156
WWTF Slide Gate and Valves Project
209,000
RRF Design and Build Recycle Center
327,191
Loan from South County Housing Corp
1,160,000
North Coast Rehabilitation
452,998
Felton Booster Pump Station Upgrade
459,191
Bay St System Transmission Improvement Project
15,762,771
Santa Cruz County Kinsley St Improvement Project
202,868
Archaeological Service for Bay St Reservoir
225,216
Desal Pilot Study on Water Supply
3,149,044
Total major capital projects
24,025,794
Total Other Commitments
3,088,258 $
Total Commitments and Contracts
89
28,768,210
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
12. OPERATING LEASES The City is obligated under various operating leases for the use of land, buildings, office space and equipment. Lease expenditures, primarily for governmental funds, for the year ended June 30, 2006 were $203,332. Future minimum lease payments required by lease agreements that have initial or remaining noncancelable lease terms in excess of one year as of June 30, 2006 are as follows: Year Ending June 30, 2007
Balance $
44,256
2008
44,256
2009
44,256
2010
5,348
Total future minimum lease payments
$
138,116
The City leases (as lessor) office facilities, buildings, and wharf facilities under operating leases to various entities and individuals. Total revenues from these leases for the year ending June 30, 2006 were $847,881. The total cost of leased assets as of June 30, 2006 was $11,815,902, and the accumulated depreciation of those assets that are depreciable amounted to $1,463,896. Future estimated revenues from these leases are as follows: Year Ending June 30, 2007
Amount $
749,238
2008
608,666
2009
453,798
2010
367,850
2011
322,877
Future years
3,582,011
90
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
13. RESERVED AND DESIGNATED FUND BALANCES Fund balances at June 30, 2006, have been reserved and designated for the following purposes: Redevelopment
Special
Debt
Capital
General
Agency
Revenue
Service
Projects
Fund
Fund
Funds
Fund
Funds
Total
Reserved for: Encumbrances
$
Noncurrent receivables and advances Prepaid items Debt service Capital projects Low and moderate income housing Total reserved
672,177
$
1,425,393
$
799,354
$
-
$
2,072,847
$
4,969,771
3,215,332
3,872,408
1,934,535
-
-
9,022,275
168,498
120,000
2,440
-
-
290,938
-
64,935
-
-
-
64,935
15,000
-
-
-
-
15,000
256,106
856,624
-
-
-
1,112,730
4,327,113
6,339,360
2,736,329
-
2,072,847
15,475,649
Designated for: 1,361,990
-
-
-
-
1,361,990
Debt service
Accrued comp. absences
-
3,430,717
-
707,775
-
4,138,492
Capital projects
-
4,528,208
-
-
-
4,528,208
City public trust
5,332,947
5,332,947
-
-
-
-
Unemployment insurance
49,040
-
-
-
-
49,040
Housing in-lieu programs
205,315
-
-
-
-
205,315
-
76,221
Computer loan program
76,221
Kiosk maintenance Street trees
24,219 30,395
-
-
-
-
-
-
30,395
Equipment maintenance
40,866
-
-
-
-
40,866
Police programs
-
-
66,361
-
-
66,361
-
-
-
-
24,219
-
Highway projects
-
-
4,488
-
-
4,488
Housing
-
-
465,602
-
-
465,602
Public works programs
-
-
-
-
21,567
21,567
Public Art
-
-
-
-
71,074
71,074
Total designated
7,120,993
7,958,925
536,451
707,775
92,641
16,416,785
Unreserved, Undesignated
11,354,586
-
3,341,962
-
281,931
14,978,479
Total fund balances
$
22,802,692
$
14,298,285
91
$
6,614,742
$
707,775
$
2,447,419
$
46,870,913
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
14. DEFICIT NET ASSETS The Risk Management internal service fund had deficit net assets of $4,256,330 as of June 30, 2006. This deficit is due to estimated liability insurance claims and workers’ compensation claims liabilities in excess of cash and other assets available in the fund. It is anticipated that this deficit will be made up in future years by increased contributions from other City funds. The City is working to establish an actuarially approved plan to fund the increased liability over a number of years. Net assets in the fund are designated for the following insurance activities: Net Assets Workers' compensation insurance
$
(4,829,809)
Liability insurance
152,232
Group health insurance
421,247 $
Total net assets
(4,256,330)
15. SUBSEQUENT EVENTS Measure H was approved by the City of Santa Cruz voters in November 2006 authorizing an increase of ¼% to the current sales tax rate, and making permanent an existing ¼% temporary sales tax rate (Measure F) that was scheduled to sunset in 2009. Effective April 1, 2007, the State Board of Equalization will show the Measure H approved sales tax increase of ½% for a total City sales tax rate of 8.50%. The increase is expected to generate an additional $2.4 million in annual City revenues.
92
REQUIRED SUPPLEMENTARY INFORMATION
93
City of Santa Cruz Required Supplementary Information For the year ended June 30, 2006
1. BUDGETARY INFORMATION An annual budget is adopted by the City Council no later than the first regular meeting in July for the fiscal year beginning July first. As part of the budget process, all City departments submit budget requests for the next fiscal year. These requests are reviewed, and a final City Manager recommended budget showing estimated revenues and expenditures of the City is prepared. This proposed budget is transmitted to the City Council and made available to the public for review. Study sessions and a public hearing are conducted before final adoption of the budget by the City Council. The City Manager is authorized to approve appropriation transfers within any department up to a specified amount; however, any new appropriation or appropriation transfer between departments requires approval by the City Council. Several supplemental appropriations were necessary during the year and are reflected in the budget amounts in the financial statements. Expenditures may not legally exceed appropriations at the department level. Under the City Charter, all unexpended appropriations shall lapse at the end of the fiscal year unless they are lawfully committed, or are required by law to be continuously appropriated from year to year. Lawfully committed amounts include amounts legally encumbered at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the governmental fund types. Encumbrances outstanding at year-end are reported as reservation of fund balances since they do not constitute expenditures or liabilities, and re-appropriations in the subsequent year provide authority to complete these transactions as expenditures. In addition, project-length (or non-lapsing) budgets are adopted for capital improvement and other projects, and grant-funded projects or programs that may not be completed within the fiscal year during which the budget appropriation for the project or program originates. Under these circumstances, the appropriation continues until project or program completion, or unless the appropriation is subsequently amended or rescinded by the City Council. In the Budgetary Comparison Schedules, the “Original Budget” column includes the final adopted budget amounts, re-appropriations for prior year encumbrances, and continuing appropriations for project-length budgets automatically carried over from prior years. The City Charter requires the City Council, upon recommendation of the City Manager and after providing sufficient funds to meet debt service and operating needs, to annually set aside in the enterprise funds an amount to be used for the acquisition and betterment of plant facilities. Such amounts, if any, would be shown in the financial statements as cash and investments held for betterment of plant facilities. No such funds were set aside during the year ended June 30, 2006.
94
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
1. BUDGETARY INFORMATION, Continued Budgets are adopted each year for all general, special revenue, debt service, and capital projects funds. These governmental fund budgets are prepared on a basis consistent with generally accepted accounting principles (GAAP), except in the following areas: ¾
Budgetary basis revenues include repayments of loan principal. Budgetary basis expenditures include loans made. On a GAAP basis both of these are considered as reclassifications of fund balance (between reserved and unreserved fund balance).
¾
GAAP basis revenues include the fair value adjustment to investment earnings. GAAP basis expenditures include compensated absences expense. Neither of these are included in the budgetary basis.
A reconciliation of differences between budgetary and GAAP revenues and expenditures follows the budget comparison schedules.
95
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96
BUDGETARY SCHEDULES
97
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006 Budgetary Comparison Schedule, General Fund Variance with Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Budget to GAAP Actual Amounts Differences
(GAAP Basis)
REVENUES: Taxes
$
35,534,911
$
37,418,532
$
39,495,863
$
2,077,331
$
-
$
39,495,863
Licenses and permits
680,650
680,650
615,448
(65,202)
-
615,448
Intergovernmental
658,250
1,221,766
1,073,997
(147,769)
-
1,073,997
External
7,041,866
7,129,866
7,485,166
355,300
-
7,485,166
Internal
2,974,352
2,975,780
2,844,775
(131,005)
-
2,844,775
Interagency
8,888,047
8,966,867
8,732,523
(234,344)
-
8,732,523
18,904,265
19,072,513
19,062,464
(10,049)
-
19,062,464
Fines and forfeitures
2,004,200
2,004,200
1,962,697
(41,503)
Use of money and property
2,411,321
2,412,509
2,595,824
183,315
151,500
163,447
216,721
53,274
60,345,097
62,973,617
65,023,014
2,049,397
Charges for services:
Subtotal charges for services
Other revenues Total revenues
-
1,962,697
(53,915)
2,541,909
-
216,721
(53,915)
64,969,099
EXPENDITURES: Current: General government
10,149,185
10,340,928
9,666,858
674,070
-
9,666,858
Public safety
27,306,800
26,874,378
26,837,330
37,048
-
26,837,330
Parks and recreation
11,249,212
10,956,820
9,402,529
1,554,291
-
9,402,529
Library
9,442,046
9,450,494
9,250,499
199,995
-
9,250,499
Public works
4,320,390
4,276,147
3,565,397
710,750
-
3,565,397
Community and economic development
2,697,524
3,112,197
1,000,492
2,111,705
-
1,000,492
845,752
1,048,192
1,566,695
(518,503)
-
1,566,695
453,416
1,076,040
765,851
310,189
-
765,851
289,252
289,252
204,928
84,324
-
204,928
48,277
48,277
48,264
13
-
48,264
66,801,854
67,472,725
62,308,843
5,163,882
-
62,308,843
(6,456,757)
(4,499,108)
2,714,171
7,213,279
Social services Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(53,915)
2,660,256
OTHER FINANCING SOURCES (USES): Proceeds from asset disposition Proceeds from long-term debt issued Loan principal recipts Transfers in Transfers out
25,000
25,000
25,256
256
-
25,256
-
-
-
-
-
-
431,767
431,767
-
(431,767)
-
-
1,130,188
1,130,188
99,894
(1,030,294)
-
99,894
(241,874) 1,345,081
Total other financing sources (uses) Net change in fund balances
(864,295)
(19,509)
844,786
-
(19,509)
722,660
105,641
(617,019)
-
105,641
(5,111,676)
(3,776,448)
2,819,812
6,596,260
8,180,104
7,981,589
15,163,949
7,182,360
(53,915)
2,765,897
FUND BALANCES: Beginning of the year End of year
$
3,068,428
$
4,205,141
98
$
17,983,761
$
13,778,620
20,036,795
4,872,846 $
4,818,931
$
22,802,692
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
General Fund Reconciliation of Net Changes in Fund Balances - Budgetary to GAAP Basis: Net Change in Fund Balances - Budgetary Basis
$
2,819,812
The amount reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances was different because: Unrealized gains and losses on investments, which are considered a component of investment income in the Statement of Revenues, Expenditures and Changes in Fund Balances, are not included as revenue on a budgetary basis. Net Change in Fund Balances - Statement of Revenues, Expenditures and Changes in Fund Balances
(53,915) $
2,765,897
$
17,983,761
Reconciliation of Fund Balances - Budgetary to GAAP Basis: Fund Balances - Ending - Budgetary Basis Cumulative effect of unrealized gains and losses on investments
(171,411)
Reserved and designated balances unavailable for appropriation
4,287,564
Designated for noncurrent component of compensated absences
702,778
Fund Balances - Ending - GAAP Basis
$
99
22,802,692
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
Budgetary Comparison Schedule, Redevelopment Agency Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Budget to GAAP Actual Amounts Differences
(GAAP Basis)
REVENUES: Tax increment
$
Use of money and property
9,106,875
$
344,683
Other revenues
$
10,323,206
$
1,216,331
344,683
512,254
167,571
200,285
147,053
(53,232)
9,540,558
9,651,843
10,982,513
89000
Total revenues
9,106,875
$
-
$
10,323,206
(40,731)
471,523
-
147,053
1,330,670
(40,731)
10,941,782
EXPENDITURES: Current: Community and economic development Capital outlay
8,033,978
10,644,328
6,978,325
3,666,003
-
6,978,325
3,079,900
7,582,687
6,282,979
1,299,708
-
6,282,979
2,773,948
2,780,349
2,728,577
51,772
(2,214,965)
513,612
391,446
421,531
409,555
11,976
-
409,555
-
-
-
-
-
-
14,279,272
21,428,895
16,399,436
4,965,711
(2,214,965)
14,184,471
(4,738,714)
(11,777,052)
(5,416,923)
6,296,381
2,174,234
(3,242,689)
Debt service: Principal Interest and fiscal charges Bond issuance costs Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): 9,000
9,000
3,123,322
3,114,322
(23,322)
-
-
-
-
-
-
58,425
58,425
-
(58,425)
-
-
Proceeds from long-term debt issued
-
-
-
-
-
-
Premiums on bonds sold
-
-
-
-
-
-
Payment to refunded bond escrow agent
-
-
-
-
-
-
67,425
67,425
3,123,322
3,055,897
(23,322)
3,100,000
9,352,278
Loan proceeds Long term advance proceeds Loan principal receipts
Total other financing sources (uses) Net change in fund balances
(4,671,289)
(11,709,627)
(2,293,601)
-
-
-
3,100,000
2,150,912
(142,689)
-
-
FUND BALANCES: Beginning of the year, as restated End of year
3,428,587 $
(1,242,702)
3,859,262 $
(7,850,365)
100
7,312,850
11,172,112 $
8,878,511
$
16,665,128
14,440,974
3,268,862 $
5,419,774
$
14,298,285
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
Redevelopment Agency Fund Reconciliation of Net Changes in Fund Balances - Budgetary to GAAP Basis: Net Change in Fund Balances - Budgetary Basis
$
(2,293,601)
The amount reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances was different because: Unrealized gains and losses on investments, which are considered a component of investment income in the Statement of Revenues, Expenditures and Changes in Fund Balances, are not included as revenue on a budgetary basis.
(40,731)
Proceeds of both short term loans and long term advances from the City are considered budgetary resources, but are not revenues on a GAAP basis.
(23,322)
The Agency budgets for both short term and long term loan and advance principal repayments to the City, but these payments are not considered expenditures on a GAAP basis. Net Change in Fund Balances - Statement of Revenues, Expenditures and Changes in Fund Balances
2,214,965 $
(142,689)
Reconciliation of Fund Balances - Budgetary to GAAP Basis: Fund Balances - Ending - Budgetary Basis
$
Cumulative effect of unrealized gains and losses on investments
8,878,511 (144,373)
Reserved balances unavailable for appropriation
5,564,147
Fund Balances - Ending - GAAP Basis
$
All funds are reserved or designated for debt service, capital projects, or low and moderate income housing.
101
14,298,285
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102
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
PUBLIC EMPLOYEE RETIREMENT SYSTEM (PERS) SCHEDULE OF FUNDING PROGRESS Miscellaneous Employees (Overfunded) Unfunded
Actuarial
Entry Age
(Overfunded)
Liability as
Actuarial
Actuarial
Actuarial
Actuarial
Valuation
Value of
Accrued
Accrued
Funded
Covered
Covered
Date
Assets
Liability
Liability
Ratio
Payroll
Payroll
June 30, 2003
$
129,704,897
$
150,709,327
$
Percentage of
21,004,430
86.1%
35,526,589
59.1%
June 30, 2004
139,133,604
160,182,390
21,048,786
86.9%
$
33,778,451
62.3%
June 30, 2005
150,956,645
170,106,283
19,149,638
88.7%
32,905,030
58.2%
Police Safety Employees Unfunded (Overfunded) Unfunded
Actuarial
Entry Age
(Overfunded)
Liability as Percentage of
Actuarial
Actuarial
Actuarial
Actuarial
Valuation
Value of
Accrued
Accrued
Funded
Covered
Covered
Date
Assets
Liability
Liability
Ratio
Payroll
Payroll
CalPERS Risk Pool Information (see comment below): June 30, 2003
692,831,816
83.8%
476,089,674
145.5%
June 30, 2004
$
4,424,586,846
3,577,742,166
$
5,383,921,942
4,270,573,982
$
959,335,096
82.2%
$
575,296,434
166.8%
June 30, 2005
5,295,150,375
6,367,049,264
1,071,898,889
83.2%
664,147,796
161.4%
Fire Safety Employees Unfunded (Overfunded) Unfunded
Actuarial
Entry Age
(Overfunded)
Liability as
Actuarial
Actuarial
Actuarial
Actuarial
Percentage of
Valuation
Value of
Accrued
Accrued
Funded
Covered
Covered
Date
Assets
Liability
Liability
Ratio
Payroll
Payroll
CalPERS Risk Pool Information (see comment below): June 30, 2003
692,831,816
83.8%
476,089,674
145.5%
June 30, 2004
$
3,577,742,166 4,424,586,846
$
5,383,921,942
4,270,573,982
$
959,335,096
82.2%
$
575,296,434
166.8%
June 30, 2005
5,295,150,375
6,367,049,264
1,071,898,889
83.2%
664,147,796
161.4%
Since the City has less than 100 active members in Fire and Police plans in at least one valuation since June 30, 2004, the City is required to participate in a risk pool. An actuarial valuation was performed with other participants within the same risk pool. Therefore, standalone information of the schedule of the funding progress for the City was not disclosed.
103
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104
SUPPLEMENTARY INFORMATION
105
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106
Non-Major Governmental Funds Special Revenue Funds: Police - Accounts for state and federal grants and other revenues restricted to be used for police programs. State Highway Funds - This fund is used to account for the City's apportionment of the State excise tax on gasoline and other related grants or receipts that are restricted for the planning, construction and maintenance of streets and roads. It is also used to account for a subvention of the State sales tax on gasoline (Traffic Congestion Relief Funds) that are restricted for street and highway maintenance, and rehabilitation and reconstruction of necessary associated facilities such as drainage and traffic control devices. Traffic Impact Fee Funds - This fund is used for capital improvements to mitigate traffic impacts generated by land development. The fee provides financial resources for improvements to transit stops, bike and pedestrian facilities, signal coordination, park and ride lots, and other alternative transportation sources impacted by development, and is levied on all Citywide projects requiring a building permit (residential remodels and limited expansions expected to generate less than five new trips per day are exempt). Parks and Recreation - Accounts for tax and fee revenues restricted for parks and recreation use. Housing and Community Development - Accounts for receipts and expenditures under the Housing and Community Development Act, which includes Community Development Block Grant funds and HOME program funds. It also is used to account for Red Cross housing reconstruction loan repayments and income and related expenditures for a City-owned rental property. Transportation Development Act Fund - This fund is used to account for receipts of State Transportation Development Act (TDA) funds restricted to be used for specialized or unmet transit needs. Acting as the public agency sponsor, the City contracts with non-profit agencies to meet these obligations. Debt Service Fund: General Obligation Bonds - This fund accounts for the debt service for a $7 million general obligation bond issue approved by voters in November 1998. Funds for payment of principal and interest on the bonds are generated by a property tax override assessment of $9.00 per $100,000 of assessed value. Capital Projects Fund: General Capital Improvement - This fund is used to account for capital improvements for which special projects funds have not been established. A portion of the City's transient occupancy tax receipts, combined with other funding sources, such as grants, provides funding for capital projects of general benefit, such as storm drain improvements, or improvements to public buildings.
107
City of Santa Cruz Combining Balance Sheet Non-Major Governmental Funds June 30, 2006
Special Revenue Housing and Police
State
Traffic
Parks and
Community
Highway
Impact Fee
Recreation
Development
ASSETS Cash and cash equivalents
$
Interest receivable Taxes receivable Accounts receivable - net
246,396
$
1,503,594
$
567,034
$
1,620,001
$
1,459,316
2,101
13,731
2,329
17,899
285,976
-
-
-
-
-
2,990
101,108
-
-
2,763
Due from other governments
-
127,754
-
-
95,948
Prepaid items
-
768
-
-
1,076
Restricted assets: Cash and cash equivalents
-
-
-
-
-
Investments
-
-
-
-
-
-
-
-
-
-
Notes receivable - net
-
-
26,824
368,848
633,223
Loans receivable - net
-
-
-
-
1,301,012
Total restricted assets
Total assets
$
251,487
$
1,746,955
$
$
105
$
57,013
$
596,187
$
-
$
2,006,748
$
1,531
$
3,779,314
LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Due to other funds
250
Intergovernmental payable Deferred revenue Advances from other funds Total liabilities
-
-
4,200
54,127 44,386
-
-
-
-
52
168,484
237,043
26,824
368,848
273,086
-
-
-
-
530,000
168,839
294,056
26,824
374,579
901,651
Fund Balances: Reserved
2,801
707,454
-
-
2,026,074
66,361
4,488
-
-
465,602
Special revenue funds
13,486
740,957
569,363
1,632,169
385,987
Capital projects funds
-
-
-
-
-
82,648
1,452,899
569,363
1,632,169
2,877,663
Unreserved, designated Unreserved, undesignated, reported in:
Total fund balances Total liabilities and fund balances
$
251,487
$
108
1,746,955
$
596,187
$
2,006,748
$
3,779,314
Debt Service
Capital Projects
Transportation
$
$
$
Total Other
Development
General
Capital
Governmental
Act
Obligation Bond
Improvement
Funds
-
$
675,566
$
1,384,811
$
7,456,718
-
5,764
23,841
351,641
-
26,446
589,088
615,534
-
-
24,267
131,128
-
-
890,219
1,113,921
-
-
-
1,844
-
-
5,035
5,035
-
-
277,519
277,519
-
-
282,554
282,554
-
-
-
-
1,028,895 -
1,301,012
-
$
707,776
$
3,194,780
$
12,283,247
-
$
1
$
402,687
$
515,464
-
$
General
-
19,723
68,559
-
-
-
52
-
-
224,950
1,299,235
-
-
100,001
630,001
-
1
747,361
2,513,311
-
-
2,072,847
4,809,176
-
707,775
92,641
1,336,867
-
-
-
3,341,962
-
-
281,931
281,931
-
707,775
2,447,419
9,769,936
-
$
707,776
$
3,194,780
$
12,283,247
109
City of Santa Cruz Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2006
Housing and Police
State
Traffic
Parks and
Community
Highway
Impact Fee
Recreation
Development
REVENUES: Taxes
$
Intergovernmental
-
$
116,495
-
$
1,831,811
-
$
417,202
-
-
$
848,870
Charges for services
39,503
-
-
245,496
-
Fines and forfeitures
2,538
-
-
-
-
Use of money and property
6,606
29,089
2,453
51,818
70,799
-
5,280
575,718
-
9,228
165,142
1,866,180
578,171
714,516
928,897
Public safety
101,299
-
-
-
-
Public works
-
593,519
-
-
-
Transit
-
-
-
-
-
Other revenues Total revenues EXPENDITURES: Current:
Community and economic development
-
-
-
-
457,651
Social services
-
-
-
-
126,572
97,652
1,374,685
-
-
11,268
Capital outlay Debt service: Principal
-
-
-
-
-
Interest and fiscal charges
-
-
-
-
19,223
198,951
1,968,204
-
-
614,714
578,171
714,516
314,183
Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(33,809)
(102,024)
OTHER FINANCING SOURCES (USES): Proceeds from long-term debt issued
-
-
-
-
-
Transfers in
-
8,808
-
-
-
(644)
-
(8,808)
(677,437)
-
(644)
8,808
(8,808)
(677,437)
-
Transfers out Total other financing sources (uses) Net change in fund balances
(34,453)
(93,216)
569,363
37,079
314,183
-
1,595,090
2,563,480
FUND BALANCES: Beginning of year End of year
117,101 $
82,648
1,546,115 $
110
1,452,899
$
569,363
$
1,632,169
$
2,877,663
Debt Service
Capital Projects
Transportation
$
General
Total Other
Development
General
Capital
Governmental
Act
Obligation Bond
Improvement
Funds
-
$
624,214
$
542,683
$
-
1,256,775
$
2,216,660
1,200,850
4,622,240 284,999
-
-
-
-
-
-
2,538
-
13,499
46,463
220,727
-
-
95,925
686,151
624,214
556,182
2,600,013
8,033,315
-
-
-
101,299
-
-
-
593,519
624,214
-
-
624,214
-
-
-
457,651
-
-
-
126,572
-
-
3,389,354
4,872,959
-
177,616
253,621
431,237
-
228,068
216,407
463,698
624,214
405,684
3,859,382
7,671,149
-
150,498
(1,259,369)
362,166
-
-
100,000
100,000
-
-
752,555
761,363
-
-
(51,772)
(738,661)
-
-
800,783
122,702
-
150,498
(458,586)
484,868
-
557,277
-
$
707,775
2,906,005 $
2,447,419
9,285,068 $
9,769,936
111
City of Santa Cruz Schedule of Budget and Actual Revenues General Fund For the year ended June 30, 2006
Variance with Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
REVENUES: Taxes: Property Sales and use
$
10,459,158 11,318,723
$
10,627,228 11,173,723
$
11,586,222 11,738,917
$
958,994 565,194
Business license
798,000
773,000
777,068
Franchise
766,000
3,218,551
2,136,686
(1,081,865)
2,047,000
1,100,000
2,128,373
1,028,373
200,000
220,000
229,629
9,629
Transient occupancy Parking
4,068
Utility users
7,800,000
8,160,000
8,304,371
144,371
Admission
1,650,000
1,650,000
1,715,133
65,133
200,000
200,000
562,724
362,724
Property transfer Business improvement
180,000
180,000
200,708
20,708
Other taxes
116,030
116,030
116,032
2
35,534,911
37,418,532
39,495,863
2,077,331
636,400
636,400
570,829
44,250
44,250
44,619
680,650
680,650
615,448
Total taxes Licenses and permits: Construction permits Other licenses and permits Total licenses and permits
(65,571) 369 (65,202)
Intergovernmental revenues: 23,450
244,978
212,832
(32,146)
State
621,800
963,788
848,165
(115,623)
Local
13,000
13,000
13,000
-
658,250
1,221,766
1,073,997
(147,769)
Federal
Total intergovernmental revenues Charges for services: General government:
-
-
1,400
1,400
Management and support
578,176
578,176
588,624
10,448
Planning and zoning
899,785
1,074,785
1,482,116
407,331
8,000
8,000
19,341
11,341
1,384,369
1,384,369
1,304,322
Legislative
Other general government Public safety: Police
(80,047)
Fire
397,348
397,348
426,269
28,921
Protective inspection
360,500
360,500
371,380
10,880
25,000
25,000
58,141
33,141
42,000
42,000
45,960
3,960
1,446,900
1,446,900
1,394,378
870,000
870,000
912,366
42,366
6,099,078
6,187,078
6,604,297
417,219
Other public safety Parks and recreation: Parks Recreation Other parkes and recreation Subtotal of charges for services
112
(52,522)
City of Santa Cruz Schedule of Budget and Actual Revenues, Continued General Fund For the year ended June 30, 2006
Variance with Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Charges for services, Continued: Subtotal from previous page
$
6,099,078
$
6,187,078
$
6,604,297
$
417,219
Public works: Engineering Transportation
85,000
85,000
95,504
10,504
843,000
843,000
771,247
(71,753)
Community and economic development: 14,788
14,788
14,118
(670)
2,974,352
2,975,780
2,844,775
(131,005)
8,047,295
8,055,743
7,889,487
(166,256)
840,752
911,124
843,036
(68,088)
8,888,047
8,966,867
8,732,523
(234,344)
18,904,265
19,072,513
19,062,464
(10,049)
1,723,000
1,723,000
1,603,759
(119,241)
281,200
281,200
358,938
2,004,200
2,004,200
1,962,697
Investment income
527,588
528,776
643,341
114,565
Rents and royalties
1,883,733
1,883,733
1,952,483
68,750
2,411,321
2,412,509
2,595,824
183,315
Other community and economic development Internal charges for services provided
0
Interagency personnel services charges: Library Redevelopment Agency Subtotal interagency charges Total charges for services Fines and forfeitures: Court and traffic fines Other fines and forfeitures Total fines and forfeitures
77,738 (41,503)
Use of money and property:
Total use of money and property Other revenues: Contributions and donations
59,500
71,447
39,904
(31,543)
Other miscellaneous revenues
92,000
92,000
176,817
84,817
151,500
163,447
216,721
53,274
60,345,097
62,973,617
65,023,014
2,049,397
256
Total other revenues Total revenues OTHER FINANCING SOURCES: Proceeds from asset dispositions
25,000
25,000
25,256
Proceeds from long-term debt issued
-
-
-
-
Loan and advance principal receipts
431,767
431,767
-
(431,767)
1,130,188
1,130,188
99,894
(1,030,294)
1,586,955
1,586,955
125,150
(1,461,805)
Transfers in Total other financing sources Total revenues and other financing sources
$
61,932,052
113
$
64,560,572
$
65,148,164
$
587,592
City of Santa Cruz Schedule of Budget and Actual Expenditures and Other Financing Uses For Legally Adopted Appropriations by Department - General Fund For the year ended June 30, 2006
Services, Supplies
City Council
$
Personnel
and Other
Debt
Capital
Actual Amounts
Services
Charges
Service
Outlay
(Budgetary Basis)
166,616
$
153,152
$
-
$
200
$
319,968
City Clerk
449,925
118,019
-
77,496
645,440
City Manager
550,146
121,432
-
-
671,578 592,797
City Attorney Human Resources Finance Police
14,059
578,738
-
-
452,463
428,420
-
604
881,487
2,681,004
887,742
-
116,980
3,685,726
13,529,087
3,355,257
-
284,101
17,168,445
Fire
8,031,769
744,639
203,524
131,189
9,026,798
Parks and Recreation
6,831,449
3,110,974
-
49,108
9,991,531
Library
7,855,748
1,394,751
-
-
9,250,499
Public Works
2,662,440
895,771
-
95,046
3,653,257
Planning and Community Development
1,767,986
746,399
-
2,068
2,502,131
841,114
29,300
-
-
884,736
7,185
2,893,274
-
-
2,900,459
Debt service
-
-
49,668
-
133,991
Capital projects
-
-
-
-
-
Total expenditures
45,840,991
15,457,868
253,192
756,792
62,308,843
Advances to other funds
-
-
-
-
-
Transfers out
-
-
-
-
19,509
Redevelopment Administration Non-Departmental
Total expenditures and other financing uses
$
45,840,991
$
15,457,868
Budget to GAAP Differences: See reconciliation in Required Supplementary Information Note 1.
114
$
253,192
$
756,792
$
62,328,352
Variance with Final Budget -
$
$
Final
Positive
Budget to GAAP
Actual Amounts
Budget
(Negative)
Differences
(GAAP Basis)
370,694
$
50,726
$
-
$
319,968
787,938
142,498
-
645,440
812,381
140,803
-
671,578
594,473
1,676
-
592,797
973,081
91,594
-
881,487
3,879,905
194,179
-
3,685,726
18,410,148
1,241,703
-
17,168,445
9,208,875
182,077
-
9,026,798
11,035,292
1,043,761
-
9,991,531
9,450,494
199,995
-
9,250,499
4,412,808
759,551
-
3,653,257
3,124,990
622,859
-
2,502,131
1,048,192
163,456
-
884,736
3,229,450
328,991
-
2,900,459
134,004
13
-
133,991
-
-
-
-
67,472,725
5,163,882
-
62,308,843
279,981
279,981
-
-
584,314
564,805
-
19,509
68,337,020
$
6,008,668
$
-
$
62,328,352
115
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Police Special Revenue Fund For the year ended June 30, 2006 Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
100,000
$
104,805
$
116,495
$
11,690
$
-
$
116,495
Charges for services
45,000
45,000
39,503
(5,497)
-
39,503
Fines and forfeitures
-
-
2,538
2,538
-
2,538
1,600
1,600
6,927
5,327
321
6,606
146,600
151,405
165,463
14,058
321
165,142
101,000
101,000
101,299
-
101,299
-
98,805
97,652
-
97,652
101,000
199,805
198,951
-
198,951
45,600
(48,400)
(33,488)
(500)
(500)
(644)
(500)
(500)
(644)
45,100
(48,900)
(34,132)
116,210
22,051
119,772
Use of money and property Total revenues EXPENDITURES: Current: Public safety: Police Capital outlay Total expenditures
(299) 1,153 (299)
REVENUES OVER (UNDER) EXPENDITURES
13,759
321
(33,809)
(144)
-
(644)
(144)
-
(644)
13,615
321
(34,453)
97,721
2,671
OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Net change in fund balances FUND BALANCES: Beginning of the year End of year
$
161,310
$
(26,849)
116
$
85,640
$
111,336
$
2,992
117,101 $
82,648
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual State Highway Special Revenue Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
Charges for services Use of money and property Other revenues Total revenues
2,203,500
$
5,747,244
$
1,831,811
$
(3,915,433)
$
-
$
1,831,811
-
-
-
-
-
-
12,000
12,000
40,550
28,550
11,461
29,089
-
-
5,280
5,280
-
5,280
2,215,500
5,759,244
1,877,641
11,461
1,866,180
(3,881,603)
EXPENDITURES: Current: Public works: 605,479
617,416
593,519
23,897
-
593,519
2,042,250
6,701,358
1,374,685
5,326,673
-
1,374,685
Principal
-
-
-
-
-
-
Interest and fiscal charges
-
-
-
-
-
-
2,647,729
7,318,774
1,968,204
5,350,570
-
1,968,204
1,468,967
11,461
Transportation Capital outlay Debt service:
Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(432,229)
(1,559,530)
(90,563)
(102,024)
OTHER FINANCING SOURCES (USES): Proceeds from asset disposition Transfers in Total other financing sources (uses) Net change in fund balances
-
300,000
-
(300,000)
-
-
75,000
139,000
8,808
(130,192)
-
8,808
75,000
439,000
8,808
-
-
8,808
1,468,967
11,461
(357,229)
(1,120,530)
(81,755)
(93,216)
FUND BALANCES: Beginning of the year End of year
707,724 $
350,495
700,972 $
(419,558)
117
1,545,783 $
1,464,028
844,811 $
2,313,778
(332) $
11,129
1,546,115 $
1,452,899
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Traffic Impact Fee Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
-
$
-
$
-
$
-
$
-
$
-
Charges for services
-
-
-
-
-
-
Use of money and property
-
-
4,530
4,530
2,077
2,453
75,000
75,000
575,718
500,718
-
575,718
75,000
75,000
580,248
505,248
2,077
578,171
-
-
-
-
-
-
-
-
-
-
-
-
Principal
-
-
-
-
-
-
Interest and fiscal charges
-
-
-
-
-
-
Total expenditures
-
-
-
-
-
-
75,000
75,000
580,248
505,248
2,077
578,171
(75,000)
(139,000)
(8,808)
130,192
-
(8,808)
(75,000)
(139,000)
(8,808)
-
-
(8,808)
571,440
505,248
2,077
569,363
-
-
-
-
Other revenues Total revenues EXPENDITURES: Current: Public works: Transportation Capital outlay Debt service:
REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Net change in fund balances
-
(64,000)
FUND BALANCES: Beginning of the year End of year
$
-
$
(64,000)
118
$
571,440
$
505,248
$
2,077
$
569,363
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Parks and Recreation Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Taxes
$
Use of money and property Other revenues Total revenues
522,360
$
522,360
$
417,202
$
(105,158)
$
-
$
417,202
20,000
20,000
51,818
31,818
-
51,818
-
-
245,496
245,496
-
245,496
542,360
542,360
714,516
172,156
-
714,516
OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Net change in fund balances
(1,086,246)
(1,635,379)
(677,437)
957,942
-
(677,437)
(1,086,246)
(1,635,379)
(677,437)
957,942
-
(677,437)
(543,886)
(1,093,019)
37,079
1,130,098
-
37,079
1,611,122
1,091,688
16,032
1,595,090
FUND BALANCES: Beginning of the year End of year
519,434 $
(24,452)
519,434 $
(573,585)
119
$
1,648,201
$
2,221,786
$
16,032
$
1,632,169
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Housing and Community Development Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
Use of money and property Other revenue Total revenues
1,638,492
$
4,072,680
$
848,870
$
(3,223,810)
$
-
$
848,870
60,770
60,770
70,799
10,029
-
70,799
-
-
9,228
9,228
-
9,228
1,699,262
4,133,450
928,897
(3,204,553)
-
928,897
1,747,468
4,227,674
457,651
3,770,023
-
457,651
126,734
126,842
126,572
270
-
126,572
47,181
779,034
11,268
767,766
-
11,268
200,000
90,000
90,000
-
90,000
-
21,000
21,000
19,223
1,777
-
19,223
2,142,383
5,244,550
704,714
4,538,059
90,000
614,714
(1,111,100)
224,183
1,333,506
(90,000)
314,183
EXPENDITURES: Current: Community and economic development: Housing and community development Social services: CDBG social services Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(443,121)
OTHER FINANCING SOURCES (USES): Loan principal receipts Proceeds from long-term debt Transfers out Total other financing sources (uses) Net change in fund balances
118,520
118,520
-
(118,520)
-
-
-
710,000
-
(710,000)
-
-
(80,000)
(110,000)
-
110,000
-
-
38,520
718,520
-
(718,520)
-
-
(404,601)
(392,580)
224,183
614,986
(90,000)
314,183
1,407,117
130,449
(1,156,363)
2,563,480
FUND BALANCES: Beginning of the year End of year
1,253,705 $
849,104
1,276,668 $
884,088
120
$
1,631,300
$
745,435
$
(1,246,363)
$
2,877,663
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Transportation Development Act For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
Total revenues
624,214
$
624,214
$
624,214
$
-
$
-
$
624,214
624,214
624,214
624,214
-
-
624,214
624,214
624,214
624,214
-
-
624,214
624,214
624,214
624,214
-
-
624,214
-
-
-
-
-
-
-
-
-
-
-
-
EXPENDITURES: Current: Transit Total expenditures REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES: Beginning of the year End of year
$
-
$
-
121
$
-
$
-
$
-
$
-
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Obligation Bond For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Taxes
$
477,645
$
477,645
$
542,683
$
65,038
$
-
$
542,683
Use of money and property
10,500
10,500
13,499
2,999
-
13,499
Total revenues
488,145
488,145
556,182
68,037
-
556,182
Principal
177,616
177,616
177,616
-
-
177,616
Interest and fiscal charges
228,234
228,234
228,068
166
-
228,068
Total expenditures
405,850
405,850
405,684
166
-
405,684
82,295
82,295
150,498
68,203
-
150,498
509,634
509,634
560,645
51,011
3,368
557,277
EXPENDITURES: Debt service:
REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES: Beginning of the year End of year
$
591,929
$
591,929
122
$
711,143
$
119,214
$
3,368
$
707,775
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Capital Improvement Projects For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Budget to GAAP Actual Amounts Differences
(GAAP Basis)
REVENUES: Taxes
$
Intergovernmental Charges for services Use of money and property
2,094,000
$
2,094,000
$
1,256,775
$
(837,225)
$
-
$
1,256,775
346,754
5,032,210
1,200,850
(3,831,360)
-
1,200,850
-
-
-
-
-
-
56,351
-
1,233
57,584
11,121
46,463
10,000
3,456,328
95,925
(3,360,403)
-
95,925
2,450,754
10,583,771
2,611,134
(7,972,637)
11,121
2,600,013
2,109,000
13,810,561
3,389,354
10,421,207
-
3,389,354
Principal
264,472
364,472
253,621
110,851
Interest and fiscal charges
216,389
216,389
216,407
2,589,861
14,391,422
3,859,382
(3,807,651)
(1,248,248)
Other revenues Total revenues EXPENDITURES: Capital outlay Debt service:
Total expenditures
-
253,621
-
216,407
10,532,040
-
3,859,382
2,559,403
11,121
(18)
REVENUES OVER (UNDER) EXPENDITURES
(139,107)
(1,259,369)
OTHER FINANCING SOURCES (USES): Proceeds from long-term debt Transfers in Transfers out
-
100,000
-
(100,000)
(100,000)
100,000
1,308,151
2,613,509
752,555
(1,860,954)
-
752,555
(1,030,465)
(1,191,420)
(51,772)
1,139,648
-
(51,772)
Total other financing sources (uses)
277,686
1,522,089
700,783
Net change in fund balances
138,579
(2,285,562)
(547,465)
(721,306)
(100,000)
800,783
1,838,097
(88,879)
(458,586)
2,180,169
(179,614)
FUND BALANCES: Beginning of the year End of year
613,075 $
751,654
546,222 $
(1,739,340)
123
2,726,391 $
2,178,926
$
4,018,266
$
(268,493)
2,906,005 $
2,447,419
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Non-Major Governmental Funds For the year ended June 30, 2006
Other Governmental Funds Reconciliation of Net Changes in Fund Balances - Budgetary to GAAP Basis: Net Change in Fund Balances - Budgetary Basis
$
319,848
The amount reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances was different because: Unrealized gains and losses on investments, which are considered a component of investment income in the Statement of Revenues, Expenditures and Changes in Fund Balances, are not included as revenue on a budgetary basis.
(24,980)
Payments on a short term loan and advance principal repayments are considered expenditures on a budgetary basis, but on a GAAP basis, these payments reduce liabilities.
90,000
On a budgetary basis, the City records loan principal receipts as revenue, but on a GAAP basis, these receipts reduce receivables.
100,000
Net Change in Fund Balances - Statement of Revenues, Expenditures and Changes in Fund Balances
$
484,868
$
7,719,238
Reconciliation of Fund Balances - Budgetary to GAAP Basis: Fund Balances - Ending - Budgetary Basis Cumulative effect of unrealized gains and losses on investments
(71,801)
Noncurrent advances payable
(630,001)
Intergovernmental payable to be repaid from future appropriations
(52)
Reserved balances unavailable for appropriation
2,749,611
Designated for noncurrent component of compensated absences
2,941
Fund Balances - Ending - GAAP Basis
$
124
9,769,936
INTERNAL SERVICE FUNDS Equipment Operations - This fund is used to account for the expenses related to city-wide fleet operations and maintenance activities, including vehicles, communications equipment, and other pooled equipment. Internal contributions to support this fund are based on cost recovery through charges to user departments and funds. These charges do not include the cost of equipment replacement. Stores Services - Accounts for the costs of operating a centralized warehouse used by the City. Telecommunications - This fund is used to account for the expenses related to the acquisition of communications equipment and ongoing maintenance of the telephone network including the main telephone switch, voice mail system, pagers, cell phones, and fax machines. Internal contributions to support this fund are based on cost recovery through user departments and funds. These charges do not include the cost of equipment replacement. Risk Management - Accounts for the expenses of the City's insurance program, including costs related to claims, administration, legal defense, and insurance premiums. Internal contributions to support this fund are based on cost recovery through charges to departments and funds. The following insurance activities are provided for in this fund: Workers' Compensation Insurance Liability Insurance Group Health Insurance
125
City of Santa Cruz Combining Statement of Net Assets All Internal Service Funds June 30, 2006 Equipment
Stores
Tele-
Risk
Operations
Services
communications
Management
Total
ASSETS Current assets: Cash and cash equivalents
$
Restricted cash and cash equivalents Interest receivable Accounts receivable - net Due from other funds
Prepaid items Inventories Deposits Total current assets
561,266
$
100,441
$
94,620
$
5,785,328
$
6,541,655
-
-
-
-
-
5,004
954
612
51,586
58,156
31,006
-
-
688
31,694
-
-
-
-
-
3,394
5,000
192
1,153
9,739
-
129,288
-
-
129,288
-
-
-
1,149,427
1,149,427
600,670
235,683
95,424
6,988,182
7,919,959
394,110
-
746,577
8,160
1,148,847
-
-
336,296
-
(311,609)
-
(895,247)
(5,032)
82,501
-
187,626
3,128
273,255
82,501
-
187,626
3,128
273,255
Noncurrent assets: Capital assets: Machinery and equipment Software Less accumulated depreciation
336,296 (1,211,888)
Total capital assets (net of accumulated depreciation) Total noncurrent assets Total assets
$
683,171
$
235,683
$
283,050
$
6,991,310
$
8,193,214
$
129,800
$
8,072
$
64,823
$
262,353
$
465,048
LIABILITIES Current liabilities: Accounts payable and other current liabilities Due to other funds Deposits payable
5,004
953
672
5,049
11,678
-
-
-
152
152
27,204
-
-
3,012,267
3,039,471
due in less than one year
21,036
-
-
-
21,036
Total current liabilities
183,044
9,025
65,495
3,279,821
3,537,385
Claims and judgments payable Bonds, notes, loans and leases payable
Noncurrent liabilities: Claims and judgments payable
-
-
-
7,967,819
7,967,819
Compensated absences payable
13,602
-
-
-
13,602
-
-
-
-
-
13,602
-
-
7,967,819
7,981,421
196,646
9,025
65,495
11,247,640
11,518,806
61,465
-
187,626
3,128
252,219
Bonds, notes, loans and leases payable due in more than one year Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Unrestricted Total net assets
$
-
-
-
-
-
425,060
226,658
29,929
(4,259,458)
(3,577,811)
486,525
$
126
226,658
$
217,555
$
(4,256,330)
$
(3,325,592)
City of Santa Cruz Combining Statement of Revenues, Expenses and Changes in Net Assets All Internal Service Funds For the year ended June 30, 2006
Equipment
Stores
Tele-
Risk
Operations
Services
communications
Management
Total
OPERATING REVENUES: Charges for services - internal
$
Charges for services - external Other revenues Total operating revenues
2,571,473
$
161,393
$
197,832
$
6,089,485
$
9,020,183
129,442
-
42,216
12,302
183,960
13,015
-
-
108,251
121,266
2,713,930
161,393
240,048
6,210,038
9,325,409
764,561
-
96,632
430,738
1,291,931
OPERATING EXPENSES: Personnel services Services, supplies, and other charges
1,695,332
128,100
199,438
4,202,482
6,225,352
Depreciation and amortization
19,638
-
64,329
1,632
85,599
Total operating expenses
2,479,531
128,100
360,399
4,634,852
7,602,882
234,399
33,293
(120,351)
1,575,186
1,722,527
Investment earnings
13,761
2,818
142,670
161,413
Interest expense and fiscal charges
(3,138)
Operating income (loss) NONOPERATING REVENUES (EXPENSES):
Total nonoperating revenues (expenses) Income (loss) before transfers Transfers out Change in net assets
2,164
-
(290)
-
1,874
(3,428)
10,623
2,818
245,022
36,111
(16,459)
(3,218)
228,563
32,893
(120,098)
1,703,584
1,844,942
257,962
193,765
337,653
(5,959,914)
(5,170,534)
(118,477) (1,621)
142,670
157,985
1,717,856
1,880,512
(14,272)
(35,570)
NET ASSETS: Beginning of year End of year
$
486,525
$
127
226,658
$
217,555
$
(4,256,330)
$
(3,325,592)
City of Santa Cruz Combining Statement of Cash Flows All Internal Service Funds For the year ended June 30, 2006
Equipment Operations
Stores Services
TeleRisk communications Management
Total
CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers and users Cash received from interfund services provided Cash payments to suppliers for goods and services Cash payments to employees for services Cash received from (payments to) others
$
119,746 2,583,115 (1,719,144) (772,133) 13,015
$
224,599
Net cash provided (used) by operating activities
151,402 (152,327) -
$
42,216 198,030 (155,695) (96,632) -
$
42,384 6,090,986 (3,967,942) (170,107) 108,251
$
2,103,572
204,346 9,023,533 (5,995,108) (1,038,872) 121,266
(925)
(12,081)
2,315,165
(16,459)
(3,218)
(1,621)
(14,272)
(35,570)
(16,459)
(3,218)
(1,621)
(14,272)
(35,570)
(42,040) (3,138)
-
(11,965) (290)
-
(54,005) (3,428)
(45,178)
-
(12,255)
-
(57,433)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Interests receivable Investment income received
(1,526) 13,761
(126) 2,818
187 2,164
(24,348) 142,670
(25,813) 161,413
12,235
2,692
2,351
118,322
135,600
175,197
(1,451)
(23,606)
2,207,622
2,357,762
Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS: Beginning of year End of year
386,069
101,892
118,226
3,577,706
4,183,893
$
561,266
$
100,441
$
94,620
$
5,785,328
$
6,541,655
$
234,399
$
33,293
$
(120,351)
$
1,575,186
$
1,722,527
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Changes in current assets and liabilities: Accounts receivable Due from other funds Prepaid items Inventories Deposits Accounts payable and other current liabilities Due to other funds Deposits payable Claims and judgments payable Compensated absences payable
19,638 (9,696) 10,116 (84) (23,728) 1,526 27,204 (34,776)
(5,000) (19,340) 113 (9,991) -
(9,800)
(34,218)
Total adjustments Net cash provided (used) by operating activities
$
-
224,599
128
$
(925)
64,329
1,632
(10) 43,753 198 108,270 $
(12,081)
$
85,599
30,082 503 81,781 152,256 1,349 152 260,631 -
20,386 10,116 (4,591) (19,340) 81,781 172,394 (6,918) 152 287,835 (34,776)
528,386
592,638
2,103,572
$
2,315,165
Private-Purpose Trust Funds McCaskill Trust - Local History - is restricted in purpose to promulgate local history. The principal and income benefit the Library Joint Powers Authority, McCaskill Trust - Visually Impaired - is restricted in purpose to providing library materials for the visually impaired. The principal and income benefit the Library Joint Powers Authority. The Finkeldey Trust - is restricted in purpose for the acquisition of musical literature. The principal and income benefit the Library Joint Powers Authority.
129
City of Santa Cruz Combining Statement of Fiduciary Net Assets Private-Purpose Trust Funds June 30, 2006
McCaskill
McCaskill
Total
Trust - Local
Trust - Visually
Finkeldey
Private-Purpose
History
Impaired
Trust
Trust Funds
ASSETS Cash and cash equivalents
$
260,175
$
247,683
$
11,128
$
518,986
Receivables: Interest receivable Total assets
2,498
2,378
107
4,983
262,673
250,061
11,235
523,969
NET ASSETS Held in trust for library programs
$
262,673
130
$
250,061
$
11,235
$
523,969
City of Santa Cruz Combining Statement of Changes in Fiduciary Net Assets Private-Purpose Trust Funds For the year ended June 30, 2006
McCaskill
McCaskill
Total
Trust - Local
Trust - Visually
Finkeldey
Private-Purpose
History
Impaired
Trust
Trust Funds
ADDITIONS: Investment earnings
$
Total additions
7,718
$
7,371
$
346
$
15,435
7,718
7,371
346
15,435
5,000
6,300
755
12,055
Total deductions
5,000
6,300
755
12,055
Change in net assets
2,718
1,071
(409)
3,380
259,955
248,990
DEDUCTIONS: Library programs
NET ASSETS: Beginning of year End of year
$
262,673
131
$
250,061
11,644 $
11,235
520,589 $
523,969
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132
Agency Funds Library Joint Powers Authority - Used to account for funds held by the City in an agency capacity for the Library Joint Powers Authority, which was established to finance the operations of the former City/County library system. Trust Deposit Holding - This fund is used to hold cash deposits received from outside parties on a temporary basis. Payroll Payables - Used to account for cash transferred from various funds to pay for payroll liabilities, which are paid out of this fund. Special Assessments - Accounts for assets held by the City in an agency capacity for special assessment districts. The City acts as agent for collection of principal and interest payments from the property owners and remits these monies to the bondholders. If funds are not available, the City is under no obligation to make bond payments from its own funds.
133
City of Santa Cruz Combining Statement of Fiduciary Net Assets Agency Funds June 30, 2006
Library
Trust
Total
Joint Powers
Deposit
Payroll
Special
Agency
Authority
Holding
Payables
Assessments
Funds
ASSETS Cash and cash equivalents
$
Investments
510,464
$
521,125
-
-
$
276,417
$
178,624
-
89,494
$
1,486,630 89,494
Receivables: 10,813
1,472
-
1,975
14,260
Taxes receivable
Interest receivable
553,799
-
-
9,885
563,684
Accounts receivable
527,368
-
-
-
527,368
16,467
-
-
-
16,467
-
-
-
-
-
Due from other governments Prepaid Items Total assets
$
1,618,911
$
522,597
$
276,417
$
279,978
$
2,697,903
$
492,512
$
5,521
$
276,417
$
-
$
774,450
LIABILITIES Accounts payable and other current liabilities
1,110,680
-
-
-
1,110,680
Deferred revenue
Due to other governments
15,024
-
-
-
15,024
Deposits payable
695
517,076
-
-
517,771
-
-
-
279,978
279,978
Payable to bondholders Total liabilities
$
1,618,911
$
522,597
134
$
276,417
$
279,978
$
2,697,903
City of Santa Cruz Combining Statement of Changes in Assets and Liabilities Agency Funds For the year ended June 30, 2006 Balance July 1, 2005 Library Joint Powers Authority Assets: Cash and cash equivalents Receivables: Interest receivable Taxes receivable Accounts receivable Due from other governments Prepaid Items Total assets Liabilities: Accounts payable and other current liabilities Due to other governments Deferred revenue Deposit payable Total liabilities Trust Deposit Holding Assets: Cash and cash equivalents Interest receivable Total assets Liabilities: Accounts payable and other current liabilities Deposits payable Total liabilities Payroll Payables Assets: Cash and cash equivalents Total assets Liabilities: Accounts payable and other current liabilities Total liabilities Special Assessments Assets: Cash and cash equivalents Investments Receivables: Interest receivable Taxes receivable Total assets Liabilities: Accounts payable and other current liabilities Payable to bondholders Total liabilities
$
123,394
Additions
$
5,229 508,031 520,779 466 46,710
12,254,664
Balance June 30, 2006
Deletions
$
23,313 553,799 652,470 16,467 -
11,867,594
$
17,729 508,031 645,881 466 46,710
510,464 10,813 553,799 527,368 16,467 -
$
1,204,609
$
13,500,713
$
13,086,411
$
1,618,911
$
553,875 640,532 10,202 -
$
3,040,565 470,148 233,920 695
$
3,101,928 229,098 -
$
492,512 1,110,680 15,024 695
$
1,204,609
$
3,745,328
$
3,331,026
$
1,618,911
$
446,306 847
$
1,449,177 5,089
$
1,374,358 4,464
$
521,125 1,472
$
447,153
$
1,454,266
$
1,378,822
$
522,597
$
13,302 433,851
$
1,065,954 1,448,069
$
1,073,735 1,364,844
$
5,521 517,076
$
447,153
$
2,514,023
$
2,438,579
$
522,597
$
1,079,595
$
65,111,898
$
65,915,076
$
276,417
$
1,079,595
$
65,111,898
$
65,915,076
$
276,417
$
1,079,595
$
1,913,355,891
$
1,914,159,069
$
276,417
$
1,079,595
$
1,913,355,891
$
1,914,159,069
$
276,417
$
144,213 91,632
$
205,101 -
$
170,690 2,138
$
178,624 89,494
1,457 7,891
3,947 9,885
3,429 7,891
1,975 9,885
$
245,193
$
218,933
$
184,148
$
279,978
$
1,735 243,458
$
1,346 36,520
$
3,081 -
$
279,978
$
245,193
$
37,866
$
3,081
$
279,978
135
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136
STATISTICAL SECTION (Unaudited)
This part of the City of Santa Cruz's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city's overall financial health.
Contents
Page
Financial Trends These tables contain trend information to help the reader understand how the city's financial performance and well-being have changed over time. Revenue Capacity These tables contain information to help the reader assess the city's most significant local revenue source, the property tax. Debt Capacity These tables present information to help the reader assess the affordability of the city's current levels of outstanding debt and the city's ability to issue additional debt in the future. Demographic and Economic Information These tables offer demographic and economic indicators to help the reader understand the environment within which the city's financial activities take place. Operating Information These tables contain service and infrastructure data to help the reader understand how the information in the city's financial report relates to the services the city provides and the activities it performs.
Sources:
Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial reports for the relevant year.
137
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138
City of Santa Cruz
TABLE 1
Net Assets By Component Last Four Fiscal Years
Fiscal Year Ended June 30 2003
2004
2005
2006
Governmental activities: Invested in capital assets, net of related debt
$
136,369,360
$
136,556,019
$
139,024,926
$
142,216,967
Restricted
10,441,164
11,411,611
10,105,142
12,132,237
Unrestricted
16,662,826
12,267,438
18,695,330
19,428,634
Total governmental activities net assets
$
163,473,350
$
160,235,068
$
167,825,398
$
173,777,838
$
168,876,424
$
174,395,150
$
179,988,569
$
164,275,405
Business-type activities: Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets
-
-
704,469
-
62,492,429
58,267,139
57,125,277
78,560,182
$
231,368,853
$
232,662,289
$
237,818,315
$
242,835,587
$
305,245,784
$
310,951,169
$
319,013,495
$
306,492,372
Primary government: Invested in capital assets, net of related debt Restricted
10,441,164
11,411,611
10,809,611
12,132,237
Unrestricted
79,155,255
70,534,577
75,820,607
97,988,816
Total primary government net assets
$
394,842,203
$
392,897,357
$
405,643,713
$
416,613,425
The City of Santa Cruz implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available.
Source: City of Santa Cruz Finance Department
139
City of Santa Cruz
TABLE 2
Changes in Net Assets Last Four Fiscal Years
Fiscal Year Ended June 30 2004 2005
2003 Expenses Governmental activities: General government Public safety Parks and recreation Library Public works Transit Community and economic development Social services Interest and fiscal charges
$
10,382,020 23,770,732 12,312,469 8,441,896 9,790,984 569,247 8,265,841 1,976,456 979,508
$
11,451,699 27,054,407 13,022,089 8,697,195 9,618,748 588,183 7,140,903 1,803,125 1,126,311
$
9,889,427 27,218,149 11,944,976 8,934,173 7,801,586 586,896 7,719,248 1,715,326 1,066,994
2006
$
9,755,194 27,227,214 11,715,023 9,179,637 9,047,430 624,214 7,414,895 2,563,680 883,866
Total governmental activities expenses
76,489,153
80,502,660
76,876,775
78,411,153
Business-type activities: Water Wastewater Refuse Parking Storm Water Golf course
13,994,913 14,824,444 14,824,819 2,222,770 2,165,345 1,745,322
13,707,644 15,456,161 14,924,093 2,471,710 1,956,563 1,811,128
14,643,440 15,524,855 14,581,347 2,565,800 2,150,359 1,781,330
15,204,565 16,192,904 12,700,841 2,960,225 1,925,661 2,325,920
Total business-type activities expenses
49,777,613
50,327,299
51,247,131
51,310,116
Total primary government expenses Program Revenues Governmental activities: Charges for services: General government Public safety Parks and recreation Library Public works Transit Community and economic development Operating grants and contributions Capital grants and contributions
$
126,266,766
$
130,829,959
$
128,123,906
$
129,721,269
$
3,945,684 1,950,228 3,798,713 7,005,781 3,459,306 432,651 3,979,717 5,823,628
$
3,938,389 2,760,629 3,956,257 7,672,089 3,083,205 110,889 3,165,361 4,864,757
$
3,814,053 3,230,321 2,863,615 8,152,865 4,008,187 115,183 2,829,078 5,141,507
$
4,662,211 3,041,137 3,191,193 8,478,112 4,253,232 66,643 996,327 2,125,537 2,499,565
Total governmental activities program revenues
30,395,708
29,551,576
30,154,809
29,313,957
Business-type activities: Charges for services: Water Wastewater Refuse Parking Storm Water Golf course Operating grants and contributions Capital grants and contributions
14,278,839 11,461,188 13,341,636 2,209,631 892,378 1,867,914 85,446 2,312,416
15,687,800 11,664,391 14,583,240 2,478,911 862,150 1,933,684 138,515 3,391,001
17,283,215 11,911,915 14,562,560 2,635,129 872,569 992,439 369,968 6,439,375
19,480,617 13,079,711 13,525,848 2,654,549 869,490 1,608,752 15,704 2,480,435
Total business-type activities program revenues
46,449,448
50,739,692
55,067,170
53,715,106
Total primary government program revenues
76,845,156
80,291,268
85,221,979
83,029,063
(46,093,445) (3,328,165)
(50,951,084) 412,393
(46,721,966) 3,820,039
(49,097,196) 2,404,990
Net (expense)/revenue: Governmental activities Business-type activities Total primary government net (expense)/revenue
$
(49,421,610)
140
$
(50,538,691)
$
(42,901,927)
$
(46,692,206)
City of Santa Cruz
TABLE 2
Changes in Net Assets Last Four Fiscal Years
Fiscal Year Ended June 30 2004 2005
2003 General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes Sales and use taxes Frachise taxes Transient occupancy taxes Utility users taxes Admission taxes Other taxes Unrestricted grants and contributions Investment earnings Gain (loss) on sale of assets Extraordinary items Miscellaneous Transfers
$
Total governmental activities
15,078,406 8,291,244 3,132,743 2,932,256 7,592,049 1,664,150 2,000,338 4,526,808 1,095,006 (4,963) 477,109 673,184 57,444
$
47,515,774
Business-type activities: Unrestricted grants and contributions Investment earnings Gain (loss) on sale of assets Miscellaneous Transfers $
Change in Net Assets Governmental activities Business-type activities
$
Total primary government
$
50,485,980
16,476,980 11,383,231 3,478,971 3,067,869 8,080,171 1,629,164 2,107,273 4,562,277 846,634 60,093 577,892 78,584
$
52,349,139
250 717,261 (11,712) 108,532 (334,346)
2,970,206
Total primary government
$
47,799,698
2,421,200 60,717 545,733 (57,444)
Total business-type activities
15,792,225 9,084,026 3,329,454 3,016,463 7,638,926 1,724,330 2,480,973 2,565,897 437,672 716,218 679,168 334,346
2006
55,049,636
222 1,469,180 97,529 (78,584)
479,985
22,384,981 11,738,917 2,136,686 3,385,148 8,304,371 1,715,133 2,303,363 1,121,274 1,380,087 24,318 487,841 67,517
2,079,379 91,920 508,500 (67,517)
1,488,347
2,612,282
$
48,279,683
$
53,837,486
$
57,661,918
1,422,329 (357,959)
$
(3,151,386) 892,378
$
5,627,173 5,308,386
$
5,952,440 5,017,272
1,064,370
$
(2,259,008)
$
10,935,559
$
10,969,712
The City of Santa Cruz implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. Source: City of Santa Cruz Finance Department
141
City of Santa Cruz Fund Balances of Governmental Funds Last Ten Fiscal Years
Fiscal Year Ended June 30 1998 1999
1997 General Fund Reserved Unreserved, designated Unreserved, undesignated Total General Fund All other governmental funds Reserved Unreserved, designated, reported in: Redevelopment Agency fund Special revenue funds Debt service funds Capital projects funds Unreserved, undesignated, reported in: Redevelopment Agency fund Special revenue funds Capital projects funds Total all other governmental funds
2000
$
6,499,142 14,415,539
$
9,540,038 9,939,971
$
5,600,632 11,351,018
$
6,215,738 12,011,261
$
20,914,681
$
19,480,009
$
16,951,650
$
18,226,999
$
4,684,281
$
5,458,871
$
10,138,359
$
11,383,565
$
1,632,264 -
1,416,538 -
1,236,971 1,502,558 -
1,210,456 890,922 -
968,407 3,076,335
1,467,435 1,839,601
1,418,246 2,158,532
(63,288) 1,508,205
10,361,287
Source: City of Santa Cruz Finance Department
142
$
10,182,445
$
16,454,666
$
14,929,860
TABLE 3
2001
Fiscal Year Ended June 30 2003 2004
2002
2005
2006
$
4,906,611 5,194,894 9,170,827
$
4,008,809 6,392,382 6,974,625
$
5,237,443 5,922,853 4,806,652
$
4,388,586 7,638,171 5,964,197
$
3,870,996 7,435,828 8,729,971
$
4,327,113 7,120,993 11,354,586
$
19,272,332
$
17,375,816
$
15,966,948
$
17,990,954
$
20,036,795
$
22,802,692
$
13,204,616
$
14,174,955
$
12,311,339
$
13,691,282
$
10,721,195
$
11,148,536
$
1,351,077 1,092,974 -
994,997 2,591,507 -
4,014,256 589,008 470,840
3,987,557 509,404 457,945
6,497,637 476,904 557,277 91,180
7,958,925 536,451 707,775 92,641
861,078 671,223
(948,602) 660,747 1,558,754
(55,035) 1,747,678 446,564
2,207,906 (1,444,460)
3,185,320 2,196,529
3,341,962 281,931
17,180,968
$
19,032,358
$
19,524,650
$
143
19,409,634
$
23,726,042
$
24,068,221
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144
City of Santa Cruz
TABLE 4
Changes in Fund Balances of Governmental Funds Last Four Fiscal Years
Fiscal Year Ended June 30 2004 2005
2003 Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Use of money and property Other revenues
$
Total revenues
40,691,186 614,012 14,011,928 16,952,167 1,587,698 2,859,096 449,907
$
42,529,756 529,649 10,258,114 17,191,373 1,805,734 2,345,707 592,012
$
2006
46,268,500 603,344 11,479,068 17,968,817 2,032,817 2,821,174 686,853
$
52,035,729 615,448 5,696,237 19,347,463 1,965,235 3,234,159 1,049,925
77,165,994
75,252,345
81,860,573
83,944,196
9,673,413 22,920,677 9,773,346 8,412,201 5,592,617 569,247 7,954,378 1,976,456 11,340,680
8,967,025 24,843,763 9,721,229 8,528,577 4,539,192 588,183 6,332,156 1,803,125 9,553,173
9,390,901 26,692,313 9,593,982 8,980,823 4,248,358 586,896 6,640,932 1,715,326 7,846,456
9,666,858 26,938,629 9,402,529 9,250,499 4,158,916 624,214 8,436,468 1,693,267 11,921,789
1,116,090 839,345 -
1,718,937 851,721 -
2,231,549 966,238 276,569
1,149,776 921,517 -
80,168,450
77,447,081
79,170,343
84,164,462
Excess of revenues over (under) expenditures
(3,002,456)
(2,194,736)
2,690,230
(220,266)
Other financing sourses (uses) Proceeds from asset dispositions Proceeds from long-term debt issued Premiums on bonds sold Payment to refunded bond escrow agent Transfers in Transfers out
777,750 1,565,684 (1,357,286)
756,823 3,244,346 (2,139,754)
139,104 5,825,000 23,994 (2,571,681) 1,928,681 (1,793,079)
25,256 3,200,000 861,257 (758,170)
1,861,415
3,552,019
3,328,343
Expenditures General government Public safety Parks and recreation Library Public works Transit Community and economic development Social services Capital outlay Debt service: Principal Interest and fiscal charges Bond issuance costs Total expenditures
Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures
986,148 $
(2,016,308)
2.8%
$
(333,321)
3.8%
$
6,242,249
4.9%
$
3,108,077
2.9%
The City of Santa Cruz implemented GASB 34 for the fiscal year ended June 30, 2003. Prior to that implementation, expenditure amounts were categorized differently in the fund statements. Information is not available now to reclassify those prior years' expenditures into comparable categories for this table. Source: City of Santa Cruz Finance Department 145
City of Santa Cruz General Governmental Tax Revenues by Source1 Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
Sales and Use2
Property $
9,192,280
$
Franchise
10,314,425
$
1,695,707
$
Transient
Utility
Occupancy
Users
2,710,994
$
6,338,533
Admission $
1,511,605
1998
9,784,131
7,191,934
1,736,039
2,716,397
6,557,490
1,539,111
1999
10,484,409
7,415,341
2,476,604
3,174,694
6,912,440
1,502,540
2000
12,176,209
8,857,748
2,771,014
3,541,396
7,149,619
1,583,897
2001
13,342,450
9,790,693
2,851,830
3,900,905
8,246,829
1,611,318
2002
14,944,971
9,126,341
2,996,907
3,131,378
7,627,331
1,612,526
2003
15,629,920
8,291,244
3,132,743
2,932,256
7,592,049
1,664,150
2004
15,792,225
9,084,026
3,329,454
3,016,463
7,638,926
1,724,330
2005
16,501,921
2006
22,348,981
11,383,231 6
5
11,738,917
3,478,971
3,067,869
8,080,171
1,629,164
2,136,686
3,385,148
8,304,371
1,715,133
Notes: 1
This table includes all governmental fund types.
2
Fiscal year 1997 includes a half-cent sales tax override (Measure E) for earthquake repairs. This half-cent override ended March 31, 1997.
3
Beginning with fiscal year 2003, business improvement taxes include the Co-op Retail Management Business Real Property Improvement District.
4
Prior to fiscal year 2003, business license taxes were shown in permits and licenses.
5
A new quarter-cent sales tax override was implemented in fiscal year 2005. This temporary tax is scheduled to end on June 30, 2009.
6
Includes amounts for Property Taxes In Lieu of Vehicle License Fees
Source: City of Santa Cruz Finance Department
146
TABLE 5
Parks and Parking $
158,576
Business Improvement3 $
168,736
Property
$
136,174
Recreation
Business License4
Transfer $
Facilities -
$
Total -
$
32,227,030
147,877
175,114
162,915
-
-
30,011,008
192,352
167,500
186,624
-
-
32,512,504
158,229
170,369
219,132
-
-
36,627,613
178,373
183,711
200,041
-
-
40,306,150
194,646
175,868
194,632
-
-
40,004,600
199,371
273,965
191,042
784,446
551,514
41,242,700
221,133
296,536
276,466
792,893
357,305
42,529,757
221,790
292,422
325,305
777,308
510,348
46,268,505
229,629
316,742
562,723
777,068
417,202
51,932,606
147
City of Santa Cruz
TABLE 6
General Fund Revenues by Source Last Ten Fiscal Years
Fiscal Year
Licenses
Ended June 30
Taxes $
Charges
Fines
Use of Money
and
Inter-
for
and
and
Other
Earthquake
Permits
Governmental
Services
Forfeitures
Property
Revenues
Relief
1,335,623
$
3,296,590
$
8,450,778
$
Total
1997
$ 25,857,144
1,169,823
$ 4,057,707
$ 219,250
$ 654,926
$ 45,041,841
1998
23,292,917
1,366,948
3,410,230
6,290,188
1,064,554
3,623,968
280,513
-
39,329,318
1999
24,918,906
1,397,862
4,170,892
6,729,820
1,397,833
3,794,000
213,496
-
42,622,809
2000
27,646,368
1,595,964
4,732,311
6,566,033
1,347,496
3,574,121
324,802
-
45,787,095
2001
30,258,503
1,342,471
5,281,661
7,009,901
1,286,990
4,152,368
327,692
-
49,659,586
2002
29,238,472
1,267,939
5,339,612
7,151,012
1,282,697
3,577,774
397,896
-
48,255,402
2003
30,027,154
614,012
4,788,035
16,693,936
1,555,481
2,252,373
308,104
-
56,239,095
2004
31,696,322
529,649
3,745,601
16,865,754
1,799,557
2,086,163
418,764
-
57,141,810
2005
34,384,206
603,344
5,465,642
17,799,213
2,022,779
2,333,922
276,565
-
62,885,671
2006
39,495,863
615,448
1,073,997
19,062,464
1,962,697
2,541,909
216,721
-
64,969,099
Notes: Beginning in fiscal year 2003, charges for personnel services provided to the Library Joint Powers Authority were included in General Fund charges for services, as well as charges for interfund personnel services provided.Also, prior to fiscal year 2003, business license taxes were shown in licenses and permits.
Source:
City of Santa Cruz Finance Department
148
City of Santa Cruz
TABLE 7
Assessed Value of Taxable Property Last Ten Fiscal Years
Fiscal Year Ended
Real Property
June 30
Residential
1997
$ 2,573,274,660
1998
2,672,618,165
Commercial $
393,559,654
Other $
398,841,413
Total
60,547,639
$ 3,027,381,953
80,522,177
3,151,981,755
$
Total
Total
Personal
Assessed
Direct Tax
Property
Value
Rate
176,491,197
$ 3,203,873,150
0.000%
176,321,921
3,328,303,676
0.000%
1999
2,760,380,015
449,610,460
87,470,143
3,297,460,618
186,050,833
3,483,511,451
0.000%
2000
2,980,522,986
510,282,517
92,665,671
3,583,471,174
198,830,667
3,782,301,841
0.009%
2001
3,193,569,036
537,141,067
113,773,535
3,844,483,638
207,913,809
4,052,397,447
0.009%
2002
3,494,071,877
611,373,783
111,624,535
4,217,070,195
237,668,331
4,454,738,526
0.009%
2003
3,657,553,824
663,946,747
122,103,592
4,443,604,163
237,898,436
4,681,502,599
0.009%
2004
3,882,699,208
700,948,081
123,781,647
4,707,428,936
225,168,674
4,932,597,610
0.009%
2005
4,150,085,545
755,991,976
126,848,221
5,032,925,742
217,439,195
5,250,364,937
0.009%
2006
4,563,844,105
788,484,799
110,751,935
5,463,080,839
216,627,737
5,679,708,576
0.009%
Notes: Total Direct Tax Rate is from Table 8. With the passage of a constitutional amendment (Proposition 13) and subsequently enacted State legislation, property is assessed according to a base year rather than on a percentage of market value. Accordingly, a reliable estimate of actual value of taxable property within the City is not possible.
Source County of Santa Cruz Auditor-Controller's Office County of Santa Cruz Assessor's Office
149
City of Santa Cruz
TABLE 8 1
Direct and Overlapping Property Tax Rates Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
-
$ 0.009
$ 0.009
$ 0.009
$ 0.009
$ 0.009
$ 0.009
$ 0.009
-
0.009
0.009
0.009
0.009
0.009
0.009
0.009
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
Direct Rates: Debt service
$
-
Total Direct Rate
-
$
-
$
Overlapping Rates2: County3
1.000
1.000
School Districts: Cabrillo College
-
-
0.014
0.007
0.012
0.021
0.019
0.019
0.038
0.037
Santa Cruz Schools
-
-
0.038
0.016
0.077
0.067
0.075
0.074
0.068
0.081
Bonny Doon Schools
0.066
0.056
0.056
0.019
0.021
0.035
0.036
0.034
0.033
0.029
Live Oak Schools
0.072
0.058
0.052
0.050
0.046
0.043
0.037
0.023
0.042
0.043
Scotts Valley Schools
0.024
0.087
0.087
0.077
0.073
0.052
0.084
0.055
0.054
0.050
1.162
1.201
1.247
1.169
1.229
1.218
1.251
1.205
1.235
1.240
$ 1.162
$ 1.201
$ 1.247
$ 1.178
$ 1.238
$ 1.227
$ 1.260
$ 1.214
$ 1.244
$ 1.249
Total Overlapping Rate Total Direct and Overlapping Rate
Notes: 1
Rates are per $100.00 of assessed value.
2
Overlapping rates are those of entities that apply to property owners within the City of Santa Cruz. Not all overlapping rates apply to all property owners (e.g., the rates for school districts apply only to the proportion of the city's property owners whose property is located within the geographic boundaries of the school district).
3
The passage of a constitutional amendment (Proposition 13) in June 1978 limits the property tax rate to a base of $1.00 per $100.00. The $1.00 rate is levied by the County and apportioned to local agencies according to a formula perscribed by the California legislature
Source:
Santa Cruz County Auditor - Controller's Office
150
City of Santa Cruz
TABLE 9
Principal Property Taxpayers Current Year and Nine Years Ago
Fiscal Year Ended June 30 2006
1997 Percentage
Percentage
of Total Assessed Taxpayer Cypress Point RE Investors LLC
Valuation $
Rank
of Total
Assessed
Assessed
Valuation
Valuation $
Assessed Rank -
Valuation
39,802,437
1
0.701%
Santa Cruz Shaffer Road Investors
31,770,292
2
0.559%
-
-
Santa Cruz Seaside Co
25,441,083
3
0.448%
23,942,433
Santa Cruz Hotel LLC
23,478,493
4
0.413%
-
Frederick Electronics Corporation
22,968,102
5
0.404%
13,238,868
1010 Pacific Investors
21,672,885
6
0.382%
-
-
CRRI/Seagate Ocean Street LLC
21,296,667
7
0.375%
-
-
2
0.747% 0.000%
7
0.413%
Cooper House LLC
19,154,186
8
0.337%
-
0.000%
Canfield Laurel & Pacific Partnership
17,941,994
9
0.316%
-
0.000%
Harmony Partners LLC
17,694,429
10
0.312%
-
-
Silicon Systems Inc
-
-
172,212,569
1
5.375%
Thomas J. Lipton, Inc.
-
-
21,213,275
3
0.662%
Wm. Wrigley Jr. Co.
-
-
20,553,426
4
0.642%
Fremont Central Investment
-
-
13,688,624
5
0.427%
The Price Company
-
-
13,239,577
6
0.413%
Pacific Square Ltd Partners
-
-
11,209,800
8
0.350%
Outlook Apartments
-
-
9,674,950
9
0.302%
Sequoia Equities III, LLC
-
-
8,717,000
10
0.272%
Totals
$
241,220,568
Total assessed value
$
5,679,708,576
4.247%
Notes: Taxpayers and values presented in this table reflect the County's Assessment Roll Reports. The total assessed value is from Table 7.
Source: County of Santa Cruz Assessor's Office
151
$
307,690,522
$
3,203,873,150
9.604%
This page is intentionally left blank.
152
City of Santa Cruz
TABLE 10 1
Property Tax Levies and Collections Last Ten Fiscal Years
Outstanding Fiscal
Total
Year
Percent
Delinquent Tax
Ended
Total Tax
Current Tax
of Levy
June 30
Levy
Collections
Collected
1997
$
8,800,364
$
Collections $
Total
2
-
$
Delinquent
Collections
Outstanding
Tax
as Percent of
Delinquent
Collections
Current Levy
Taxes
Percent of
2
$
Taxes as Current Levy
8,800,364
100.0%
8,800,364
100.0%
-
-
1998
9,396,855
9,396,855
100.0%
-
9,396,855
100.0%
-
-
1999
10,104,672
10,104,672
100.0%
-
10,104,672
100.0%
-
-
2000
11,732,295
11,732,295
100.0%
-
11,732,295
100.0%
-
-
2001
12,516,202
12,516,202
100.0%
-
12,516,202
100.0%
-
-
2002
14,190,378
14,190,378
100.0%
-
14,190,378
100.0%
-
-
2003
14,639,056
14,639,056
100.0%
-
14,639,056
100.0%
-
-
2004
15,335,693
15,335,693
100.0%
-
15,335,693
100.0%
-
-
2005
16,013,591
16,013,591
100.0%
-
16,013,591
100.0%
-
-
2006
18,191,952
18,191,952
100.0%
-
18,191,952
100.0%
-
-
Notes: 1
This table includes levies and collections for the Redevelopment Agency.
2
Because it adopted a new method of distributing property taxes (commonly referred to as the "Teeter Plan"), the County is now responsible for all delinquent secured property taxes.
3
Does not include amounts for Property Taxes in Lieu of Vehicle License Fees
Source:
County of Santa Cruz Auditor-Controller's Office City of Santa Cruz Finance Department
153
City of Santa Cruz Ratios of Outstanding Debt By Type Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
Governmental Activities: General obligation bonds
$
Tax allocation bonds
-
$
-
$
6,998,473
$
7,176,298
$
7,299,481
3,755,000
3,690,000
3,540,000
3,385,000
3,225,000
598,586
569,946
555,921
518,392
4,890,431
-
-
854,158
1,583,610
1,649,722
Notes
-
-
-
-
-
Other
-
-
-
-
531,900
4,353,586
4,259,946
11,948,552
12,663,300
17,596,534
Wastewater revenue bonds
21,335,000
20,570,000
19,745,000
5,210,000
5,085,000
Storm water revenue bonds
-
-
-
-
-
Certificates of participation Capital leases
Total Governmental Activities Business-type Activities:
Water revenue bonds
380,000
-
-
-
Golf course revenue bonds
290,000
225,000
155,000
80,000
-
Certificates of Participation
12,315,054
9,221,558
14,251,608
22,339,568
28,985,383
Leases
1,546,663
2,175,315
1,619,560
2,353,054
2,942,887
Notes
45,399,542
51,938,582
50,976,494
48,894,934
47,221,604
Total Business-type Activities
81,266,259
84,130,455
86,747,662
78,877,556
84,234,874
Total Primary Government
$
85,619,845
$
88,390,401
$
98,696,214
$
91,540,856
$
101,831,408
Personal income
$
1,485,678,852
$
1,570,062,816
$
1,709,289,000
$
1,890,711,810
$
2,154,291,172
Debt as percentage of personal income
5.76%
Population
5.63%
5.77%
4.84%
4.73%
53,172
53,172
54,575
56,046
55,028
Debt per capita
1,610
1,662
1,808
1,633
1,851
Assessed value
3,203,873,150
4,932,597,610
5,250,364,937
5,679,708,576
4,681,502,599
Debt as percentage of assessed value
2.67%
1.79%
Notes: Personal income and population figures are from Table 16. Assessed value is from Table 7.
Source:
City of Santa Cruz Finance Department
154
1.88%
1.61%
2.18%
TABLE 11
Fiscal Year Ended June 30 2002 $
2003
7,286,115
$
2004
7,260,759
$
2005
7,228,152
$
2006
7,183,381
$
7,126,075
3,055,000
2,880,000
2,695,000
5,245,000
5,125,000
4,769,607
4,642,350
4,513,661
4,377,108
4,239,123
3,355,410
2,450,555
1,765,216
1,766,635
1,247,913
1,500,000
1,500,000
1,624,706
1,334,942
4,205,026
998,692
985,663
920,263
1,029,804
944,836
20,964,824
19,719,327
18,746,998
20,936,870
22,887,973
4,955,000
4,955,000
4,820,000
4,680,000
4,715,000
-
-
-
-
6,100,000
-
-
-
-
12,450,000
-
-
-
-
-
28,047,650
28,047,650
29,831,339
28,662,892
20,915,877
2,926,370
4,624,099
3,939,187
3,108,344
3,145,352
44,988,271
44,883,261
42,593,574
40,240,469
37,822,337
80,917,291
82,510,010
81,184,100
76,691,705
85,148,566
$
101,882,115
$
102,229,337
$
99,931,098
$
97,628,575
$
108,036,539
$
2,096,039,335
$
2,085,569,904
$
2,109,542,853
$
2,247,596,565
$
2,365,518,375
4.86%
4.90%
4.74%
4.34%
4.57%
55,085
55,633
56,289
56,451
56,925
1,850
1,838
1,775
1,729
1,898
4,932,597,610
4,681,502,599
4,932,597,610
5,250,364,937
5,679,708,576
2.07%
2.18%
2.03%
1.86%
155
1.90%
City of Santa Cruz
TABLE 12
Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years
Fiscal
Less: Amount
Year
General
Available
Percentage
Debt
Ended
Obligation
in Debt
of Assessed
Per
Assessed
June 30
Bonds
Service Fund
Value
Capita
Value
Population
-
$3,203,873,150
53,172
1997
$
-
$
-
Total $
-
-
$
1998
-
-
-
-
3,328,303,676
53,172
1999
6,998,473
12
6,998,461
0.20%
128
3,483,511,451
54,575
2000
7,176,298
125,218
7,051,080
0.19%
126
3,782,301,841
56,046
2001
7,299,481
277,763
7,021,718
0.17%
128
4,052,397,447
55,028
2002
7,286,115
324,117
6,961,998
0.16%
126
4,454,738,526
55,085
2003
7,260,759
389,184
6,871,575
0.15%
124
4,681,502,599
55,633
2004
7,228,153
457,945
6,770,208
0.14%
120
4,932,597,610
56,289
2005
7,183,381
557,277
6,626,104
0.13%
117
5,250,364,937
56,451
2006
7,126,075
707,777
6,418,298
0.11%
113
5,679,708,576
56,925
Notes: Assessed Value is from Table 7. Population figure is from Table 16.
Source:
City of Santa Cruz Finance Department
156
City of Santa Cruz
TABLE 13
Computation of Direct and Overlapping Debt June 30, 2006
2005-2006 Assessed Valuation
$ 5,679,708,576
Redevelopment Incremental Valuation: Adjusted Assessed Valuation:
899,383,880 $ 4,780,324,696 Total
Percentage
Amount
Debt
Applicable
Applicable
Outstanding
to City1
to City
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Cabrillo Joint Community College District
$ 129,113,503
20.003%
Santa Cruz High School District
50,973,963
54.374%
27,716,583
Santa Cruz Elementary School District
24,742,596
94.653%
23,419,609
Live Oak School District
12,580,000
3.109%
391,112
Scotts Valley Unified School District
21,000,000
0.012%
2,520
City of Santa Cruz
7,126,075
100.000%
7,126,075
City of Santa Cruz 1915 Act Bonds
1,650,000
100.000%
1,650,000
Total Direct and Overlapping Tax and Assessment Debt
$ 247,186,137
$
25,826,574
$
86,132,473
$
13,719,539
2
DIRECT AND OVERLAPPING GENERAL FUND DEBT: Santa Cruz County Certificates of Participation
67,637,248
20.284%
Cabrillo Joint Community College District Certificates of Participation
$
3,040,000
20.003%
Scotts Valley Unified School District Certificates of Participation
3,985,000
0.012%
478
Santa Cruz City Schools Certificates of Participation
5,545,000
54.374%
3,015,038
Live Oak School District Certificates of Participation
4,000,000
3.109%
124,360
City of Santa Cruz General Fund Obligations
8,690,000
100.000%
8,690,000
950,976
100.000%
950,976
3,495,000
7.086%
247,656
Santa Cruz Consolidated Emergency Communication Center Monterey Bay Unified Air Pollution Control District Authority Total Direct and Overlapping General Fund Debt
$
97,343,224
Combined Total Debt
$ 344,529,361
Notes: 1
Percentage of overlapping agency's assessed valuation located within boundaries of the city.
2
Debt is reported at the accreted value. Excludes issues self-supporting from enterprise revenues ($7,515,000).
3
Includes $5,265,000 for Certificates of Participation that are primarily supported by enterprise revenue. Under the lease agreement, however, the City is obligated to pay the lease payments from any source of legally available funds. 4
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and tax allocation bonds and non-bonded capital lease obligations.
Ratios to 2005-2006 Assessed Valuation: Direct Debt ($7,126,075)
0.13%
Total Direct and Overlapping Tax and Assessment Debt
1.50%
Ratios to Adjusted Assessed Valuation: Combined Direct Debt ($15,829,781)
0.35%
Combined Total Debt
2.37% $0
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/06: Source: California Municipal Statistics, Inc.
157
608,091
$
27,356,138
$ 113,488,611
3
4
City of Santa Cruz Legal Debt Margin Information Last Ten Fiscal Years
Fiscal Year Ended June 30
Debt limit
1997
1998
1999
2000
2001
$ 480,580,973
$ 499,245,551
$ 522,526,718
$ 567,345,276
$ 607,859,617
-
-
6,998,461
7,051,080
7,021,718
$ 480,580,973
$ 499,245,551
$ 515,528,257
$ 560,294,196
$ 600,837,899
Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit
0.00%
0.00%
1.34%
Notes: Section 1418 of the Charter of the City of Santa Cruz limits general obligation bond indebtedness to 15% of the total assessed valuation of all real personal property within the City.
Source: County of Santa Cruz Auditor-Controller's Office City of Santa Cruz Finance Department
158
1.24%
1.16%
TABLE 14
Fiscal Year Ended June 30 2002
2003
2004
2005
2006
$ 668,210,779
$ 702,225,390
$ 739,889,642
$ 787,554,741
$ 851,956,286
6,961,998
6,871,575
6,770,208
6,626,104
6,418,298
$ 661,248,781
$ 695,353,815
$ 733,119,434
$ 780,928,637
$ 845,537,988
1.04%
0.98%
0.92%
0.84%
0.75%
Legal Debt Margin Calculation For Fiscal Year 2005-06: Total assessed value
$5,679,708,576
Debt limit (15% of total assessed value) Debt applicable to limit: General obligation bonds (reported at accreted value) Less: Amount available in debt service fund for repayment of bonds
851,956,286 7,126,075 707,777
Total net debt applicable to limit
6,418,298
Legal debt margin
$ 845,537,988
159
City of Santa Cruz Pledged-Revenue Coverage Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
Wastewater Revenue Bonds: Wastewater charges and other
$
10,579,889
$
10,730,501
$
12,179,844
$
12,846,315
$
11,585,518
$
12,146,047
Less: operating expenses
5,984,051
6,054,987
7,379,231
7,856,133
7,275,278
8,929,861
Net available revenue
4,595,838
4,675,514
4,800,613
4,990,182
4,310,240
3,216,186
Debt service: 405,000
725,000
765,000
115,000
120,000
125,000
Interest
Principal
1,309,565
1,234,454
1,227,031
296,608
290,733
284,608
Total
1,714,565
1,959,454
1,992,031
411,608
410,733
409,608
2.68
2.39
2.41
12.12
10.49
7.85
Coverage Water Revenue Bonds: Water charges and other
$
13,464,846
$
14,468,484
$
14,425,845
$
-
$
-
$
-
Less: operating expenses
6,987,765
7,319,245
8,546,215
-
-
-
Net available revenue
6,477,081
7,149,239
5,879,630
-
-
-
355,000
380,000
380,000
-
-
-
Interest
37,402
19,850
9,925
-
-
-
Total
392,402
399,850
389,925
-
-
-
16.51
17.88
15.08
-
-
-
Debt service: Principal
Coverage Certificates of Participation: Special assessments and other
$
-
$
-
$
-
$
-
$
11,510,578
$
12,080,193
Less: operating expenses
-
-
-
-
8,519,131
9,747,000
Net available revenue
-
-
-
-
2,991,447
2,333,193
Debt service: Principal
-
-
-
-
110,000
100,000
Interest
-
-
-
-
223,868
537,580
Total
-
-
-
-
333,868
637,580
-
-
-
-
8.96
3.66
Coverage
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation.
Source:
City of Santa Cruz Finance Department
160
TABLE 15
Fiscal Year Ended June 30 2003 $
$
$
2004
12,306,445
$
2005
12,230,219
$
2006
12,578,070
$
12,394,292
9,415,409
9,855,372
9,964,418
8,591,034
2,891,036
2,374,847
2,613,652
3,803,258
130,000
135,000
140,000
150,000
278,233
271,608
264,733
256,233
408,233
406,608
404,733
406,233
7.08
5.84
6.46
9.36
-
$
-
$
-
$
18,692,531
-
-
-
11,775,892
-
-
-
6,916,639
-
-
-
-
-
-
-
121,517
-
-
-
121,517
-
-
-
56.92
12,422,235
$
13,577,644
$
13,121,028
$
13,218,521
10,447,158
11,045,892
11,350,148
9,859,552
1,975,077
2,531,752
1,770,880
3,358,969
145,000
695,000
720,000
755,000
529,300
514,088
487,153
457,327
674,300
1,209,088
1,207,153
1,212,327
2.93
2.09
1.47
2.77
161
City of Santa Cruz
TABLE 16
Demographic and Economic Statistics Last Ten Fiscal Years
Fiscal Year Ended June 30
Population1
Unemployment Rate2
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
53,172 53,172 54,575 56,046 55,028 55,085 55,633 56,289 56,451 56,925
8.5% 7.9% 7.3% 6.4% 5.2% 5.8% 7.5% 7.9% 7.2% 6.4%
Total
Per Capita
Personal
Personal Income3
Income $
1,485,679 1,570,063 1,709,289 1,890,712 2,154,291 2,096,039 2,085,570 2,109,543 2,247,597 2,365,518
Notes: Total Personal Income and Taxable Sales amounts are in thousands.
1 Source: State Department of Finance 2 State Employment Development Department 3
U.S. Department of Commerce
4
State Board of Equalization
162
$
27,941 29,528 31,320 33,735 39,149 38,051 37,488 37,477 39,815 41,555
Per Capita Taxable Sales4 $
550,962 680,283 634,138 725,287 828,500 809,628 761,208 761,986 795,060 813,834
Taxable Sales $
10,362 12,794 11,620 12,941 15,056 14,698 13,683 13,537 14,084 14,297
City of Santa Cruz
TABLE 17
Principal Employers June 30, 2006
Fiscal Year Ended June 30, 2006 Percentage Number of
of Total
Employees
Rank
Employment
4,250 2,358 1,066 476 347 257 212 195 174 158
1 2 3 4 5 6 7 8 9 10
4.570% 2.535% 1.146% 0.512% 0.373% 0.276% 0.228% 0.210% 0.187% 0.170%
Employer: University of California at Santa Cruz County of Santa Cruz City of Santa Cruz Plantronics Santa Cruz Beach-Boardwalk Costco Community Bridges Crow's Nest Santa Cruz Sentinel Santa Cruz Biotechnology Incorporated Totals
9,493
Total employment1
93,000
This table shows the data for the current fiscal year. Prior years' data is not available in the City's business license database.
Source:
City of Santa Cruz Business License database U.S. Department of Labor - Bureau of Labor Statistics
1
163
10.208%
City of Santa Cruz
TABLE 18 1
Number of City Employees by Department Current Year and Last Year
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Departments: City Clerk
7
7
7
7
7
7
7
7
7
7
City Manager
5
5
5
5
5
5
5
5
5
4
Human Resources
11
12
12
12
13
13
13
12
12
13
Finance
33
34
34
36
38
38
38
36
35
38
-
-
-
-
-
-
-
-
-
-
117
120
122
126
134
136
133
126
124
125
51
52
53
55
59
59
58
55
54
53
Parks and Recreation
110
113
114
118
126
127
125
118
116
111
Library
112
115
116
120
128
130
127
120
118
119
Public Works
205
209
212
219
235
239
232
219
216
216
27
28
28
30
31
32
31
30
29
27
Information Technology Police Fire
Planning and Community Development Redevelopment
8
8
8
8
9
9
9
8
8
9
Water
82
84
85
89
94
96
94
89
87
88
Total
768
787
796
825
879
891
872
825
724
722
Notes: 1
Personnel authorizations budgeted. Figures rounded to whole numbers.
Source:
City of Santa Cruz Budget Document
164
City of Santa Cruz
TABLE 19
Operating Indicators By Function Last Four Fiscal Years
Fiscal Year Ended June 30 2003
2004
2005
2006
Function: City Clerk Hours for creating the agenda for posting
326
305
291
**
**
**
600
600
450
280
180
400
40
**
60
120
Advisory body hours Election hours Initiative/referendum petitions processing hours Police Calls for service
**
76,069
76,498
70,065
Cases
**
14,717
14,076
14,212
Emergency calls
4,606
4,623
4,631
5,006
Inspections
1,603
1,853
1,727
1,794
275
306
305
294
Fire
Parks and Recreation Number of classes Facility rentals: Parks
961
892
760
831
**
7,753
7,534
7,348
181
146
183
193
Louden Nelson Civic Auditorium Swimming pool Special events produced
**
200
167
146
32
30
20
22
1,877,256
1,856,142
1,899,739
1,975,986
289,726
288,821
293,525
313,496
470
432
432
438
Library (all locations) Items checked out Queries handled Open hours/week Pubic Works Overlay (square footage)
-
Seal coat (square footage)
-
524,963 -
-
251,106
-
320,879
Sewer New connections
144
72
85
106
Average daily flow (MGD)
10.53
9.52
9.92
11.39
Annual total flow (MG)
3,843
3,475
3,621
4,157
23,724
23,799
23,924
24,044
10
10
10
9
3,603
3,660
3,448
3,340
$22
$25
$30
$34
Water Active accounts Averge daily consumption (MGD) Annual consumption (MG) Averge monthly residential bill
This table shows data for the last four fiscal years. Prior years' data is not available. **
Unavailable.
Source:
City of Santa Cruz Departments
165
City of Santa Cruz
TABLE 20
Capital Asset Statistics By Function Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Function: Public Safety Police: Stations Vehicular patrol units Fire stations
1
1
1
1
1
1
1
1
1
1
43
43
55
55
78
78
43
43
61
61
3
3
3
3
3
3
3
3
3
3
Public Parking 21
19
20
21
23
22
26
20
21
21
Spaces
2,050
1,916
1,369
4,939
5,094
5,235
5,397
5,124
5,149
5,149
Parking meters
2,030
2,014
1,953
1,945
1,741
1,764
1,695
1,714
1,764
1,764
28
28
29
29
29
30
30
30
30
30
1,350
1,350
1,450
1,450
1,457
1,970
1,970
1,970
1,970
1,970
13
13
11
11
11
17
17
17
17
17
Swimming pools
1
1
1
1
1
1
1
1
1
1
Tennis courts
7
7
7
7
7
7
7
7
8
8
Golf course
1
1
1
1
1
1
1
1
1
1
Central library
1
1
1
1
1
1
1
1
1
1
Branch libraries within city
2
2
2
2
2
2
2
2
2
2
Branch libraries in county
7
7
8
7
7
7
7
7
7
7
Bookmobile
-
-
-
-
1
1
1
1
1
1
145
145
145
136
136
136
136
136
136
136
9
9
9
13
13
13
13
13
13
13
2,307
2,310
2,335
2,335
2,800
2,825
2,825
2,893
2,893
2,893
200
200
200
208
62
148
148
151
151
151
35
35
35
35
8
50
50
50
50
50
22,557
22,694
23,024
23,064
23,170
23,310
23,590
23,724
23,799
23,924
Lots
Parks and Recreation Parks Parks acreage Playgrounds
Libraries
Streets Miles of paved streets Miles of alleys Street lights Sewer Miles of sanitary sewers Miles of storm drains Water Active accounts Miles of water mains Fire hydrants
Source:
300
300
300
300
300
300
300
300
290
291
1,841
1,850
1,890
1,890
1,904
1,913
1,997
2,019
2,089
2,060
City of Santa Cruz Departments
166
Santa Cruz Coastline
COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2006
Cover by Natalia Duarte
City of Santa Cruz State of California
Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2006
Prepared by Sandra Benoit Cheryl Fyfe Kathryn Mintz Ray Galindo Ralph Reader
Tori Hannah Raymond Chin Kim Wigley
Charlene Pringle Shelley Horrow Natalia Duarte
City of Santa Cruz Comprehensive Annual Financial Report For the year ended June 30, 2006 Table of Contents
INTRODUCTORY SECTION
Page
Transmittal Letter ................................................................................................................................................... i Map of Santa Cruz...............................................................................................................................................vii Organization Chart ........................................................................................................................................... viii Directory of City Officials of the City of Santa Cruz....................................................................................... ix FINANCIAL SECTION Independent Auditors’ Report........................................................................................................................... 1 Management’s Discussion and Analysis ......................................................................................................... 3 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets..........................................................................................................................20 Statement of Activities and Changes in Net Assets ...........................................................................22 Fund Financial Statements: Government Fund Financial Statements: Balance Sheet .....................................................................................................................................28 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets................................................................29 Statement of Revenues, Expenditures and Changes in Fund Balances ....................................30 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Assets ..............................................................31 Proprietary Fund Financial Statements: Statement of Net Assets ...................................................................................................................34 Statement of Revenues, Expenses and Changes in Net Assets ..................................................38 Statement of Cash Flows..................................................................................................................40 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Assets .................................................................................................46 Statement of Changes in Fiduciary Net Assets.............................................................................47 Index to Notes to Basic Financial Statements ............................................................................................49 Notes to Basic Financial Statements ............................................................................................................51
City of Santa Cruz Comprehensive Annual Financial Report For the year ended June 30, 2005 Table of Contents, Continued
FINANCIAL SECTION, Continued
Page
Required Supplementary Information: Budgetary Information....................................................................................................................................94 Budgetary Comparison Schedule – General Fund ...............................................................................98 Reconciliation of Net Changes in Fund Balances – Budgetary to GAAP Basis: General Fund .......................................................................................................................................99 Budgetary Comparison Schedule – Redevelopment Agency ............................................................100 Reconciliation of Net Changes in Fund Balances – Budgetary to GAAP Basis: Redevelopment Agency .....................................................................................................................101 Defined Benefit Pension Plan .........................................................................................................................103 Supplementary Information: Non-Major Governmental Funds: Combining Balance Sheet.........................................................................................................................108 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................110 Schedule of Budget and Actual Revenues – General Fund .................................................................112 Schedule of Budget and Actual Expenditures and Other Financing Uses for Legally Adopted Appropriations by Department – General Fund .............................................114 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: Police Special Revenue Fund.............................................................................................................116 State Highway Special Revenue Fund .............................................................................................117 Traffic Impact Fee Fund .....................................................................................................................118 Parks and Recreation Fund................................................................................................................119 Housing and Community Development Fund...............................................................................120 Transportation Development Act.....................................................................................................121 General Obligation Bond Debt Service ............................................................................................122 General Capital Improvement Projects............................................................................................123 Reconciliation of Net Changes in Fund Balances – Budgetary to GAAP Basis: Non-Major Governmental Funds .....................................................................................................124 Internal Service Funds: Combining Statement of Net Assets.......................................................................................................126 Combining Statement of Activities and Changes in Net Assets.........................................................127 Combining Statement of Cash Flows .....................................................................................................128
City of Santa Cruz Comprehensive Annual Financial Report For the year ended June 30, 2005 Table of Contents, Continued
FINANCIAL SECTION, Continued
Page
Private-Purpose Trust Funds: Combining Statement of Fiduciary Net Assets .....................................................................................130 Combining Statement of Changes in Fiduciary ....................................................................................131 Agency Funds: Combining Statement of Fiduciary Net Assets .....................................................................................134 Combining Statement of Changes in Assets and Liabilities................................................................135 STATISTICAL SECTION (Unaudited) Net Assets by Component..................................................................................................................................... 139 Changes in Net Assets ........................................................................................................................................... 140 Fund Balances of Governmental Funds .............................................................................................................. 142 Changes in Fund Balances of Governmental Funds ......................................................................................... 145 Governmental Activities Tax Revenue by Source ............................................................................................. 146 General Governmental Tax Revenue by Source ................................................................................................ 148 Assessed Value of Taxable Property.................................................................................................................... 149 Direct and Overlapping Property Tax Rates ...................................................................................................... 150 Principal Property Tax Owners ............................................................................................................................ 151 Property Tax Levies and Collections ................................................................................................................... 153 Ratios of Outstanding Debt by Type .................................................................................................................. 154 Ratios of General Bonded Debt Outstanding ..................................................................................................... 156 Computation of Direct and Overlapping Debt .................................................................................................. 157 Legal Debt Margin Information ........................................................................................................................... 158 Pledged-Revenue Coverage.................................................................................................................................. 160 Demographics and Economic Statistics............................................................................................................... 162 Principal Employers............................................................................................................................................... 163 Full-Time City Government Employees by Function/Program ..................................................................... 164 Operating Indicators by Function/Program ...................................................................................................... 165 Capital Asset Statistics by Function/Program ................................................................................................... 166
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809 Center Street, Room 8, Santa Cruz, CA 95060 831 420-5052 Fax: 831 420-5051 www.ci.santa-cruz.ca.us
October 27, 2006
To the Honorable Mayor, Members of the City Council and Citizens of the City of Santa Cruz, California:
Comprehensive Annual Financial Report In accordance with the City Charter, the Comprehensive Annual Financial Report of the City of Santa Cruz for the fiscal year ended June 30, 2006 is submitted for your information and review. Various financing covenants and regulations associated with restricted funding sources also require the City of Santa Cruz, California (City) to publish a complete set of financial statements presented in conformance with generally accepted accounting principles (GAAP) and audited by a firm of licensed certified public accountants. Pursuant to the requirements noted above, we hereby issue the Comprehensive Annual Financial Report of the City of Santa Cruz, California for the fiscal year ended June 30, 2006. This report consists of management's representations concerning the finances of the City of Santa Cruz. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Santa Cruz has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the City of Santa Cruz's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Santa Cruz's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Caporicci & Larson, a firm of licensed certified public accountants, has audited the City of Santa Cruz's financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Santa Cruz for the fiscal year ended June 30, 2006, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial presentation. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Santa Cruz’s financial statements for the fiscal year ended June 30, 2006, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report.
i
The independent audit of the financial statements of the City of Santa Cruz was part of a broader, federally mandated "Single Audit" designed to meet the needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of Santa Cruz’s separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Santa Cruz's MD&A can be found immediately following the report of the independent auditors. Profile of the Government The City of Santa Cruz, incorporated in 1866, is located on the northern part of the Monterey Bay approximately 74 miles south of San Francisco and 30 miles from San Jose. The City of Santa Cruz was first founded in 1769 by the Spanish explorer Don Gaspar de Portola, who, along with Father Junipero Serra, began land based settlement in the area. Santa Cruz is the county seat for the County of Santa Cruz, and is a charter city which operates under the provisions of a voter-approved charter. The City has an area of 12 square miles and an estimated population of 56,925 as of January 2006. Santa Cruz is the home to the University of California, Santa Cruz (UCSC) which first opened in 1965 and has a current enrollment of over 15,000 students. UCSC has received worldwide recognition in the past few years for its high quality academic programs and sponsored research programs such as the California Institute for Quantitative Biomedical Research (QB3), the Center for Information Technology Research in the Interest of Society (CITRIS), and the Laboratory for Adaptive Optics. The major industries include agriculture, tourism, manufacturing, food processing, and technology. Like other cities in California, the City of Santa Cruz has limited ability to set tax rates. The State Constitution establishes a maximum rate for property tax and limits the growth of assessed value. Prop 13 sets the limit for increases of the property tax rate to 2% per year, but upon sale, full value becomes the assessed value. The property tax collected is allocated among the jurisdictions in the City's tax rate areas based on criteria established by the state legislature. The rates and tax base of two of the City's other major general revenues , sales and use tax and motor vehicle in lieu fees (VLF), are also controlled by the legislature. Changes to existing local taxes and any new taxes require voter approval. Taxes used for general purposes are subject to approval by a simple majority of voters while taxes levied for specific purposes require a twothirds majority of voters. Assessments must be approved by a two-thirds vote with voting rights apportioned based on the amount of the assessment. In addition, fees for facilities and services are subject to requirements that they not be set at levels that exceed the reasonable costs of providing services. As a result, fund balances generated by differences between fee revenue and related expense are retained and designated for services and facilities that benefit fee payers. The City of Santa Cruz has operated under the council-manager form of government since its incorporation in 1866. Policy-making and legislative authority are vested in a seven member governing council consisting of the Mayor and six Council Members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, approving nominees to commissions, and hiring the City Manager, City Clerk and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council Members serve four-year staggered terms, with either three or four Council Members elected every two years. The Mayor is selected by a majority of the City Council and serves a one year term. The Mayor and Council Members are elected at large and all are subject to two term limits. ii
The City of Santa Cruz provides a broad range of services including police and fire protection, construction and maintenance of streets, parks, flood control and other infrastructure, a wharf facility, recreational and cultural activities including a performing arts center and human services programs. It also operates municipal utilities for water, wastewater, storm water, refuse collection, recycling and landfill disposal in addition to self supporting enterprise operations for parking facilities and a golf course. The water utility provides water service beyond the municipal boundaries and has a total service population of approximately 90,000. Certain infrastructure construction and community development activities are provided through a legally separate redevelopment agency. The Council sits as the agency's board and it functions, in essence, as a department of the City. Therefore, the City of Santa Cruz Redevelopment Agency has been included as an integral part of the City of Santa Cruz’s financial statements. Many major public services delivered within the City's boundaries, including education, and public transportation are provided by other agencies. The City of Santa Cruz is not financially accountable for the operations of the franchisees or these government agencies. As required by the City Charter, an annual budget is adopted by the City Council no later than the first regular meeting in July for the fiscal year beginning July first. As part of the budget process, all City departments submit budget requests for the next fiscal year. These requests are reviewed, and a final City Manager recommended budget showing estimated revenues and expenditures of the City is prepared. This proposed budget is transmitted to the City Council and made available to the public for review. Study sessions and a public hearing are conducted before final adoption of the budget by the City Council. The City Manager is authorized to approve appropriation transfers within any department up to a specified amount; however, any new appropriation or appropriation transfer between departments requires approval by the City Council. Several supplemental appropriations were necessary during the year and are reflected in the budget amounts in the financial statements. Expenditures may not legally exceed appropriations at the department level. The Council reviews budget results at the mid-year review and at budget adoption. Redevelopment budgets are adopted annually along with an annual report. The ongoing review and long range planning focus for financial management provides numerous opportunities to identify and respond to changes in revenues and expenditures and in community priorities. Factors Affecting Financial Condition We think that the information presented in the financial statements is best understood when it is considered from the broader perspective of the context within which the City of Santa Cruz operates. Economic Conditions and Outlook The City of Santa Cruz’s economic growth began to slow during the FY 2002 fiscal year and declined significantly through FY 2004. Tax revenues have begun to show positive growth in FY 2005 and FY 2006. However, significant labor cost increases and a continued sluggish economy have resulted in projecting a potential budget deficit for FY 2007. The local economy is linked to a large degree to the economy of the nearby Silicon Valley region, whose growth continues to lag. Over the last four year period, ending with fiscal year 2006, there has been substantial growth in assessed value of real property. The assessed value is approximately $5.7 billion which is an increase of $500.0 or 9.6% over FY 2005. Property Tax revenues are up $5.9 million or 36% over the previous year.
iii
An important event affecting City revenues took place in August 2005. At a special election called by the City Council, voters approved, by a 58% majority, continuation of a franchise tax on municipal utilities. This tax was previously charged as a type of fee which had been deemed invalid in recent court cases without voter approval. Another significant event that took place in recent years was the approval of a ¼ cent transactions and use tax by the voters. On October 8, 2003, the California Governor approved SB 566 which authorized cities to seek voter approval to levy a transactions and use tax in multiples of 0.25%. City Council authorized submitting Measure F, the ¼ cent sales tax measure, to the voters in March, 2003. This is a five-year general tax which was approved by a 69% majority and is effective July 1, 2006. In November 2006, the voters approved Measure H, making the Measure F ¼ cent sales tax permanent and approving an additional ¼ cent sales tax to become effective April 1, 2007. Historical Trend Information Property Tax The historical trend for property tax has been very positive showing substantial growth given the assessed value of property is approximately $5.7 billion with growth in this year of 9.6%. Property Tax revenues are up $5.9 million or 36% over the previous year.
City of Santa Cruz Property Tax 25.0
22.4
$ Millions
20.0 15.0
12.2
13.3
14.9
15.6
15.8
16.5 Series1
10.0 5.0 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
iv
Sales & Use Tax, Local Transactions and Use Tax and Supplemental Property Tax In-Lieu of Sales Tax In the 2005 and 2006 fiscal years revenues have begun to trend significantly upward. Sales tax increased $.3 million in FY 06 over FY 05. Sales tax in 1997 was $10.3 million and it was not until Fiscal Year 2005 that the City again reached that level for sales tax. Sluggish sales tax in the years between 1997 and 2005 was a result of many things, including, a downturn in the economy of the Silicon Valley, decline of the technology sector within the City, relocation of a number of businesses outside the City, and the September 11 tragedy which significantly reduced the tourist trade.
City of Santa Cruz, Sales Tax Trends 14.0 11.4
12.0 $ Millions
10.0
8.9
9.8
9.1
8.3
11.7
9.1
8.0 Series1
6.0 4.0 2.0 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
Transient Occupancy Tax Transient Occupancy Tax declined after 2001 for many of the reasons cited and consistent with the decline in sales and use tax. However, the transient occupancy tax has not recovered and based on the forecast for growth in hotel rooms, occupancy, and room rates this revenue has remained basically flat. The slight increase in recent years can be attributed to a small increase in room rates.
$ Millions
City of Santa Cruz, Transient Occupancy Tax Trends 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 -
3.9 3.5 3.1
2.9
3.0
3.1
3.4
Series1
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
v
Utility Users Tax The utility users tax is the third largest revenue source for the City, coming after property tax and sales tax. The utility users tax is comprised of a tax on eight utilities; electric, wired telecom, wireless telecom, natural gas, cable, water, wastewater, and refuse (the last three being municipal utilities). Modest increases over the last four years can be attributed to a number of factors. Generally speaking, there have been declines in electric and wired telecom while wireless telecom, gas, and cable have increased. The most significant factor for the rise in overall revenues point to the water, wastewater, and refuse municipal utilities and the increase tax revenues due to recent customer rate increases.
$ Millions
City of Santa Cruz, Utility User Tax Trends 8.4 8.2 8.0 7.8 7.6 7.4 7.2 7.0 6.8 6.6
8.3
8.2
8.1 7.6
7.6
7.6 Series1
7.2
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Fiscal Year
Risk management. The City of Santa Cruz uses a program of self-insurance for workers’ compensation and general liability claims, and employs a professional risk manager, supplemented by a professional claim administration firm, to minimize losses. The City is self-insured for workers' compensation up to $500,000 per occurrence. Santa Cruz participates in a multi-agency joint powers authority to provide excess insurance coverage for liability coverage. The joint powers authority and the City rely on estimates prepared by professional actuaries to set aside funds adequate to meet potential future losses. Excess coverage purchased through the joint powers authority covers claims in excess of $1,000,000 for general liability claims. As reflected in the financial statements, the Risk Management internal service fund had deficit net assets as of June 30, 2006 of $4.3 million due to accrued claims liabilities. A deficit balance of $4.8 million related to workers’ compensation activities was offset by surplus balances of $0.4 million related to group health insurance activities and a surplus of 0.2 million related to liability insurance activities, resulting in a total net asset deficit balance of $4.3 million. Significant contributing factors to rising workers’ compensation costs and claims liabilities include both an increased benefit structure resulting from recent State legislation, and cost increases in the excess insurance market that are being passed along to public agencies. At the same time, the self-insured retention per occurrence has increased from $250,000 to $500,000. Health care costs. The City contracts with CalPERS for employee health care coverage. Under this program, employer premiums increased 10% for fiscal year 2006. A similar or even greater increase is projected for fiscal year 2007. In addition, public agencies have been told by CalPERS to expect additional increases in future years.
vi
State budget. California faced budget deficits in previous years. noteworthy changes in state/local finance law. •
This imbalance created a number of
The “Triple Flip” In FY 04, the State of California issued State Deficit Reduction bonds under Proposition 57. Wall Street wanted a dedicated revenue stream. The State of California then devised a method to secure the dedicated revenue stream called the “Triple Flip”. 1.
The State would take 25% of the local government 1% sales tax (Cities and Counties). This is to continue for nine (9) years, beginning in FY 2004-05.
2.
In January (6 months into the fiscal year), the State would require the Counties to take property tax which was earmarked for schools and pay back the first 6 months of the sales tax takeaway to the local governments, the State will then have the counties pay the estimated next 6 months in May. The difference between the estimated and actual sales tax in one year will be corrected in the next year payments.
3.
Then the State, using State General Fund monies, would pay back the schools.
The Sales Tax taken by the State in FY 06 was $2.0 million and it was repaid by the County in the form of “Property Tax in Lieu of Sales Tax. Santa Cruz County pays the City in December and April our estimated 6 month payments. •
VLF-Property Tax Swap for FY 2006 was $3,7 million. In 1999, the state began reducing the vehicle license fee (VLF) rate charged to vehicle owners – and backfilling city and county revenue losses from this tax reduction with state subventions. The FY 2005 state budget package permanently replaced the VLF backfill by shifting an equal amount of K-14 property taxes to cities and counties. Increased state aid offsets K-14 school district revenue losses.
•
FY 2004-05 Property Tax Shift. The FY 2004-05 state budget package included a $1.3 billion shift of property taxes (called ERAF III) from noneducational local agencies (cities, counties, special districts, and redevelopment agencies) to K-14 school districts. Unlike the two permanent property tax shifts enacted in the 1990’s, this tax shift sunsets in FY 2006-07.
•
Proposition 1A. In 2004, state voters amended the State Constitution to prohibit the state from permanently reallocating the property tax in any county noneducation local agencies to K-14 school districts. Also, this measure generally requires a two-thirds vote of the Legislature to change the distribution of property taxes amount noneducation local agencies.
Cash management and policies Cash temporarily idle during the year was invested in obligations of the U.S. Treasury and agencies of the federal government, and the State Treasurer's, Local Agency Investment Pool (LAIF). Maturities of the investments range from one day to five years, with an average maturity of 342 days. The average yield on investments not held by fiscal agents was 3.68%. Investment income includes appreciation in the fair value of investments. Increases in fair value during the current year, however, do not necessarily represent trends that will continue; nor is it always possible to realize such amounts. It is the City’s policy to hold investments to maturity; therefore, gains and losses due to temporary market value fluctuations are rarely realized.
vii
Major Initiatives The City of Santa Cruz operates four municipal utilities, including water, wastewater, storm water, and refuse collection/landfill operations. The Water Department has not made any major capital improvements for the past 10 to 15 years while a new water supply project was being developed. Now, in order to address the pressing needs of an aging infrastructure and the need for a new water supply, the Water Department has embarked upon an ambitious program of capital improvements that will span the next 4 years and will cost approximately $53 million, to be financed partially through the issuance of new debt. Major distribution and supply projects are planned, including a desalination plant. The National Marine Sanctuary Program (NMSP), an agency of the National Oceanic and Atmospheric Administration (NOAA), and the City of Santa Cruz are partnering to design and construct the Monterey Bay National Marine Sanctuary Education Center. The Education Center in the City of Santa Cruz will function as the Monterey Bay National Marine Sanctuary’s premier visitor center. The site was chosen after the NMSP studied 23 locations along California’s Central Coast, settling on the City’s ¾-acre “Fun Spot” property in the Santa Cruz beach area, visited by an estimated 3 million people per year. Formal design will commence in FY 2007. The City will continue to use Development Impact fees to enhance and upgrade park facilities. These fees will also be used for improvements to the greenbelt. During these tough economic times the Parks and Recreation Department will continue to seek grants and bond monies to renovate and upgrade outdated facilities. The development of Depot Park and the Multi Modal Station is an example of a successful partnership between numerous agencies. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Santa Cruz for its comprehensive annual financial report for the fiscal year ended June 30, 2004. This was the 23rd consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for one year only. Due to staff turnover, the City was unable to prepare the FY 2005 Comprehensive Annual Financial Report (CAFR) in the timeframe required to present the CAFR for the award for that year. We believe that our current comprehensive annual financial report (CAFR) to meets the Certificate of Achievement Program’s requirements. Acknowledgements The Finance Department takes great pride in the preparation of this report. The professionalism, commitment and effort of the entire staff of the Finance Department have made this presentation possible. We would like to express our appreciation to all the members of the other departments who assisted and contributed to the preparation of this report. We also want to thank the partners and staff of our auditors for their assistance and support. We wish to also express our sincere thanks to the City Manager, the Mayor and the City Council Members for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Santa Cruz's financial operations. Respectfully submitted,
Sandra Benoit Director of Finance viii
ix
x
DIRECTORY OF CITY OFFICIALS CITY OF SANTA CRUZ Mayor Cynthia Mathews Vice Mayor Emily Reilly
Councilmember Mike Rotkin
Councilmember Ryan Coonerty
Councilmember Tim Fitzmaurice
Councilmember Ed Porter
Councilmember Tony Madrigal
City Manager, Richard C. Wilson
Assistant City Manager .....................................................................Martín Bernal Chief of Fire ......................................................................................Ron Oliver Chief of Police...................................................................................Howard Skerry City Attorney .....................................................................................John G. Barisone City Clerk ..........................................................................................Lesile Cook Director of Finance............................................................................Sandra Benoit Director of Human Resources ...........................................................Adela Gonzalez Director of Libraries ..........................................................................Anne M. Turner Director of Parks and Recreation ......................................................Dannettee E. Shoemaker Director of Planning and Community Development.........................Greg Larson Director of Public Works and City Engineer ....................................Mark Dettle Director of Redevelopment Agency..................................................Ceil Cirillo Director of Water Department...........................................................Bill Kocher
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xii
INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council of the City of Santa Cruz Santa Cruz, California We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Santa Cruz, California (City), as of and for the year ended June 30, 2006, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in the United States 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 significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2006, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with generally accepted accounting principles in the United States. As described in Note 1 to the basic financial statements, the City adopted the Governmental Accounting Standards Board Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and Insurance Recoveries, No. 44, Economic Condition Reporting: The Statistical Section (an amendment of NCGA Statement 1), No. 46, Net Assets Restricted by Enabling Legislation, and No. 47, Accounting for Termination Benefits. In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2006 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. 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.
To the Honorable Mayor and Members of the City Council of the City of Arcadia Arcadia, California Page 2 The accompanying Required Supplementary Information, such as Management’s Discussion and Analysis, budgetary comparison information and other information as listed in the table of contents, is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. 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 express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Supplementary Information is presented for purpose of additional analysis and is not a required part of the basic financial statements. The Supplementary Information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
Irvine, California October 27, 2006
2
MANAGEMENT’S DISCUSSION AND ANALYSIS
3
Management's Discussion and Analysis As management of the City of Santa Cruz we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City of Santa Cruz for the fiscal year ended June 30, 2006. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on page i of this report.
Financial Highlights – Primary Government (in $ millions) •
Government-Wide Highlights: Net Assets - The assets of the City of Santa Cruz exceeded its liabilities at the close of the fiscal year by $416.6. Of total Net Assets, $98.0 or 23.5% was reported as unrestricted net assets and may be used to meet the government’s ongoing obligations to citizens and creditors. Restricted net assets of $12.1 may be used for the City’s ongoing obligations related to programs with external restrictions. The remaining $306.5 represents the City’s investment in capital assets, less any related outstanding debt used to acquire those assets. Changes in Net Assets - The City’s total net assets increased by $11.0 or 2.7% in fiscal year 2006. The increase in Net Assets represents the degree to which revenues exceed expenses.
•
Fund Highlights: Governmental Funds – Governmental funds include general, special revenue, debt service, and capital projects funds. As of the close of fiscal year 2006, the City’s governmental funds, including the Redevelopment Agency Fund, reported a combined ending fund balance of $46.9, which is an increase of $3.1 from the prior year. Approximately 67% of this amount, or $31.4, represents the unreserved fund balance available for appropriation. 52.3% of the unreserved fund balance, or $16.4, has been designated for various purposes. General Fund – Total fund balance of the General Fund on June 30, 2006 was $22.8, an increase of $2.8 or 13.8% from the prior year. 81% of the total fund balance, or $18.5, was unreserved. Of the unreserved fund balance, $7.1, or approximately 38.5%, is designated for various purposes. The designations include $5.3 for the city public trust, and varying amounts for other activities. The remaining unreserved balance of $11.4, or 61.5% of unreserved fund balance, is undesignated.
Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information 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 City’s finances, in a manner similar to a private-sector business. They are comprised of the statement of net assets and statement of activities and changes in net assets. The statement of net assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. 4
The statement of activities and changes in net assets presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., interest expense due but unpaid). Both of the above government-wide financial statements distinguish functions of the City 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 City include general government, public safety, public works, parks and recreation, library, transit, social services and community and economic development. The business-type activities of the City include the four municipal utilities: water, wastewater, storm water, and refuse and landfill operation; and also the self-supporting golf course and parking enterprises. Blended Component Units – Component units are legally separate entities that meet certain criteria and would be misleading if their data were not included in this report. This report includes two separate legal entities in this category; The City of Santa Cruz Redevelopment Agency, and The Santa Cruz Public Improvement Financing Corporation. In this report all component units are blended with the primary government because the governing boards are substantively the same as the primary government, and the component units serve the primary government exclusively. The government-wide financial statements can be found on pages 22-23 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The fund financial statements provide detail information about each of the City’s most significant funds, called major funds. The concept of major funds, and the determination of which are major funds, was established by GASB 34 and replaces the concept of combining like funds and presenting them in total. Instead, each major fund is presented individually, with all nonmajor funds summarized and presented in a single column. Individual fund data on the nonmajor funds is presented in the form of combining statements and schedules on pages 107 through 111 of this report. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term 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 financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
5
The City has nine governmental funds, of which two are considered major funds for presentation purposes. Each major fund is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the City’s two major funds – the General Fund and the Redevelopment Agency Fund. Data from the other seven governmental funds are combined into a single, aggregated presentation. The basic governmental fund financial statements can be found on pages 28 through 31 of this report. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements on pages 108 through 109 of this report. Proprietary Funds – The City maintains two different types of proprietary funds – enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the four municipal utilities; water, wastewater, storm water, and refuse and landfill operation; and also the selfsupporting golf and parking enterprises. Internal service funds are used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its equipment operations and maintenance, stores inventory, telecommunications, and risk management activities. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the governmental-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The fund financial statements for the proprietary funds provide separate information for the four municipal utilities; water, wastewater, storm water, and refuse and landfill operation; and also the selfsupporting golf course and parking enterprises. Conversely, the internal service funds are combined into a single aggregated column in the proprietary fund statements. Individual fund data for the internal service funds is provided in the form of combining statements on pages 127 - 129 of this report. The basic proprietary fund financial statements can be found on page 34 - 43 of this report. Fiduciary Funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 49 - 96 of this report. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Santa Cruz’s progress in funding its obligation to provide pension benefits to its employees, as well as providing a budgetary comparison schedule for the General Fund and the Redevelopment Agency Fund. Required supplementary information can be found on pages 92 - 96 of this report. Additional budgetary schedules for the General Fund and the combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information. Combining and individual statements and schedules can be found on pages XX-XX of this report.
6
Government-Wide Financial Analysis (in $ millions) Net Assets. As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Santa Cruz, combined net assets (governmental and businesstype activities) totaled $416.6 at the close of the fiscal year ending June 30, 2006. By far the largest portion of the City’s net assets $306.5 or 73.6% reflects its investment in capital assets (e.g., land, streets, bridges, water and sewer lines, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’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. An additional portion of the City’s net assets $12.1 or 2.9% represents resources that are subject to external restrictions on how they may be used. The remaining $98.0 or 23.5% of the City’s net assets, are “unrestricted,” and may be used to meet the government’s ongoing obligations to citizens and creditors.
City of Santa Cruz's Net Assets (amounts expressed in $ millions) Governmental Activities 2006 2005 Current assets
$
53.3
$
Business-Type Activities 2006 2005 45.7
$
56.4
$
Total 2006 55.7
$
2005
109.7
$
101.4
6.8
8.6
33.3
21.6
40.1
30.2
Capital assets
154.7
151.8
249.9
248.3
404.6
400.1
Total assets
214.8
206.1
339.6
325.6
554.4
531.7
Current liabilities
11.9
9.0
11.5
10.3
23.4
19.3
Noncurrent liabilities
29.1
29.3
85.3
77.4
114.4
106.7
Total liabilities
41.0
38.3
96.8
87.7
137.8
126.0
142.2
139.0
164.3
180.0
306.5
319.0
Restricted
12.1
10.1
-
0.7
12.1
10.8
Unrestricted
19.4
18.7
78.5
57.1
97.9
75.8
Noncurrent assets
Net assets: Invested in capital assets, net of related debt
Total net assets
$
173.8
$
167.8
$
242.8
$
237.8
$
416.6
$
405.6
Changes in Net Assets. The City’s net assets increased by $11.0 or 2.7%, from the prior fiscal year. The City’s expenses cover a range of services. Further analysis is provided within the governmental and business-type activity sections.
7
City of Santa Cruz Changes in Net Assets (amounts expressed in $ millions) Governmental Activities 2006 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues General revenues: Property taxes Sales and use taxes Franchise taxes Transient occupancy taxes Utility users taxes Admissions taxes Other taxes Total taxes Unrestricted grants and contributions Unrestricted investment earnings Gain (loss) on sale of assets Miscellaneous
$
Total revenues Expenses: General government Public safety Parks and recreation Library Public works Transit Community and economic development Social services Interest and charges on long term debt Water Wastewater Refuse Parking Storm water Golf course
Business-Type Activities
2005
24.7 2.1 2.5 29.3
$
22.2 2.8 5.1 30.1
2006
$
51.2 2.5 53.7
Total
2005
$
48.2 0.4 6.4 55.0
2006
$
2005
75.9 2.1 5.0 83.0
$
70.4 3.2 11.5 85.1
22.4 11.7 2.1 3.4 8.3 1.7 2.4 52.0 1.1 1.4 0.5
16.5 11.4 3.5 3.0 8.1 1.6 2.1 46.2 4.6 0.8 0.7
2.1 0.1 0.5
1.5 0.1
22.4 11.7 2.1 3.4 8.3 1.7 2.4 52.0 1.1 3.5 0.1 1.0
16.5 11.4 3.5 3.0 8.1 1.6 2.1 46.2 4.6 2.3 0.8
84.3
82.4
56.4
56.6
140.7
139.0
9.8 27.2 11.7 9.2 9.0 0.6 7.4 2.6 0.9 -
9.9 27.2 11.9 8.9 7.8 0.6 7.8 1.7 1.1 -
15.2 16.2 12.7 3.0 1.9 2.3
14.6 15.5 14.6 2.6 2.1 1.8
9.8 27.2 11.7 9.2 9.0 0.6 7.4 2.6 0.9 15.2 16.2 12.7 3.0 1.9 2.3
9.9 27.2 11.9 8.9 7.8 0.6 7.8 1.7 1.1 14.6 15.5 14.6 2.6 2.1 1.8
78.4
76.9
51.3
51.2
129.7
128.1
Increase (decrease) in net assets before transfers
5.9
5.5
5.1
5.4
11.0
10.9
Transfers
0.1
0.1
(0.1)
(0.1)
-
-
Change in net assets
6.0
5.6
5.0
5.3
11.0
10.9
Net assets, beginning of year Prior period adjustment (Note 15)
167.8 -
162.2 -
237.8 -
232.5 -
405.6 -
394.7 -
Net assets, beginning of year (as restated)
167.8
Total expenses
Net assets - end of year
$
173.8
8
162.2 $
167.8
237.8 $
242.8
232.5 $
237.8
405.6 $
416.6
394.7 $
405.6
Governmental Activities. Governmental activities increased the City’s net assets by $6.0. A comparison of the cost of services by function for the City’s governmental activities is shown below, along with the revenues used to cover the net expenses of the governmental activities. Governmental Activities (amounts expressed in $ millions) 2006
2005
Expenses net of program revenues: General government
$
Public safety
(5.1)
$
(6.1)
(23.7)
(23.1)
Parks and recreation
(8.2)
(8.7)
Library
(0.7)
(0.8)
Public works
(2.9)
0.9
Transit
0.9
-
Community and economic development
(5.9)
(6.2)
Social services
(2.6)
(1.7)
Interest and fiscal charges on long-term debt
(0.9)
(1.0)
Total expenses net of program revenues governmental activities
(49.1)
(46.7)
Property taxes
22.4
16.5
Sales and use taxes
11.7
11.4
Franchise taxes
2.1
3.5
Transient occupancy taxes
3.4
3.0
Utility users taxes
8.3
8.1
Admission taxes
1.7
1.6
Other taxes
2.4
2.1
52.0
46.2
Unrestricted grants and contributions
1.1
4.6
Unrestricted investment earnings
1.4
0.8
Gain on sale of assets
0.0
0.0
Miscellaneous
0.5
0.6
General revenues and transfers: General revenues:
Total taxes
Transfers Total general revenues and transfers $
Change in governmental activities net assets
0.1
0.1
55.1
52.3
6.0
$
5.6
Governmental Expenses. Total governmental activity expenses were $78.4 in fiscal year 2006. The largest expenses were incurred for public safety, parks and recreation, and general government. These expenses do not include capital outlays, which are now reflected in the City’s capital assets. Governmental Revenues. Per GASB 34, program revenues are derived directly from the program itself or from parties outside the reporting government’s taxpayers or citizenry. They reduce the net cost of the function to be financed from the government’s general revenues. Total program revenues from governmental activities were $29.3 in fiscal year 2006. Governmental program revenues derive primarily from charges for services, which include licenses and permits, planning fees, developer fees, recreation charges, traffic and other fines and forfeitures, charges to the Library Joint Powers Authority for personnel services provided, and several other revenues. Program revenues under the operating grants and contributions category include revenues restricted for specific purposes, such as gasoline tax and other federal, state and local grants. Program revenues in the capital grants and contributions category also include federal, state and local grants, but are restricted specifically to be used for capital projects or acquisitions. 9
General revenues are all other revenues not categorized as program revenues, and include all taxes, unrestricted grants, contributions and investment earnings, gains on sales of capital assets, and other miscellaneous revenues. Total general revenues from governmental activities were $55.1 in fiscal year 2006. Taxes of $52.0 comprised 94.4% of the City’s general revenues for fiscal year 2006. The largest single source of general revenues received during fiscal year 2006 was $22.4 of property taxes, or 40.8% of general revenues, followed by $11.7 of sales and use taxes, or 21.3% of general revenues. The largest sources of other taxes are, utility user’s taxes, transient occupancy, franchise and admissions taxes.
EXPENSES & REVENUES GOVERNMENTAL ACTIVITIES, FY 2006
30 25
$ Millions
20 15 10 5
Revenues
10
Tr C an om si m t un ity D ev So In el te ci . re al st Se on rv ic Lo es ng Te rm De bt
W or ks
Li br ar y
ec re at io n
Pu bl ic
&
R
Sa fe ty s
Pu bl ic
Pa rk
G
en er al G
ov er nm
en t
0
Expense
REVENUES BY SOURSE GOVERNMENTAL ACTIVITIES FT 2006
10% Utility User Tax
2% Admission Tax
4% Transient Occupancy Tax
3% Other Taxes 30% Charges for Services
3% Franchise Tax 14% Sales & Use Tax
28% Property Tax
3% Operating Grants 3% Capital Grants
Business Type Activities. Net assets for business-type activities were $242.8, an increase of $5.0 from the prior fiscal year. Total program revenues for business-type activities were $53.7. The largest program revenues were charges for services of $51.2. Other program revenues included capital grants and contributions of $2.5. Total expenses for the business-type activities were $51.3 during fiscal year 2006.
EXPENSES & REVENUES BUSINESS ACTIVITIES, FY 2006
25
$ Millions
20 15
10 5 0 Water
Waste Water
Refuse
Revenues
11
Parking
Storm Water
Expense
Golf Course
REVENUES BY SOURSE BUSINESS ACTIVITIES FT 2006
6% Capital Grants
3% General Revenues
2% Operating Grants
89% Charges for Services
Financial Analysis of Individual Funds (in $ millions) As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds - The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $46.9 which is an increase of $3.1 or 7.1% over the previous year. Approximately $31.4 of the fund balance is unreserved fund balance, which is available for spending at the government’s discretion. Unreserved fund balance increased by $2.2 or 7.6% over the previous year. It should, however, be noted that 52.3% of the unreserved fund balance, or $16.4, has been designated for various purposes, such as debt service, capital projects, public art, police programs and the City Public Trust, leaving $15.0 unreserved and undesignated. The remainder of fund balance $15.5 is reserved to indicate that it is not available for spending because it has already been legally committed. General Fund – Total fund balance of the General Fund on June 30, 2006 was $22.8, an increase of $2.8 or 13.8% over the prior year. Approximately 81% of this amount, or $18.5, was unreserved. Of the unreserved fund balance, $7.1, or 38.5% has been designated for specific uses. The designations include $5.3 for the City Public Trust, and $1.4 for Accrued Compensated Absences (such as, vacations), and varying amounts for other activities, such as unemployment insurance, housing, parks and recreation programs, and equipment and facilities maintenance. The remaining unreserved balance of $11.4, or 61.6% of unreserved fund balance, is undesignated and represents an increase of $2.6 or 30.1% over the previous year. As a measure of the general fund’s liquidity, it may be useful to compare unreserved fund balance, the undesignated portion of the unreserved fund balance, ant the total fund balance to total fund expenditures. Unreserved fund balance ($18.5) represents 28.5% of total general fund expenditures ($65.0), including transfers out. Unreserved and undesignated fund balance ($11.4) represents 17.5% of total expenditures, and total fund balance ($22.8) represents 35% of total fund expenditures ($65.0). The 17.5% percent of total expenditures that is represented by the undesignated, unreserved fund balance ($11.4) exceeds the City Council’s targeted minimum reserve level of 10% of the operating budget for the General Fund. 12
Redevelopment Agency Fund – The City of Santa Cruz Redevelopment Agency is responsible for redevelopment of areas identified under the Community Redevelopment Law as being blighted. The Agency’s operations are funded primarily by the issuance of debt, which is expected to be repaid out of property tax increment revenue generated by increases in property assessed values in the redevelopment areas. At the end of fiscal year 2006, the total fund balance of the Redevelopment Agency Fund was $14.3, a decrease of $.1 from the prior year, or .9%. Of that amount, $6.3 is reserved to indicate that it is not available for spending because it has already been legally committed. The remainder of the unreserved fund balance of $ 8.0 is designated for either debt service or capital projects and represents an increase of $1.5 or 22.5% over the previous year. The Redevelopment Agency Fund had revenues of $10.9, including $10.3 of property tax increment revenue. Expenditures in this fund amounted to $14.2 which is an increase of $5.6 over the previous year due to increases in capital expenditures within the project areas. Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. They include both enterprise funds and internal service funds. For the government-wide financial statements, the internal service funds are consolidated with governmental activities, and the enterprise funds comprise the business-type activities. As discussed in the business-type activities section previously, the City’s net assets increased by $5.0 as a result of operations in the enterprise funds. Net assets ($3.3 negative) in the internal service funds increased by $1.8 over prior year ($5.2 negative). The increases are due to decreases in expenditures in risk management and increases in charges to departments for risk management.
General Fund Budgetary Highlights. The final amended general fund budget, including transfers out and advances, totaled $66.3 and included amendments to the original budget resulting in a $519K increase in operating expenditure appropriations. The principal amendments can be summarized as follows: Operating Appropriations Increases. Significant Appropriations Increases: • • • • • • • •
Minimum Wage Study, $28,000 Public Opinion Survey - Measure F, $36,000 Consultant - Community Design Background, $20,300 Consulting Services - Special District Establishment (Beach Area), $45,000 State Operating Grants - Cal Trans Agreement (Revenue receipt), $130,000 August 30 Special Election, $74,828 State Grant - Route 1/17 Police Officer, $42,000 Electronic Records Management System, $156,907
These appropriations were offset by additional estimated revenue of $2.6, mostly due to increases in taxes of $1.9 and increase in intergovernmental revenues of $0.6
13
Capital Assets and Debt Administration (in $ millions) Capital Assets. The City’s investment in capital assets for its governmental and business- type activities as of June 30, 2006, amounts to $404.6, net of accumulated depreciation of $258.7. This investment in capital assets includes land, land improvements, infrastructure, buildings, machinery and equipment, lease improvements, software, and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the City such as roads, bridges, streets and sidewalks, drainage systems, lighting systems and similar items. The total additions to the City’s investment in capital assets for the current fiscal year, after restatements and deletions, were $4.6, net of accumulated depreciation. Major capital asset additions during the current fiscal included the following: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
RDA Land Purchase – Salz Tannery, $6,3 Water System Improvements, $7.5 Bike Path, $.1 Vehicles and heavy equipment – General Fund, $.3 Sewer Improvements, $.7 Sewer Vehicles (trucks), $.6 Recycling Center Improvements, $1.1 Refuse Trucks, $1.2 Storm Drain Improvements, $.3 Golf Course Improvements, $2.9
Changes in capital assets from the prior year (as restated) are shown in the following table. Additional information on the City’s capital assets can be found in Note 5 on pages XX-XX of this report. Capital Assets (net of depreciation) (amounts expressed in $ millions) Governmental Activities
Business-Type Activities
June 30
June 30
2006 Land
$
2005
50.5
$
2006
44.2
$
Total 2005
11.9
$
2006
11.9
$
2005
62.4
$
56.1
Construction in progress
5.1
2.5
10.4
13.4
15.5
Land improvements
4.0
4.2
3.3
1.0
7.3
15.9 5.2
Infrastructure
65.0
69.4
106.6
101.5
171.6
170.9
Buildings
26.5
27.2
107.9
110.7
134.4
137.9
Machinery and equipment
3.0
3.3
9.5
9.4
12.5
12.7
Lease improvements
0.4
0.5
0.1
0.1
0.5
0.6
Software
0.2
0.4
0.2
0.3
0.4
0.7
Totals
$
154.7
$
151.7
$
249.9
$
248.3
$
404.6
$
400.0
Debt Administration (in millions) Long Term Debt - At the end of the current fiscal year, the City had $127.7 in long term debt outstanding compared to $116.7 last year, an increase of $11.0 or 9.4%. Increases to claims and judgments payable, landfill closure costs, lease obligations, and tax allocation bonds were offset by decreases in a variety of other bonds, notes, loans, and leases payable. The debt associated with governmental activities increased by $2.3 or 6.7% from $33.7 to $36.0. Business-type activity debt was increased by $8.7 or 10.5% from $83.0 to $91.7. Major increase in debt during the year included the issuance of Water Revenue Bonds.
14
The City currently has $7.1 in outstanding general obligation debt. This debt was approved by voters in November 1998 and authorized an ad valorem tax override for acquisition of open space property, improvements to fire stations, acquisition of a fire administrative headquarters building, and construction of a community park. This tax override is currently assessed at $9 per $100,000 of assessed value. The largest single debt obligation of the City is a note payable to the State of California for the construction of secondary treatment improvements at the City's wastewater treatment plant. As of June 30, 2006 the outstanding balance on this note was $37.8. The chart below illustrates the changes in bonds, notes, loans and leases payable for the year ending June 30, 2006. Bonds, Notes, Loans and Leases Payable (amounts expressed in $ millions) Governmental Activities
Business-Type Activities
June 30 2006 Certificates of participation
$
4.2
Revenue bonds payable
June 30 2005
2006
$
4.4
$
Total 2005
20.9
$
2006
28.7
$
2005
25.1
$
33.1
-
-
23.3
4.7
23.3
4.7
General obligation bonds
7.1
7.2
-
-
7.1
7.2
Notes payable
41.5
4.2
1.3
37.8
40.2
42.0
Notes payable-County-RDA
-
-
-
-
-
-
Tax allocation bonds payable
5.1
5.2
-
-
5.1
5.2
Capital lease obligations
1.2
1.8
3.1
3.1
4.3
4.9
Other long-term liabilities
1.0
1.0
-
-
1.0
1.0
$
Totals
22.8
$
20.9
$
85.1
$
76.7
$
107.9
$
97.6
The City of Santa Cruz also has significant liabilities for claims and judgments, compensated absences (accrued vacation pay), and landfill closure and postclosure costs. The amounts and changes of these liabilities are shown below. Claims and Judgments, Compensated Absences, and Landfill Closure Costs Payable (amounts expressed in $ millions) June 30 2006 Claims and Judgements
$
June 30, 2006 2005
11.0
$
10.5
$
Increase
Percent
Due in less
Due in more
(Decrease)
Change
than one year
than one year
$
$
0.5
4.8%
3.0
8.0
Compensated absences
2.9
2.9
-
0.0%
1.9
1.0
Closure and post closure landfill costs
5.8
5.4
0.4
7.4%
-
5.8
0.4
4.8%
Totals
$
8.7
$
8.3
$
$
1.9
$
6.8
Additional information on the City of Santa Cruz’s long term debt can be found in Note 6 to the financial statements. Economic Climate The City of Santa Cruz, and Santa Cruz County for that matter, is closely tied to the regional economy of the nine-county San Francisco Bay Area and to Silicon Valley in particular. Fiscal Year 2006 showed signs of recovery at the national level, along with the Bay Area and Silicon Valley. Local private employers include a diverse array of manufacturing, business services, retail, hotel and food services, and biotechnology companies. In addition to the local private employers, the local economy also benefits from the University of California Santa Cruz. The University is a major employer, and has potential spin-off benefits from federal and state funded scientific research ventures including biomedical research, technology research, and adaptive optics. 15
The state, and the bay area in particular, experienced modest growth in jobs, personal income, and tourism in 2006 and the economy is expected to continue to improve during 2006, albeit modestly. However, the bay area regional economic opportunities and challenges including continued job growth, housing prices, interest rates, state and national economic issues will, of course, moderate the rate of improvement.
Requests for Information This financial report is designed to provide a general overview of the City’s finances for all of its citizens, taxpayers, customers, investors and creditors. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the City of Santa Cruz, Finance Department, 809 Center Street, Room 8, Santa Cruz, CA 95060.
16
BASIC FINANCIAL STATEMENTS
17
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18
GOVERNMENT-WIDE FINANCIAL STATEMENTS
19
City of Santa Cruz Statement of Net Assets June 30, 2006
Primary Government Governmental
Business-Type
Activities
Activities
Total
ASSETS Current assets: Cash and cash equivalents
$
Restricted cash and cash equivalents Interest receivable Taxes receivable Accounts receivable - net Due from other governments
41,279,889
$
45,636,664
$
86,916,553
2,963,869
2,765,752
5,729,621
682,729
950,933
1,633,662
3,936,698
-
3,936,698
959,308
5,130,015
6,089,323
1,389,967
676,898
2,066,865
Notes receivable - due within one year
220,401
25,962
246,363
Loans receivable - due within one year
87,376
-
87,376 1,120,316
-
1,120,316
Prepaid items
Intergovernmental receivable - due within one year
216,801
94,570
311,371
Inventories
249,288
-
249,288
1,351,477
30,000
1,381,477
53,337,803
56,431,110
109,768,913
339,768
13,984,480
14,324,248
Notes receivable - due in more than one year
4,853,840
401,058
5,254,898
Loans receivable - due in more than one year
1,213,636
-
1,213,636
-
16,660,168
16,660,168
Deferred charges
294,093
2,250,124
2,544,217
Long-term internal balances
(25,130)
25,130
-
50,452,567
11,931,526
62,384,093
5,393,352
3,956,018
9,349,370
Deposits Total current assets Noncurrent assets: Restricted investments
Intergovernmental receivable - due in more than one year
Capital assets: Land Land improvements Infrastructure
167,322,095
180,436,253
347,758,348
Buildings
35,421,568
160,134,334
195,555,902
Machinery and equipment
10,279,605
20,026,950
30,306,555
724,114
70,000
794,114
Software
Lease improvements
1,056,070
555,258
1,611,328
Construction in progress
5,108,592
10,436,904
15,545,496
275,757,963
387,547,243
663,305,206
(121,022,337)
(137,683,979)
(258,706,316)
Total capital assets, net
154,735,626
249,863,264
404,598,890
Total noncurrent assets
161,411,833
283,184,224
444,596,057
Total assets
214,749,636
339,615,334
554,364,970
Total capital assets Less accumulated depreciation
See accompanying Notes to Basic Financial Statements.
20
City of Santa Cruz Statement of Net Assets, Continued June 30, 2005
Primary Government Governmental
Business-Type
Activities
Activities
Total
LIABILITIES Current liabilities: Accounts payable and other current liabilities
$
Intergovernmental payable
3,767,770
$
3,651,379
$
7,419,149
52
-
52
Interest payable
243,029
1,378,739
1,621,768
Deferred revenue
823,128
56,451
879,579
Deposits payable
134,221
41,611
175,832
Claims and judgments payable - due within one year
3,039,471
-
3,039,471
Compensated absences payable - due within one year
1,405,557
501,062
1,906,619
Bonds, notes, loans and leases payable - due within one year
1,119,055
5,857,679
6,976,734
10,532,283
11,486,921
22,019,204
7,967,819
Total current liabilities Noncurrent liabilities: Claims and judgments payable - due in more than one year
7,967,819
-
Compensated absences payable - due in more than one year
702,778
250,532
953,310
21,768,918
79,290,887
101,059,805
-
5,751,407
5,751,407
Total noncurrent liabilities
30,439,515
85,292,826
115,732,341
Total liabilities
40,971,798
96,779,747
137,751,545
142,469,186
164,275,405
306,744,591
Capital projects
4,256,664
-
4,256,664
Debt service
4,361,282
-
4,361,282
Public safety
82,648
-
82,648
Parks and recreation
92,338
-
92,338
Bonds, notes, loans and leases payable - due in more than one year Landfill closure costs
NET ASSETS Invested in capital assets, net of related debt Restricted for:
Community and economic development Unrestricted Total net assets
3,339,305
-
3,339,305
19,176,415
78,560,182
97,736,597
$
173,777,838
$
242,835,587
$
416,613,425
Assets - Liab.& Net Assets $
-
$
-
$
-
Bal. Sheet Net Assets - IS Net Assets $
-
$
-
$
-
See accompanying Notes to Basic Financial Statements.
21
City of Santa Cruz Statement of Activities and Changes in Net Assets For the year ended June 30, 2006
Program Revenues
Functions/Programs
Charges for Services
Expenses
Operating
Capital
Grants and Contributions
Grants and Contributions
Total
Primary government: Governmental activities: General government
$
9,755,194
$
4,662,211
$
-
$
-
$
4,662,211
Public safety
27,227,214
3,041,137
239,005
206,123
3,486,265
Parks and recreation
11,715,023
3,191,193
81,133
194,513
3,466,839
Library
9,179,637
8,478,112
-
-
8,478,112
Public works
9,047,430
4,253,232
1,284,078
624,214
6,161,524
624,214
66,643
-
1,474,715
1,541,358
Community and economic development
8,285,308
996,327
521,321
-
1,517,648
Social services
1,693,267
-
-
-
-
883,866
-
-
-
-
78,411,153
24,688,855
2,125,537
2,499,565
29,313,957
Water
15,204,565
19,480,617
-
460,731
19,941,348
Wastewater
16,192,904
13,079,711
-
1,456,986
14,536,697
Refuse
12,700,841
13,525,848
11,000
-
13,536,848
Parking
2,960,225
2,654,549
-
25,015
2,679,564
Storm water
1,925,661
869,490
-
535,628
1,405,118
Golf course
2,325,920
1,608,752
4,704
2,075
1,615,531
Transit
Interest and fiscal charges on long-term debt Total governmental activities Business-type activities:
Total business-type activities Total primary government
51,310,116 $
129,721,269
51,218,967 $
75,907,822
15,704 $
2,141,241
2,480,435 $
General Revenues: Taxes: Property taxes Sales and use taxes Franchise taxes Transient occupancy taxes Utility users taxes Admission taxes Other taxes Total taxes Unrestricted grants and contributions Unrestricted investment earnings Gain on sale of assets Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets - beginning of year Net assets - end of year See accompanying Notes to Basic Financial Statements.
22
4,980,000
53,715,106 $
83,029,063
Net (Expense) Revenue and Changes in Net Assets Governmental Activities
Business-Type Activities
$
$
(5,092,983)
$
(5,092,983)
(23,740,949)
-
(23,740,949)
(8,248,184)
-
(8,248,184)
(701,525)
-
(701,525)
(2,885,906)
-
(2,885,906)
917,144
$
-
Total
-
917,144
(6,767,660)
-
(6,767,660)
(1,693,267)
-
(1,693,267)
(883,866)
-
(883,866)
(49,097,196)
-
(49,097,196)
-
4,736,783
4,736,783
-
(1,656,207)
(1,656,207)
-
836,007
836,007
-
(280,661)
(280,661)
-
(520,543)
(520,543)
-
(710,389)
(710,389)
-
2,404,990
2,404,990
(49,097,196)
2,404,990
(46,692,206)
22,384,981
-
22,384,981
11,738,917
-
11,738,917
2,136,686
-
2,136,686
3,385,148
-
3,385,148
8,304,371
-
8,304,371
1,715,133
-
1,715,133
2,303,363
-
2,303,363
51,968,599
-
51,968,599
1,121,274
-
1,121,274
1,380,087
2,079,379
3,459,466
24,318
91,920
116,238
487,841 67,517
508,500 (67,517)
996,341 -
55,049,636
2,612,282
57,661,918
5,952,440
5,017,272
10,969,712
167,825,398
237,818,315
405,643,713
173,777,838
$
242,835,587
$
416,613,425
23
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24
FUND FINANCIAL STATEMENTS
25
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26
Governmental Fund Financial Statements General Fund - The General Fund is used to account for sources and uses of financial resources traditionally associated with governments, and which are not required to be accounted for in another fund. Redevelopment Agency Fund - The Redevelopment Agency fund is used to account for all the activities of the City of Santa Cruz Redevelopment Agency. This includes the accumulation of resources for and the payment of interest and principal on debt issued to finance redevelopment activities, and general redevelopment operations. Other Governmental Funds - Other Governmental funds is the aggregate of all the non-major governmental funds.
27
City of Santa Cruz Balance Sheet Governmental Funds June 30, 2006
Major Funds
Other
Total
General
Redevelopment
Governmental
Governmental
Fund
Agency
Funds
Funds
ASSETS Cash and cash equivalents
$
Interest receivable
19,778,125
$
7,503,391
$
7,456,718
$
34,738,234
146,611
126,321
351,641
624,573
3,006,225
314,939
615,534
3,936,698
Accounts receivable - net
796,486
-
131,128
927,614
Due from other governments
276,046
-
1,113,921
1,389,967
Taxes receivable
Due from other funds
80,237
-
-
80,237
205,218
-
1,844
207,062
Cash and cash equivalents
-
2,958,834
5,035
2,963,869
Investments
-
62,249
277,519
339,768
-
3,021,083
282,554
3,303,637
Prepaid items Restricted assets:
Total restricted assets Deposits
202,050
-
-
202,050
Notes receivable - net
330,775
3,714,571
1,028,895
5,074,241
Loans receivable - net Advances to other funds
-
-
1,301,012
1,301,012
957,838
96,501
-
1,054,339
-
120,000
-
120,000
Inventory of land held for resale - net Total assets
$
25,779,611
$
14,896,806
$
12,283,247
$
52,959,664
$
2,641,189
$
146,069
$
515,464
$
3,302,722
LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Due to other funds
-
-
68,559
68,559
-
-
52
52
Deferred revenue
204,645
-
1,299,235
1,503,880
Deposits payable
131,085
2,984
-
134,069
-
449,468
630,001
1,079,469
2,976,919
598,521
2,513,311
6,088,751
Reserved
4,327,113
6,339,360
4,809,176
15,475,649
Unreserved, designated:
7,120,993
7,958,925
1,336,867
16,416,785
Intergovernmental payable
Advances from other funds Total liabilities Fund Balances:
Unreserved, undesignated, reported in: General fund
11,354,586
-
-
11,354,586
Special revenue funds
-
-
3,341,962
3,341,962
Capital projects funds
-
-
281,931
281,931
22,802,692
14,298,285
9,769,936
46,870,913
Total fund balances Total liabilities and fund balances
$
25,779,611
See accompanying Notes to Basic Financial Statements.
28
$
14,896,806
$
12,283,247
$
52,959,664
City of Santa Cruz
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets June 30, 2006 Total Fund Balances - All Governmental Funds
$
46,870,913
Amounts reported for Governmental Activities in the Statement of Net Assets were different because: Capital assets used in governmental activities are not current financial resources. Therefore, they are not reported in the governmental funds. Except for the internal service funds reported below, the capital assets are adjusted as follows: Non-depreciable
GovernmentWide Statement of Net Assets
Internal Service Funds
$
$
Depreciable, net
55,561,159 99,174,467
$
Total capital assets
154,735,626
$
-
55,561,159
(273,255)
98,901,212
(273,255)
154,462,371
Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the governmental funds.
(243,029)
Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and equipment management, to individual funds. The assets and liabilities of the Internal Service Funds are included in governmental activities in the statement of net assets. Equipment Operations Fund
486,525
Stores Services Fund
226,658
Telecommunications Fund
217,555
Risk Management Fund
(4,256,330)
Total internal service funds
(3,325,592)
Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. Noncurrent liabilities were not due and payable in the current period. Therefore, they are not reported in the governmental funds. Except for the internal service funds reported above, the long-term liabilities are adjusted as follows. Compensated absences payable - due within one year
680,752 GovernmentWide Statement of Net Assets
Internal Service Funds
$
$
(1,405,557)
-
(1,405,557)
Compensated absences payable - due in more than one year
(702,778)
13,602
(689,176)
Bonds, notes, loans and leases payable - due within one year
(1,119,055)
21,036
(1,098,019)
(21,768,918)
-
(21,768,918)
34,638
(24,961,670)
Bonds, notes, loans and leases payable - due in more than one year Total long-term liabilities
$
(24,996,308)
$
Certain transactions related to debt issuance and refunding are reported as expenditures and other financing sources/uses in the governmental funds. For the statement of net assets, the net amount of these transactions is capitalized as deferred charges, and will be amortized as an adjustment to interest expense over the remaining life of the debt. Net Assets of Governmental Activities
294,093 $
See accompanying Notes to Basic Financial Statements.
29
173,777,838
City of Santa Cruz Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2006
Major Funds Other
Total
General
Redevelopment
Governmental
Governmental
Fund
Agency
Funds
Funds
REVENUES: Taxes
$
Licenses and permits
39,495,863
$
615,448
Intergovernmental
10,323,206
$
2,216,660
-
-
$
52,035,729 615,448
1,073,997
-
4,622,240
5,696,237
Charges for services
19,062,464
-
284,999
19,347,463
Fines and forfeitures
1,962,697
-
2,538
1,965,235
Use of money and property
2,541,909
471,523
220,727
3,234,159
216,721
147,053
686,151
1,049,925
64,969,099
10,941,782
8,033,315
83,944,196
Other revenues Total revenues EXPENDITURES: General government Public safety
9,666,858
-
-
9,666,858
26,837,330
-
101,299
26,938,629
Parks and recreation
9,402,529
-
-
9,402,529
Library
9,250,499
-
-
9,250,499
Public works
3,565,397
-
593,519
4,158,916
-
-
624,214
624,214
Community and economic development
1,000,492
6,978,325
457,651
8,436,468
Social services
1,566,695
-
126,572
1,693,267
Capital outlay
765,851
6,282,979
4,872,959
11,921,789
204,928
513,612
431,237
1,149,777
48,264
409,555
463,698
921,517
-
-
-
-
62,308,843
14,184,471
7,671,149
84,164,463
2,660,256
(3,242,689)
Transit
Debt service: Principal Interest and fiscal charges Bond issuance costs Total expenditures REVENUES OVER (UNDER) EXPENDITURES
362,166
(220,267)
OTHER FINANCING SOURCES (USES): Proceeds from asset disposition
25,256
-
-
25,256
-
3,100,000
100,000
3,200,000
99,894
-
761,363
861,257
(19,509)
-
(738,661)
(758,170)
Proceeds from long-term debt issued Transfers in Transfers out Total other financing sources (uses)
105,641
Net change in fund balances
3,100,000
2,765,897
(142,689)
122,702
3,328,343
484,868
3,108,076
9,285,068
43,762,837
FUND BALANCES: Beginning of year End of year
20,036,795 $
22,802,692
See accompanying Notes to Basic Financial Statements.
30
14,440,974 $
14,298,285
$
9,769,936
$
46,870,913
City of Santa Cruz Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Assets For the year ended June 30, 2006 Net Change in Fund Balances - All Governmental Funds
$
3,108,076
Amounts reported for governmental activities in the Statement of Activities and Changes in Net Assets were different because: Governmental funds report capital outlays 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. This is the amount by which depreciation exceeded capital outlays in the current period, excluding the internal service funds, which are reported below.
3,063,302
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and capital contributions) is to increase net assets.
(938)
Revenues considered "unavailable" at the end of the previous fiscal year were collected during the current year and are reported as revenues in the governmental funds. These revenues were previously included in the statement of activities.
(17,811)
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.
16,306
Certain costs related to issuing new debt and refunding existing debt are reported as expenditures and financing uses in the governmental funds, but are capitalized in the statement of net assets, and will be amortized over the remaining life of the debt.
(11,311)
Proceeds of long-term debt and payments to refunding bond escrow agents are reported as financing sources/uses in governmental funds. In the statement of net assets, however, issuing or refinancing debt affects noncurrent liabilities.
(3,163,916)
Repayment of principal is an expenditure in governmental funds, but reduces noncurrent liabilities in the statement of net assets.
1,149,777
Debt service principal payments are reclassified as "Community and economic development" expense in the Government-Wide Statement of Activities.
84,323
Accrued but unpaid and accreted interest on long-term debt is reported in the statement of activities, but does not require the use of current financial resources. Therefore, it is not reported as an expenditure in the governmental funds.
(120,310)
Internal service funds are used by management to charge the costs of certain activities, such as insurance and equipment management, to individual funds. The net revenue of the internal service funds is reported with governmental activities. Change in Net Assets of Governmental Activities
1,844,942 $
See accompanying Notes to Basic Financial Statements.
31
5,952,440
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32
Proprietary Fund Financial Statements Water - Accounts for the activities of the City's water utility, which provides water delivery services to the residents of the City and some residents of the County. Wastewater - Accounts for the activities of the City's wastewater utility, which provides wastewater collection and treatment services to the residents of the City and some residents of the County. Refuse - Accounts for the activities of the City's refuse utility, which provides refuse pick-up services, recycling services, and a sanitary landfill for residents of the City. Parking - Accounts for the activities of the Downtown Parking District, which provides parking facilities in the downtown area. Storm Water - Accounts for storm water utility fees on properties within the City limits. These fees provide funding for flood control improvements associated with the U.S. Army Corps of Engineers San Lorenzo River Flood Control project, storm water pollution prevention programs, and measures to comply with the U.S. Environmental Protection Agency Non-Point Pollution Discharge Emissions Standards Program (NPDES). Golf Course - Accounts for the activities of the Delaveaga Golf Course, which provides recreational facilities to the public. Internal Service Funds - These funds are used to provide goods and services by one department or agency to other departments or agencies of the City on a cost reimbursement basis.
33
City of Santa Cruz Statement of Net Assets Proprietary Funds June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
ASSETS Current assets: Cash and cash equivalents
$
25,506,424
$
8,146,550
$
7,601,120
$
2,544,649
Restricted cash and cash equivalents
146,152
378,311
1,948,584
20,273
Interest receivable
319,954
508,498
73,853
26,929
3,517,726
825,433
653,056
33,375
-
375,793
11,000
12,751
Accounts receivable - net Due from other governments Notes receivable - due within one year
-
25,962
-
-
Intergovernmental receivable - due within one year
-
1,120,316
-
-
32,366
17,619
35,503
3,495
Inventories
Prepaid items
-
-
-
-
Deposits
-
-
-
30,000
29,522,622
11,398,482
10,323,116
2,671,472
12,000,000
-
1,058,100
491,129
401,058
-
-
-
-
16,160,263
-
-
Total current assets Noncurrent assets: Restricted investments Notes receivable - due in more than one year Intergovernmental receivable - due in more than one year Advances to other funds
21,630
100,001
-
-
446,203
284,213
330,974
212,239
3,654,410
1,371,330
98,575
4,979,102
71,900
910,270
-
280,701
54,010,317
51,085,388
19,746,219
805,464
Buildings
9,117,940
126,672,607
2,709,094
20,398,375
Machinery and equipment
5,832,199
3,623,937
9,768,770
163,866
-
70,000
-
-
249,431
196,557
99,336
9,934
Deferred charges Capital assets: Land Land improvements Infrastructure
Lease improvements Software Construction in progress
7,024,800
Less accumulated depreciation
429,186
2,318,333
333,757
(34,614,606)
(65,267,707)
(18,012,630)
(6,734,606)
Total capital assets (net of accumulated depreciation)
45,346,391
119,091,568
16,727,697
20,236,593
Total noncurrent assets
58,215,282
135,636,045
18,116,771
20,939,961
Total assets
87,737,904
147,034,527
28,439,887
23,611,433
See accompanying Notes to Basic Financial Statements.
34
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
1,837,921
$
Total
-
$
Service Funds
45,636,664
$
6,541,655
329
272,103
2,765,752
-
20,299
1,400
950,933
58,156 31,694
37,057
63,368
5,130,015
269,754
7,600
676,898
-
-
-
25,962
-
-
-
1,120,316
-
190
5,397
94,570
9,739
-
-
-
129,288
-
-
30,000
1,149,427
2,165,550
349,868
56,431,110
7,919,959
-
435,251
13,984,480
-
-
-
401,058
-
499,905
-
16,660,168
-
439,293
-
560,924
-
832,867
143,628
2,250,124
-
8,822
1,819,287
11,931,526
242,277
2,450,870
3,956,018
-
54,554,503
234,362
180,436,253
-
-
1,236,318
160,134,334
-
6,421
631,757
20,026,950
1,148,847
-
-
70,000
-
-
-
555,258
336,296
330,828
-
10,436,904
-
(11,663,944)
(1,390,486)
(137,683,979)
(1,211,888)
43,478,907
4,982,108
249,863,264
273,255
45,250,972
5,560,987
283,720,018
273,255
47,416,522
5,910,855
340,151,128
8,193,214
(Continued)
35
City of Santa Cruz Statement of Net Assets, Continued Proprietary Funds June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
LIABILITIES Current liabilities: Accounts payable and other current liabilities
$
2,000,966
Due to other funds Interest payable
$
611,800
$
676,657
$
162,415
-
-
-
50,408
127,576
972,787
134,092
Deferred revenue
622
-
37,440
-
Deposits payable
20,449
47
253
20,862
Claims and judgments payable
-
-
-
-
Compensated absences payable
218,955
114,023
141,729
8,070
due in less than one year
393,767
2,599,040
2,266,230
201,337
Total current liabilities
2,762,335
4,297,697
3,256,401
443,092 96,501
Bonds, notes, loans and leases payable
Noncurrent liabilities: Advances from other funds
-
-
-
Claims and judgments payable
-
-
-
-
Compensated absences payable
109,478
57,012
70,864
4,035
12,846,733
38,850,560
11,489,100
6,145,000
-
-
5,751,407
-
Bonds, notes, loans and leases payable due in more than one year Landfill closure costs Total noncurrent liabilities
12,956,211
38,907,572
17,311,371
6,245,536
Total liabilities
15,718,546
43,205,269
20,567,772
6,688,628
Invested in capital assets, net of related debt
32,105,891
77,641,968
2,972,367
13,890,256
Unrestricted
39,913,467
26,187,290
4,899,748
3,032,549
NET ASSETS
Total net assets
$
72,019,358
See accompanying Notes to Basic Financial Statements.
36
$
103,829,258
$
7,872,115
$
16,922,805
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
86,774
$
-
$
Total
112,767
$
Service Funds
3,651,379
$
465,048
-
-
11,678
59,962
33,914
1,378,739
-
-
18,389
56,451
-
-
-
41,611
152
-
-
-
3,039,471
1,331
16,954
501,062
-
160,000
237,305
5,857,679
21,036
308,067
419,329
11,486,921
3,537,385
-
439,293
535,794
-
-
-
-
7,967,819
666
8,477
250,532
13,602
5,940,000
4,019,494
79,290,887
-
-
-
5,751,407
-
5,940,666
4,467,264
85,828,620
7,981,421
6,248,733
4,886,593
97,315,541
11,518,806
37,378,907
286,016
164,275,405
3,788,882
738,246
78,560,182
41,167,789
$
1,024,262
$
242,835,587
252,219 (3,577,811) $
(3,325,592)
(Concluded)
37
City of Santa Cruz Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For the year ended June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
OPERATING REVENUES: Charges for services
$
19,480,617
$
13,079,711
$
13,525,848
$
2,654,549
Use of property
6,450
-
-
147,015
Other revenues
221,100
2,070
46,471
49,971
19,708,167
13,081,781
13,572,319
2,851,535
6,671,445
4,302,400
5,532,163
918,508
Total operating revenues OPERATING EXPENSES: Personnel services Services, supplies, and other charges
6,734,037
6,384,713
4,692,936
1,230,474
Depreciation and amortization
1,649,079
4,267,555
1,896,004
489,528
Total operating expenses
15,054,561
14,954,668
12,121,103
2,638,510
Operating income (loss)
4,653,606
(1,872,887)
1,451,216
213,025
NONOPERATING REVENUES (EXPENSES): Intergovernmental Investment earnings Interest expense and fiscal charges
-
283,786
11,000
25,015
855,653
681,315
270,588
71,143
(147,572)
(1,232,551)
(542,932)
(311,805)
Debt issuance costs
(2,432)
(5,685)
(36,806)
(9,910)
Gain (loss) on sale of capital assets
15,515
5,775
69,035
1,595
Total nonoperating revenues (expenses) Income (loss) before contributions and transfers
721,164
(267,360)
5,374,770
(2,140,247)
Capital contributions
460,731
Transfers out
(31,638)
Total contributions and transfers
1,173,200 (7,541)
429,093
Change in net assets
(229,115)
1,165,659
5,803,863
(974,588)
(223,962)
1,222,101
(10,937)
-
-
(14,908)
(6,388)
(14,908)
(6,388)
1,207,193
(17,325)
NET ASSETS: Beginning of year End of year
66,215,495 $
72,019,358
See accompanying Notes to Basic Financial Statements.
38
104,803,846 $
103,829,258
6,664,922 $
7,872,115
16,940,130 $
16,922,805
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
869,490
$
1,608,752
$
51,218,967
Service Funds
$
9,204,143
-
920
154,385
-
-
188,888
508,500
121,266
869,490
1,798,560
51,881,852
9,325,409
89,463
854,481
18,368,460
1,291,931
244,176
1,062,891
20,349,227
6,225,352
1,317,062
172,066
9,791,294
85,599
1,650,701
2,089,438
48,508,981
7,602,882
3,372,871
1,722,527
(781,211)
(290,878)
535,628
4,704
860,133
-
26,507
19,788
1,924,994
161,413
(265,614)
(226,001)
(2,726,475)
(3,428)
(9,346)
(10,481)
(74,660)
-
-
-
91,920
-
287,175
(211,990)
75,912
157,985
(494,036)
(502,868)
3,448,783
1,880,512
1,636,006
-
-
2,075
(6,360)
(682)
(6,360)
1,024,262
(35,570)
5,017,272
1,525,737 $
(35,570)
1,568,489
(501,475)
41,668,185 41,167,789
(67,517)
1,393
(500,396)
$
Total
1,844,942
237,818,315 $
242,835,587
(5,170,534) $
(3,325,592)
39
City of Santa Cruz Combining Statement of Cash Flows Proprietary Funds For the year ended June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers and users
$
Cash received from interfund services provided
18,710,565
$
566,367
12,828,339
$
23,025
13,509,946
$
-
2,616,476 29,391
Cash payments to suppliers for goods and services
(7,531,499)
(8,011,836)
(6,565,783)
(1,541,637)
Cash payments to employees for services
(6,632,478)
(4,314,881)
(5,516,543)
(931,127)
1,536,566
1,221,360
2,369,403
36,851
95,015
93,927
90,090
25,061
195,184
(15,549)
10,968
193,491
3,898,081
428,506
Cash payments for interfund services used Cash payments to other governments Cash received from (payments to) others Net cash provided (used) by operating activities
6,939,720
1,824,385
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out
(31,638)
(7,541)
(14,908)
(6,388)
Advances from other funds
-
-
-
(61,356)
Receipts from other governments
-
1,125,242
-
21,215
(31,638)
1,117,701
(14,908)
Net cash provided (used) by noncapital financing activities
(46,529)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital contributions
-
-
Purchase and construction of capital assets
(4,922,609)
460,731
(1,657,655)
(4,215,642)
(30,536)
Principal paid on capital debt
11,875,132
(2,500,949)
(1,188,742)
(177,980)
(1,311,537)
(595,632)
(322,955)
Interest paid on capital debt
1,173,200
(29,683)
Proceeds from sales of capital assets
15,515
5,775
69,035
1,595
Net cash provided (used) by capital and related financing activities
7,399,086
(4,291,166)
(5,930,981)
(529,876)
CASH FLOWS FROM INVESTING ACTIVITIES: Advances to other funds Proceeds from sales and maturities of investments Purchase of investments Interest receivables Investment income received Net cash provided (used) by investing activities
7,927
11,121
-
-
-
404,491
19,664
2,826
(12,000,000)
-
-
-
-
-
-
-
748,891
708,894
280,732
69,976
1,124,506
300,396
72,802
(11,243,182)
Net increase (decrease) in cash and cash equivalents
3,063,986
(224,574)
(1,747,412)
(75,097)
CASH AND CASH EQUIVALENTS: Beginning of year
22,588,590
End of year
$
See accompanying Notes to Basic Financial Statements.
40
25,652,576
8,749,435 $
8,524,861
11,297,116 $
9,549,704
2,640,019 $
2,564,922
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
867,710
$
1,625,908
$
Service Funds
50,158,944
$
-
(1,298,926)
(25,233,629)
(5,995,108)
(93,308)
(852,507)
(18,340,844)
(1,038,872)
64,800
146,982
5,375,962
121,266
9,148
1,266
314,507
-
184,411
568,315
-
13,462,038
2,315,165
564,212
618,783
204,346
(283,948)
(190)
(192,866)
(6,360)
(682)
9,023,533
(67,517)
(35,570)
-
439,293
377,937
-
652,516
28,333
1,827,306
-
646,156
466,944
2,137,726
(35,570)
1,636,006
-
-
2,075
(317,860)
(227,623)
(11,371,925)
(574,292)
(141,104)
7,292,065
(54,005)
(298,588)
(237,940)
(2,796,335)
(3,428)
-
-
(1,190,740)
(604,592)
(5,148,269)
(57,433)
(439,293)
-
(420,245)
-
-
887,177
-
91,920
-
454,671
5,525
-
-
(12,000,000)
-
-
-
-
(25,813)
21,672
27,299
1,857,464
161,413
37,050
32,824
(9,675,604)
135,600
56,678
(297,690)
1,781,572 $
Total
1,838,250
569,793 $
272,103
$
775,891
2,357,762
47,626,525
4,183,893
48,402,416
$
6,541,655
(Continued)
41
City of Santa Cruz Combining Statement of Cash Flows, Continued Proprietary Funds For the year ended June 30, 2006
Major Funds
Water
Wastewater
Refuse
Parking
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income (loss)
$
4,653,606
$
(1,872,887)
$
1,451,216
$
213,025
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Estimated closure/postclosure costs
1,649,079
4,267,555
1,896,004
489,528
-
-
300,433
-
(212,494)
(274,710)
(31,539)
(8,792)
28,427
19,455
30,591
2,818
278,330
-
-
(30,000)
Changes in assets and liabilities: Accounts receivable Prepaid items Inventories Deposits
-
-
-
Notes and loans receivable
-
46,316
-
(219,251)
Accounts payable and other current liabilities
555,789
(311,836)
286,213
Due to/from other funds
(35,503)
(32,366)
(17,619)
Deferred revenue
-
-
15,384
(3,495) -
Deposits payable
110
8,809
47
253
Claims and judgments payable
-
-
-
-
Compensated absences payable
10,540
(31,936)
(14,971)
(15,437)
Total adjustments
2,286,114
Net cash provided (used) by operating activities
$
See accompanying Notes to Basic Financial Statements.
42
6,939,720
3,697,272 $
1,824,385
2,446,865 $
3,898,081
215,481 $
428,506
Major Funds
Governmental Activities Internal
Storm Water
$
Golf Course
(781,211)
$
(290,878)
$
Service Funds
3,372,871
$
1,722,527
1,317,062
172,066
9,791,294
85,599
-
-
300,433
-
(1,780)
(1,233)
(530,548)
144
5,470
86,905
(4,591)
-
-
278,330
(19,340)
-
-
(30,000)
81,781
-
-
46,316
-
34,176
(87,787)
257,304
172,394
(190)
20,386
(5,397)
(94,570)
-
18,389
33,773
-
-
9,219
152
-
-
-
287,835
(3,989)
(3,496)
(59,289)
1,345,423 $
Total
564,212
98,012 $
(192,866)
3,198 -
(34,776)
10,089,167 $
13,462,038
592,638 $
2,315,165
(Concluded)
43
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44
Fiduciary Fund Financial Statements Private - Purpose Trust Funds: Private-purpose trust funds are used to report the trust arrangements under which the principal and income benefit the Library Joint Powers Authority. Agency Funds: Agency funds are used to account for resources held by the City in a custodial capacity. These funds account for the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments.
45
City of Santa Cruz Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2006
PrivatePurpose
Agency
Trust Funds
Funds
ASSETS Cash and cash equivalents
$
Investments
518,986
$
-
1,486,630 89,494
Receivables: Interest receivable Taxes receivable Accounts receivable Due from other governments Total assets
4,983
14,260
-
563,684
-
527,368
-
16,467
$
523,969
$
2,697,903
$
-
$
774,450
LIABILITIES Accounts payable and other current liabilities Due to other governments
-
1,110,680
Deferred revenue
-
15,024
Deposits payable
-
517,771
Payable to bondholders
-
279,978
Total liabilities
-
NET ASSETS Held in trust for library programs
$
See accompanying Notes to Basic Financial Statements.
46
523,969
$
2,697,903
City of Santa Cruz Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the year ended June 30, 2006
PrivatePurpose Trust Funds ADDITIONS: Investment earnings
$
Total additions
15,435 15,435
DEDUCTIONS: Library programs
12,055
Total deductions
12,055
Change in net assets
3,380
NET ASSETS: Beginning of year
520,589
End of year
$
See accompanying Notes to Basic Financial Statements.
47
523,969
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48
City of Santa Cruz Index to Notes to the Basic Financial Statements For the year ended June 30, 2006
Page Note 1 - Summary of Significant Accounting Policies..................................................................................51 A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. P. Q. R. S.
Reporting Entity..............................................................................................................................51 Basis of Accounting and Measurement Focus............................................................................51 Use of Restricted/Unrestricted Net Assets.................................................................................54 Cash, Cash Equivalents and Investments ...................................................................................54 Restricted Cash and Investments with Fiscal Agents................................................................54 Prepaid Items ..................................................................................................................................54 Inventories .......................................................................................................................................55 Interfund Transactions...................................................................................................................55 Capital Assets..................................................................................................................................55 Interest Payable...............................................................................................................................56 Deferred Revenue ...........................................................................................................................56 Compensated Absences .................................................................................................................56 Bond Premiums, Discounts, and Issuance Costs .......................................................................57 Long-Term Debt..............................................................................................................................57 Net Assets ........................................................................................................................................57 Fund Balances – Reservations and Designations .......................................................................57 Property Taxes ................................................................................................................................58 Use of Estimates..............................................................................................................................58 Implementation of New Governmental Accounting Standard Board Pronouncements .....58
Note 2 - Cash Deposits and Investments .........................................................................................................59 A. Cash Deposits..................................................................................................................................60 B. Investments .....................................................................................................................................60 C. Risk Disclosures ..............................................................................................................................62 Note 3 – Receivables ............................................................................................................................................64 Note 4 – Interfund Balances and Transactions ...............................................................................................66 A. Government-Wide Financial Statements ....................................................................................66 B. Fund Financial Statements ............................................................................................................66 Note 5 – Capital Assets ........................................................................................................................................68 A. Government-Wide Financial Statements ....................................................................................68 B. Fund Financial Statements ............................................................................................................71
49
City of Santa Cruz Index to Notes to the Basic Financial Statements, Continued For the year ended June 30, 2006
Page Note 6 – Long-Term Debt....................................................................................................................................71 A. Governmental Activities Long-Term Debt .................................................................................71 B. Proprietary Fund Obligations .......................................................................................................77 C. Defeased Debt .................................................................................................................................83 Note 7 – Risk Management and Self Insurance..............................................................................................83 Note 8 – Landfill Closure and Postclosure Costs ...........................................................................................86 Note 9 – Retirement Plans...................................................................................................................................87 A. Pension Plan ....................................................................................................................................87 Note 10 – Post-Employment Retirement Benefits ..........................................................................................88 Note 11 – Commitments and Contingencies ...................................................................................................88 Note 12 – Operating Leases ................................................................................................................................90 Note 13 – Reserved and Designated Fund Balances ......................................................................................91 Note 14 – Deficit Net Assets ...............................................................................................................................92 Note 15 – Subsequent Events .............................................................................................................................92
50
City of Santa Cruz Notes to Basic Financial Statements For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of the City of Santa Cruz, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below. A. Reporting Entity The City was incorporated as a town in 1866 under the laws of the State of California. It became a City in 1876. The City is a charter city administered under a council/manager form of government. The financial statements present the City and its component units (legally separate entities for which the City is considered to be financially accountable). Component units include those entities for which the City may have governing authority or is in a relationship of financial benefit or burden. Component units also include entities that are fiscally dependent upon the City. The financial activities of these entities are integrally related to those of the City and, therefore, blended with those of the City. Blending involves aggregating/merging component unit data and data from the City at the combined financial statement level. Based on the above criteria, the accompanying financial statements include the financial activities of the following entities as blended component units. Separate financial statements of these entities can be obtained from the Finance Department of the City. City of Santa Cruz Redevelopment Agency - The City of Santa Cruz Redevelopment Agency (Agency) was formed in 1956 to improve social, physical and economic conditions of the City by constructing a series of commercial, residential and public buildings in the downtown area. The City's Council members are the Agency's Directors and have full accountability for the Agency's fiscal matters. Santa Cruz Public Improvement Financing Corporation - The Santa Cruz Public Improvement Financing Corporation (Corporation) is a non-profit benefit corporation organized and operated under the laws of the State of California. The primary purpose of the Corporation is to serve as a financing vehicle for the City. The City Council has final responsibility for the operations of the Corporation. B. Basis of Accounting and Measurement Focus The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Government - Wide Financial Statements The City’s Government-Wide Financial Statements include a Statement of Net Assets and a Statement of Activities and Changes in Net Assets. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. 51
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Government - Wide Financial Statements, Continued These basic financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Certain types of transactions are reported as program revenues for the City in three categories: Charges for services ¾ Operating grants and contributions ¾ Capital grants and contributions ¾
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those representing balances between the governmental activities and the businesstype activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Assets, internal service fund transactions have been eliminated; however, those transactions between governmental and businesstype activities have not been eliminated. The following interfund activities have been eliminated: Due to/from other funds Advances to/from other funds ¾ Transfers in/out ¾ ¾
For its business type activities, the City applies all applicable GASB pronouncements currently in effect, as well as Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the Committee on Accounting Procedure that do not conflict with or contradict GASB pronouncements. Governmental Fund Financial Statements Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets as presented in these statements to the net assets presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria. All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. 52
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Governmental Fund Financial Statements, Continued Revenues are recorded when received in cash, except for that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. Deferred revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Deferred revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when the government has a legal claim to the resources, the deferred revenue is removed from the Balance Sheet and revenue is recognized. The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34. Proprietary Fund Financial Statements Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of Revenues, Expenses and Changes in Net Assets, and a Statement of Cash Flows for each major proprietary fund. A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Net Assets presents increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts. In accordance with GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Government Entities that Use Proprietary Fund Accounting, the City applies all GASB pronouncements currently in effect as well as FASB Statements and Interpretations, APB Opinions and ARB of the Committee on Accounting Procedure that do not conflict with or contradict GASB pronouncements. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.
53
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Net Assets and a Statement of Changes in Fiduciary Net Assets. The City's fiduciary funds represent agency funds and private-purpose trust funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The agency funds are accounted for using the accrual basis of accounting. The private-purpose trust funds are used to account for resources legally held in trust for special purposes. C. Use of Restricted/Unrestricted Net Assets When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the City’s policy is to apply restricted net assets first. D. Cash, Cash Equivalents and Investments Cash and cash equivalents are considered to be amounts in demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. For purposes of both the balance sheet and statements of cash flows, cash and cash equivalents includes not only currency on hand, but deposits in the City’s cash and investment pool. These deposits have the same characteristics for the participating funds as demand deposit accounts, in that the funds may deposit additional cash at any time and also effectively withdraw cash at any time without prior notice or penalty. Cash and cash equivalents also include restricted cash and money market funds held by fiscal agents. Investments include unpooled investments in securities having original maturities greater than three months. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, both these investments and investments included in the City’s cash and investment pool are stated at fair value, which is based on a quoted market price. This includes all investments except the City’s investment in the California Local Agency Investment Fund (LAIF). LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The City valued its investments in LAIF as of June 30, 2006, by multiplying its account balance with LAIF times a fair value factor determined by LAIF (.998185821). This fair value factor was determined by dividing the total aggregate fair value for all LAIF participants by total aggregate amortized cost. E. Restricted Cash and Investments with Fiscal Agents Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. F. Prepaid Items Certain payments applicable to future accounting periods are recorded as prepaid items. Prepaid items do not reflect current appropriable resources and, thus, an equivalent portion of fund balance is reserved. 54
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued G. Inventories Inventories consist of material and supplies which are stated at cost using the first-in, first-out method. Inventories are recognized as expenditures when consumed rather than when purchased. H. Interfund Transactions Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the long-term portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-Wide Financial Statements as “internal balances.” I.
Capital Assets Capital assets are defined by the City as assets having an estimated useful life in excess of one year, and an initial, individual cost in excess of the capitalization thresholds described below: Infrastructure Land improvements Buildings and lease improvements Machinery and equipment Software (if qualified)
$
25,000 10,000 10,000 5,000 5,000
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair market value on the date donated. Assets acquired under capital leases are capitalized in accordance with generally accepted accounting principles. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest accrued during capital assets construction, if any, is capitalized for the businesstype activities and proprietary funds as part of the asset cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s useful life are not capitalized. Capital assets are reported in the applicable governmental or business-type activities in the Government-Wide Financial Statements. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows: Land improvements Buildings and lease improvements Water tanks and water mains Underground sewer lines Other infrastructure Machinery and equipment Software ( if qualified)
55
20 years 15-50 years 30-50 years 50 years 5-100 years 5-20 years 5 years
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued I.
Capital Assets, Continued Assets are grouped by asset type into one of the following accounts – land, land improvements, infrastructure assets (e.g. roads, bridges, sidewalks, and similar items), buildings (and improvements), machinery and equipment, lease improvements, software, and construction in progress. For all infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for infrastructure reporting. Estimated historical costs were developed in one of three ways: (1) historical records; (2) standard unit costs appropriate for the construction/acquisition date; or (3) present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation, defined as the total depreciation from the date of construction/acquisition to the current date on a straight line, unrecovered cost method was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the estimated historical cost.
J.
Interest Payable In the Government-Wide Financial Statements, interest payable on long-term debt is recognized as the liability is incurred for governmental fund types and proprietary fund types. In the Fund Financial Statements, propriety fund types recognize the interest payable when the liability is incurred.
K. Deferred Revenue In the Government-Wide Financial Statements, deferred revenue is recognized for transactions for which revenue has not yet been earned. Typical transactions recorded as deferred revenues in the Government-Wide Financial Statements are long-term assessments, long-term loans receivable, and prepaid charges for services. In the Fund Financial Statements, deferred revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records deferred revenue for transactions for which revenues have not been earned, or for which funds are not available to meet current financial obligations. Typical transactions for which deferred revenue is recorded are grants received but not yet earned or available, interest on interfund advances receivable, long-term assessments and loans receivable. L. Compensated Absences The City has accumulated unpaid regular vacation leave (for all departments) which is accounted for in accordance with GAAP. The maximum accumulation of vacation leave is limited to the total number of hours accruable during two years. Employees are paid 100% of their accumulated vacation pay when they terminate their employment for any reason. Employees are allowed a partial payoff of accumulated sick leave up to a certain maximum amount.
56
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued M. Bond Premiums, Discounts, and Issuance Costs For governmental type activities, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as other financing sources net of the applicable premium or discount. Issuance costs, whether or not withheld from the actual net proceeds received, are reported as debt service expenditures. For business type activities, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using a straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs and costs in excess of net assets acquired are reported as other assets in the accompanying financial statements. N. Long-Term Debt Government-Wide Financial Statements - Long-term debt and other long-term obligations are reported as liabilities in the appropriate activities. Fund Financial Statements - With the exception of advances from other funds, the governmental fund financial statements do not present long-term liabilities. However, the long term debt is shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets. O. Net Assets In the Government-Wide Financial Statements, net assets are classified in the following categories: Invested in Capital Assets, net of Related Debt – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets. Restricted Net Assets – This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments. Unrestricted Net Assets – This amount is all net assets that do not meet the definition of “invested in capital assets, net of related debt” or “restricted net assets.” P. Fund Balances - Reservations and Designations In the Fund Financial Statements, governmental funds report reservations of fund balances for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balances represent tentative management plans that are subject to change.
57
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Q. Property Taxes Assessed property values are determined annually by the County Assessor as of March 1, and become a lien on real property at July 1. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. The County bills and collects property taxes and remits them to the City under the State authorized method of apportioning taxes whereby all local agencies, including cities, receive from the county their respective shares of the amount of ad valorem taxes collected. Property tax revenues are recognized when levied provided the measurement and availability criteria have been met. R. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. S. Implementation of New Governmental Accounting Standards Board (GASB) Pronouncements The City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements: •
GASB Statement No. 42 Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries establishes accounting and financial reporting standards for impairment of capital assets. A capital asset is considered impaired when its service utility has declined significantly and unexpectedly. This Statement also clarifies and establishes accounting requirements for insurance recoveries.
•
GASB Statement No. 44 Economic Condition Reporting: The Statistical Section (an amendment of NCGA Statement 1) guides the preparation of the statistical section. The statistical section presents detailed information, typically in ten-year trends, that assists users in utilizing the basic financial statements, notes to basic financial statements, and required supplementary information to assess the economic condition of a government.
•
GASB Statement No. 46 Net Assets Restricted by Enabling Legislation addresses selected issues and amends GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments. The Statement enhances the usefulness and comparability of net asset information and clarifies the meaning of legal enforceability. The Statement also specified accounting and financial reporting requirements for restricted net assets.
•
GASB Statement No. 47 Accounting for Termination Benefits provides accounting guidance for state and local governmental employers regarding benefits (such as early-retirement incentives and severance benefits) provided to employees that are terminated. The Statement requires recognition of the cost of involuntary termination benefits in the period in which a government becomes obligated to provide benefits to terminated employees. 58
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS The following is a summary of cash, cash equivalents, and investments, including restricted cash and investments with fiscal agents at June 30, 2006: Government-Wide Statement of Net Assets Governmental Business-Type Activities Activities Total Unrestricted assets: Cash and cash equivalents Investments
$
Total unrestricted assets Restricted assets: Cash and cash equivalents Investments with fiscal agents Total restricted assets Grand Total
41,279,889 -
$
$
86,916,553 -
$
Total
2,005,616 89,494
$
88,922,169 89,494
41,279,889
45,636,664
86,916,553
2,095,110
89,011,663
2,963,869 339,768
2,765,752 13,984,480
5,729,621 14,324,248
-
5,729,621 14,324,248
3,303,637 $
45,636,664 -
Statement of Fiduciary Net Assets
44,583,526
16,750,232 $
62,386,896
20,053,869 $
106,970,422
$
2,095,110
20,053,869 $
109,065,532
The City pools its available cash for investment purposes. Investment income from this pool is allocated to each fund based on its proportionate share of the pool. Cash and investments not pooled include bond proceeds held by fiscal agents, and other amounts required to be segregated by bond indentures or other regulations. Investment income from cash and investments with fiscal agents is credited directly to the related fund. Cash, cash equivalents, and investments consisted of the following at June 30, 2006: Cash and cash equivalents: Pooled cash deposits Outstanding checks Other deposits and cash held by City Certificates of deposit Money market mutual funds available for debt service Federal securities State local agency investment fund
$
Total cash and cash equivalents
1,418,548 (2,794,655) 45,301 596,000 6,018 52,090,817 37,560,140 88,922,169
Restricted cash and cash equivalents: Pooled cash deposits Other cash deposits Money market mutual funds held by fiscal agents State local agency investment fund
573,732 74,481 1,825,806 3,255,602
Total restricted cash and cash equivalents
5,729,621
Investments: Federal securities Federal securities held by fiscal agents Investment contracts held by fiscal agents
89,494 2,324,248 12,000,000
Total investments
14,413,742
Total cash, cash equivalents, and investments
59
$
109,065,532
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued A. Cash Deposits At June 30, 2006, the carrying amounts of the City’s cash deposits were ($681,319), net of outstanding checks in the amount of $2,794,655. Bank balances before reconciling items were $1,306,277. The total bank balance was collateralized or insured with securities held by the pledging financial institutions in the City’s name as discussed below. The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure city deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $100,000 by the Federal Deposit Insurance Corporation. B. Investments The investments made by the City treasurer are limited to those allowable under State statutes as incorporated into the City’s Investment Policy, dated May 31, 2006, which is more conservative than that allowed by State statute. The scope of the investment policy includes all activities of the City and the following reporting entities: ¾ ¾ ¾
City of Santa Cruz City of Santa Cruz Redevelopment Agency Santa Cruz Public Improvement Financing Corporation
Under provisions of this policy, the City is authorized to invest in the following types of investments: ¾ ¾ ¾ ¾ ¾ ¾
Money Market accounts deposited with a nationally or state-chartered bank. Bonds issued by the City. Purchases of this type shall not exceed five years to maturity. U.S. Treasury bills, notes, bonds, or certificates of indebtedness, or those securities backed by the full faith and credit of the U.S. Government with maturities not exceeding five years. Obligations, participations, or other instruments of, or issued by, a Federal Agency or a United States Government-Sponsored Enterprise with maturities not to exceed five years. Bankers’ acceptances with a term not to exceed 180 days maturity and 40 percent of the City’s portfolio. Nonnegotiable and nontransferable certificates of deposit issued by a nationally or statechartered bank, state or federal association, or by a state-licensed branch of a foreign bank. Purchases of these certificates of deposit may not exceed 30% of the City’s portfolio, and purchases in a single issuer in this category shall not exceed 5% of the fair value of the portfolio. 60
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued B. Investments, Continued State of California Local Agency Investment Fund as long as the total amount of City and Agency combined funds invested does not exceed the limit set by LAIF. ¾ Shares of beneficial interest issued by diversified management companies investing in authorized securities and obligations (e.g., money market mutual funds). ¾ Repurchase agreements with primary dealers of the Federal Reserve with specific terms and conditions. The market value of securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities and shall be valued daily by the third party custodial agent. Securities that can be pledged for collateral consist only of investments permitted within this policy with a maximum maturity of five years. Purchases shall not exceed 90 days to maturity and 15% of the fair value of the portfolio. ¾
Bond proceeds held by fiscal agents to be used only for specific capital outlay, payments of certain longterm debt and maintaining required reserves are invested in accordance with the requirements and restrictions of the City’s investment policy and as permitted by specific State statutes, applicable City ordinance or resolution, and bond indenture requirements. The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2006, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities: Structured Notes: debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options. Asset-Backed Securities: generally mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, Collateralized Mortgage Obligations) or credit card receivables. As of June 30, 2006, the City had $40,815,742 invested in LAIF accounts, which had invested 2.567% of the pool investments in structured notes and asset-backed securities. The City’s share of structured notes and asset-backed securities due to its holdings in LAIF amounted to approximately .960% of investments at June 30, 2006.
61
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued C. Risk Disclosures Interest Rate Risk - In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the weighted average maturity of its investment portfolio to two and-one half (2 ½) years or less. The City is in 100% compliance with this provision of the investment policy. At June 30, 2006, the City had the following investment maturities: Investment Type U.S. Treasuries
$
U.S. Agencies U.S. Treasury Money Market Mutual Funds
Fair Value
Maturity (Days)
8,211,931
290
45,610,035
443
1,831,824
1
596,000
1,545
Local Agency Investment Fund
40,815,742
152
Guaranteed Investment Contract
12,000,000
640
Certificates of Deposit
$
Total Fair Value
109,065,532
Portfolio Weighted Average Maturity (Days)
342
Portfolio Weighted Average Maturity (Years)
0.94
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations. Investments in callable bonds are investments that, although having clearly defined maturities, allow for the issuer to redeem or call such bonds earlier than their respective maturity dates. The investor must then replace the called bonds with investments that may have lower yield than the original bonds. As a result, the fair value of the callable bonds is highly sensitive to changes in interest rates. As of June 30, 2006, the City held $2,000,000 in callable securities, which amounted to approximately 2% of investments at June 30, 2006. The investment policy limits the purchase of callable U.S. Agency instruments to discreet calls and those that pay 100% of the principal at the redemption date. In addition, purchases of callable U.S. Agency instruments are not to exceed 30% of the value of the portfolio. The City is in compliance with these provisions of the investment policy. Credit Risk - State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. The City’s investments are rated as follows:
U.S. Agencies Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association U.S. Treasury Money Market Mutual Funds Blackrock Provident - Treasury Trust Fund Fidelity - Treasury Portfolio Goldman Sachs - Financial Square Treasury Obligations Goldman Sachs - Treasury Instruments Guaranteed Investment Contract Trinity Plus Funding Company External Pool State of California - Local Agency Investment Fund
62
Moody's
Standard & Poor's
Aaa Aaa Aaa Aaa
AAA AAA AAA AAA
Not Rated Aaa Aaa Aaa
AAAm AAA AAAm AAAm
Aaa
AAA
Not Rated
Not Rated
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
2. CASH DEPOSITS AND INVESTMENTS, Continued C. Risk Disclosures, Continued The City’s investment policy requires that the management company of mutual funds must have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations. The investment in Blackrock Provident U.S. Treasury Money Market Mutual Fund is rated by only one nationally recognized statistical rating organization. Blackrock Provident U.S. Treasury Money Market Mutual Fund is approved by the National Association of Investors Corporation. Concentration of Credit Risk - The City’s investment policy states that not more than 25% of the portfolio shall be invested in any one entity or any one instrument to protect the City from concentration of credit risk, with the following exceptions: U.S. Treasury Obligations and the external investment pool (State of California – Local Agency Investment Fund). In addition, purchases of mutual funds must not exceed 20% of the value of the portfolio. Purchases in a single mutual fund may not exceed 10% of the value of the portfolio. The City is in compliance with these provisions of the investment policy. The following chart presents investments in any one issuer (other than U.S. Treasury securities and external investment pools) that represent 5% or more of total investments at June 30, 2006: Investment Type
Amount Invested
Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association Guaranteed Investment Contract Total
Percentage of Investments
$
7,337,037 13,656,534 11,495,765 13,120,699 12,000,000
6.69% 12.44% 10.47% 11.95% 10.93%
$
57,610,035
52.48%
The following chart presents the City’s investments in money market mutual funds by issuer at June 30, 2006: U.S. Treasury Money Market Mutual Funds
Amount Invested
Blackrock Provident - Treasury Trust Fund Fidelity - Treasury Portfolio Goldman Sachs - Treasury Only Goldman Sachs - Financial Square Treasury Obligations Total
Percentage of Investments
$
75,501 108,175 429,292 1,218,856
0.07% 0.10% 0.39% 1.11%
$
1,831,824
1.67%
Custodial Credit Risk - For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Of the City’s total cash and investment balance at June 30, 2006, $14,324,248 is held by fiscal agents, not in the name of the City, and invested as follows: $12,000,000 in a guaranteed investment contract and $2,324,248 in federal agency securities.
63
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
3. RECEIVABLES Government-Wide Statements The following is a summary of receivables net of allowances for uncollectible amounts at June 30, 2006: Government-Wide Statement of Net Assets
Interest receivable
Governmental
Business-Type
Activities
Activities
$
Taxes receivable Accounts receivable, net
682,729
$
Statement of Fiduciary
Total
950,933
$
1,633,662
Net Assets $
Total
19,243
3,936,698
-
3,936,698
563,684
$
1,652,905 4,500,382
959,308
5,130,015
6,089,323
527,368
6,616,691
Due from other governments
1,389,967
676,898
2,066,865
16,467
2,083,332
Notes receivable
5,074,241
427,020
5,501,261
-
5,501,261
Loans receivable
1,301,012
-
1,301,012
-
1,301,012
-
17,780,484
17,780,484
-
17,780,484
Intergovernmental receivable Total
$
13,343,955
$
24,965,350
$
38,309,305
$
1,126,762
$
39,436,067
Fund Financial Statements At June 30, 2006, the Fund Financial Statements show the following notes, loans and intergovernmental receivables: Notes Receivable - in the General Fund of $330,775 (net of an allowance for uncollectible amounts of $368,899) consist of a note from Neary Lagoon Partners in the amount of $78,800; a promissory note from Santa Cruz Shaffer Road Investors for housing developments in the amount of $134,575; a loan to the River Street Shelter for repairs in the amount of $16,500; a loan to First Night Santa Cruz for $20,000; Harvey West Assessment District notes in the amount of $91,915; employee computer loans in the amount of $17,784; various notes for housing improvement activities in the Housing In-Lieu program of $270,099; and $70,000 in loans to two borrowers participating in the Accessory Dwelling Unit Loan Program. Some notes are secured by a deed of trust. The employee computer loan program provides two-year loans to employees with a simple interest rate of 5%, payable through payroll deductions. The Redevelopment Agency Fund notes receivable balance of $3,714,571 (net of an allowance of $303,548) represents loans for low/moderate income housing projects. There are two types of loan repayment for these notes: due upon sale or transfer and lump sum payment at maturity. Interest rates range from 0% to 7%. The notes are all secured by a deed of trust. The $26,824 note receivable in the Public Works special revenue fund pertains to traffic impact fees owed to the City by an individual (“promissor”) who renovated residential property for commercial purposes. Any default results in the forfeiture of building permits issued to the promissor. Notes receivable in the Parks and Recreation special revenue fund of $368,848 pertain to a promissory note for housing developments – development impact fees. There is no interest on this promissory note. Loan repayment is deferred to a future date when monthly repayment will begin. The note is secured by a personal guarantee from Santa Cruz Shaffer Road Investors, LP, a California limited partnership. 64
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
3. RECEIVABLES, Continued Fund Financial Statements, Continued The notes receivable in the Housing and Community Development special revenue fund of $633,223 (net of an allowance of $1,344,517) consist of loans for buildings damaged in the 1989 earthquake. There are two types of loan repayments: monthly repayment and deferred to a future date when monthly repayment will begin. The interest rate on these notes is 3%. The notes are all secured by a deed of trust. Notes receivable in the enterprise funds are made up of three notes totaling $427,020. $25,962 is due from the County of Santa Cruz for its share of improvements to the City's wastewater treatment plant with annual payments scheduled through the year 2006 at an interest rate of 6.3%. This note is unsecured. The remaining two notes, both due from Neary Lagoon Partners, total $401,058 for water system connection fees pertaining to a low-moderate income housing project. These notes do not bear interest, and repayment is deferred until 2019. Loans Receivable - in other governmental funds of $1,301,012 (net of an allowance of $5,200,318) consist of loans for rehabilitation of low/moderate income housing. The loans are made with Federal funds from the Department of Housing and Urban Development (HUD). The City administers these funds for HUD. There are four types of loan repayment schedules: monthly installments, due upon sale or transfer, deferred to a future date when monthly repayment will begin, and no repayment if the property remains in use for low/moderate income housing for a specified time period. Interest rates range from 0% to 7%. The loans are all secured by a deed of trust on the property being rehabilitated. Intergovernmental Receivables - in the enterprise funds total $17,780,484 and are comprised of various amounts due from local, state, and federal governmental agencies. $499,905 of the total pertains to reimbursements resulting from various construction and improvement projects. The remaining $17,280,579 ($1,120,316 due within one year and $16,160,263 due in more than one year) is owed by the County of Santa Cruz for its share of a State Water Resources Board loan for wastewater treatment plant upgrades. Payments of interest and principal from the County of Santa Cruz are due in annual installments of $1,604,172, at an interest rate of 2.8%, with the final payment due August 1, 2018. Allowance for uncollectible notes and loans - When considerable uncertainty exists as to the collectibility of a note (as determined by management) due to the terms of the loan or other factors, it is offset by an allowance for uncollectible notes.
65
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
4. INTERFUND BALANCES AND TRANSACTIONS A. Government-Wide Financial Statements Long-Term Internal Balances At June 30, 2006, the City had the following long-term internal balances: Internal Balances Payable Business-Type Activities Internal Balances Receivable Governmental Activities
$
25,130
This balance consists of the net amount of long-term advances between the Redevelopment Agency Fund and the Water, Wastewater and Parking enterprise funds. The advances are due to fund various projects. Transfers The City had the following transfers for the year ending June 30, 2006: Transfers In Governmental Activities Transfers Out Business-Type Activities
$
67,517
Transfers are made from the enterprise funds to the General Capital Improvement capital projects fund to finance a share of project expenses or debt service costs for projects from which those funds receive benefit. B. Funds Financial Statements The City had the following due to/from other funds as of June 30, 2006: Due to Other Funds
Due from Other Funds General Total
Fund General Fund Non-Major Governmental Funds Internal Service Funds Total
66
$
68,559 11,678
$
68,559 11,678
$
80,237
$
80,237
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
4. INTERFUND BALANCES AND TRANSACTIONS B. Funds Financial Statements, Continued The outstanding balances between funds result mainly from a timing difference between when interest revenues are earned and when they are received for amounts which are transferred from the earning fund to the General Fund. Long-Term Advances
Advances from Other Funds
The City had the following long-term advances as of June 30, 2006: Advances to Other Funds General Fund Redevelopment Agency Fund Other Governmental Funds Parking Enterprise Fund Golf Course Enterprise Fund Total
Redevelopment Agency Fund
Water Enterprise Fund
Wastewater Enterprise Fund
Storm Water Enterprise Fund
Total
$
427,838 530,000 -
$
96,501 -
$
21,630 -
$
100,001 -
$
439,293
$
449,468 630,001 96,501 439,293
$
957,838
$
96,501
$
21,630
$
100,001
$
439,293
$
1,615,263
Long-term advances were made 1) from the General Fund and the Water enterprise fund to the Redevelopment Agency Fund to finance redevelopment projects, 2) from the General Fund to the Housing and Community Development special revenue fund as a deposit for matching grant funds, 3) from the Wastewater enterprise fund to the General Capital Improvement capital projects fund to finance a project at the City’s corporation yard, and 4) from the Redevelopment Agency Fund to the Parking enterprise fund to finance two parking capital improvements projects. 5) from the Storm Water Enterprise Fund to the Golf Course Enterprise Fund to cover current financial need. Transfers In/Out The City had the following transfers for the year ending June 30, 2006: Transfers In Non-Major Governmental Funds
General
Transfers Out
Fund General Fund Other Governmental Funds Enterprise Funds: Water Wastewater Refuse Parking Storm Water Golf Course Internal Service Funds Total
$
64,324
$
99,894
67
Total $
31,638 7,541 14,908 6,388 6,360 682 -
35,570 $
19,509 674,337
$
761,363
19,509 738,661 31,638 7,541 14,908 6,388 6,360 682 35,570
$
861,257
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
4. INTERFUND BALANCES AND TRANSACTIONS, Continued B. Funds Financial Statements, Continued Transfers In/Out, Continued Transfers are used to 1) move interest revenues from the earning fund to the General Fund, 2) move revenues from the General Fund and other funds to the General Capital Improvement capital projects fund for financing various capital projects, and 3) to move unrestricted tax revenues from the General Capital Improvement capital projects fund to the General Fund as an operating subsidy.
5. CAPITAL ASSETS A. Government-Wide Financial Statements At June 30, 2006 the City’s capital assets consisted of the following: Governmental
Business-Type
Activities
Activities
Total
Capital Assets: Capital assets, not being depreciated: Land
$
Construction in progress Subtotal, capital assets, not being depreciated
50,452,567
$
11,931,526
$
62,384,093
5,108,592
10,436,904
15,545,496
55,561,159
22,368,430
77,929,589
Capital assets, being depreciated: Land improvements
5,393,352
3,956,018
9,349,370
167,322,095
180,436,253
347,758,348
Buildings
35,421,568
160,134,334
195,555,902
Machinery and equipment
10,279,605
20,026,950
30,306,555
Infrastructure
Lease improvements
724,114
70,000
794,114
1,056,070
555,258
1,611,328
Subtotal, capital assets, being depreciated
220,196,804
365,178,813
585,375,617
Total capital assets
275,757,963
387,547,243
663,305,206
Software
Less accumulated depreciation: Land improvements
(1,394,671)
Infrastructure
(675,258)
(2,069,929)
(102,361,142)
(73,818,113)
(176,179,255)
Buildings
(8,950,969)
(52,271,065)
(61,222,034)
Machinery and equipment
(7,210,260)
(10,573,668)
(17,783,928)
Lease improvements
(296,913)
(11,434)
(308,347)
Software
(808,382)
(334,441)
(1,142,823)
(121,022,337)
(137,683,979)
(258,706,316)
Total accumulated depreciation Total capital assets, net
$
68
154,735,626
$
249,863,264
$
404,598,890
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
5. CAPITAL ASSETS, Continued A. Government-Wide Financial Statements, Continued The following is a summary of capital assets for governmental activities:
Balance
Balance
July 1, 2005
Additions
Deletions
June 30, 2006
Governmental Activities: Capital assets, not being depreciated: Land
$
Construction in progress
44,188,313
$
6,264,254
$
-
$
50,452,567
2,519,948
3,089,359
(500,715)
5,108,592
46,708,261
9,353,613
(500,715)
55,561,159
5,290,639
102,713
-
5,393,352
167,207,541
114,554
-
167,322,095
-
35,421,568
Subtotal, capital assets, not being depreciated Capital assets, being depreciated: Land improvements Infrastructure Buildings
35,421,568
-
Machinery and equipment
10,156,196
485,231
Lease improvements
(361,822)
10,279,605
724,114
-
-
724,114
1,056,070
-
-
1,056,070
being depreciated
219,856,128
702,498
(361,822)
220,196,804
Total capital assets
266,564,389
10,056,111
(862,537)
275,757,963
Software Subtotal, capital assets,
Less accumulated depreciation: Land improvements
(1,110,161)
(284,510)
-
(1,394,671)
(97,782,746)
(4,578,396)
-
(102,361,142)
Buildings
(8,183,899)
(767,070)
-
(8,950,969)
Machinery and equipment
(6,841,294)
(729,850)
360,884
(7,210,260)
Infrastructure
Lease improvements
(222,999)
(73,914)
-
(296,913)
Software
(664,427)
(143,955)
-
(808,382)
(114,805,526)
(6,577,695)
360,884
(121,022,337)
Total accumulated depreciation Total capital assets, net
$
151,758,863
69
$
3,478,416
$
(501,653)
$
154,735,626
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
5. CAPITAL ASSETS, Continued A. Government-Wide Financial Statements, Continued Depreciation expense of the governmental activities for the year ended June 30, 2006 was $6,577,695 and was distributed among City departments as follows: General government: City Council City Clerk Human Resources Finance Non-Departmental Internal service funds
$
Total general government
6,780 10,156 23,758 202,924 157,877 85,599 487,094
Public safety: Police Fire
386,069 270,115
Total public safety
656,184
Parks and Recreation Library Public Works Planning and Community Development Redevelopment
2,105,325 26,800 3,214,844 12,734 74,714
Total depreciation expense
$
6,577,695
The following is a summary of capital assets for business-type activities: Balance July 1, 2005
Additions
Deletions
Balance June 30, 2006
Business-type Activities: Capital assets, not being depreciated: Land Construction in process Subtotal, capital assets, not being depreciated
$
11,891,526 13,362,141
$
40,000 2,462,038
$
(5,387,275)
$
11,931,526 10,436,904
25,253,667
2,502,038
(5,387,275)
22,368,430
1,510,635 171,294,779 159,491,728 19,382,706 70,000 555,258
2,445,383 9,177,694 642,606 2,147,939 -
(36,220) (1,503,695) -
3,956,018 180,436,253 160,134,334 20,026,950 70,000 555,258
Subtotal, capital assets, being depreciated
352,305,106
14,413,622
(1,539,915)
365,178,813
Total capital assets
377,558,773
16,915,660
(6,927,190)
387,547,243
(502,764) (69,781,307) (48,757,886) (10,002,160) (8,634) (223,389)
(172,494) (4,073,032) (3,513,179) (1,918,739) (2,800) (111,052)
36,226 1,347,231 -
(675,258) (73,818,113) (52,271,065) (10,573,668) (11,434) (334,441)
Capital assets, being depreciated: Land improvements Infrastructure Buildings Machinery and equipment Lease improvements Software
Less accumulated depreciation: Land improvements Infrastructure Buildings Machinery and equipment Lease improvements Software Total accumulated depreciation Total capital assets, net
(129,276,140) $ 248,282,633
70
(9,791,296) $
7,124,364
1,383,457 $
(5,543,733)
(137,683,979) $ 249,863,264
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
5. CAPITAL ASSETS, Continued B. Funds Financial Statements Business-type activities depreciation expense for the year ended June 30, 2006 is as follows: Water
$
1,649,080
Wastewater
4,267,556
Refuse
1,896,004
Parking
489,528
Storm Water
1,317,062
Golf Course
172,066
Total depreciation expense
$
9,791,296
The funds financial statements do not present general government capital assets consequently, they are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets.
6. LONG-TERM DEBT A. Governmental Activities Long-Term Debt Classification
Compensated absences Claims and judgments
Balance
Accreted
July 1, 2005
Interest
$
2,098,095
$
Additions -
$
10,240
Amount
Amount
Balance
Due Within
Due in More
Retirements
June 30, 2006
One Year
Than One Year
$
$
-
2,108,335
$
1,405,557
$
702,778
10,719,455
-
456,172
(168,337)
11,007,290
3,039,471
7,967,819
Certificates of participation
4,377,108
-
-
(137,985)
4,239,123
142,984
4,096,139
General obligation bonds
7,183,381
120,310
-
(177,616)
7,126,075
185,577
6,940,498
Notes payable
1,334,942
-
3,100,000
(229,916)
4,205,026
292,463
3,912,563
Tax allocation bonds payable
5,245,000
-
-
(120,000)
5,125,000
120,000
5,005,000
Capital lease obligations
1,766,635
-
-
(518,722)
1,247,913
282,285
965,628
Other long-term liabilities
1,029,804
-
18,900
(103,868)
944,836
95,746
849,090
3,585,312
$ (1,456,444)
$ 36,003,598
Total
$ 33,754,420
$
120,310
$
$
5,564,083
$
30,439,515
Compensated absences and Claims and judgments As shown in the table above, the total amount outstanding at June 30, 2006 was $2,108,335 for compensated absences and $11,007,290 for claims and judgments. In prior years, compensated absences have been liquidated by the general fund. Claims and judgments are paid by the separate internal service funds for each liability.
71
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Certificates of Participation Certificates of Participation payable at June 30, 2006, are comprised of the following individual issues: Redevelopment Agency certificates of participation are part of the $2,080,000 Golf and Redevelopment Agency Certificates described under enterprise debt. The outstanding balance relating to the Agency at June 30, 2006 was $229,123. The Agency amount due within one year is $52,984 and amount due in more than one year is $176,139. For more information refer to the City of Santa Cruz Redevelopment Agency Basic Financial Statements. The City issued certificates in April 2001, in the amount of $4,415,000, to be used for the Civic Center Improvement Project. The certificates provide funds to finance the acquisition, construction and improvement of the project. The obligation of the City to make the lease payments does not constitute a debt of the City or the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State or any political subdivision thereof is obligated to levy or pledge any form of taxation. Annual payments are $75,000 - $270,000. The certificates bear interest at 4.6% - 5% and are payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2001. Principal is payable annually on April 1 through the year 2031. The balance outstanding at June 30, 2006 was $4,010,000. The amount due within one year is $90,000 and amount due in more than one year is $3,920,000. The annual debt service requirements on the certificates of participation at June 30, 2006, were as follows: For the Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2031 Total
Principal $
$
Interest
142,984 150,849 153,713 161,577 105,000 600,000 750,000 955,000 1,220,000 4,239,123
$
$
72
204,707 198,448 191,844 185,052 177,835 812,125 658,315 452,750 189,250 3,070,326
Total $
$
347,691 349,297 345,557 346,629 282,835 1,412,125 1,408,315 1,407,750 1,409,250 7,309,449
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued General Obligation Bonds In March 1999, the City issued $6,998,473 in general obligation bonds. The proceeds were used to upgrade fire stations, acquire open space property, and construct a community park and a fire administration facility. Annual payments ranging from $142,625 to $354,010 began September 1, 2000, and continue through September 1, 2029; interest ranges from 3.5% to 8.0%. The bonds are subject to early redemption at the option of the City beginning in 2008. The bonds are secured by and will be paid with annual ad valorem tax levies on all property subject to taxation within the City. The bonds were issued in two series. Series A consisted of $4,500,000 of general obligation bonds, and Series B consisted of $2,498,473 of general obligation bonds - capital appreciation bonds. During fiscal year ended June 30, 2006, $177,616 principal payments were made on the bonds. The balance outstanding of Series A bonds at June 30, 2006 was $4,110,000. The carrying value of the Series B bonds was increased to $3,016,075 in order to reflect the accreted interest due at June 30, 2006. The total balance outstanding at June 30, 2006 was $7,126,075. The annual debt service requirements on the general obligation bonds at June 30, 2006, were as follows: For the Year Ending June 30, 2007
Principal $
Interest
185,577
$
Total
229,873
$
415,450
2008
193,004
233,546
426,550
2009
199,781
237,617
437,398
2010
205,937
241,998
447,935
2011
208,582
244,570
453,152
2012-2016
1,115,553
1,291,607
2,407,160
2017-2021
1,266,608
1,396,378
2,662,986
2022-2026
1,455,681
1,480,569
2,936,250
2027-2030
1,358,082
1,205,417
2,563,499
Sub-total
6,188,805
6,561,575
12,750,380
937,270
-
937,270
Accreted Interest Total
$
7,126,075
$
73
6,561,575
$
13,687,650
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Notes Payable In July 2001, the Redevelopment Agency received HELP Loan funds, from the State of California, to be used to finance the acquisition, development, demolition of existing structures, and the construction of a multifamily rental apartment complex in the Beach Target Area. There is no amortization schedule for this note. The proceeds for the note are to be repaid by July 2011 with an interest rate of 3%. The balance outstanding at June 30, 2006, was $1,105,026. In March 2006, the Redevelopment Agency received loan funds from Salz Leather, Inc., to be used to finance the acquisition of land. There is no amortization schedule for this note. The proceeds of the note are to be repaid by March 2009 with an interest rate of 5%. The balance outstanding at June 30, 2006 was $3,100,000. Tax Allocation Bonds In October 2004, The Redevelopment Agency issued $5,245,000 in tax allocation bonds. The proceeds were used, together with other funds, to redeem, on December 1, 2004, all of the Agency’s outstanding 1996 Merged Earthquake Recovery and Reconstruction Project Area Tax Allocation Refunding Bonds, in the amount of $2,505,000, and to raise additional funds for programs, projects and activities related to the Redevelopment Project. Annual principal payments of $120,000 - $305,000 will be made through October, 2031; interest ranges from 2.50% to 4.625%. The 2004 Tax Allocation Bonds will be secured by a pledge of and first lien of the tax increment revenues derived from the Redevelopment Project, net of certain amounts which are payable to other taxing agencies. The balance outstanding at June 30, 2006 was $5,125,000. The annual debt service requirements on the tax allocation bonds at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2031 2032
$
120,000 125,000 130,000 130,000 135,000 750,000 905,000 1,115,000 1,395,000 320,000
$
206,016 202,954 199,766 196,516 192,866 891,759 734,053 522,792 240,820 7,400
$
326,016 327,954 329,766 326,516 327,866 1,641,759 1,639,053 1,637,792 1,635,820 327,400
Total
$
5,125,000
$
3,394,942
$
8,519,942
74
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Lease Obligations In December 1998, the City acquired a new telecommunications system under a capital lease agreement payable in semi-annual installments of $87,706 through December 2005. The interest rate is 4.85%. This lease has been allocated to the General Fund, all enterprise funds, the Equipment Services Internal Service Fund, and the Agency. The lease has been fully paid-off as of June 30, 2006. In August 1999, the City acquired a new information technology system under a capital lease agreement payable in semi-annual installments of $138,444 through August 2005 with an interest rate of 5%. The lease has been allocated to the General Fund, the Water, Wastewater and Refuse enterprise funds, and the Agency. The lease has been fully paid-off as of June 30, 2006. In August 2001, the City acquired miscellaneous vehicles, equipment and computer software under a capital lease agreement payable in semi-annual installments of $331,597 though August 2006, with an interest rate of 4.46%. This lease has been allocated to the General Fund, the Water, Wastewater, Refuse and Parking enterprise funds, and the Agency. The balance outstanding at June 30, 2006 was $141,924. In June 2002, the City acquired land under a capital lease agreement with Zion’s First National Bank in the amount of $765,000. The agreement is payable in semi-annual installments of $61,362 through 2021, with a 4.88% interest rate through January 2007 and a variable interest rate thereafter. From January 2007 through January 2021, the interest is to be recomputed, for each interest period, based on 90% of the current Index Rate. The balance outstanding at June 30, 2006 was $642,113. In July 2004, the City entered into a five year capital lease agreement to obtain financing in the amount of $580,000 for the purchase of a seventy-five foot aerial fire truck to replace a 1979 Crown Telesquirt unit. The annual installment payment of $125,781 begins in August 2005 and ends in August 2009. Interest is at the rate of 3.33% and the payments will be made from the General Fund. The balance outstanding at June 30, 2006 was $463,876. The annual debt service requirements on the capital leases at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011 2012-2016 2017-20211
$
282,285 145,500 150,834 156,369 36,331 210,045 266,549
$
50,346 41,642 36,309 30,774 25,031 96,764 40,261
$
332,631 187,142 187,143 187,143 61,362 306,809 306,810
Total
$
1,247,913
$
321,127
$
1,569,040
75
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Other Long-Term Liabilities The Redevelopment Agency is obligated under three separate Owner Participation Agreements (OPA), for various portions of the $1,250,000 Chestnut Street Special Assessment District Debt. Under the first OPA the Agency owes $265,860 as of June 30, 2006. Under the second OPA, the Agency owes $31,690. Under a third OPA the Agency assumed responsibility for an additional 48.68% of the Special Assessment Debt contingent upon the availability of tax increment. The Agency is liable for principal in the amount of $647,286 and interest, currently estimated at $67,334. The total of $944,836 will be paid with annual installments through 2011, as follows: For the Year Ending June 30, 2007 2008 2009 2010 2011 2011-2015 Total
Principal $
$
Interest
95,746 154,632 166,757 176,009 188,134 163,558 944,836
$
$
48,733 40,353 31,633 22,177 12,261 1,606 156,763
Total $
$
144,479 194,985 198,390 198,186 200,395 165,164 1,101,599
Conduit Debt During the fiscal year 2003, the Agency issued variable rate demand multifamily housing revenue bonds to provide funding for loans made to Santa Cruz Shaffer Road Investors L.P., and 1010 Pacific Investors L.P. (both California limited partnerships). The revenue bonds were used to finance a portion of the costs of building a 206-unit multifamily residential development and for the rehabilitation and equipping of a 113-unit multifamily residential development within the city limits. The housing facilities are to be occupied by persons of low and very low income, to the extent required by federal tax law. The bonds were issued under a Trust Indenture, dated July 1, 2002 between the Agency, and Wells Fargo Bank, National Association, as trustee. For the Shaffer Road Apartments, the Agency issued 2002 Series A bonds and 2002 Series A-T in the amounts of $29,925,000 and $2,750,000 respectively. For the 1010 Pacific Avenue Apartments, 2002 Series B bonds in the amount of $21,650,000 were issued. The amount outstanding as of June 30, 2006 is $54,325,000. The bonds mature on August 15, 2035. The bonds and interest are limited obligations of the Agency, payable solely from the “trust estate” which is specifically assigned and pledged to such purposes to the extent provided in the Official Statements. The trust estate includes the Agency’s interest in the loans made to the developer, including rights to receive payments on the loans, and rights to certain bond proceeds and related revenues. The Official Statements contain more information regarding the trust estate.
76
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations A summary of long-term debt transactions of the City for the enterprise funds for the year ended June 30, 2006, is as follows:
Balance July 1, 2005 Compensated absences Landfill closure costs Certificates of participation Revenue bonds payable Notes payable Lease obligations Total
$
810,883 5,450,974 28,662,892 4,680,000 40,240,469 3,108,344
$ 82,953,562
Additions $
Retirements
300,433 23,265,000 1,298,193
$
$ 24,863,626
Balance June 30, 2006
Classification Amount Amount Due Within Due in More One Year then One Year
(59,289) (7,747,015) (4,680,000) (2,418,132) (1,261,185)
751,594 5,751,407 20,915,877 23,265,000 37,822,337 3,145,352
$
501,062 1,732,015 665,000 2,485,044 975,620
$
250,532 5,751,407 19,183,862 22,600,000 35,337,293 2,169,732
$ (16,165,621)
$ 91,651,567
$
6,358,741
$ 85,292,826
Compensated absences As shown in the table above, the total amount outstanding at June 30, 2006 was $751,594 for compensated absences. In prior years, compensated absences have been liquidated primarily by the enterprise funds. Landfill closure costs As shown in the table above, the total amount outstanding at June 30, 2006 was $5,751,407 for landfill closure costs. Refer to Note 8 for landfill closure details. Certificates of Participation Certificates of Participation payable at June 30, 2006, are comprised of the following individual issues: Santa Cruz Golf and Redevelopment Agency Certificates, issued in November, 1998, in the amount of $2,080,000, was used to refinance an issue used for improvements to the City's golf course and projects within the City's redevelopment plan areas. Annual payments of $125,000 to $215,000 will be made through May 2010; interest ranges from 3.5% to 4.25%. Annual debt service is covered by lease payments made by the City and secured by covenants made by the City in a lease with the Corporation. The balance outstanding relating to the Golf Course fund at June 30, 2006, was $570,877. Santa Cruz Parking Certificates issued in November 1998, in the amount of $7,955,000, were used for the construction of a second parking structure in the downtown area. The certificates are a liability of the Parking Enterprise Fund. Annual payments are $155,000 - $445,000. The certificates bear interest at 3.5% to 4.9%. Interest is payable semi-annually on May 1 and November 1 and principal is payable annually on May 1 through the year 2019. The balance outstanding at June 30, 2006, was $6,345,000.
77
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Certificates of Participation, Continued Santa Cruz Storm Water Certificates, issued in October 1999, in the amount of $6,665,000 was issued to finance the City’s share of the San Lorenzo River Flood control and Beautification Project and to repay the Wastewater Enterprise Fund for earlier loans to rehabilitate and retrofit bridges across the San Lorenzo River. Annual payment of $105,000 to $250,000 will be made through October 2019; interest ranges from 4.0% to 5.6%. This has been refinance by the 2005 Storm Water Revenue Refunding bonds. The balance outstanding at June 30, 2006, was zero. Santa Cruz Refuse Certificates, issued in October 1999, in amount of $4,345,000, were issued to repay the Wastewater Enterprise Fund for earlier loans to construct a tunnel at the City’s landfill and a leachate line from the landfill to the City’s sewer treatment plant. Annual payments of $100,000 to $245,000 will be made through October 2020; interest ranges from 4.0% to 5.625%. The balance outstanding at June 30, 2006, was $3,705,000. Santa Cruz Refuse Certificates issued in March 2001, in the amount of $7,500,000, were used in the purchase of certain property and improvements, and to finance the acquisition, construction and improvement of the project. The installment payments are payable solely from and secured by a first pledge of certain revenues of the City’s Refuse Enterprise Fund. Annual payments are $45,000 to $720,000. The certificates bear interest at 3.5% to 4.875%. Interest represented by the certificates will be payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2001. Principal is payable annually on October 1 through the year 2021. The certificates are subject to optional and mandatory prepayment. The balance outstanding at June 30, 2006, was $5,615,000. Santa Cruz Refuse Certificates, issued in May 2004, in the amount of $1,590,000 was used to refinance the Santa Cruz Landfill Certificates issued in 1993. Annual payments of $495,000 to $545,000 will be made through 2008: Interest ranges from 4.0 % to 5.375%. The City is obligated, subject to abatement, under the Agreement to pay the certificate payments from any source of legally available funds. The City is currently liable and may become liable on other obligations payable from general revenues, some of which may have priority over the lease payments. The balance outstanding relating to the Refuse Fund at June 30, 2006, was $1,070,000. Santa Cruz Golf Agency Certificates issued in May 2004, in the amount of $3,700,000 was used to finance the acquisition and construction of improvements to the DeLaveaga Golf Course. Annual payments of $ 90,000 to $ 260,000 will be made through 2029; interest ranges from 4.0% to 5.375%. The City is obligated, subject to abatement, under the Agreement to pay the certificate payments from any source of legally available funds. The City is currently liable and may become liable on other obligations payable from general revenues, some of which may have priority over the lease payments. The balance outstanding relating to the Golf Course Fund at June 30, 2006 was $3,610,000.
78
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Certificates of Participation, Continued The annual debt service requirements on the certificates of participation at June 30, 2006, were as follows: For the Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2030 Total
Principal $
$
Interest $
1,732,015 1,799,151 1,306,287 823,424 670,000 3,805,000 4,855,000 4,320,000 1,605,000 20,915,877
$
974,620 904,064 830,535 786,839 751,332 3,274,930 2,243,012 643,586 146,374 10,555,292
Total $
$
2,706,635 2,703,215 2,136,822 1,610,263 1,421,332 7,079,930 7,098,012 4,963,586 1,751,374 31,471,169
Annual principal and interest requirements for the certificates of participation are apportioned to the various funds based on the percentage share of certificate proceeds. Revenue Bonds Payable 2005 Waste Water Revenue Refunding Bonds, issued in November 2005, in the amount of $4,715,000 was used to refinance the Series B Sewer Revenue Bonds issued in February 1994. Annual payments of $200,000 to $350,000 will be made through November 2023; interest ranges from 3.0% to 4.50%. Annual debt service is payable solely from and secured by a lien on net revenues of the sewer system. The balance outstanding at June 30, 2006, was $4,715,000. 2005 Storm Water Revenue Refunding Bonds, issued in September 2005, in the amount of $6,100,000 was used to refinance the Santa Cruz Storm Water Certificates issued in October 1999. Annual payments of $160,000 to $385,000 will be made through October 2029; interest ranges from 3.0% to 4.375%. The bonds are special obligations of the City payable solely from the revenues received by the City from the ownership and operation of the Storm Water Enterprise. All revenues are irrevocably pledged to the payment of the bonds. The balance outstanding at June 30, 2006, was $6,100,000. The 2006 Water Revenue Bonds issued in May 2006, in the amount of $12,450,000 was used to finance construction of a new transmission main connecting the Graham Hill Water Treatment Plant to the Bay Street Reservoir. Annual payments of $220,000 to $555,000 will be made through March 2036; interest ranges from 4.0% to 4.625%. The bonds are special obligations of the City payable from the Net Revenues received by the City from the ownership and operation of the City’s Water System. The balance outstanding at June 30, 2006, was $12,450,000.
79
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Revenue Bonds Payable, Continued The annual debt service requirements on the revenue bonds at June 30, 2006, were as follows: Ending June 30,
Principal
2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-20226 2027-2031 2032-2037
$
Total
$
Interest
665,000 590,000 615,000 635,000 660,000 3,645,000 4,385,000 4,645,000 4,105,000 3,320,000 23,265,000
$
$
871,358 939,455 917,605 895,830 874,017 3,998,114 3,215,982 2,212,753 1,283,281 482,529 15,690,924
Total $
$
1,536,358 1,529,455 1,532,605 1,530,830 1,534,017 7,643,114 7,600,982 6,857,753 5,388,281 3,802,529 38,955,924
Under conditions of the various revenue bond covenants, the Wastewater Enterprise Fund is required to provide adequate cash and maintain adequate revenues to cover future bond payments. Cash and investments set aside for this purpose is shown in the financial statements as restricted cash and investments. Under condition of the storm water revenue refunding bond covenant, the Storm Water Enterprise Fund is required to maintain adequate revenues to cover future bond payments. Under conditions of the water revenue bond covenant, the Water Enterprise Fund is required to maintain adequate revenues to cover future bond payments. Notes Payable State of California loans for the construction of a water main line north of the City. Proceeds for the note were received in September 1995, to be repaid in semi-annual installments of $46,679, including interest at 2.973%, through April 2016. This debt is recorded in the Water Enterprise Fund. The balance outstanding at June 30, 2006, was $767,774. State of California loans for the construction of secondary treatment improvements at the City's wastewater treatment plant. Loan proceeds were received as the City incurred project expenditures. Repayment began August 1999. Annual payments of $3,417,099, including interest at 2.8%, will be made through August 2018. This debt is recorded in the Wastewater Enterprise Fund. The balance outstanding at June 30, 2006, was $36,721,230.
80
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Notes Payable, Continued State of California loans for the construction of certain solid waste facilities to assist them to achieve or improve compliance with state minimum standards. Proceeds were received in March 2001, and the loan is to be repaid in $33,333 annual payments of principal through 2016. No interest is due on the principal balance of the loan outstanding. This debt is recorded in the Refuse Enterprise Fund. The balance outstanding at June 30, 2006, was $333,333. The annual debt service requirements on the notes at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011 2012-2016 2017-2021
$
2,485,044 2,553,788 2,624,583 2,697,247 2,771,988 15,010,137 9,679,550
$
1,050,498 981,752 910,958 838,295 763,553 2,621,150 547,043
$
3,535,542 3,535,540 3,535,541 3,535,542 3,535,541 17,631,287 10,226,593
Total
$
37,822,337
$
7,713,249
$
45,535,586
Lease Obligations The City leases equipment in the Refuse, Water, Wastewater, Parking, and Golf Course funds under various capital lease agreements payable in semi-annual and annual installments through August 2006 with interest rates ranging from 4.5% to 5.9%. In December 2003, the City entered into an equipment lease agreement in the amount of $656,182 payable in sixty months. The payments are due in ten consecutive semi-annual payments, and each payment includes 3.13% interest per year on the unpaid principal. In November 2002, the City entered into another equipment lease in the amount of $1,038,840 payable in sixty months. The payments are due in ten consecutive semi-annual payments, and each payment includes 3.26% interest per year on the unpaid balance. The combined Refuse, Water, Wastewater, Parking, and Golf Course funds balance outstanding at June 30, 2006, was $537,130. In December 1998, the City acquired a new telecommunications system under a capital lease agreement payable in semi-annual installments of $87,706 through December 2005 with an interest rate of 4.85%. This lease has been allocated to the General Fund, all enterprise funds, the Equipment Operations internal service fund, and the Agency. The lease has been paid-off as of June 30, 2006. In August 1999, the City acquired a new information technology system under a capital lease agreement payable in semi-annual installments of $114,770 through August 2005 with an interest rate of 5%. The lease has been allocated to the General Fund, the Water, Wastewater, and Refuse enterprise funds, and the Agency. The lease has been paid-off as of June 30, 2006. 81
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued B. Proprietary Fund Obligations, Continued Lease Obligations, Continued In August 2001, the City acquired miscellaneous vehicles, equipment and computer software under a capital lease agreement payable in semi-annual installments of $331,597 through August 2006, with an interest rate of 4.46%. This lease has been allocated to the General Fund, the Water, Wastewater, Refuse and Parking enterprise funds, and the agency. The balance outstanding at June 30, 2006 was $182,415. In January 2005, The City acquired four refuse trucks under a capital lease agreement payable in semiannual installments of $88,482 through February 2009 with an annual interest rate of 3.04%. This lease has been allocated to the Refuse fund. The balance outstanding at June 30, 2006, was $503,758. In April 2005, the City acquired twenty-five receptacles, three recycling trucks and a truck retrofit under a capital lease agreement payable in semi-annual installments of $85,636 through May 2010 with an annual interest rate of 3.70%. This lease has been allocated to the Refuse Fund. The balance outstanding at June 30, 2006, was $631,403. In May 2006, the City acquired one front loader and five side loader under a capital lease agreement payable in semi-annual installments of $135,798 though June 2011 with an annual interest rate of 4.16% allocated to the Refuse fund. The balance outstanding is $1,214,724. In December 2005, the City entered into a capital lease agreement for lease rental of two fairway mowers. The lease is payable in quarterly installments of $9,584 through December 2010 with an annual interest rate of 3.90%. The lease has been allocated to the Golf Course Fund. The Balance outstanding at June 30, 2006 was $75,922. The annual debt service requirements on the lease obligations at June 30, 2006, were as follows: For the Year Ending June 30,
Principal
Interest
Total
2007 2008 2009 2010 2011
$
1,088,453 753,527 593,244 437,389 272,739
$
106,277 $ $ 67,280 43,654 23,506 8,245
1,194,730 820,807.00 636,898.00 460,895.00 280,984.00
Total
$
3,145,352
$
248,962
3,394,314
82
$
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
6. LONG-TERM DEBT, Continued C. Defeased Debt On September 29, 2005, the City issued $6,100,000 in Storm Water Revenue Refunding Bonds. $6,100,000 (par value) of these revenue refunding bonds, with an interest rate of 4%, were used to advance refund $6,090,000 of outstanding 1999 Storm Water Enterprise Certificate of Participations with an average interest rate of 5.60%. The net proceeds of $6,008,439 (after payment of $313,585 in underwriting fees and other issuance costs),plus an additional $456,578 of 1999 Storm Water Enterprise Certificate of Participation Reserve Fund monies were deposited in an irrevocable trust with an agent and invested in a federal money market fund to provide for debt service payments on the 1999 certificates, which will be called on October 1, 2007. As a result, the 1999 Storm Water Certificate of Participation are considered to be defeased and the liability for those certificates has been removed from the Storm Water enterprise fund statement of net assets. The City completed an advance refunding to reduce its total debt service payments by $939,477, which resulted in an economic gain (difference between present value of the old and new debt service payments) of $462,440. On November 22, 2005, the City issued $4,715,000 in Wastewater Revenue Refunding Bonds. $4,715,000 (par value) of these revenue refunding bonds, with an interest rate of 4.10%, were used to advance refund $4,530,000 of outstanding 1994 Sewer Revenue Bonds with an average interest rate of 5.65%. The net proceeds of $4,518,464 (after payment of $197,000 in underwriting fees and other issuance costs), plus an additional $411,370 of 1994 Reserve Fund monies were deposited in an irrevocable trust with an agent and invested in a federal money market fund to provide for debt service payments on the 1994 revenue bonds, which will be called on December 22, 2005. As a result, the 1994 Wastewater revenue bonds are considered to be defeased and the liability for those bonds has been removed from the Wastewater enterprise fund statement of net assets. The City completed an advanced refunding to reduce its total debt service payments by $199,665, which resulted in an economic gain (difference between present value of the old and new debt service payments) of $645,380.
7. RISK MANAGEMENT AND SELF-INSURANCE The City has an established Risk Management Fund (an internal service fund) to account for a self-insurance program. Under this program, the City is completely self-insured for unemployment insurance, vision, and dental insurance claims. For the period ending June 30, 2006, the City was self-insured for workers' compensation up to $500,000 per occurrence and for general liability up to $1,000,000 per occurrence. Claims in excess of these amounts are insured. The City has contracted with outside administrators to administer the programs. There were no significant reductions in insurance coverage. Settlements have not exceeded insurance coverage in any of the past three fiscal years.
83
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
7. RISK MANAGEMENT AND SELF-INSURANCE, Continued In January 1997, the City joined the Authority for California Cities Excess Liability (ACCEL). The Authority for California Cities Excess Liability (ACCEL) is a joint powers authority organized under the provisions of Section 6500 et. seq. of the California Government code. ACCEL was founded in 1986 to provide mediumsized California cities self-funding for catastrophic losses. There are currently 12 members. ACCEL operates a liability program which is subject to an annual independent financial audit and biennial actuarial study. ACCEL is governed by a twelve member Board of Directors. Each member agency appoints a representative to the Board of Directors. Each member of the Board of Directors has a single vote for policy and charter changes. ACCEL is funded by its member participants and, at the discretion of its Board of Directors, may assess the members for additional premiums (in an unlimited amount) in the event ACCEL assets at any time are insufficient to discharge its liabilities. For the fiscal year 2005-2006, the deposit rate was $0.60 per one-hundred dollars of payroll. ACCEL selffunded $2,000,000 excess of a $1,000,000 member self-insured retention, and purchased a $20,000,000 commercial excess insurance policy, providing a total limit of $23,000,000 per occurrence. In addition to the $23,000,000 program limits, two members purchased optional limits of $10,000,000, and two members purchased another optional $10,000,000. Members were also charged administrative costs in equal amounts. The City of Santa Cruz elected to pay the $360,000 administrative fee from pooled deposits. ACCEL’s day-to-day operations are administered by Driver Alliant Insurance Services contracted by ACCEL to provide accounting, risk consulting, insurance brokerage, and program administration services. Driver’s responsibility also includes the administration of policies as set forth by the ACCEL Joint Powers Authority Agreement, By-laws, and by the Board of Directors. The authority provides coverage above each member’s self-insured retention (SIR), subject to aggregate limit. Historically, nine members have $500,000 SIRS and two members have $1,000,000 SIRS. ACCEL provided an optional coverage of $500,000 excess of $500,000 per occurrence through 1989-90, however this coverage is no longer available. Prior to July 1, 1990, ACCEL pooled losses incurred by its members up to $10,000,000. Effective July 1, 1990, ACCEL created a reinsurance pool within the $9,000,000 excess of $1,000,000 layer by purchasing $5,000,000 excess of $5,000,000 coverage. On July 1, 1997, ACCEL further reduced its exposure and purchased coverage of $17,000,000 excess of $3,000,000 coverage. Due to favorable market conditions, ACCEL purchased coverage of $19,000,000 excess of $1,000,000 effective July 1, 1998. Six members with SIR of $500,000 purchased additional coverage of $500,000 excess of $500,000 (including the City of Santa Cruz). As of July 1, 2000, nine members purchased insurance of $19,500,000 excess of $1,000,000. ACCEL was fully insured through June 30, 2003. As of July 1, 2003, the Authority purchased a reinsurance covering $20,000,000 excess of $2,000,000 and pooled losses in the layer $1,000,000 excess of $1,000,000. All members have SIR of $1,000,000. ACCEL members may participate in the purchase of other insurance, such as excess worker’s compensation and excess liability over $12 million per occurrence where risk is not transferred to the pool. Effective September 1, 2003, ACCEL purchased excess insurance for all losses in excess of $2,000,000 per occurrence. ACCEL does not administer claims for these programs; therefore, no revenue or expense is reflected in ACCEL’s financial statements. 84
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
7. RISK MANAGEMENT AND SELF-INSURANCE, Continued ACCEL has a retrospective rating plan whereby all premiums collected, together with related investment income earned, in excess of pooled losses and loss expenses for each program year will be returned to members beginning five years after the end of the program year. Losses and loss expenses are allocated to each member based on a weighted actual loss formula. At the June 2006 Board of Directors meeting, a retrospectively rated refund was made available for distribution to the members for program years 2 through 15 in the amount of $10,435,477. Members could elect to have all or a portion of their refund, or choose retain the funds in the respective program year in the member city. The City of Santa Cruz’ retrospective rated refund is $550,058. Summary audited financial information for ACCEL as of and for the year ended June 30, 2006, is as follows: Assets Cash and investments Other assets
$
22,951,718 467,313
Total assets
$
23,419,031
$
9,506,000 13,374,872 441,621
Liabilities and Net Assets Unpaid claims liability retrospectively rated refunds liability Other liabilities Total liabilities Net assets
23,322,493 96,538
Total liabilities and net assets
$
23,419,031
$
5,721,090 634,010 359,500 -
Revenues Premiums earned Investment income Administrative fees Retro Assessment Total revenues
6,714,600 Expenses
Loss provision and premiums paid General and administrative
$
Total expenses
6,340,757 343,936 6,684,693
Net income/ (loss) Net assets, beginning of year
29,907 66,631
Net assets, end of year
$
96,538
Complete financial statements for ACCEL can be obtained from Driver Alliant Insurance Services, 600 Montgomery Street, 9th Floor, San Francisco, CA 94111.
85
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
7. RISK MANAGEMENT AND SELF-INSURANCE, Continued Risk Management Fund revenues are primarily premium charges received from other funds and are planned to match expenses of insurance premiums for coverage in excess of self-insured amounts, estimated payments resulting from self-insurance programs, and operating expenses. Department charges are based on historical experience. Claims known to be payable and the estimated liability for the balance, based on a case-by-case review of all claims is recorded as claims payable. An additional estimate of the amount to be paid for claims incurred, but not reported, is also recorded as claims payable. Changes in the Risk Management Fund's claims liability amount for the years ended June 30, 2004 through 2006 are as follows: CLAIMS PAYABLE
June 30, 2004
$
Beginning
Claims
Balance
Incurred
11,007,290
$
7,217,089
Ending Payments $
Balance
(3,848,258)
$
14,376,121
June 30, 2005
14,376,121
3,350,942
(2,463,787)
15,263,276
June 30, 2006
10,719,455
2,686,917
(2,399,082)
11,007,290
The General Fund and Redevelopment Agency Fund typically have been used in prior years to liquidate the liability for claims and judgments.
8. LANDFILL CLOSURE AND POSTCLOSURE COSTS In accordance with requirements established by the California Integrated Waste Management Board, the City has recognized a portion of the landfill's closure and postclosure care (closure) costs. These cost estimates are based on the amount of landfill used to date. The total estimated costs are as follows: Total estimated closure costs Total estimated postclosure costs Total estimated closure and postclosure costs
$
4,393,999 8,524,739
$
12,918,738
The City has increased the landfill’s capacity through excavations and plans to continue excavating in future years to increase capacity. This effort has also increased the estimates of the closure and postclosure costs. At June 30, 2006, the estimated landfill closure cost liabilities of $5,751,407 and estimated annual landfill closure cost of $300,433 were calculated as follows: Total estimated closure and postclosure costs
$
Percent of used capacity to total capacity
12,918,738 44.52%
Estimate landfill closure and postclosure cost liability
5,751,422
Miscellaneous adjustments
(15)
Estimated total closure and postclosure costs liability
5,751,407
Previous closure costs accrued
5,450,974
Fiscal year 2006 expense for closure and postclosure costs
86
$
300,433
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
8. LANDFILL CLOSURE AND POSTCLOSURE COSTS, Continued The landfill has an estimated remaining capacity of 5,816,715 cubic yards and has a current projected closure date of January 2038. Based upon the requirements of the California Integrated Waste Management Board, the City set aside $166,558 to fund future closure and post closure costs for the year ended June 30, 2006. All cash is invested. The market value of the invested cash at June 30, 2006 was $3,172,777, and is available to provide for closure and postclosure costs. Total funds accumulated as of June 30, 2006, are comprised as follows: Closure
$
Postclosure
1,314,425 1,858,352
Total
$
3,172,777
The City has also estimated corrective action costs of $361,265 for a reasonable foreseeable landfill release. This amount is based on a March 1995 Hydrogeologic Summary for Support of Financial Assurance Mechanism report which is adjusted annually for inflation. Sufficient funds to cover these potential costs are available in the Refuse Fund’s unrestricted cash account. The estimated closure and corrective action costs are current estimates based on data provided by an independent consultant and are subject to changes in inflation, technological advancements, or regulatory changes. 9. RETIREMENT PLANS A. Pension Plan Plan Description The City contributes to the California Public Employees' Retirement System (PERS); an agent multiple-employer defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS’ annual financial report may be obtained from their Executive Office located at 400 P Street, Sacramento, CA 95814. Funding Policy City employees are required to contribute 9% for safety employees and 7% for all other employees of their annual covered salary. The City employer is required to contribute at an actuarially determined rate; the fiscal year 2006 rate is 13.835% for miscellaneous employees, 32.616% for police safety employees, and 38.181% for fire safety employees of annual covered payroll. There is a cost sharing agreement with miscellaneous employees whereby the employee is required to pay the employer share above 6.354%, a portion on a pre-tax basis and a portion on a post-tax basis. The contribution requirements of City employees and the City employer are established and may be amended by PERS. 87
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
9. RETIREMENT PLANS, Continued A. Pension Plan, Continued Annual Pension Cost For fiscal year 2006, the City’s annual pension cost of $6,330,030 for PERS was equal to the City’s required and actual contributions. The required contribution was determined as part of the June 30, 2004, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumption included (a) 7.75% investment rate of return (net of administrative expenses); (b) projected salary increases ranging from 3.25% to 14.45% depending on age, service, and type of employment, and (c) 2% per year cost-of-living adjustments. Both (a) and (b) included an inflation component of 3.0%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a three-year period. PERS unfunded actuarial accrued liability (or surplus) is being amortized as a level percentage of projected payroll on a closed basis. The amortization period at June 30, 2004 was 17 years for public safety police employees, 17 years for public safety fire employees, and 30 years for miscellaneous employees for prior and current service unfunded liability. Fiscal Year Ended June 30, 2004 June 30, 2005 June 30, 2006
Annual Pension Cost (APC) $
Percentage of APC Contributed
4,729,159 6,175,176 6,330,030
100% 100% 100%
Net Pension Obligation $
-
10. POST-EMPLOYMENT RETIREMENT BENEFITS The City pays a portion of its retiree’s health insurance premium. All part-time and full-time regular employees that meet certain requirements (continuous service with the City and minimum age) are eligible. As of June 30, 2006, there were 143 employees eligible. The benefit will be provided until the retiree becomes eligible for Medicare. The benefit is provided through the memorandum of understanding (MOU) the City has entered into with each bargaining unit. The retirees are paid monthly by the City per the amount specified in each MOU. The City paid $104,952 in post-employment retirement benefits to 65 participants for the year ended June 30, 2006.
11. COMMITMENTS AND CONTINGENCIES The City participates in a number of Federal assisted grant programs, of which the principal grants are the Disaster Assistance Program, Community Development Block Grant, HOME grant program, various Department of Justice and Department of Transportation grant programs. These programs are subject to program compliance audits by the grantors or their representatives. The amount, if any, of expenditures, which may be disallowed by the granting agencies upon audit, cannot be determined at this time although the City expects such amounts to be immaterial. 88
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
11. COMMITMENTS AND CONTINGENCIES, Continued The California Legislature granted tidal and submerged lands in trust to the City to be used for a number of statewide purposes in furtherance of navigation, commerce and fisheries. In accordance with this legislation, revenues derived from the Wharf are required to be used for purposes permitted under the grant statute. There are a number of lawsuits presently against the City. While the ultimate outcome of these lawsuits is not determinable, in the opinion of the City Attorney and City management, recovery from the City, if any, would not have a material effect on the accompanying financial statements. The following schedule summarizes the major contractual commitments of the City as of June 30, 2006: Major Commitments and Contracts for Professional Services: Utility Billing Software Implementation
$
Refuse Trucks Purchase Agreement
136,345 1,214,728
Belz Treatment Plant Rehabiliation Review
303,085 1,654,158
Total major professional services Major Commitments and Contracts for Capital Projects: Skate Park Construction Contract
988,359
Construction for Restroom Facility at Lighthouse Field State Beach
854,000
Design Services for Sewer System Master Plan
235,156
WWTF Slide Gate and Valves Project
209,000
RRF Design and Build Recycle Center
327,191
Loan from South County Housing Corp
1,160,000
North Coast Rehabilitation
452,998
Felton Booster Pump Station Upgrade
459,191
Bay St System Transmission Improvement Project
15,762,771
Santa Cruz County Kinsley St Improvement Project
202,868
Archaeological Service for Bay St Reservoir
225,216
Desal Pilot Study on Water Supply
3,149,044
Total major capital projects
24,025,794
Total Other Commitments
3,088,258 $
Total Commitments and Contracts
89
28,768,210
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
12. OPERATING LEASES The City is obligated under various operating leases for the use of land, buildings, office space and equipment. Lease expenditures, primarily for governmental funds, for the year ended June 30, 2006 were $203,332. Future minimum lease payments required by lease agreements that have initial or remaining noncancelable lease terms in excess of one year as of June 30, 2006 are as follows: Year Ending June 30, 2007
Balance $
44,256
2008
44,256
2009
44,256
2010
5,348
Total future minimum lease payments
$
138,116
The City leases (as lessor) office facilities, buildings, and wharf facilities under operating leases to various entities and individuals. Total revenues from these leases for the year ending June 30, 2006 were $847,881. The total cost of leased assets as of June 30, 2006 was $11,815,902, and the accumulated depreciation of those assets that are depreciable amounted to $1,463,896. Future estimated revenues from these leases are as follows: Year Ending June 30, 2007
Amount $
749,238
2008
608,666
2009
453,798
2010
367,850
2011
322,877
Future years
3,582,011
90
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
13. RESERVED AND DESIGNATED FUND BALANCES Fund balances at June 30, 2006, have been reserved and designated for the following purposes: Redevelopment
Special
Debt
Capital
General
Agency
Revenue
Service
Projects
Fund
Fund
Funds
Fund
Funds
Total
Reserved for: Encumbrances
$
Noncurrent receivables and advances Prepaid items Debt service Capital projects Low and moderate income housing Total reserved
672,177
$
1,425,393
$
799,354
$
-
$
2,072,847
$
4,969,771
3,215,332
3,872,408
1,934,535
-
-
9,022,275
168,498
120,000
2,440
-
-
290,938
-
64,935
-
-
-
64,935
15,000
-
-
-
-
15,000
256,106
856,624
-
-
-
1,112,730
4,327,113
6,339,360
2,736,329
-
2,072,847
15,475,649
Designated for: 1,361,990
-
-
-
-
1,361,990
Debt service
Accrued comp. absences
-
3,430,717
-
707,775
-
4,138,492
Capital projects
-
4,528,208
-
-
-
4,528,208
City public trust
5,332,947
5,332,947
-
-
-
-
Unemployment insurance
49,040
-
-
-
-
49,040
Housing in-lieu programs
205,315
-
-
-
-
205,315
-
76,221
Computer loan program
76,221
Kiosk maintenance Street trees
24,219 30,395
-
-
-
-
-
-
30,395
Equipment maintenance
40,866
-
-
-
-
40,866
Police programs
-
-
66,361
-
-
66,361
-
-
-
-
24,219
-
Highway projects
-
-
4,488
-
-
4,488
Housing
-
-
465,602
-
-
465,602
Public works programs
-
-
-
-
21,567
21,567
Public Art
-
-
-
-
71,074
71,074
Total designated
7,120,993
7,958,925
536,451
707,775
92,641
16,416,785
Unreserved, Undesignated
11,354,586
-
3,341,962
-
281,931
14,978,479
Total fund balances
$
22,802,692
$
14,298,285
91
$
6,614,742
$
707,775
$
2,447,419
$
46,870,913
City of Santa Cruz Notes to Basic Financial Statements, Continued For the year ended June 30, 2006
14. DEFICIT NET ASSETS The Risk Management internal service fund had deficit net assets of $4,256,330 as of June 30, 2006. This deficit is due to estimated liability insurance claims and workers’ compensation claims liabilities in excess of cash and other assets available in the fund. It is anticipated that this deficit will be made up in future years by increased contributions from other City funds. The City is working to establish an actuarially approved plan to fund the increased liability over a number of years. Net assets in the fund are designated for the following insurance activities: Net Assets Workers' compensation insurance
$
(4,829,809)
Liability insurance
152,232
Group health insurance
421,247 $
Total net assets
(4,256,330)
15. SUBSEQUENT EVENTS Measure H was approved by the City of Santa Cruz voters in November 2006 authorizing an increase of ¼% to the current sales tax rate, and making permanent an existing ¼% temporary sales tax rate (Measure F) that was scheduled to sunset in 2009. Effective April 1, 2007, the State Board of Equalization will show the Measure H approved sales tax increase of ½% for a total City sales tax rate of 8.50%. The increase is expected to generate an additional $2.4 million in annual City revenues.
92
REQUIRED SUPPLEMENTARY INFORMATION
93
City of Santa Cruz Required Supplementary Information For the year ended June 30, 2006
1. BUDGETARY INFORMATION An annual budget is adopted by the City Council no later than the first regular meeting in July for the fiscal year beginning July first. As part of the budget process, all City departments submit budget requests for the next fiscal year. These requests are reviewed, and a final City Manager recommended budget showing estimated revenues and expenditures of the City is prepared. This proposed budget is transmitted to the City Council and made available to the public for review. Study sessions and a public hearing are conducted before final adoption of the budget by the City Council. The City Manager is authorized to approve appropriation transfers within any department up to a specified amount; however, any new appropriation or appropriation transfer between departments requires approval by the City Council. Several supplemental appropriations were necessary during the year and are reflected in the budget amounts in the financial statements. Expenditures may not legally exceed appropriations at the department level. Under the City Charter, all unexpended appropriations shall lapse at the end of the fiscal year unless they are lawfully committed, or are required by law to be continuously appropriated from year to year. Lawfully committed amounts include amounts legally encumbered at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the governmental fund types. Encumbrances outstanding at year-end are reported as reservation of fund balances since they do not constitute expenditures or liabilities, and re-appropriations in the subsequent year provide authority to complete these transactions as expenditures. In addition, project-length (or non-lapsing) budgets are adopted for capital improvement and other projects, and grant-funded projects or programs that may not be completed within the fiscal year during which the budget appropriation for the project or program originates. Under these circumstances, the appropriation continues until project or program completion, or unless the appropriation is subsequently amended or rescinded by the City Council. In the Budgetary Comparison Schedules, the “Original Budget” column includes the final adopted budget amounts, re-appropriations for prior year encumbrances, and continuing appropriations for project-length budgets automatically carried over from prior years. The City Charter requires the City Council, upon recommendation of the City Manager and after providing sufficient funds to meet debt service and operating needs, to annually set aside in the enterprise funds an amount to be used for the acquisition and betterment of plant facilities. Such amounts, if any, would be shown in the financial statements as cash and investments held for betterment of plant facilities. No such funds were set aside during the year ended June 30, 2006.
94
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
1. BUDGETARY INFORMATION, Continued Budgets are adopted each year for all general, special revenue, debt service, and capital projects funds. These governmental fund budgets are prepared on a basis consistent with generally accepted accounting principles (GAAP), except in the following areas: ¾
Budgetary basis revenues include repayments of loan principal. Budgetary basis expenditures include loans made. On a GAAP basis both of these are considered as reclassifications of fund balance (between reserved and unreserved fund balance).
¾
GAAP basis revenues include the fair value adjustment to investment earnings. GAAP basis expenditures include compensated absences expense. Neither of these are included in the budgetary basis.
A reconciliation of differences between budgetary and GAAP revenues and expenditures follows the budget comparison schedules.
95
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96
BUDGETARY SCHEDULES
97
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006 Budgetary Comparison Schedule, General Fund Variance with Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Budget to GAAP Actual Amounts Differences
(GAAP Basis)
REVENUES: Taxes
$
35,534,911
$
37,418,532
$
39,495,863
$
2,077,331
$
-
$
39,495,863
Licenses and permits
680,650
680,650
615,448
(65,202)
-
615,448
Intergovernmental
658,250
1,221,766
1,073,997
(147,769)
-
1,073,997
External
7,041,866
7,129,866
7,485,166
355,300
-
7,485,166
Internal
2,974,352
2,975,780
2,844,775
(131,005)
-
2,844,775
Interagency
8,888,047
8,966,867
8,732,523
(234,344)
-
8,732,523
18,904,265
19,072,513
19,062,464
(10,049)
-
19,062,464
Fines and forfeitures
2,004,200
2,004,200
1,962,697
(41,503)
Use of money and property
2,411,321
2,412,509
2,595,824
183,315
151,500
163,447
216,721
53,274
60,345,097
62,973,617
65,023,014
2,049,397
Charges for services:
Subtotal charges for services
Other revenues Total revenues
-
1,962,697
(53,915)
2,541,909
-
216,721
(53,915)
64,969,099
EXPENDITURES: Current: General government
10,149,185
10,340,928
9,666,858
674,070
-
9,666,858
Public safety
27,306,800
26,874,378
26,837,330
37,048
-
26,837,330
Parks and recreation
11,249,212
10,956,820
9,402,529
1,554,291
-
9,402,529
Library
9,442,046
9,450,494
9,250,499
199,995
-
9,250,499
Public works
4,320,390
4,276,147
3,565,397
710,750
-
3,565,397
Community and economic development
2,697,524
3,112,197
1,000,492
2,111,705
-
1,000,492
845,752
1,048,192
1,566,695
(518,503)
-
1,566,695
453,416
1,076,040
765,851
310,189
-
765,851
289,252
289,252
204,928
84,324
-
204,928
48,277
48,277
48,264
13
-
48,264
66,801,854
67,472,725
62,308,843
5,163,882
-
62,308,843
(6,456,757)
(4,499,108)
2,714,171
7,213,279
Social services Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(53,915)
2,660,256
OTHER FINANCING SOURCES (USES): Proceeds from asset disposition Proceeds from long-term debt issued Loan principal recipts Transfers in Transfers out
25,000
25,000
25,256
256
-
25,256
-
-
-
-
-
-
431,767
431,767
-
(431,767)
-
-
1,130,188
1,130,188
99,894
(1,030,294)
-
99,894
(241,874) 1,345,081
Total other financing sources (uses) Net change in fund balances
(864,295)
(19,509)
844,786
-
(19,509)
722,660
105,641
(617,019)
-
105,641
(5,111,676)
(3,776,448)
2,819,812
6,596,260
8,180,104
7,981,589
15,163,949
7,182,360
(53,915)
2,765,897
FUND BALANCES: Beginning of the year End of year
$
3,068,428
$
4,205,141
98
$
17,983,761
$
13,778,620
20,036,795
4,872,846 $
4,818,931
$
22,802,692
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
General Fund Reconciliation of Net Changes in Fund Balances - Budgetary to GAAP Basis: Net Change in Fund Balances - Budgetary Basis
$
2,819,812
The amount reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances was different because: Unrealized gains and losses on investments, which are considered a component of investment income in the Statement of Revenues, Expenditures and Changes in Fund Balances, are not included as revenue on a budgetary basis. Net Change in Fund Balances - Statement of Revenues, Expenditures and Changes in Fund Balances
(53,915) $
2,765,897
$
17,983,761
Reconciliation of Fund Balances - Budgetary to GAAP Basis: Fund Balances - Ending - Budgetary Basis Cumulative effect of unrealized gains and losses on investments
(171,411)
Reserved and designated balances unavailable for appropriation
4,287,564
Designated for noncurrent component of compensated absences
702,778
Fund Balances - Ending - GAAP Basis
$
99
22,802,692
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
Budgetary Comparison Schedule, Redevelopment Agency Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Budget to GAAP Actual Amounts Differences
(GAAP Basis)
REVENUES: Tax increment
$
Use of money and property
9,106,875
$
344,683
Other revenues
$
10,323,206
$
1,216,331
344,683
512,254
167,571
200,285
147,053
(53,232)
9,540,558
9,651,843
10,982,513
89000
Total revenues
9,106,875
$
-
$
10,323,206
(40,731)
471,523
-
147,053
1,330,670
(40,731)
10,941,782
EXPENDITURES: Current: Community and economic development Capital outlay
8,033,978
10,644,328
6,978,325
3,666,003
-
6,978,325
3,079,900
7,582,687
6,282,979
1,299,708
-
6,282,979
2,773,948
2,780,349
2,728,577
51,772
(2,214,965)
513,612
391,446
421,531
409,555
11,976
-
409,555
-
-
-
-
-
-
14,279,272
21,428,895
16,399,436
4,965,711
(2,214,965)
14,184,471
(4,738,714)
(11,777,052)
(5,416,923)
6,296,381
2,174,234
(3,242,689)
Debt service: Principal Interest and fiscal charges Bond issuance costs Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): 9,000
9,000
3,123,322
3,114,322
(23,322)
-
-
-
-
-
-
58,425
58,425
-
(58,425)
-
-
Proceeds from long-term debt issued
-
-
-
-
-
-
Premiums on bonds sold
-
-
-
-
-
-
Payment to refunded bond escrow agent
-
-
-
-
-
-
67,425
67,425
3,123,322
3,055,897
(23,322)
3,100,000
9,352,278
Loan proceeds Long term advance proceeds Loan principal receipts
Total other financing sources (uses) Net change in fund balances
(4,671,289)
(11,709,627)
(2,293,601)
-
-
-
3,100,000
2,150,912
(142,689)
-
-
FUND BALANCES: Beginning of the year, as restated End of year
3,428,587 $
(1,242,702)
3,859,262 $
(7,850,365)
100
7,312,850
11,172,112 $
8,878,511
$
16,665,128
14,440,974
3,268,862 $
5,419,774
$
14,298,285
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
Redevelopment Agency Fund Reconciliation of Net Changes in Fund Balances - Budgetary to GAAP Basis: Net Change in Fund Balances - Budgetary Basis
$
(2,293,601)
The amount reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances was different because: Unrealized gains and losses on investments, which are considered a component of investment income in the Statement of Revenues, Expenditures and Changes in Fund Balances, are not included as revenue on a budgetary basis.
(40,731)
Proceeds of both short term loans and long term advances from the City are considered budgetary resources, but are not revenues on a GAAP basis.
(23,322)
The Agency budgets for both short term and long term loan and advance principal repayments to the City, but these payments are not considered expenditures on a GAAP basis. Net Change in Fund Balances - Statement of Revenues, Expenditures and Changes in Fund Balances
2,214,965 $
(142,689)
Reconciliation of Fund Balances - Budgetary to GAAP Basis: Fund Balances - Ending - Budgetary Basis
$
Cumulative effect of unrealized gains and losses on investments
8,878,511 (144,373)
Reserved balances unavailable for appropriation
5,564,147
Fund Balances - Ending - GAAP Basis
$
All funds are reserved or designated for debt service, capital projects, or low and moderate income housing.
101
14,298,285
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102
City of Santa Cruz Required Supplementary Information, Continued For the year ended June 30, 2006
PUBLIC EMPLOYEE RETIREMENT SYSTEM (PERS) SCHEDULE OF FUNDING PROGRESS Miscellaneous Employees (Overfunded) Unfunded
Actuarial
Entry Age
(Overfunded)
Liability as
Actuarial
Actuarial
Actuarial
Actuarial
Valuation
Value of
Accrued
Accrued
Funded
Covered
Covered
Date
Assets
Liability
Liability
Ratio
Payroll
Payroll
June 30, 2003
$
129,704,897
$
150,709,327
$
Percentage of
21,004,430
86.1%
35,526,589
59.1%
June 30, 2004
139,133,604
160,182,390
21,048,786
86.9%
$
33,778,451
62.3%
June 30, 2005
150,956,645
170,106,283
19,149,638
88.7%
32,905,030
58.2%
Police Safety Employees Unfunded (Overfunded) Unfunded
Actuarial
Entry Age
(Overfunded)
Liability as Percentage of
Actuarial
Actuarial
Actuarial
Actuarial
Valuation
Value of
Accrued
Accrued
Funded
Covered
Covered
Date
Assets
Liability
Liability
Ratio
Payroll
Payroll
CalPERS Risk Pool Information (see comment below): June 30, 2003
692,831,816
83.8%
476,089,674
145.5%
June 30, 2004
$
4,424,586,846
3,577,742,166
$
5,383,921,942
4,270,573,982
$
959,335,096
82.2%
$
575,296,434
166.8%
June 30, 2005
5,295,150,375
6,367,049,264
1,071,898,889
83.2%
664,147,796
161.4%
Fire Safety Employees Unfunded (Overfunded) Unfunded
Actuarial
Entry Age
(Overfunded)
Liability as
Actuarial
Actuarial
Actuarial
Actuarial
Percentage of
Valuation
Value of
Accrued
Accrued
Funded
Covered
Covered
Date
Assets
Liability
Liability
Ratio
Payroll
Payroll
CalPERS Risk Pool Information (see comment below): June 30, 2003
692,831,816
83.8%
476,089,674
145.5%
June 30, 2004
$
3,577,742,166 4,424,586,846
$
5,383,921,942
4,270,573,982
$
959,335,096
82.2%
$
575,296,434
166.8%
June 30, 2005
5,295,150,375
6,367,049,264
1,071,898,889
83.2%
664,147,796
161.4%
Since the City has less than 100 active members in Fire and Police plans in at least one valuation since June 30, 2004, the City is required to participate in a risk pool. An actuarial valuation was performed with other participants within the same risk pool. Therefore, standalone information of the schedule of the funding progress for the City was not disclosed.
103
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104
SUPPLEMENTARY INFORMATION
105
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106
Non-Major Governmental Funds Special Revenue Funds: Police - Accounts for state and federal grants and other revenues restricted to be used for police programs. State Highway Funds - This fund is used to account for the City's apportionment of the State excise tax on gasoline and other related grants or receipts that are restricted for the planning, construction and maintenance of streets and roads. It is also used to account for a subvention of the State sales tax on gasoline (Traffic Congestion Relief Funds) that are restricted for street and highway maintenance, and rehabilitation and reconstruction of necessary associated facilities such as drainage and traffic control devices. Traffic Impact Fee Funds - This fund is used for capital improvements to mitigate traffic impacts generated by land development. The fee provides financial resources for improvements to transit stops, bike and pedestrian facilities, signal coordination, park and ride lots, and other alternative transportation sources impacted by development, and is levied on all Citywide projects requiring a building permit (residential remodels and limited expansions expected to generate less than five new trips per day are exempt). Parks and Recreation - Accounts for tax and fee revenues restricted for parks and recreation use. Housing and Community Development - Accounts for receipts and expenditures under the Housing and Community Development Act, which includes Community Development Block Grant funds and HOME program funds. It also is used to account for Red Cross housing reconstruction loan repayments and income and related expenditures for a City-owned rental property. Transportation Development Act Fund - This fund is used to account for receipts of State Transportation Development Act (TDA) funds restricted to be used for specialized or unmet transit needs. Acting as the public agency sponsor, the City contracts with non-profit agencies to meet these obligations. Debt Service Fund: General Obligation Bonds - This fund accounts for the debt service for a $7 million general obligation bond issue approved by voters in November 1998. Funds for payment of principal and interest on the bonds are generated by a property tax override assessment of $9.00 per $100,000 of assessed value. Capital Projects Fund: General Capital Improvement - This fund is used to account for capital improvements for which special projects funds have not been established. A portion of the City's transient occupancy tax receipts, combined with other funding sources, such as grants, provides funding for capital projects of general benefit, such as storm drain improvements, or improvements to public buildings.
107
City of Santa Cruz Combining Balance Sheet Non-Major Governmental Funds June 30, 2006
Special Revenue Housing and Police
State
Traffic
Parks and
Community
Highway
Impact Fee
Recreation
Development
ASSETS Cash and cash equivalents
$
Interest receivable Taxes receivable Accounts receivable - net
246,396
$
1,503,594
$
567,034
$
1,620,001
$
1,459,316
2,101
13,731
2,329
17,899
285,976
-
-
-
-
-
2,990
101,108
-
-
2,763
Due from other governments
-
127,754
-
-
95,948
Prepaid items
-
768
-
-
1,076
Restricted assets: Cash and cash equivalents
-
-
-
-
-
Investments
-
-
-
-
-
-
-
-
-
-
Notes receivable - net
-
-
26,824
368,848
633,223
Loans receivable - net
-
-
-
-
1,301,012
Total restricted assets
Total assets
$
251,487
$
1,746,955
$
$
105
$
57,013
$
596,187
$
-
$
2,006,748
$
1,531
$
3,779,314
LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Due to other funds
250
Intergovernmental payable Deferred revenue Advances from other funds Total liabilities
-
-
4,200
54,127 44,386
-
-
-
-
52
168,484
237,043
26,824
368,848
273,086
-
-
-
-
530,000
168,839
294,056
26,824
374,579
901,651
Fund Balances: Reserved
2,801
707,454
-
-
2,026,074
66,361
4,488
-
-
465,602
Special revenue funds
13,486
740,957
569,363
1,632,169
385,987
Capital projects funds
-
-
-
-
-
82,648
1,452,899
569,363
1,632,169
2,877,663
Unreserved, designated Unreserved, undesignated, reported in:
Total fund balances Total liabilities and fund balances
$
251,487
$
108
1,746,955
$
596,187
$
2,006,748
$
3,779,314
Debt Service
Capital Projects
Transportation
$
$
$
Total Other
Development
General
Capital
Governmental
Act
Obligation Bond
Improvement
Funds
-
$
675,566
$
1,384,811
$
7,456,718
-
5,764
23,841
351,641
-
26,446
589,088
615,534
-
-
24,267
131,128
-
-
890,219
1,113,921
-
-
-
1,844
-
-
5,035
5,035
-
-
277,519
277,519
-
-
282,554
282,554
-
-
-
-
1,028,895 -
1,301,012
-
$
707,776
$
3,194,780
$
12,283,247
-
$
1
$
402,687
$
515,464
-
$
General
-
19,723
68,559
-
-
-
52
-
-
224,950
1,299,235
-
-
100,001
630,001
-
1
747,361
2,513,311
-
-
2,072,847
4,809,176
-
707,775
92,641
1,336,867
-
-
-
3,341,962
-
-
281,931
281,931
-
707,775
2,447,419
9,769,936
-
$
707,776
$
3,194,780
$
12,283,247
109
City of Santa Cruz Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds For the year ended June 30, 2006
Housing and Police
State
Traffic
Parks and
Community
Highway
Impact Fee
Recreation
Development
REVENUES: Taxes
$
Intergovernmental
-
$
116,495
-
$
1,831,811
-
$
417,202
-
-
$
848,870
Charges for services
39,503
-
-
245,496
-
Fines and forfeitures
2,538
-
-
-
-
Use of money and property
6,606
29,089
2,453
51,818
70,799
-
5,280
575,718
-
9,228
165,142
1,866,180
578,171
714,516
928,897
Public safety
101,299
-
-
-
-
Public works
-
593,519
-
-
-
Transit
-
-
-
-
-
Other revenues Total revenues EXPENDITURES: Current:
Community and economic development
-
-
-
-
457,651
Social services
-
-
-
-
126,572
97,652
1,374,685
-
-
11,268
Capital outlay Debt service: Principal
-
-
-
-
-
Interest and fiscal charges
-
-
-
-
19,223
198,951
1,968,204
-
-
614,714
578,171
714,516
314,183
Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(33,809)
(102,024)
OTHER FINANCING SOURCES (USES): Proceeds from long-term debt issued
-
-
-
-
-
Transfers in
-
8,808
-
-
-
(644)
-
(8,808)
(677,437)
-
(644)
8,808
(8,808)
(677,437)
-
Transfers out Total other financing sources (uses) Net change in fund balances
(34,453)
(93,216)
569,363
37,079
314,183
-
1,595,090
2,563,480
FUND BALANCES: Beginning of year End of year
117,101 $
82,648
1,546,115 $
110
1,452,899
$
569,363
$
1,632,169
$
2,877,663
Debt Service
Capital Projects
Transportation
$
General
Total Other
Development
General
Capital
Governmental
Act
Obligation Bond
Improvement
Funds
-
$
624,214
$
542,683
$
-
1,256,775
$
2,216,660
1,200,850
4,622,240 284,999
-
-
-
-
-
-
2,538
-
13,499
46,463
220,727
-
-
95,925
686,151
624,214
556,182
2,600,013
8,033,315
-
-
-
101,299
-
-
-
593,519
624,214
-
-
624,214
-
-
-
457,651
-
-
-
126,572
-
-
3,389,354
4,872,959
-
177,616
253,621
431,237
-
228,068
216,407
463,698
624,214
405,684
3,859,382
7,671,149
-
150,498
(1,259,369)
362,166
-
-
100,000
100,000
-
-
752,555
761,363
-
-
(51,772)
(738,661)
-
-
800,783
122,702
-
150,498
(458,586)
484,868
-
557,277
-
$
707,775
2,906,005 $
2,447,419
9,285,068 $
9,769,936
111
City of Santa Cruz Schedule of Budget and Actual Revenues General Fund For the year ended June 30, 2006
Variance with Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
REVENUES: Taxes: Property Sales and use
$
10,459,158 11,318,723
$
10,627,228 11,173,723
$
11,586,222 11,738,917
$
958,994 565,194
Business license
798,000
773,000
777,068
Franchise
766,000
3,218,551
2,136,686
(1,081,865)
2,047,000
1,100,000
2,128,373
1,028,373
200,000
220,000
229,629
9,629
Transient occupancy Parking
4,068
Utility users
7,800,000
8,160,000
8,304,371
144,371
Admission
1,650,000
1,650,000
1,715,133
65,133
200,000
200,000
562,724
362,724
Property transfer Business improvement
180,000
180,000
200,708
20,708
Other taxes
116,030
116,030
116,032
2
35,534,911
37,418,532
39,495,863
2,077,331
636,400
636,400
570,829
44,250
44,250
44,619
680,650
680,650
615,448
Total taxes Licenses and permits: Construction permits Other licenses and permits Total licenses and permits
(65,571) 369 (65,202)
Intergovernmental revenues: 23,450
244,978
212,832
(32,146)
State
621,800
963,788
848,165
(115,623)
Local
13,000
13,000
13,000
-
658,250
1,221,766
1,073,997
(147,769)
Federal
Total intergovernmental revenues Charges for services: General government:
-
-
1,400
1,400
Management and support
578,176
578,176
588,624
10,448
Planning and zoning
899,785
1,074,785
1,482,116
407,331
8,000
8,000
19,341
11,341
1,384,369
1,384,369
1,304,322
Legislative
Other general government Public safety: Police
(80,047)
Fire
397,348
397,348
426,269
28,921
Protective inspection
360,500
360,500
371,380
10,880
25,000
25,000
58,141
33,141
42,000
42,000
45,960
3,960
1,446,900
1,446,900
1,394,378
870,000
870,000
912,366
42,366
6,099,078
6,187,078
6,604,297
417,219
Other public safety Parks and recreation: Parks Recreation Other parkes and recreation Subtotal of charges for services
112
(52,522)
City of Santa Cruz Schedule of Budget and Actual Revenues, Continued General Fund For the year ended June 30, 2006
Variance with Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Charges for services, Continued: Subtotal from previous page
$
6,099,078
$
6,187,078
$
6,604,297
$
417,219
Public works: Engineering Transportation
85,000
85,000
95,504
10,504
843,000
843,000
771,247
(71,753)
Community and economic development: 14,788
14,788
14,118
(670)
2,974,352
2,975,780
2,844,775
(131,005)
8,047,295
8,055,743
7,889,487
(166,256)
840,752
911,124
843,036
(68,088)
8,888,047
8,966,867
8,732,523
(234,344)
18,904,265
19,072,513
19,062,464
(10,049)
1,723,000
1,723,000
1,603,759
(119,241)
281,200
281,200
358,938
2,004,200
2,004,200
1,962,697
Investment income
527,588
528,776
643,341
114,565
Rents and royalties
1,883,733
1,883,733
1,952,483
68,750
2,411,321
2,412,509
2,595,824
183,315
Other community and economic development Internal charges for services provided
0
Interagency personnel services charges: Library Redevelopment Agency Subtotal interagency charges Total charges for services Fines and forfeitures: Court and traffic fines Other fines and forfeitures Total fines and forfeitures
77,738 (41,503)
Use of money and property:
Total use of money and property Other revenues: Contributions and donations
59,500
71,447
39,904
(31,543)
Other miscellaneous revenues
92,000
92,000
176,817
84,817
151,500
163,447
216,721
53,274
60,345,097
62,973,617
65,023,014
2,049,397
256
Total other revenues Total revenues OTHER FINANCING SOURCES: Proceeds from asset dispositions
25,000
25,000
25,256
Proceeds from long-term debt issued
-
-
-
-
Loan and advance principal receipts
431,767
431,767
-
(431,767)
1,130,188
1,130,188
99,894
(1,030,294)
1,586,955
1,586,955
125,150
(1,461,805)
Transfers in Total other financing sources Total revenues and other financing sources
$
61,932,052
113
$
64,560,572
$
65,148,164
$
587,592
City of Santa Cruz Schedule of Budget and Actual Expenditures and Other Financing Uses For Legally Adopted Appropriations by Department - General Fund For the year ended June 30, 2006
Services, Supplies
City Council
$
Personnel
and Other
Debt
Capital
Actual Amounts
Services
Charges
Service
Outlay
(Budgetary Basis)
166,616
$
153,152
$
-
$
200
$
319,968
City Clerk
449,925
118,019
-
77,496
645,440
City Manager
550,146
121,432
-
-
671,578 592,797
City Attorney Human Resources Finance Police
14,059
578,738
-
-
452,463
428,420
-
604
881,487
2,681,004
887,742
-
116,980
3,685,726
13,529,087
3,355,257
-
284,101
17,168,445
Fire
8,031,769
744,639
203,524
131,189
9,026,798
Parks and Recreation
6,831,449
3,110,974
-
49,108
9,991,531
Library
7,855,748
1,394,751
-
-
9,250,499
Public Works
2,662,440
895,771
-
95,046
3,653,257
Planning and Community Development
1,767,986
746,399
-
2,068
2,502,131
841,114
29,300
-
-
884,736
7,185
2,893,274
-
-
2,900,459
Debt service
-
-
49,668
-
133,991
Capital projects
-
-
-
-
-
Total expenditures
45,840,991
15,457,868
253,192
756,792
62,308,843
Advances to other funds
-
-
-
-
-
Transfers out
-
-
-
-
19,509
Redevelopment Administration Non-Departmental
Total expenditures and other financing uses
$
45,840,991
$
15,457,868
Budget to GAAP Differences: See reconciliation in Required Supplementary Information Note 1.
114
$
253,192
$
756,792
$
62,328,352
Variance with Final Budget -
$
$
Final
Positive
Budget to GAAP
Actual Amounts
Budget
(Negative)
Differences
(GAAP Basis)
370,694
$
50,726
$
-
$
319,968
787,938
142,498
-
645,440
812,381
140,803
-
671,578
594,473
1,676
-
592,797
973,081
91,594
-
881,487
3,879,905
194,179
-
3,685,726
18,410,148
1,241,703
-
17,168,445
9,208,875
182,077
-
9,026,798
11,035,292
1,043,761
-
9,991,531
9,450,494
199,995
-
9,250,499
4,412,808
759,551
-
3,653,257
3,124,990
622,859
-
2,502,131
1,048,192
163,456
-
884,736
3,229,450
328,991
-
2,900,459
134,004
13
-
133,991
-
-
-
-
67,472,725
5,163,882
-
62,308,843
279,981
279,981
-
-
584,314
564,805
-
19,509
68,337,020
$
6,008,668
$
-
$
62,328,352
115
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Police Special Revenue Fund For the year ended June 30, 2006 Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
100,000
$
104,805
$
116,495
$
11,690
$
-
$
116,495
Charges for services
45,000
45,000
39,503
(5,497)
-
39,503
Fines and forfeitures
-
-
2,538
2,538
-
2,538
1,600
1,600
6,927
5,327
321
6,606
146,600
151,405
165,463
14,058
321
165,142
101,000
101,000
101,299
-
101,299
-
98,805
97,652
-
97,652
101,000
199,805
198,951
-
198,951
45,600
(48,400)
(33,488)
(500)
(500)
(644)
(500)
(500)
(644)
45,100
(48,900)
(34,132)
116,210
22,051
119,772
Use of money and property Total revenues EXPENDITURES: Current: Public safety: Police Capital outlay Total expenditures
(299) 1,153 (299)
REVENUES OVER (UNDER) EXPENDITURES
13,759
321
(33,809)
(144)
-
(644)
(144)
-
(644)
13,615
321
(34,453)
97,721
2,671
OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Net change in fund balances FUND BALANCES: Beginning of the year End of year
$
161,310
$
(26,849)
116
$
85,640
$
111,336
$
2,992
117,101 $
82,648
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual State Highway Special Revenue Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
Charges for services Use of money and property Other revenues Total revenues
2,203,500
$
5,747,244
$
1,831,811
$
(3,915,433)
$
-
$
1,831,811
-
-
-
-
-
-
12,000
12,000
40,550
28,550
11,461
29,089
-
-
5,280
5,280
-
5,280
2,215,500
5,759,244
1,877,641
11,461
1,866,180
(3,881,603)
EXPENDITURES: Current: Public works: 605,479
617,416
593,519
23,897
-
593,519
2,042,250
6,701,358
1,374,685
5,326,673
-
1,374,685
Principal
-
-
-
-
-
-
Interest and fiscal charges
-
-
-
-
-
-
2,647,729
7,318,774
1,968,204
5,350,570
-
1,968,204
1,468,967
11,461
Transportation Capital outlay Debt service:
Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(432,229)
(1,559,530)
(90,563)
(102,024)
OTHER FINANCING SOURCES (USES): Proceeds from asset disposition Transfers in Total other financing sources (uses) Net change in fund balances
-
300,000
-
(300,000)
-
-
75,000
139,000
8,808
(130,192)
-
8,808
75,000
439,000
8,808
-
-
8,808
1,468,967
11,461
(357,229)
(1,120,530)
(81,755)
(93,216)
FUND BALANCES: Beginning of the year End of year
707,724 $
350,495
700,972 $
(419,558)
117
1,545,783 $
1,464,028
844,811 $
2,313,778
(332) $
11,129
1,546,115 $
1,452,899
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Traffic Impact Fee Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
-
$
-
$
-
$
-
$
-
$
-
Charges for services
-
-
-
-
-
-
Use of money and property
-
-
4,530
4,530
2,077
2,453
75,000
75,000
575,718
500,718
-
575,718
75,000
75,000
580,248
505,248
2,077
578,171
-
-
-
-
-
-
-
-
-
-
-
-
Principal
-
-
-
-
-
-
Interest and fiscal charges
-
-
-
-
-
-
Total expenditures
-
-
-
-
-
-
75,000
75,000
580,248
505,248
2,077
578,171
(75,000)
(139,000)
(8,808)
130,192
-
(8,808)
(75,000)
(139,000)
(8,808)
-
-
(8,808)
571,440
505,248
2,077
569,363
-
-
-
-
Other revenues Total revenues EXPENDITURES: Current: Public works: Transportation Capital outlay Debt service:
REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Net change in fund balances
-
(64,000)
FUND BALANCES: Beginning of the year End of year
$
-
$
(64,000)
118
$
571,440
$
505,248
$
2,077
$
569,363
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Parks and Recreation Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Taxes
$
Use of money and property Other revenues Total revenues
522,360
$
522,360
$
417,202
$
(105,158)
$
-
$
417,202
20,000
20,000
51,818
31,818
-
51,818
-
-
245,496
245,496
-
245,496
542,360
542,360
714,516
172,156
-
714,516
OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources (uses) Net change in fund balances
(1,086,246)
(1,635,379)
(677,437)
957,942
-
(677,437)
(1,086,246)
(1,635,379)
(677,437)
957,942
-
(677,437)
(543,886)
(1,093,019)
37,079
1,130,098
-
37,079
1,611,122
1,091,688
16,032
1,595,090
FUND BALANCES: Beginning of the year End of year
519,434 $
(24,452)
519,434 $
(573,585)
119
$
1,648,201
$
2,221,786
$
16,032
$
1,632,169
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Housing and Community Development Fund For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
Use of money and property Other revenue Total revenues
1,638,492
$
4,072,680
$
848,870
$
(3,223,810)
$
-
$
848,870
60,770
60,770
70,799
10,029
-
70,799
-
-
9,228
9,228
-
9,228
1,699,262
4,133,450
928,897
(3,204,553)
-
928,897
1,747,468
4,227,674
457,651
3,770,023
-
457,651
126,734
126,842
126,572
270
-
126,572
47,181
779,034
11,268
767,766
-
11,268
200,000
90,000
90,000
-
90,000
-
21,000
21,000
19,223
1,777
-
19,223
2,142,383
5,244,550
704,714
4,538,059
90,000
614,714
(1,111,100)
224,183
1,333,506
(90,000)
314,183
EXPENDITURES: Current: Community and economic development: Housing and community development Social services: CDBG social services Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures REVENUES OVER (UNDER) EXPENDITURES
(443,121)
OTHER FINANCING SOURCES (USES): Loan principal receipts Proceeds from long-term debt Transfers out Total other financing sources (uses) Net change in fund balances
118,520
118,520
-
(118,520)
-
-
-
710,000
-
(710,000)
-
-
(80,000)
(110,000)
-
110,000
-
-
38,520
718,520
-
(718,520)
-
-
(404,601)
(392,580)
224,183
614,986
(90,000)
314,183
1,407,117
130,449
(1,156,363)
2,563,480
FUND BALANCES: Beginning of the year End of year
1,253,705 $
849,104
1,276,668 $
884,088
120
$
1,631,300
$
745,435
$
(1,246,363)
$
2,877,663
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Transportation Development Act For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Intergovernmental
$
Total revenues
624,214
$
624,214
$
624,214
$
-
$
-
$
624,214
624,214
624,214
624,214
-
-
624,214
624,214
624,214
624,214
-
-
624,214
624,214
624,214
624,214
-
-
624,214
-
-
-
-
-
-
-
-
-
-
-
-
EXPENDITURES: Current: Transit Total expenditures REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES: Beginning of the year End of year
$
-
$
-
121
$
-
$
-
$
-
$
-
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Obligation Bond For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
Budget to GAAP
Actual Amounts
(Budgetary Basis)
(Negative)
Differences
(GAAP Basis)
REVENUES: Taxes
$
477,645
$
477,645
$
542,683
$
65,038
$
-
$
542,683
Use of money and property
10,500
10,500
13,499
2,999
-
13,499
Total revenues
488,145
488,145
556,182
68,037
-
556,182
Principal
177,616
177,616
177,616
-
-
177,616
Interest and fiscal charges
228,234
228,234
228,068
166
-
228,068
Total expenditures
405,850
405,850
405,684
166
-
405,684
82,295
82,295
150,498
68,203
-
150,498
509,634
509,634
560,645
51,011
3,368
557,277
EXPENDITURES: Debt service:
REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES: Beginning of the year End of year
$
591,929
$
591,929
122
$
711,143
$
119,214
$
3,368
$
707,775
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Capital Improvement Projects For the year ended June 30, 2006
Final Budget Budgeted Amounts Original
Final
Actual Amounts
Positive
(Budgetary Basis)
(Negative)
Budget to GAAP Actual Amounts Differences
(GAAP Basis)
REVENUES: Taxes
$
Intergovernmental Charges for services Use of money and property
2,094,000
$
2,094,000
$
1,256,775
$
(837,225)
$
-
$
1,256,775
346,754
5,032,210
1,200,850
(3,831,360)
-
1,200,850
-
-
-
-
-
-
56,351
-
1,233
57,584
11,121
46,463
10,000
3,456,328
95,925
(3,360,403)
-
95,925
2,450,754
10,583,771
2,611,134
(7,972,637)
11,121
2,600,013
2,109,000
13,810,561
3,389,354
10,421,207
-
3,389,354
Principal
264,472
364,472
253,621
110,851
Interest and fiscal charges
216,389
216,389
216,407
2,589,861
14,391,422
3,859,382
(3,807,651)
(1,248,248)
Other revenues Total revenues EXPENDITURES: Capital outlay Debt service:
Total expenditures
-
253,621
-
216,407
10,532,040
-
3,859,382
2,559,403
11,121
(18)
REVENUES OVER (UNDER) EXPENDITURES
(139,107)
(1,259,369)
OTHER FINANCING SOURCES (USES): Proceeds from long-term debt Transfers in Transfers out
-
100,000
-
(100,000)
(100,000)
100,000
1,308,151
2,613,509
752,555
(1,860,954)
-
752,555
(1,030,465)
(1,191,420)
(51,772)
1,139,648
-
(51,772)
Total other financing sources (uses)
277,686
1,522,089
700,783
Net change in fund balances
138,579
(2,285,562)
(547,465)
(721,306)
(100,000)
800,783
1,838,097
(88,879)
(458,586)
2,180,169
(179,614)
FUND BALANCES: Beginning of the year End of year
613,075 $
751,654
546,222 $
(1,739,340)
123
2,726,391 $
2,178,926
$
4,018,266
$
(268,493)
2,906,005 $
2,447,419
City of Santa Cruz Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Non-Major Governmental Funds For the year ended June 30, 2006
Other Governmental Funds Reconciliation of Net Changes in Fund Balances - Budgetary to GAAP Basis: Net Change in Fund Balances - Budgetary Basis
$
319,848
The amount reported in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances was different because: Unrealized gains and losses on investments, which are considered a component of investment income in the Statement of Revenues, Expenditures and Changes in Fund Balances, are not included as revenue on a budgetary basis.
(24,980)
Payments on a short term loan and advance principal repayments are considered expenditures on a budgetary basis, but on a GAAP basis, these payments reduce liabilities.
90,000
On a budgetary basis, the City records loan principal receipts as revenue, but on a GAAP basis, these receipts reduce receivables.
100,000
Net Change in Fund Balances - Statement of Revenues, Expenditures and Changes in Fund Balances
$
484,868
$
7,719,238
Reconciliation of Fund Balances - Budgetary to GAAP Basis: Fund Balances - Ending - Budgetary Basis Cumulative effect of unrealized gains and losses on investments
(71,801)
Noncurrent advances payable
(630,001)
Intergovernmental payable to be repaid from future appropriations
(52)
Reserved balances unavailable for appropriation
2,749,611
Designated for noncurrent component of compensated absences
2,941
Fund Balances - Ending - GAAP Basis
$
124
9,769,936
INTERNAL SERVICE FUNDS Equipment Operations - This fund is used to account for the expenses related to city-wide fleet operations and maintenance activities, including vehicles, communications equipment, and other pooled equipment. Internal contributions to support this fund are based on cost recovery through charges to user departments and funds. These charges do not include the cost of equipment replacement. Stores Services - Accounts for the costs of operating a centralized warehouse used by the City. Telecommunications - This fund is used to account for the expenses related to the acquisition of communications equipment and ongoing maintenance of the telephone network including the main telephone switch, voice mail system, pagers, cell phones, and fax machines. Internal contributions to support this fund are based on cost recovery through user departments and funds. These charges do not include the cost of equipment replacement. Risk Management - Accounts for the expenses of the City's insurance program, including costs related to claims, administration, legal defense, and insurance premiums. Internal contributions to support this fund are based on cost recovery through charges to departments and funds. The following insurance activities are provided for in this fund: Workers' Compensation Insurance Liability Insurance Group Health Insurance
125
City of Santa Cruz Combining Statement of Net Assets All Internal Service Funds June 30, 2006 Equipment
Stores
Tele-
Risk
Operations
Services
communications
Management
Total
ASSETS Current assets: Cash and cash equivalents
$
Restricted cash and cash equivalents Interest receivable Accounts receivable - net Due from other funds
Prepaid items Inventories Deposits Total current assets
561,266
$
100,441
$
94,620
$
5,785,328
$
6,541,655
-
-
-
-
-
5,004
954
612
51,586
58,156
31,006
-
-
688
31,694
-
-
-
-
-
3,394
5,000
192
1,153
9,739
-
129,288
-
-
129,288
-
-
-
1,149,427
1,149,427
600,670
235,683
95,424
6,988,182
7,919,959
394,110
-
746,577
8,160
1,148,847
-
-
336,296
-
(311,609)
-
(895,247)
(5,032)
82,501
-
187,626
3,128
273,255
82,501
-
187,626
3,128
273,255
Noncurrent assets: Capital assets: Machinery and equipment Software Less accumulated depreciation
336,296 (1,211,888)
Total capital assets (net of accumulated depreciation) Total noncurrent assets Total assets
$
683,171
$
235,683
$
283,050
$
6,991,310
$
8,193,214
$
129,800
$
8,072
$
64,823
$
262,353
$
465,048
LIABILITIES Current liabilities: Accounts payable and other current liabilities Due to other funds Deposits payable
5,004
953
672
5,049
11,678
-
-
-
152
152
27,204
-
-
3,012,267
3,039,471
due in less than one year
21,036
-
-
-
21,036
Total current liabilities
183,044
9,025
65,495
3,279,821
3,537,385
Claims and judgments payable Bonds, notes, loans and leases payable
Noncurrent liabilities: Claims and judgments payable
-
-
-
7,967,819
7,967,819
Compensated absences payable
13,602
-
-
-
13,602
-
-
-
-
-
13,602
-
-
7,967,819
7,981,421
196,646
9,025
65,495
11,247,640
11,518,806
61,465
-
187,626
3,128
252,219
Bonds, notes, loans and leases payable due in more than one year Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Unrestricted Total net assets
$
-
-
-
-
-
425,060
226,658
29,929
(4,259,458)
(3,577,811)
486,525
$
126
226,658
$
217,555
$
(4,256,330)
$
(3,325,592)
City of Santa Cruz Combining Statement of Revenues, Expenses and Changes in Net Assets All Internal Service Funds For the year ended June 30, 2006
Equipment
Stores
Tele-
Risk
Operations
Services
communications
Management
Total
OPERATING REVENUES: Charges for services - internal
$
Charges for services - external Other revenues Total operating revenues
2,571,473
$
161,393
$
197,832
$
6,089,485
$
9,020,183
129,442
-
42,216
12,302
183,960
13,015
-
-
108,251
121,266
2,713,930
161,393
240,048
6,210,038
9,325,409
764,561
-
96,632
430,738
1,291,931
OPERATING EXPENSES: Personnel services Services, supplies, and other charges
1,695,332
128,100
199,438
4,202,482
6,225,352
Depreciation and amortization
19,638
-
64,329
1,632
85,599
Total operating expenses
2,479,531
128,100
360,399
4,634,852
7,602,882
234,399
33,293
(120,351)
1,575,186
1,722,527
Investment earnings
13,761
2,818
142,670
161,413
Interest expense and fiscal charges
(3,138)
Operating income (loss) NONOPERATING REVENUES (EXPENSES):
Total nonoperating revenues (expenses) Income (loss) before transfers Transfers out Change in net assets
2,164
-
(290)
-
1,874
(3,428)
10,623
2,818
245,022
36,111
(16,459)
(3,218)
228,563
32,893
(120,098)
1,703,584
1,844,942
257,962
193,765
337,653
(5,959,914)
(5,170,534)
(118,477) (1,621)
142,670
157,985
1,717,856
1,880,512
(14,272)
(35,570)
NET ASSETS: Beginning of year End of year
$
486,525
$
127
226,658
$
217,555
$
(4,256,330)
$
(3,325,592)
City of Santa Cruz Combining Statement of Cash Flows All Internal Service Funds For the year ended June 30, 2006
Equipment Operations
Stores Services
TeleRisk communications Management
Total
CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers and users Cash received from interfund services provided Cash payments to suppliers for goods and services Cash payments to employees for services Cash received from (payments to) others
$
119,746 2,583,115 (1,719,144) (772,133) 13,015
$
224,599
Net cash provided (used) by operating activities
151,402 (152,327) -
$
42,216 198,030 (155,695) (96,632) -
$
42,384 6,090,986 (3,967,942) (170,107) 108,251
$
2,103,572
204,346 9,023,533 (5,995,108) (1,038,872) 121,266
(925)
(12,081)
2,315,165
(16,459)
(3,218)
(1,621)
(14,272)
(35,570)
(16,459)
(3,218)
(1,621)
(14,272)
(35,570)
(42,040) (3,138)
-
(11,965) (290)
-
(54,005) (3,428)
(45,178)
-
(12,255)
-
(57,433)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Interests receivable Investment income received
(1,526) 13,761
(126) 2,818
187 2,164
(24,348) 142,670
(25,813) 161,413
12,235
2,692
2,351
118,322
135,600
175,197
(1,451)
(23,606)
2,207,622
2,357,762
Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS: Beginning of year End of year
386,069
101,892
118,226
3,577,706
4,183,893
$
561,266
$
100,441
$
94,620
$
5,785,328
$
6,541,655
$
234,399
$
33,293
$
(120,351)
$
1,575,186
$
1,722,527
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Changes in current assets and liabilities: Accounts receivable Due from other funds Prepaid items Inventories Deposits Accounts payable and other current liabilities Due to other funds Deposits payable Claims and judgments payable Compensated absences payable
19,638 (9,696) 10,116 (84) (23,728) 1,526 27,204 (34,776)
(5,000) (19,340) 113 (9,991) -
(9,800)
(34,218)
Total adjustments Net cash provided (used) by operating activities
$
-
224,599
128
$
(925)
64,329
1,632
(10) 43,753 198 108,270 $
(12,081)
$
85,599
30,082 503 81,781 152,256 1,349 152 260,631 -
20,386 10,116 (4,591) (19,340) 81,781 172,394 (6,918) 152 287,835 (34,776)
528,386
592,638
2,103,572
$
2,315,165
Private-Purpose Trust Funds McCaskill Trust - Local History - is restricted in purpose to promulgate local history. The principal and income benefit the Library Joint Powers Authority, McCaskill Trust - Visually Impaired - is restricted in purpose to providing library materials for the visually impaired. The principal and income benefit the Library Joint Powers Authority. The Finkeldey Trust - is restricted in purpose for the acquisition of musical literature. The principal and income benefit the Library Joint Powers Authority.
129
City of Santa Cruz Combining Statement of Fiduciary Net Assets Private-Purpose Trust Funds June 30, 2006
McCaskill
McCaskill
Total
Trust - Local
Trust - Visually
Finkeldey
Private-Purpose
History
Impaired
Trust
Trust Funds
ASSETS Cash and cash equivalents
$
260,175
$
247,683
$
11,128
$
518,986
Receivables: Interest receivable Total assets
2,498
2,378
107
4,983
262,673
250,061
11,235
523,969
NET ASSETS Held in trust for library programs
$
262,673
130
$
250,061
$
11,235
$
523,969
City of Santa Cruz Combining Statement of Changes in Fiduciary Net Assets Private-Purpose Trust Funds For the year ended June 30, 2006
McCaskill
McCaskill
Total
Trust - Local
Trust - Visually
Finkeldey
Private-Purpose
History
Impaired
Trust
Trust Funds
ADDITIONS: Investment earnings
$
Total additions
7,718
$
7,371
$
346
$
15,435
7,718
7,371
346
15,435
5,000
6,300
755
12,055
Total deductions
5,000
6,300
755
12,055
Change in net assets
2,718
1,071
(409)
3,380
259,955
248,990
DEDUCTIONS: Library programs
NET ASSETS: Beginning of year End of year
$
262,673
131
$
250,061
11,644 $
11,235
520,589 $
523,969
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132
Agency Funds Library Joint Powers Authority - Used to account for funds held by the City in an agency capacity for the Library Joint Powers Authority, which was established to finance the operations of the former City/County library system. Trust Deposit Holding - This fund is used to hold cash deposits received from outside parties on a temporary basis. Payroll Payables - Used to account for cash transferred from various funds to pay for payroll liabilities, which are paid out of this fund. Special Assessments - Accounts for assets held by the City in an agency capacity for special assessment districts. The City acts as agent for collection of principal and interest payments from the property owners and remits these monies to the bondholders. If funds are not available, the City is under no obligation to make bond payments from its own funds.
133
City of Santa Cruz Combining Statement of Fiduciary Net Assets Agency Funds June 30, 2006
Library
Trust
Total
Joint Powers
Deposit
Payroll
Special
Agency
Authority
Holding
Payables
Assessments
Funds
ASSETS Cash and cash equivalents
$
Investments
510,464
$
521,125
-
-
$
276,417
$
178,624
-
89,494
$
1,486,630 89,494
Receivables: 10,813
1,472
-
1,975
14,260
Taxes receivable
Interest receivable
553,799
-
-
9,885
563,684
Accounts receivable
527,368
-
-
-
527,368
16,467
-
-
-
16,467
-
-
-
-
-
Due from other governments Prepaid Items Total assets
$
1,618,911
$
522,597
$
276,417
$
279,978
$
2,697,903
$
492,512
$
5,521
$
276,417
$
-
$
774,450
LIABILITIES Accounts payable and other current liabilities
1,110,680
-
-
-
1,110,680
Deferred revenue
Due to other governments
15,024
-
-
-
15,024
Deposits payable
695
517,076
-
-
517,771
-
-
-
279,978
279,978
Payable to bondholders Total liabilities
$
1,618,911
$
522,597
134
$
276,417
$
279,978
$
2,697,903
City of Santa Cruz Combining Statement of Changes in Assets and Liabilities Agency Funds For the year ended June 30, 2006 Balance July 1, 2005 Library Joint Powers Authority Assets: Cash and cash equivalents Receivables: Interest receivable Taxes receivable Accounts receivable Due from other governments Prepaid Items Total assets Liabilities: Accounts payable and other current liabilities Due to other governments Deferred revenue Deposit payable Total liabilities Trust Deposit Holding Assets: Cash and cash equivalents Interest receivable Total assets Liabilities: Accounts payable and other current liabilities Deposits payable Total liabilities Payroll Payables Assets: Cash and cash equivalents Total assets Liabilities: Accounts payable and other current liabilities Total liabilities Special Assessments Assets: Cash and cash equivalents Investments Receivables: Interest receivable Taxes receivable Total assets Liabilities: Accounts payable and other current liabilities Payable to bondholders Total liabilities
$
123,394
Additions
$
5,229 508,031 520,779 466 46,710
12,254,664
Balance June 30, 2006
Deletions
$
23,313 553,799 652,470 16,467 -
11,867,594
$
17,729 508,031 645,881 466 46,710
510,464 10,813 553,799 527,368 16,467 -
$
1,204,609
$
13,500,713
$
13,086,411
$
1,618,911
$
553,875 640,532 10,202 -
$
3,040,565 470,148 233,920 695
$
3,101,928 229,098 -
$
492,512 1,110,680 15,024 695
$
1,204,609
$
3,745,328
$
3,331,026
$
1,618,911
$
446,306 847
$
1,449,177 5,089
$
1,374,358 4,464
$
521,125 1,472
$
447,153
$
1,454,266
$
1,378,822
$
522,597
$
13,302 433,851
$
1,065,954 1,448,069
$
1,073,735 1,364,844
$
5,521 517,076
$
447,153
$
2,514,023
$
2,438,579
$
522,597
$
1,079,595
$
65,111,898
$
65,915,076
$
276,417
$
1,079,595
$
65,111,898
$
65,915,076
$
276,417
$
1,079,595
$
1,913,355,891
$
1,914,159,069
$
276,417
$
1,079,595
$
1,913,355,891
$
1,914,159,069
$
276,417
$
144,213 91,632
$
205,101 -
$
170,690 2,138
$
178,624 89,494
1,457 7,891
3,947 9,885
3,429 7,891
1,975 9,885
$
245,193
$
218,933
$
184,148
$
279,978
$
1,735 243,458
$
1,346 36,520
$
3,081 -
$
279,978
$
245,193
$
37,866
$
3,081
$
279,978
135
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136
STATISTICAL SECTION (Unaudited)
This part of the City of Santa Cruz's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city's overall financial health.
Contents
Page
Financial Trends These tables contain trend information to help the reader understand how the city's financial performance and well-being have changed over time. Revenue Capacity These tables contain information to help the reader assess the city's most significant local revenue source, the property tax. Debt Capacity These tables present information to help the reader assess the affordability of the city's current levels of outstanding debt and the city's ability to issue additional debt in the future. Demographic and Economic Information These tables offer demographic and economic indicators to help the reader understand the environment within which the city's financial activities take place. Operating Information These tables contain service and infrastructure data to help the reader understand how the information in the city's financial report relates to the services the city provides and the activities it performs.
Sources:
Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial reports for the relevant year.
137
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138
City of Santa Cruz
TABLE 1
Net Assets By Component Last Four Fiscal Years
Fiscal Year Ended June 30 2003
2004
2005
2006
Governmental activities: Invested in capital assets, net of related debt
$
136,369,360
$
136,556,019
$
139,024,926
$
142,216,967
Restricted
10,441,164
11,411,611
10,105,142
12,132,237
Unrestricted
16,662,826
12,267,438
18,695,330
19,428,634
Total governmental activities net assets
$
163,473,350
$
160,235,068
$
167,825,398
$
173,777,838
$
168,876,424
$
174,395,150
$
179,988,569
$
164,275,405
Business-type activities: Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets
-
-
704,469
-
62,492,429
58,267,139
57,125,277
78,560,182
$
231,368,853
$
232,662,289
$
237,818,315
$
242,835,587
$
305,245,784
$
310,951,169
$
319,013,495
$
306,492,372
Primary government: Invested in capital assets, net of related debt Restricted
10,441,164
11,411,611
10,809,611
12,132,237
Unrestricted
79,155,255
70,534,577
75,820,607
97,988,816
Total primary government net assets
$
394,842,203
$
392,897,357
$
405,643,713
$
416,613,425
The City of Santa Cruz implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available.
Source: City of Santa Cruz Finance Department
139
City of Santa Cruz
TABLE 2
Changes in Net Assets Last Four Fiscal Years
Fiscal Year Ended June 30 2004 2005
2003 Expenses Governmental activities: General government Public safety Parks and recreation Library Public works Transit Community and economic development Social services Interest and fiscal charges
$
10,382,020 23,770,732 12,312,469 8,441,896 9,790,984 569,247 8,265,841 1,976,456 979,508
$
11,451,699 27,054,407 13,022,089 8,697,195 9,618,748 588,183 7,140,903 1,803,125 1,126,311
$
9,889,427 27,218,149 11,944,976 8,934,173 7,801,586 586,896 7,719,248 1,715,326 1,066,994
2006
$
9,755,194 27,227,214 11,715,023 9,179,637 9,047,430 624,214 7,414,895 2,563,680 883,866
Total governmental activities expenses
76,489,153
80,502,660
76,876,775
78,411,153
Business-type activities: Water Wastewater Refuse Parking Storm Water Golf course
13,994,913 14,824,444 14,824,819 2,222,770 2,165,345 1,745,322
13,707,644 15,456,161 14,924,093 2,471,710 1,956,563 1,811,128
14,643,440 15,524,855 14,581,347 2,565,800 2,150,359 1,781,330
15,204,565 16,192,904 12,700,841 2,960,225 1,925,661 2,325,920
Total business-type activities expenses
49,777,613
50,327,299
51,247,131
51,310,116
Total primary government expenses Program Revenues Governmental activities: Charges for services: General government Public safety Parks and recreation Library Public works Transit Community and economic development Operating grants and contributions Capital grants and contributions
$
126,266,766
$
130,829,959
$
128,123,906
$
129,721,269
$
3,945,684 1,950,228 3,798,713 7,005,781 3,459,306 432,651 3,979,717 5,823,628
$
3,938,389 2,760,629 3,956,257 7,672,089 3,083,205 110,889 3,165,361 4,864,757
$
3,814,053 3,230,321 2,863,615 8,152,865 4,008,187 115,183 2,829,078 5,141,507
$
4,662,211 3,041,137 3,191,193 8,478,112 4,253,232 66,643 996,327 2,125,537 2,499,565
Total governmental activities program revenues
30,395,708
29,551,576
30,154,809
29,313,957
Business-type activities: Charges for services: Water Wastewater Refuse Parking Storm Water Golf course Operating grants and contributions Capital grants and contributions
14,278,839 11,461,188 13,341,636 2,209,631 892,378 1,867,914 85,446 2,312,416
15,687,800 11,664,391 14,583,240 2,478,911 862,150 1,933,684 138,515 3,391,001
17,283,215 11,911,915 14,562,560 2,635,129 872,569 992,439 369,968 6,439,375
19,480,617 13,079,711 13,525,848 2,654,549 869,490 1,608,752 15,704 2,480,435
Total business-type activities program revenues
46,449,448
50,739,692
55,067,170
53,715,106
Total primary government program revenues
76,845,156
80,291,268
85,221,979
83,029,063
(46,093,445) (3,328,165)
(50,951,084) 412,393
(46,721,966) 3,820,039
(49,097,196) 2,404,990
Net (expense)/revenue: Governmental activities Business-type activities Total primary government net (expense)/revenue
$
(49,421,610)
140
$
(50,538,691)
$
(42,901,927)
$
(46,692,206)
City of Santa Cruz
TABLE 2
Changes in Net Assets Last Four Fiscal Years
Fiscal Year Ended June 30 2004 2005
2003 General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes Sales and use taxes Frachise taxes Transient occupancy taxes Utility users taxes Admission taxes Other taxes Unrestricted grants and contributions Investment earnings Gain (loss) on sale of assets Extraordinary items Miscellaneous Transfers
$
Total governmental activities
15,078,406 8,291,244 3,132,743 2,932,256 7,592,049 1,664,150 2,000,338 4,526,808 1,095,006 (4,963) 477,109 673,184 57,444
$
47,515,774
Business-type activities: Unrestricted grants and contributions Investment earnings Gain (loss) on sale of assets Miscellaneous Transfers $
Change in Net Assets Governmental activities Business-type activities
$
Total primary government
$
50,485,980
16,476,980 11,383,231 3,478,971 3,067,869 8,080,171 1,629,164 2,107,273 4,562,277 846,634 60,093 577,892 78,584
$
52,349,139
250 717,261 (11,712) 108,532 (334,346)
2,970,206
Total primary government
$
47,799,698
2,421,200 60,717 545,733 (57,444)
Total business-type activities
15,792,225 9,084,026 3,329,454 3,016,463 7,638,926 1,724,330 2,480,973 2,565,897 437,672 716,218 679,168 334,346
2006
55,049,636
222 1,469,180 97,529 (78,584)
479,985
22,384,981 11,738,917 2,136,686 3,385,148 8,304,371 1,715,133 2,303,363 1,121,274 1,380,087 24,318 487,841 67,517
2,079,379 91,920 508,500 (67,517)
1,488,347
2,612,282
$
48,279,683
$
53,837,486
$
57,661,918
1,422,329 (357,959)
$
(3,151,386) 892,378
$
5,627,173 5,308,386
$
5,952,440 5,017,272
1,064,370
$
(2,259,008)
$
10,935,559
$
10,969,712
The City of Santa Cruz implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. Source: City of Santa Cruz Finance Department
141
City of Santa Cruz Fund Balances of Governmental Funds Last Ten Fiscal Years
Fiscal Year Ended June 30 1998 1999
1997 General Fund Reserved Unreserved, designated Unreserved, undesignated Total General Fund All other governmental funds Reserved Unreserved, designated, reported in: Redevelopment Agency fund Special revenue funds Debt service funds Capital projects funds Unreserved, undesignated, reported in: Redevelopment Agency fund Special revenue funds Capital projects funds Total all other governmental funds
2000
$
6,499,142 14,415,539
$
9,540,038 9,939,971
$
5,600,632 11,351,018
$
6,215,738 12,011,261
$
20,914,681
$
19,480,009
$
16,951,650
$
18,226,999
$
4,684,281
$
5,458,871
$
10,138,359
$
11,383,565
$
1,632,264 -
1,416,538 -
1,236,971 1,502,558 -
1,210,456 890,922 -
968,407 3,076,335
1,467,435 1,839,601
1,418,246 2,158,532
(63,288) 1,508,205
10,361,287
Source: City of Santa Cruz Finance Department
142
$
10,182,445
$
16,454,666
$
14,929,860
TABLE 3
2001
Fiscal Year Ended June 30 2003 2004
2002
2005
2006
$
4,906,611 5,194,894 9,170,827
$
4,008,809 6,392,382 6,974,625
$
5,237,443 5,922,853 4,806,652
$
4,388,586 7,638,171 5,964,197
$
3,870,996 7,435,828 8,729,971
$
4,327,113 7,120,993 11,354,586
$
19,272,332
$
17,375,816
$
15,966,948
$
17,990,954
$
20,036,795
$
22,802,692
$
13,204,616
$
14,174,955
$
12,311,339
$
13,691,282
$
10,721,195
$
11,148,536
$
1,351,077 1,092,974 -
994,997 2,591,507 -
4,014,256 589,008 470,840
3,987,557 509,404 457,945
6,497,637 476,904 557,277 91,180
7,958,925 536,451 707,775 92,641
861,078 671,223
(948,602) 660,747 1,558,754
(55,035) 1,747,678 446,564
2,207,906 (1,444,460)
3,185,320 2,196,529
3,341,962 281,931
17,180,968
$
19,032,358
$
19,524,650
$
143
19,409,634
$
23,726,042
$
24,068,221
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144
City of Santa Cruz
TABLE 4
Changes in Fund Balances of Governmental Funds Last Four Fiscal Years
Fiscal Year Ended June 30 2004 2005
2003 Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Use of money and property Other revenues
$
Total revenues
40,691,186 614,012 14,011,928 16,952,167 1,587,698 2,859,096 449,907
$
42,529,756 529,649 10,258,114 17,191,373 1,805,734 2,345,707 592,012
$
2006
46,268,500 603,344 11,479,068 17,968,817 2,032,817 2,821,174 686,853
$
52,035,729 615,448 5,696,237 19,347,463 1,965,235 3,234,159 1,049,925
77,165,994
75,252,345
81,860,573
83,944,196
9,673,413 22,920,677 9,773,346 8,412,201 5,592,617 569,247 7,954,378 1,976,456 11,340,680
8,967,025 24,843,763 9,721,229 8,528,577 4,539,192 588,183 6,332,156 1,803,125 9,553,173
9,390,901 26,692,313 9,593,982 8,980,823 4,248,358 586,896 6,640,932 1,715,326 7,846,456
9,666,858 26,938,629 9,402,529 9,250,499 4,158,916 624,214 8,436,468 1,693,267 11,921,789
1,116,090 839,345 -
1,718,937 851,721 -
2,231,549 966,238 276,569
1,149,776 921,517 -
80,168,450
77,447,081
79,170,343
84,164,462
Excess of revenues over (under) expenditures
(3,002,456)
(2,194,736)
2,690,230
(220,266)
Other financing sourses (uses) Proceeds from asset dispositions Proceeds from long-term debt issued Premiums on bonds sold Payment to refunded bond escrow agent Transfers in Transfers out
777,750 1,565,684 (1,357,286)
756,823 3,244,346 (2,139,754)
139,104 5,825,000 23,994 (2,571,681) 1,928,681 (1,793,079)
25,256 3,200,000 861,257 (758,170)
1,861,415
3,552,019
3,328,343
Expenditures General government Public safety Parks and recreation Library Public works Transit Community and economic development Social services Capital outlay Debt service: Principal Interest and fiscal charges Bond issuance costs Total expenditures
Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures
986,148 $
(2,016,308)
2.8%
$
(333,321)
3.8%
$
6,242,249
4.9%
$
3,108,077
2.9%
The City of Santa Cruz implemented GASB 34 for the fiscal year ended June 30, 2003. Prior to that implementation, expenditure amounts were categorized differently in the fund statements. Information is not available now to reclassify those prior years' expenditures into comparable categories for this table. Source: City of Santa Cruz Finance Department 145
City of Santa Cruz General Governmental Tax Revenues by Source1 Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
Sales and Use2
Property $
9,192,280
$
Franchise
10,314,425
$
1,695,707
$
Transient
Utility
Occupancy
Users
2,710,994
$
6,338,533
Admission $
1,511,605
1998
9,784,131
7,191,934
1,736,039
2,716,397
6,557,490
1,539,111
1999
10,484,409
7,415,341
2,476,604
3,174,694
6,912,440
1,502,540
2000
12,176,209
8,857,748
2,771,014
3,541,396
7,149,619
1,583,897
2001
13,342,450
9,790,693
2,851,830
3,900,905
8,246,829
1,611,318
2002
14,944,971
9,126,341
2,996,907
3,131,378
7,627,331
1,612,526
2003
15,629,920
8,291,244
3,132,743
2,932,256
7,592,049
1,664,150
2004
15,792,225
9,084,026
3,329,454
3,016,463
7,638,926
1,724,330
2005
16,501,921
2006
22,348,981
11,383,231 6
5
11,738,917
3,478,971
3,067,869
8,080,171
1,629,164
2,136,686
3,385,148
8,304,371
1,715,133
Notes: 1
This table includes all governmental fund types.
2
Fiscal year 1997 includes a half-cent sales tax override (Measure E) for earthquake repairs. This half-cent override ended March 31, 1997.
3
Beginning with fiscal year 2003, business improvement taxes include the Co-op Retail Management Business Real Property Improvement District.
4
Prior to fiscal year 2003, business license taxes were shown in permits and licenses.
5
A new quarter-cent sales tax override was implemented in fiscal year 2005. This temporary tax is scheduled to end on June 30, 2009.
6
Includes amounts for Property Taxes In Lieu of Vehicle License Fees
Source: City of Santa Cruz Finance Department
146
TABLE 5
Parks and Parking $
158,576
Business Improvement3 $
168,736
Property
$
136,174
Recreation
Business License4
Transfer $
Facilities -
$
Total -
$
32,227,030
147,877
175,114
162,915
-
-
30,011,008
192,352
167,500
186,624
-
-
32,512,504
158,229
170,369
219,132
-
-
36,627,613
178,373
183,711
200,041
-
-
40,306,150
194,646
175,868
194,632
-
-
40,004,600
199,371
273,965
191,042
784,446
551,514
41,242,700
221,133
296,536
276,466
792,893
357,305
42,529,757
221,790
292,422
325,305
777,308
510,348
46,268,505
229,629
316,742
562,723
777,068
417,202
51,932,606
147
City of Santa Cruz
TABLE 6
General Fund Revenues by Source Last Ten Fiscal Years
Fiscal Year
Licenses
Ended June 30
Taxes $
Charges
Fines
Use of Money
and
Inter-
for
and
and
Other
Earthquake
Permits
Governmental
Services
Forfeitures
Property
Revenues
Relief
1,335,623
$
3,296,590
$
8,450,778
$
Total
1997
$ 25,857,144
1,169,823
$ 4,057,707
$ 219,250
$ 654,926
$ 45,041,841
1998
23,292,917
1,366,948
3,410,230
6,290,188
1,064,554
3,623,968
280,513
-
39,329,318
1999
24,918,906
1,397,862
4,170,892
6,729,820
1,397,833
3,794,000
213,496
-
42,622,809
2000
27,646,368
1,595,964
4,732,311
6,566,033
1,347,496
3,574,121
324,802
-
45,787,095
2001
30,258,503
1,342,471
5,281,661
7,009,901
1,286,990
4,152,368
327,692
-
49,659,586
2002
29,238,472
1,267,939
5,339,612
7,151,012
1,282,697
3,577,774
397,896
-
48,255,402
2003
30,027,154
614,012
4,788,035
16,693,936
1,555,481
2,252,373
308,104
-
56,239,095
2004
31,696,322
529,649
3,745,601
16,865,754
1,799,557
2,086,163
418,764
-
57,141,810
2005
34,384,206
603,344
5,465,642
17,799,213
2,022,779
2,333,922
276,565
-
62,885,671
2006
39,495,863
615,448
1,073,997
19,062,464
1,962,697
2,541,909
216,721
-
64,969,099
Notes: Beginning in fiscal year 2003, charges for personnel services provided to the Library Joint Powers Authority were included in General Fund charges for services, as well as charges for interfund personnel services provided.Also, prior to fiscal year 2003, business license taxes were shown in licenses and permits.
Source:
City of Santa Cruz Finance Department
148
City of Santa Cruz
TABLE 7
Assessed Value of Taxable Property Last Ten Fiscal Years
Fiscal Year Ended
Real Property
June 30
Residential
1997
$ 2,573,274,660
1998
2,672,618,165
Commercial $
393,559,654
Other $
398,841,413
Total
60,547,639
$ 3,027,381,953
80,522,177
3,151,981,755
$
Total
Total
Personal
Assessed
Direct Tax
Property
Value
Rate
176,491,197
$ 3,203,873,150
0.000%
176,321,921
3,328,303,676
0.000%
1999
2,760,380,015
449,610,460
87,470,143
3,297,460,618
186,050,833
3,483,511,451
0.000%
2000
2,980,522,986
510,282,517
92,665,671
3,583,471,174
198,830,667
3,782,301,841
0.009%
2001
3,193,569,036
537,141,067
113,773,535
3,844,483,638
207,913,809
4,052,397,447
0.009%
2002
3,494,071,877
611,373,783
111,624,535
4,217,070,195
237,668,331
4,454,738,526
0.009%
2003
3,657,553,824
663,946,747
122,103,592
4,443,604,163
237,898,436
4,681,502,599
0.009%
2004
3,882,699,208
700,948,081
123,781,647
4,707,428,936
225,168,674
4,932,597,610
0.009%
2005
4,150,085,545
755,991,976
126,848,221
5,032,925,742
217,439,195
5,250,364,937
0.009%
2006
4,563,844,105
788,484,799
110,751,935
5,463,080,839
216,627,737
5,679,708,576
0.009%
Notes: Total Direct Tax Rate is from Table 8. With the passage of a constitutional amendment (Proposition 13) and subsequently enacted State legislation, property is assessed according to a base year rather than on a percentage of market value. Accordingly, a reliable estimate of actual value of taxable property within the City is not possible.
Source County of Santa Cruz Auditor-Controller's Office County of Santa Cruz Assessor's Office
149
City of Santa Cruz
TABLE 8 1
Direct and Overlapping Property Tax Rates Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
-
$ 0.009
$ 0.009
$ 0.009
$ 0.009
$ 0.009
$ 0.009
$ 0.009
-
0.009
0.009
0.009
0.009
0.009
0.009
0.009
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
Direct Rates: Debt service
$
-
Total Direct Rate
-
$
-
$
Overlapping Rates2: County3
1.000
1.000
School Districts: Cabrillo College
-
-
0.014
0.007
0.012
0.021
0.019
0.019
0.038
0.037
Santa Cruz Schools
-
-
0.038
0.016
0.077
0.067
0.075
0.074
0.068
0.081
Bonny Doon Schools
0.066
0.056
0.056
0.019
0.021
0.035
0.036
0.034
0.033
0.029
Live Oak Schools
0.072
0.058
0.052
0.050
0.046
0.043
0.037
0.023
0.042
0.043
Scotts Valley Schools
0.024
0.087
0.087
0.077
0.073
0.052
0.084
0.055
0.054
0.050
1.162
1.201
1.247
1.169
1.229
1.218
1.251
1.205
1.235
1.240
$ 1.162
$ 1.201
$ 1.247
$ 1.178
$ 1.238
$ 1.227
$ 1.260
$ 1.214
$ 1.244
$ 1.249
Total Overlapping Rate Total Direct and Overlapping Rate
Notes: 1
Rates are per $100.00 of assessed value.
2
Overlapping rates are those of entities that apply to property owners within the City of Santa Cruz. Not all overlapping rates apply to all property owners (e.g., the rates for school districts apply only to the proportion of the city's property owners whose property is located within the geographic boundaries of the school district).
3
The passage of a constitutional amendment (Proposition 13) in June 1978 limits the property tax rate to a base of $1.00 per $100.00. The $1.00 rate is levied by the County and apportioned to local agencies according to a formula perscribed by the California legislature
Source:
Santa Cruz County Auditor - Controller's Office
150
City of Santa Cruz
TABLE 9
Principal Property Taxpayers Current Year and Nine Years Ago
Fiscal Year Ended June 30 2006
1997 Percentage
Percentage
of Total Assessed Taxpayer Cypress Point RE Investors LLC
Valuation $
Rank
of Total
Assessed
Assessed
Valuation
Valuation $
Assessed Rank -
Valuation
39,802,437
1
0.701%
Santa Cruz Shaffer Road Investors
31,770,292
2
0.559%
-
-
Santa Cruz Seaside Co
25,441,083
3
0.448%
23,942,433
Santa Cruz Hotel LLC
23,478,493
4
0.413%
-
Frederick Electronics Corporation
22,968,102
5
0.404%
13,238,868
1010 Pacific Investors
21,672,885
6
0.382%
-
-
CRRI/Seagate Ocean Street LLC
21,296,667
7
0.375%
-
-
2
0.747% 0.000%
7
0.413%
Cooper House LLC
19,154,186
8
0.337%
-
0.000%
Canfield Laurel & Pacific Partnership
17,941,994
9
0.316%
-
0.000%
Harmony Partners LLC
17,694,429
10
0.312%
-
-
Silicon Systems Inc
-
-
172,212,569
1
5.375%
Thomas J. Lipton, Inc.
-
-
21,213,275
3
0.662%
Wm. Wrigley Jr. Co.
-
-
20,553,426
4
0.642%
Fremont Central Investment
-
-
13,688,624
5
0.427%
The Price Company
-
-
13,239,577
6
0.413%
Pacific Square Ltd Partners
-
-
11,209,800
8
0.350%
Outlook Apartments
-
-
9,674,950
9
0.302%
Sequoia Equities III, LLC
-
-
8,717,000
10
0.272%
Totals
$
241,220,568
Total assessed value
$
5,679,708,576
4.247%
Notes: Taxpayers and values presented in this table reflect the County's Assessment Roll Reports. The total assessed value is from Table 7.
Source: County of Santa Cruz Assessor's Office
151
$
307,690,522
$
3,203,873,150
9.604%
This page is intentionally left blank.
152
City of Santa Cruz
TABLE 10 1
Property Tax Levies and Collections Last Ten Fiscal Years
Outstanding Fiscal
Total
Year
Percent
Delinquent Tax
Ended
Total Tax
Current Tax
of Levy
June 30
Levy
Collections
Collected
1997
$
8,800,364
$
Collections $
Total
2
-
$
Delinquent
Collections
Outstanding
Tax
as Percent of
Delinquent
Collections
Current Levy
Taxes
Percent of
2
$
Taxes as Current Levy
8,800,364
100.0%
8,800,364
100.0%
-
-
1998
9,396,855
9,396,855
100.0%
-
9,396,855
100.0%
-
-
1999
10,104,672
10,104,672
100.0%
-
10,104,672
100.0%
-
-
2000
11,732,295
11,732,295
100.0%
-
11,732,295
100.0%
-
-
2001
12,516,202
12,516,202
100.0%
-
12,516,202
100.0%
-
-
2002
14,190,378
14,190,378
100.0%
-
14,190,378
100.0%
-
-
2003
14,639,056
14,639,056
100.0%
-
14,639,056
100.0%
-
-
2004
15,335,693
15,335,693
100.0%
-
15,335,693
100.0%
-
-
2005
16,013,591
16,013,591
100.0%
-
16,013,591
100.0%
-
-
2006
18,191,952
18,191,952
100.0%
-
18,191,952
100.0%
-
-
Notes: 1
This table includes levies and collections for the Redevelopment Agency.
2
Because it adopted a new method of distributing property taxes (commonly referred to as the "Teeter Plan"), the County is now responsible for all delinquent secured property taxes.
3
Does not include amounts for Property Taxes in Lieu of Vehicle License Fees
Source:
County of Santa Cruz Auditor-Controller's Office City of Santa Cruz Finance Department
153
City of Santa Cruz Ratios of Outstanding Debt By Type Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
Governmental Activities: General obligation bonds
$
Tax allocation bonds
-
$
-
$
6,998,473
$
7,176,298
$
7,299,481
3,755,000
3,690,000
3,540,000
3,385,000
3,225,000
598,586
569,946
555,921
518,392
4,890,431
-
-
854,158
1,583,610
1,649,722
Notes
-
-
-
-
-
Other
-
-
-
-
531,900
4,353,586
4,259,946
11,948,552
12,663,300
17,596,534
Wastewater revenue bonds
21,335,000
20,570,000
19,745,000
5,210,000
5,085,000
Storm water revenue bonds
-
-
-
-
-
Certificates of participation Capital leases
Total Governmental Activities Business-type Activities:
Water revenue bonds
380,000
-
-
-
Golf course revenue bonds
290,000
225,000
155,000
80,000
-
Certificates of Participation
12,315,054
9,221,558
14,251,608
22,339,568
28,985,383
Leases
1,546,663
2,175,315
1,619,560
2,353,054
2,942,887
Notes
45,399,542
51,938,582
50,976,494
48,894,934
47,221,604
Total Business-type Activities
81,266,259
84,130,455
86,747,662
78,877,556
84,234,874
Total Primary Government
$
85,619,845
$
88,390,401
$
98,696,214
$
91,540,856
$
101,831,408
Personal income
$
1,485,678,852
$
1,570,062,816
$
1,709,289,000
$
1,890,711,810
$
2,154,291,172
Debt as percentage of personal income
5.76%
Population
5.63%
5.77%
4.84%
4.73%
53,172
53,172
54,575
56,046
55,028
Debt per capita
1,610
1,662
1,808
1,633
1,851
Assessed value
3,203,873,150
4,932,597,610
5,250,364,937
5,679,708,576
4,681,502,599
Debt as percentage of assessed value
2.67%
1.79%
Notes: Personal income and population figures are from Table 16. Assessed value is from Table 7.
Source:
City of Santa Cruz Finance Department
154
1.88%
1.61%
2.18%
TABLE 11
Fiscal Year Ended June 30 2002 $
2003
7,286,115
$
2004
7,260,759
$
2005
7,228,152
$
2006
7,183,381
$
7,126,075
3,055,000
2,880,000
2,695,000
5,245,000
5,125,000
4,769,607
4,642,350
4,513,661
4,377,108
4,239,123
3,355,410
2,450,555
1,765,216
1,766,635
1,247,913
1,500,000
1,500,000
1,624,706
1,334,942
4,205,026
998,692
985,663
920,263
1,029,804
944,836
20,964,824
19,719,327
18,746,998
20,936,870
22,887,973
4,955,000
4,955,000
4,820,000
4,680,000
4,715,000
-
-
-
-
6,100,000
-
-
-
-
12,450,000
-
-
-
-
-
28,047,650
28,047,650
29,831,339
28,662,892
20,915,877
2,926,370
4,624,099
3,939,187
3,108,344
3,145,352
44,988,271
44,883,261
42,593,574
40,240,469
37,822,337
80,917,291
82,510,010
81,184,100
76,691,705
85,148,566
$
101,882,115
$
102,229,337
$
99,931,098
$
97,628,575
$
108,036,539
$
2,096,039,335
$
2,085,569,904
$
2,109,542,853
$
2,247,596,565
$
2,365,518,375
4.86%
4.90%
4.74%
4.34%
4.57%
55,085
55,633
56,289
56,451
56,925
1,850
1,838
1,775
1,729
1,898
4,932,597,610
4,681,502,599
4,932,597,610
5,250,364,937
5,679,708,576
2.07%
2.18%
2.03%
1.86%
155
1.90%
City of Santa Cruz
TABLE 12
Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years
Fiscal
Less: Amount
Year
General
Available
Percentage
Debt
Ended
Obligation
in Debt
of Assessed
Per
Assessed
June 30
Bonds
Service Fund
Value
Capita
Value
Population
-
$3,203,873,150
53,172
1997
$
-
$
-
Total $
-
-
$
1998
-
-
-
-
3,328,303,676
53,172
1999
6,998,473
12
6,998,461
0.20%
128
3,483,511,451
54,575
2000
7,176,298
125,218
7,051,080
0.19%
126
3,782,301,841
56,046
2001
7,299,481
277,763
7,021,718
0.17%
128
4,052,397,447
55,028
2002
7,286,115
324,117
6,961,998
0.16%
126
4,454,738,526
55,085
2003
7,260,759
389,184
6,871,575
0.15%
124
4,681,502,599
55,633
2004
7,228,153
457,945
6,770,208
0.14%
120
4,932,597,610
56,289
2005
7,183,381
557,277
6,626,104
0.13%
117
5,250,364,937
56,451
2006
7,126,075
707,777
6,418,298
0.11%
113
5,679,708,576
56,925
Notes: Assessed Value is from Table 7. Population figure is from Table 16.
Source:
City of Santa Cruz Finance Department
156
City of Santa Cruz
TABLE 13
Computation of Direct and Overlapping Debt June 30, 2006
2005-2006 Assessed Valuation
$ 5,679,708,576
Redevelopment Incremental Valuation: Adjusted Assessed Valuation:
899,383,880 $ 4,780,324,696 Total
Percentage
Amount
Debt
Applicable
Applicable
Outstanding
to City1
to City
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Cabrillo Joint Community College District
$ 129,113,503
20.003%
Santa Cruz High School District
50,973,963
54.374%
27,716,583
Santa Cruz Elementary School District
24,742,596
94.653%
23,419,609
Live Oak School District
12,580,000
3.109%
391,112
Scotts Valley Unified School District
21,000,000
0.012%
2,520
City of Santa Cruz
7,126,075
100.000%
7,126,075
City of Santa Cruz 1915 Act Bonds
1,650,000
100.000%
1,650,000
Total Direct and Overlapping Tax and Assessment Debt
$ 247,186,137
$
25,826,574
$
86,132,473
$
13,719,539
2
DIRECT AND OVERLAPPING GENERAL FUND DEBT: Santa Cruz County Certificates of Participation
67,637,248
20.284%
Cabrillo Joint Community College District Certificates of Participation
$
3,040,000
20.003%
Scotts Valley Unified School District Certificates of Participation
3,985,000
0.012%
478
Santa Cruz City Schools Certificates of Participation
5,545,000
54.374%
3,015,038
Live Oak School District Certificates of Participation
4,000,000
3.109%
124,360
City of Santa Cruz General Fund Obligations
8,690,000
100.000%
8,690,000
950,976
100.000%
950,976
3,495,000
7.086%
247,656
Santa Cruz Consolidated Emergency Communication Center Monterey Bay Unified Air Pollution Control District Authority Total Direct and Overlapping General Fund Debt
$
97,343,224
Combined Total Debt
$ 344,529,361
Notes: 1
Percentage of overlapping agency's assessed valuation located within boundaries of the city.
2
Debt is reported at the accreted value. Excludes issues self-supporting from enterprise revenues ($7,515,000).
3
Includes $5,265,000 for Certificates of Participation that are primarily supported by enterprise revenue. Under the lease agreement, however, the City is obligated to pay the lease payments from any source of legally available funds. 4
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and tax allocation bonds and non-bonded capital lease obligations.
Ratios to 2005-2006 Assessed Valuation: Direct Debt ($7,126,075)
0.13%
Total Direct and Overlapping Tax and Assessment Debt
1.50%
Ratios to Adjusted Assessed Valuation: Combined Direct Debt ($15,829,781)
0.35%
Combined Total Debt
2.37% $0
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/06: Source: California Municipal Statistics, Inc.
157
608,091
$
27,356,138
$ 113,488,611
3
4
City of Santa Cruz Legal Debt Margin Information Last Ten Fiscal Years
Fiscal Year Ended June 30
Debt limit
1997
1998
1999
2000
2001
$ 480,580,973
$ 499,245,551
$ 522,526,718
$ 567,345,276
$ 607,859,617
-
-
6,998,461
7,051,080
7,021,718
$ 480,580,973
$ 499,245,551
$ 515,528,257
$ 560,294,196
$ 600,837,899
Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit
0.00%
0.00%
1.34%
Notes: Section 1418 of the Charter of the City of Santa Cruz limits general obligation bond indebtedness to 15% of the total assessed valuation of all real personal property within the City.
Source: County of Santa Cruz Auditor-Controller's Office City of Santa Cruz Finance Department
158
1.24%
1.16%
TABLE 14
Fiscal Year Ended June 30 2002
2003
2004
2005
2006
$ 668,210,779
$ 702,225,390
$ 739,889,642
$ 787,554,741
$ 851,956,286
6,961,998
6,871,575
6,770,208
6,626,104
6,418,298
$ 661,248,781
$ 695,353,815
$ 733,119,434
$ 780,928,637
$ 845,537,988
1.04%
0.98%
0.92%
0.84%
0.75%
Legal Debt Margin Calculation For Fiscal Year 2005-06: Total assessed value
$5,679,708,576
Debt limit (15% of total assessed value) Debt applicable to limit: General obligation bonds (reported at accreted value) Less: Amount available in debt service fund for repayment of bonds
851,956,286 7,126,075 707,777
Total net debt applicable to limit
6,418,298
Legal debt margin
$ 845,537,988
159
City of Santa Cruz Pledged-Revenue Coverage Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
Wastewater Revenue Bonds: Wastewater charges and other
$
10,579,889
$
10,730,501
$
12,179,844
$
12,846,315
$
11,585,518
$
12,146,047
Less: operating expenses
5,984,051
6,054,987
7,379,231
7,856,133
7,275,278
8,929,861
Net available revenue
4,595,838
4,675,514
4,800,613
4,990,182
4,310,240
3,216,186
Debt service: 405,000
725,000
765,000
115,000
120,000
125,000
Interest
Principal
1,309,565
1,234,454
1,227,031
296,608
290,733
284,608
Total
1,714,565
1,959,454
1,992,031
411,608
410,733
409,608
2.68
2.39
2.41
12.12
10.49
7.85
Coverage Water Revenue Bonds: Water charges and other
$
13,464,846
$
14,468,484
$
14,425,845
$
-
$
-
$
-
Less: operating expenses
6,987,765
7,319,245
8,546,215
-
-
-
Net available revenue
6,477,081
7,149,239
5,879,630
-
-
-
355,000
380,000
380,000
-
-
-
Interest
37,402
19,850
9,925
-
-
-
Total
392,402
399,850
389,925
-
-
-
16.51
17.88
15.08
-
-
-
Debt service: Principal
Coverage Certificates of Participation: Special assessments and other
$
-
$
-
$
-
$
-
$
11,510,578
$
12,080,193
Less: operating expenses
-
-
-
-
8,519,131
9,747,000
Net available revenue
-
-
-
-
2,991,447
2,333,193
Debt service: Principal
-
-
-
-
110,000
100,000
Interest
-
-
-
-
223,868
537,580
Total
-
-
-
-
333,868
637,580
-
-
-
-
8.96
3.66
Coverage
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation.
Source:
City of Santa Cruz Finance Department
160
TABLE 15
Fiscal Year Ended June 30 2003 $
$
$
2004
12,306,445
$
2005
12,230,219
$
2006
12,578,070
$
12,394,292
9,415,409
9,855,372
9,964,418
8,591,034
2,891,036
2,374,847
2,613,652
3,803,258
130,000
135,000
140,000
150,000
278,233
271,608
264,733
256,233
408,233
406,608
404,733
406,233
7.08
5.84
6.46
9.36
-
$
-
$
-
$
18,692,531
-
-
-
11,775,892
-
-
-
6,916,639
-
-
-
-
-
-
-
121,517
-
-
-
121,517
-
-
-
56.92
12,422,235
$
13,577,644
$
13,121,028
$
13,218,521
10,447,158
11,045,892
11,350,148
9,859,552
1,975,077
2,531,752
1,770,880
3,358,969
145,000
695,000
720,000
755,000
529,300
514,088
487,153
457,327
674,300
1,209,088
1,207,153
1,212,327
2.93
2.09
1.47
2.77
161
City of Santa Cruz
TABLE 16
Demographic and Economic Statistics Last Ten Fiscal Years
Fiscal Year Ended June 30
Population1
Unemployment Rate2
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
53,172 53,172 54,575 56,046 55,028 55,085 55,633 56,289 56,451 56,925
8.5% 7.9% 7.3% 6.4% 5.2% 5.8% 7.5% 7.9% 7.2% 6.4%
Total
Per Capita
Personal
Personal Income3
Income $
1,485,679 1,570,063 1,709,289 1,890,712 2,154,291 2,096,039 2,085,570 2,109,543 2,247,597 2,365,518
Notes: Total Personal Income and Taxable Sales amounts are in thousands.
1 Source: State Department of Finance 2 State Employment Development Department 3
U.S. Department of Commerce
4
State Board of Equalization
162
$
27,941 29,528 31,320 33,735 39,149 38,051 37,488 37,477 39,815 41,555
Per Capita Taxable Sales4 $
550,962 680,283 634,138 725,287 828,500 809,628 761,208 761,986 795,060 813,834
Taxable Sales $
10,362 12,794 11,620 12,941 15,056 14,698 13,683 13,537 14,084 14,297
City of Santa Cruz
TABLE 17
Principal Employers June 30, 2006
Fiscal Year Ended June 30, 2006 Percentage Number of
of Total
Employees
Rank
Employment
4,250 2,358 1,066 476 347 257 212 195 174 158
1 2 3 4 5 6 7 8 9 10
4.570% 2.535% 1.146% 0.512% 0.373% 0.276% 0.228% 0.210% 0.187% 0.170%
Employer: University of California at Santa Cruz County of Santa Cruz City of Santa Cruz Plantronics Santa Cruz Beach-Boardwalk Costco Community Bridges Crow's Nest Santa Cruz Sentinel Santa Cruz Biotechnology Incorporated Totals
9,493
Total employment1
93,000
This table shows the data for the current fiscal year. Prior years' data is not available in the City's business license database.
Source:
City of Santa Cruz Business License database U.S. Department of Labor - Bureau of Labor Statistics
1
163
10.208%
City of Santa Cruz
TABLE 18 1
Number of City Employees by Department Current Year and Last Year
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Departments: City Clerk
7
7
7
7
7
7
7
7
7
7
City Manager
5
5
5
5
5
5
5
5
5
4
Human Resources
11
12
12
12
13
13
13
12
12
13
Finance
33
34
34
36
38
38
38
36
35
38
-
-
-
-
-
-
-
-
-
-
117
120
122
126
134
136
133
126
124
125
51
52
53
55
59
59
58
55
54
53
Parks and Recreation
110
113
114
118
126
127
125
118
116
111
Library
112
115
116
120
128
130
127
120
118
119
Public Works
205
209
212
219
235
239
232
219
216
216
27
28
28
30
31
32
31
30
29
27
Information Technology Police Fire
Planning and Community Development Redevelopment
8
8
8
8
9
9
9
8
8
9
Water
82
84
85
89
94
96
94
89
87
88
Total
768
787
796
825
879
891
872
825
724
722
Notes: 1
Personnel authorizations budgeted. Figures rounded to whole numbers.
Source:
City of Santa Cruz Budget Document
164
City of Santa Cruz
TABLE 19
Operating Indicators By Function Last Four Fiscal Years
Fiscal Year Ended June 30 2003
2004
2005
2006
Function: City Clerk Hours for creating the agenda for posting
326
305
291
**
**
**
600
600
450
280
180
400
40
**
60
120
Advisory body hours Election hours Initiative/referendum petitions processing hours Police Calls for service
**
76,069
76,498
70,065
Cases
**
14,717
14,076
14,212
Emergency calls
4,606
4,623
4,631
5,006
Inspections
1,603
1,853
1,727
1,794
275
306
305
294
Fire
Parks and Recreation Number of classes Facility rentals: Parks
961
892
760
831
**
7,753
7,534
7,348
181
146
183
193
Louden Nelson Civic Auditorium Swimming pool Special events produced
**
200
167
146
32
30
20
22
1,877,256
1,856,142
1,899,739
1,975,986
289,726
288,821
293,525
313,496
470
432
432
438
Library (all locations) Items checked out Queries handled Open hours/week Pubic Works Overlay (square footage)
-
Seal coat (square footage)
-
524,963 -
-
251,106
-
320,879
Sewer New connections
144
72
85
106
Average daily flow (MGD)
10.53
9.52
9.92
11.39
Annual total flow (MG)
3,843
3,475
3,621
4,157
23,724
23,799
23,924
24,044
10
10
10
9
3,603
3,660
3,448
3,340
$22
$25
$30
$34
Water Active accounts Averge daily consumption (MGD) Annual consumption (MG) Averge monthly residential bill
This table shows data for the last four fiscal years. Prior years' data is not available. **
Unavailable.
Source:
City of Santa Cruz Departments
165
City of Santa Cruz
TABLE 20
Capital Asset Statistics By Function Last Ten Fiscal Years
Fiscal Year Ended June 30 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Function: Public Safety Police: Stations Vehicular patrol units Fire stations
1
1
1
1
1
1
1
1
1
1
43
43
55
55
78
78
43
43
61
61
3
3
3
3
3
3
3
3
3
3
Public Parking 21
19
20
21
23
22
26
20
21
21
Spaces
2,050
1,916
1,369
4,939
5,094
5,235
5,397
5,124
5,149
5,149
Parking meters
2,030
2,014
1,953
1,945
1,741
1,764
1,695
1,714
1,764
1,764
28
28
29
29
29
30
30
30
30
30
1,350
1,350
1,450
1,450
1,457
1,970
1,970
1,970
1,970
1,970
13
13
11
11
11
17
17
17
17
17
Swimming pools
1
1
1
1
1
1
1
1
1
1
Tennis courts
7
7
7
7
7
7
7
7
8
8
Golf course
1
1
1
1
1
1
1
1
1
1
Central library
1
1
1
1
1
1
1
1
1
1
Branch libraries within city
2
2
2
2
2
2
2
2
2
2
Branch libraries in county
7
7
8
7
7
7
7
7
7
7
Bookmobile
-
-
-
-
1
1
1
1
1
1
145
145
145
136
136
136
136
136
136
136
9
9
9
13
13
13
13
13
13
13
2,307
2,310
2,335
2,335
2,800
2,825
2,825
2,893
2,893
2,893
200
200
200
208
62
148
148
151
151
151
35
35
35
35
8
50
50
50
50
50
22,557
22,694
23,024
23,064
23,170
23,310
23,590
23,724
23,799
23,924
Lots
Parks and Recreation Parks Parks acreage Playgrounds
Libraries
Streets Miles of paved streets Miles of alleys Street lights Sewer Miles of sanitary sewers Miles of storm drains Water Active accounts Miles of water mains Fire hydrants
Source:
300
300
300
300
300
300
300
300
290
291
1,841
1,850
1,890
1,890
1,904
1,913
1,997
2,019
2,089
2,060
City of Santa Cruz Departments
166
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