HomeMy WebLinkAboutAgenda Report - December 15, 2010 I-01f1
AGENDA ITEM
A% CITY OF LODI
COUNCIL COMMUNICATION
Im
AGENDA TITLE: Review of City's Annual Financial Report (Fiscal Year 2009/10) by Macias, Gini &
O'Connell, LLP
MEETING DATE: December 15,2010
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive and file the following reports and financial statements
submitted by Macias, Gini & O'Connell, LLP and the Internal
Services department for Fiscal Year 2009/10:
• The Combined Annual Financial and Single Audit Report
• Management Report
• Report on Applying Agreed-upon Procedures
BACKGROUND INFORMATION: The annual audit was conducted to assure the City Council and
other interested parties that the City's financial records and reports
are prepared in accordance with generally accepted accounting
principles (GAAP), that internal controls are adequate to safeguard the City against loss from
unauthorized use or disposition of assets and that the City has complied with all agreements and
covenants to obtain grant funds and debt financing. Macias, Gini & O'Connell, LLP (MGO) issued an
'unqualified opinion.' Scott Brunner, Director of MGO will present the audit report and answer questions
during the meeting.
The reports will be provided to federal and State oversight agencies, bond trustees and insurance
companies for their review and evaluation. Copies of the reports are provided to the City Council and are
also available to the public by contacting the Financial Services Division or through the City web site at
www.lodi.gov and at the Lodi Public Library.
Certificate of Achievement
The City received a Certificate of Achievement for Excellence in Financial Reporting from the
Government Finance Officers Association of the United States and Canada (GFOA) for the 17th year and
the California Society of Municipal Finance Officers (CSMFO) for the 11th year in a row. A copy of the
GFOA certificate is included in the 2009/10 Financial Reports.
FISCAL IMPACT: By law and good management practice, the City's financial records are audited by
independent auditors according to Generally Accepted Auditing Standards. Well
maintained financial records are the cornerstone by which the City fulfills it
fiduciary responsibilities a public.
Jordan Ayers
Deputy City Manager
APPROVED:
Konradt Bartlam, City Manager
CITY OF LODI, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended June 30,2010
PHIL KATZAKIAN, MAYOR
SUSAN HITCHCOCK, MAYOR PRO TEMP
LARRY HANSEN, COUNCILMEMBER
BOB JOHNSON, COUNCILMEMBER
JOANNE MOUNCE, COUNCILMEMBER
KONRADT BARTLAM, CITY MANAGER
Prepared by the Financial Services Division
Ruby Paiste, Financial Services Manager
CorieneWadlow, Supervising Accountant
Odette Bondoc, Accountant II
(This page intentionally left blank.)
INTRODUCTORY SECTION
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30,2010
TABLE OF CONTENTS
INTRODUCTORY SECTION
Table of Contents i
Letter of Transmittal v
Certificate of Achievement for Excellence in Financial Reporting xiii
Organization Chart of the City of Lodi xiv
Directoryof Officials and Advisory Bodies xv
FINANCIAL SECTION
IndependentAuditor's Report 1
MANAGEMENTS DISCUSSION AND ANALYSIS 3
BASIC FINANCIAL STATEMENTS
Government -wide Financial Statements:
Statementof Net Assets
17
Statementof Activities
18
Fund Financial Statements:
19
Balance Sheet — Governmental Funds
21
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets
22
Statementof Revenues, Expenditures and Changes in Fund Balances— Governmental Funds
23
Reconciliation of the Statement of Revenues, Expendituresand Changes in Fund Balances
of Governmental Funds to the Statement of Activities
24
Statementof Net Assets — Proprietary Funds
25
Statement of Revenues, Expenses and Changes in Net Assets — Proprietary Funds
26
Statement of Cash Flows — Proprietary Funds
27
Statementof Fiduciary Net Assets —Fiduciary Funds
28
Statementof Changes in Fiduciary Net Assets - Fiduciary Funds
29
Notes to Basic Financial Statements
31
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress — Pension Plan 77
Schedule of Funding Progress— OPEB Plan 78
Schedule of Revenues, Expendituresand Changes in Fund Balance — Budget and Actual — General Fund 79
Notes to the Required Supplementary Information 80
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet — Nonmajor Governmental Funds 83
Combining Statementof Revenues, Expendituresand Changes in Fund Balances— Nonmajor Governmental Funds 84
Nonmajor Governmental Funds - Special Revenue Funds 85
Combining Balance Sheet—Nonmajor Governmental Funds — Special Revenue Funds 87
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDEDJUNE 30,2010
TABLE OF CONTENTS - continued
Combining Statementof Revenues, Expendituresand Changes in Fund Balances — Nonmajor Governmental Funds — Special Revenue Funds
88
Schedules of Revenues, Expendituresand Changes in Fund Balance — Budget and Actual — Nonmajor Governmental Funds — Special Revenue Funds
89
Nonmajor Governmental Funds - Capital Project Funds
97
Combining Balance Sheet — Nonmajor Governmental Funds — Capital Project Funds
98
Combining Statement of Revenues, Expendituresand Changes in Fund Balances — Nonmajor Governmental Funds — Capital Project Funds
99
Combining Statementof Net Assets - Internal Service Funds
101
Combining Statementof Revenues, Expenses and Changes in Fund Net Assets — Internal Service Funds
102
Combining Statementof Cash Flows- Internal Service Funds
103
Combining Statement of Fiduciary Net Assets - Private-PurposeTrust Funds
105
Combining Statementof Changes in Fiduciary Net Assets - Fiduciary Funds
106
Statementof Changes in Assets and Liabilities -Agency Fund
107
STATISTICAL TABLES (UNAUDITED)
Government -wide information:
109
Net Assets by Component- Last Eight FiscalYears
110
Changes in Net Assets - Last Eight FiscalYears
111
Fund information:
Fund Balances, Governmental Funds- LastTen FiscalYears
113
Changes in Fund Balancesof Governmental Funds- LastTen FiscalYears
114
Tax Revenues by Source, Governmental Funds- LastTen FiscalYears
116
Assessed Value and Estimated Actual Value of Taxable Property- LastTen FiscalYears
117
Directand Overlapping Property Tax Rates- LastTen FiscalYears
118
Principal PropertyTaxpayers-CurrentYear and NineYears Ago
119
PropertyTax Levies and Collections- LastTen FiscalYears
120
Electricity Sold by Type of Customer - Last Five FiscalYears
121
Ratios of Outstanding Debt by Type - Last Ten FiscalYears
122
Ratiosof General Bonded Debt Outstanding-LastTen FiscalYears
123
Legal Debt Margin Information - LastTen FiscalYears
124
Direct and Overlapping Governmental Activities Debt
125
Pledged -Revenue Coverage- LastTen FiscalYears
126
Demographicand Economic Statistics- LastTen FiscalYears
128
Principal Employers- CurrentYear and NineYears Ago
129
Full -Time Equivalent City Government Employees By Department- LastTen FiscalYears
130
Operating Indicators by Function/Program/Department - Last Five FiscalYears
131
Capital Asset Statistics by Function/Program/Department - Last Six FiscalYears
133
SINGLE AUDIT REPORTS
Schedule of Expendituresof Federal Awards 137
Notes to the Schedule of Expendituresof Federal Awards 139
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30,2010
TABLE CF CONTENTS- continued
IndependentAuditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with GovernmentAuditing Standards 140
IndependentAuditor's Report on Compliancewith RequirementsApplicable to Each Major Program and Internal Control over
Compliance inAccordancewith CircularA-133 142
Schedule of Findings and Questioned Costs 144
Schedule of PriorYear Findings and Questioned Costs 150
CONTINUING DISCLOSURES (UNAUDITED)
Annual Reportfor Electric Utility 151
Annual Reportfor Wastewater Utility 157
Annual Reportfor the Lodi Public Improvement Corporation 164
(This page intentionally left blank.)
CITY COUNCIL
BOB JOHNSON, Mayor
JOANNE MOUNCE, Mayor Pro
Tempore
COUNCILMEMBERS:
LARRY HANSEN
PHIL KATZAKIAN
December7,2010
CITY OF LODI
CITY HALL, 221 WEST PINE STREET
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
(209) 333-6706
FAX (209) 333-6795
To the Honorable Mayor, Members of the City Council and the Manager
of the City cf Lodi:
KONRADT BARTLAM
City Manager
RANDI JOHL
City Clerk
STEVE SCHWABAUER
City Attorney
The Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2010, is hereby submitted. This report is provided to
present the financial position, changes in financial position, and where applicable, cash flows of the City of Lodi (City) as of and for the year ended
June 30, 2010, in conformity with generally accepted accounting principles. The report conforms to the highest standards of financial reporting as
established by the Governmental Accounting Standards Board (GASB), for reporting by State and local governments. The responsibility for the
accuracy, fairness and completeness of the report rests with the City.
This report consists of management's representations concerning the finances of the City. 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 has established a comprehensive internal control framework that is designed to protectthe City's assets from loss, theft, or
misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with generally accepted
accounting principles (GAAP). We believe that the information is accurate in all material respects and that it is presented in a manner designed to
fairly present the financial position of the City. In addition, we believe that all disclosures necessary to enable the reader to gain full understanding of
the City's financial activities have been included.
This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately
following the independent auditors' report.
THE REPORTING ENTITYAND SERVICES PROVIDED
The funds included in the CAFR are those deemed dependent upon the City and controlled by the City Council and reflect the City's financial
reporting entity in accordancewith GASB Statement 14.
The City was incorporated December6, 1906, as a municipal corporation under the general laws of the State of California. The City operates under
a Council-Managerform of government. Under the Council -Manager form of government, policy making and legislative authority are entrusted to
the City Council. The City Council consists of five members elected at -large by its voters for four-year terms, with no term limits. Elections are held
in November of even -numbered years. Each year the Mayor and Mayor Pro -Tempore are chosen by the members of the City Council. The Mayor
presides at Council meetings and acts as the ceremonial head of the City, the Mayor Pro Tempore serves as Mayor in his or her absence. The City
Manager is responsible for carrying out the policies and ordinances of the City Council, for appointing department heads, and overseeing the
operations of the City. The City Manager, City Attorney and the City Clerk are appointed by the City Council.
The City provides a wide range of municipal services including public safety (police, fire and graffiti abatement), public utilities services (electric,
water and wastewater), transportation services (streets, flood control and transit) leisure, cultural and social services (parks and recreation, library
and community center), and general government services (management, community development, human resources administration, financial
administration, building maintenance and equipment maintenance).
Several municipal services are provided through other government agencies, private companies or public utility companies, including:
Numberof
Facilities
Elementaryand Secondary Schools 18
Sanitation (solid waste) and Cable Television 3
Ambulance 1
Gas and Telephone 2
ECONOMIC CONDITION AND OUTLOOK
The City is located in the San Joaquin Valley between Stockton 10 miles to the south, and Sacramento 35 miles to the north, and adjacent to U.S.
Highway 99. The City population is 63,549and is contained in an area of 13.92square miles. The City has grown steadily since incorporation in
1906. The City's growth is provided for in both the General Plan and the City's growth control ordinance that allows an increase in population of 2%
per year until the growth limits are reached.
The City is built on a strong and broad based local economy. The City is known for its Zinfandel wine. It is an authentic dynamic wine region with 75
wineries within 10 miles of downtown. The employment base is diversifiedwith food processing, packaging, plastic and service industries.
In addition, the City has a wide range of small, financially sound businesses that add to the economic strength of the City. These companies range
in size from 10 to 150 employees and produce a wide variety of products, services and commodities.
Over the past several years, there has been an increase in industrial and residential development that has been unprecedented since the early
1980s. This new development combined with the growing strength of the wine/grape industry is a positive indicator for the City. The City's focus on
economic development has encouraged numerous big industries to move to the City that collectively created hundreds of new jobs.
A
Economic Development
The City continues to be committed to promoting economic development (business retention and attraction) and expanding the tax base to fund City
services rather than increase taxes to pay for these services. The City has provided for additional retail sales and commercial activity with approval
of new retail developments adjacent to Highway 99 and Harney Lane, The City is also committed to an Enterprise Zone with San Joaquin County.
MAJOR GOALS, OBJECTIVESAND PROJECTS
To assist the citizens of the City in understanding where the City intends to allocate available resources, the City Council, the City Manager and
Department Heads established in 2004 a hierarchy of major goals, objectives and major projects that support and re -enforce the City's mission
statement.
Four major City goals were established as policy direction and focal points for the efforts of City staff. These goals include:
Ensure a High Quality of Life and a Safe Environmentfor Citizens
Ensure Efficient and Productive City Organization
Ensure PublicTrust, and
Ensure the Developmentof the Lodi Economy for a Fiscally Sound City Organization
City Council, the City Manager and Department Heads established nineteen major City objectives:
Maintain City's Sense of Community Provide Employee Training and Education
Provide for a Balanced Community Evaluate Telecommunications Opportunities
EnhanceAccess through Implementation of Information Systems Strategic Plan Provide Resourcesto Maintain City's Infrastructure
Promote Urban Forestry Promote Public Relations and Marketing Efforts
Attract, Retain and Invest in a Quality City Work Force Ensure Open and Accessible Public Meetings
Encourage PublicArts, Cultural and Recreational Opportunities Pursue Effortsto be Entrepreneurial
Provide Appropriate and Sufficient City Facilities Improve Customer Service
Develop Short and Long Range Operational Plans Continue to use Partnerships to Advance City's Objectives
Develop Effective Records Management Program Provide a Balanced Budget& Adhere to Adopted Policies
Promote Commercial/Industrial Base
Projects represent the foundation of the planning statements for the City. These projects are designed to accomplish specific objectives and
become the focus for organization wide effort.
As discussed above, economic revitalization continued to be an active focal point of the City in 2009-10. The following projects are underway and
will see significant progress or be completed in 2011.
Water Treatment Plant
The City currently relies on groundwater for its drinking water supply. During FY 2009-10, the City requested bids for the construction of an 8 million
gallon a day water treatment plant, utilizing surface water from the Mokelumne River. In October 2010, the City awarded the construction contract
and closed on a revenue bond issue to finance the construction. Total cost for the plant is estimated to be $36.5 million and construction is
estimated to be completed in FY 2011-12.
Vii
LodiAvenue Reconstruction
Lodi Avenue is a major thoroughfare running through the center of the City. The City used approximately $1.6 million in American Recovery and
ReinvestmentAct (ARRA) funds to reconstruct and beautify a .06 mile portion of Lodi Avenue. Construction was completed in November 2010.
Tienda Drive Senior Housing and Roget Park
The City has sold a parcel of land to a developer to build a senior housing project. The land is adjacent to land that had been given to the City to
develop a park. Through the sale of the adjacent parcel to the developer, the City will be able to develop the park and have a showcase senior
housing development. Construction is expected on both projects in FY 2010-11 with completion in FY 2012-13.
DeBenedetti Park Improvements and G -Basin
DeBenedetti Park is approximately a 46 -acre parcel that will support parks and recreation programs and serve as a storm drainage basin. The
initial phase of this project consists of providing and installing storm drainage piping and pumping, water well and irrigation system and turf. New
turf areas will be used for soccer, flag football and softball programs. Estimated cost of this phase of the project is $1.3 million and completion is
expected in FY 2010-11.
Grape Bowl Improvements
The Grape Bowl is a stadium that was originally constructed using Work Project Administration Funding during the 1940's. During FY 2009-10,
Energy Efficiency Conservation Block Grant funds under the ARRA were used to upgrade the lighting. Additionally, significant improvements related
to disability access were completed and significant progress was made toward installing an all-weather playing surface. Completion is expected in
November 2010.
Reynolds Ranch
Reynolds Ranch is a planned development on the south eastern edge of the city that will eventually incorporate residential and commercial
development. An application for permits for construction of a Costco was received during FY 2009-10. Construction is currently underway with an
expected completion in the first half of calendar year 2011. Additional applications for permits are expected for other retail establishments in FY
2010-11.
Water Meters and Water Infrastructure
Under the state law, all residential housing must be billed for water usage on a metered basis by 2025. The City has embarked on a program to
install meters on approximately 14,000 parcels over the next 7 years. A portion of this project will also include moving mains and service
connections from alleys and rear yards to streets and front yards. Additionally, the City will be appropriately sizing water mains as part of this
project. Construction began during FY 2009-10 and will continue through FY 2016-17. Estimated cost for the complete program is $42.5 million.
White Slough Wastewater Treatment Plant De -watering Facility
The City received approval during the FY 2009-10 from the Council to construct a de -watering facility at its White Slough Wastewater Treatment
Plant. The de -watering facility is estimated to cost approximately $5 million and be completed by the end of calendar year 2011.
vfff
FINANCIAL INFORMATION, MANAGEMENTAND CONTROL
A detailed understanding of the financial position and operating results of the City is provided in the following sections of this report. The following is
a brief description of the City's financial condition, management practices and control techniques.
Basis of Accounting
Basis of accounting refers to the policy as to when revenues, expenditures or expenses are recognized in the financial accounts and reported in the
financial statements. The City's accounting records for general government operations are maintained on a modified accrual basis. Revenues are
recorded when available and measurable. Expenditures are recorded when the services or goods are received and the liability incurred. For
proprietary fund types, the City uses the accrual basis of accounting. As such, the measurement focus is on net income in addition to financial
position and changes in financial position. Revenues are recognized when earned and expenses are recognized as the liability is incurred. We
believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial
transactions.
Accounting System and Budgetary Control
In developing the City's accounting system, consideration is given to the adequacy of the internal controls. The objective of the City's internal
accounting controls is to provide reasonable, but not absolute, assurance that the assets are safeguarded against loss from unauthorized use or
disposition; and to ensure that transactions are properly recorded to permit the preparation of financial statements in accordance with generally
accepted accounting principles. The concept of reasonable assurance recognizes that the cost of control should not exceed the benefits likely to
be derived and that estimates and judgments are required to be made by management in evaluating these costs and benefits.
In addition, the City maintains budgetary controls. The objective of these controls is to ensure compliance with legal provisions embodied in the
annual appropriated budget approved by the City Council. The City Manager is responsible for the preparation of the budget and its implementation
after adoption. The City Council has the authority to amend the budget at any time during the year. The City Manager has the authority to make
adjustments to the budget as long as those changes will not have a significant policy impact nor affect budgeted year-end balances. During fiscal
year 2009-10, the City Council and City Manager made several supplemental budget appropriations, the majority of which relate to operating
budgets and capital projects.
Fund Balance
It is the City's goal to target and maintain an unreserved, undesignated fund balance in the General Fund of at least 15 % of operating expenditures
and working capital balances in the Water and Wastewater enterprise funds of at least 25% of operating expenses. Based on a study completed in
2007, the target for the Electric enterprise fund working capital is $12.9 million. The goals allow for variations from year-to-year to account for
economic and fiscal changes. The General Fund maintained an unreserved undesignated fund balance of $3,896,576 or 10.99%, of operating
expenditures at the end of fiscal year 2009-10.
Cash Management
The City has written investment policies that address a wide range of investments. These policies describe the City's investment objectives,
investment authority, allowable investment vehicles, maturity terms and eligible financial institutions. They also describe the City's capital
preservation and cash management objectives. As provided in the policy, investments are intended to be held until maturity and investment terms
are to be consistent with the City's cash flow needs. Investment reports are issued quarterly to the City Manager and City Council to provide
I►;1
detailed information regarding the City's investments and compliance with City policy and as required by state law. An important objective of the
City's investment policy is to achieve a reasonable rate of return on public funds while minimizing risks and preserving capital. In evaluating the
performance of the City's investment portfolio, investments are expected to yield a rate of return that regularly meets or exceeds an average rate of
return on a three-month U.S. Treasury Bill.
Appropriation Limitation
Article XIII B of the Constitution of the State of California (Proposition 4) provides for the limitation of expenditures by state and local governments.
Underthe provisions of this article, City appropriations funded through tax sources may not exceed Fiscal Year 1979 appropriation levels except as
adjusted for increases in population and the growth in the California per capita income or non-residential assessed valuation due to new
construction within the City.
Excluded from the limitation are appropriations funded through charges for services, fines and forfeitures, grants, transfers of service responsibilities
between government agencies and indebtedness incurred prior to Fiscal Year 1979. Pursuantto subsequent legislation adopted after Article XIII B,
the City is required to annually establish and adopt its appropriations limit by resolution. For 2009-10, the City's appropriations subject to limit were
$30,614,117 and the appropriation limit was $77,022,286 leaving appropriations at $46,408,169 below the limit.
Debt Administration
At June 30, 2010, the City had outstanding Certificates of Participation of $159,070,050. These liabilities are discussed in Note 8 of the Basic
Financial Statements and summarized below.
The City issued $5.0 million of Certificates of Participation (1995 COP) to fund its share of capital improvements in the downtown and Cherokee
Lane areas. These bonds were refunded by the issuance of the 2002 Certificates of Participation. The City also issued $1.97 million limited
obligation improvement bonds for the Central City Revitalization Assessment District on July 22, 1996. The improvement bonds of the assessment
district are not general obligations of the City.
The City also issued $10.12 million for the renovation of the Performing Arts Center on August 1, 1996; the 2002 Certificates of Participation also
refunded these bonds.
In 1999, the Electric Utility issued $43.96 million Certificates of Participation to finance the costs of certain improvements to the distribution and
transmission facilities of the City's electric system. These bonds were refunded by the issuance of the 2002 Electric Systems Revenue Certificates
of Participation. The 2002 bonds were refunded with the 2008 Electric Systems Revenue Certificates of Participation thereby eliminating a variable
rate obligation.
In November 2002, the City issued the 2002 Revenue Certificates of Participation Series C for $21,225,000 and 2002 Series D for $22,740,000, to
buy out the energy purchase agreement entered into by the City in January 2002 with Calpine.
On October 21, 2003, the City and the City of Fort Bragg issued Water and Wastewater revenue bonds (20038) through the California Statewide
Communities DevelopmentAuthority ("the Authority") under its pooled financing program. Total bonds issued were $9,855,000 of which $5,000,000
was for the upgrade of the City's wastewater faci I ities.
In 2004, the City issued $27,360,000 in Wastewater Certificates of Participation (2004A) to finance the costs of improvements to the wastewater
collection, treatment and disposal system.
In 2007, the City issued $30,320,000 in Wastewater Certificates of Participation (2007A) to finance Phase III of the wastewater improvements and to
refund the 1991 Certificatesof Participation.
On July 24, 2008, the City issued the 2008 Electric System Revenue Certificates of Participation to provide funds to currently refund the outstanding
$46,760,000 principal amount of the Electric System Revenue Certificates of Participation 2002 Series A Variable Rates Certificates (the "Refunded
2002 Certificates"); and to pay certain costs relating to the termination of a swap agreement relating to the Refunded 2002 Certificates.
The City's debt management policy includes a commitment to monitor all forms of debt annually during the preparation of the City's Financial Plan
and Budget to ensure compliance. Also, the City will generally conduct financing on a competitive basis, will seek an investment grade rating on any
direct debt and will obtain credit enhancements such as letters of credit or insurance when necessaryfor marketing purposes, availability and cost
effectiveness.
Interim Financial Reporting
Monthly financial reports are prepared to present the City's financial condition and results of operations. These executive reports are organized
using the "pyramid" approach. As such, the highest level of summary data is presented first, followed by progressively greater levels of detail. The
reports provide current period and year to date revenues, expenditures and encumbrances for all activities and funds, including year to date
estimates and variances. The reports are available to all departments and to the public on the City's website.
Single Audit
The City is subject to financial and compliance reporting required by the Single Audit Act Amendments of 1996 and OMB Circular A-133, which is a
requirement of all local and state governments receiving federal financial awards. As part of the Single Audit, tests are made to determine the
adequacy of internal controls, including that portion related to federal financial awards, as well as to determine that the City has complied with
certain applicable laws and regulations governing federal funds. The Single Audit report is published as part of the annual financial statements for
easy reference.
Competitive Bidding Policy
All required purchasesfor materials, equipment and services during 2009-10 were made pursuantto competitive bidding procedures as established
under the City's purchasing ordinance. Contracts for construction projects were awarded pursuant to competitive bidding procedures established by
the State of California for projects in excess of $5,000.
Risk Management
The City is self-insured for dental care, workers' compensation, general liability and unemployment insurance. General liability and workers'
compensation are administered by outside agencies. The City administers unemployment insurance. Self-insurance transactions are accounted for
under the Insurance Funds. At June 30, 2010, the Insurance Fund had a net deficit of $1,368,350.
A
In 2004, the City issued $27,360,000 in Wastewater Certificates of Participation (2004A) to finance the costs of improvements to the wastewater
collection, treatment and disposal system.
In 2007, the City issued $30,320,000 in Wastewater Certificates of Participation (2007A) to finance Phase III of the wastewater improvements and to
refund the 1991 Certificates of Participation.
On July 24, 2008, the City issued the 2008 Electric System Revenue Certificates of Participationto provide funds to currently refund the outstanding
$46,760,000 principal amount of the Electric System Revenue Certificates of Participation 2002 Series A Variable Rates Certificates (the "Refunded
2002 certificates"); and to pay certain costs relating to the termination of a swap agreement relating to the Refunded 2002 Certificates.
The City's debt management policy includes a commitment to monitor all forms of debt annually during the preparation of the City's Financial Plan
and Budgetto ensure compliance. Also, the Citywill generally conduct financing on a competitive basis, will seek an investmentgrade rating on any
direct debt and will obtain credit enhancements such as letters of credit or insurancewhen necessary for marketing purposes, availability and cost
effectiveness.
Interim Financial Reporting
Monthly financial reports are prepared to present the City's financial condition and results of operations. These executive reports are organized
using the "pyramid" approach. As such, the highest level of summary data is presented first, followed by progressively greater levels of detail. The
reports provide current period and year to date revenues, expenditures and encumbrances for all activities and funds, including year to date
estimates and variances. The reports are available to all departments and to the public on the City's website.
Single Audit
The City is subject to financial and compliance reporting required by the Single Audit Act Amendments of 1996 and OMB CircularA-133, which is a
requirement of all local and state governments receiving federal financial awards. As part of the Single Audit, tests are made to determine the
adequacy of internal controls, including that portion related to federal financial awards, as well as to determine that the City has complied with
certain applicable laws and regulations governing federal funds. The Single Audit report is published as part of the annual financial statements for
easy reference.
Competitive Bidding Policy
All required purchases for materials, equipment and services during 2009-10 were made pursuantto competitive bidding procedures as established
under the City's purchasing ordinance. Contracts for construction projects were awarded pursuant to competitive bidding procedures established by
the State of California for projects in excess of $5,000.
Risk Management
The City is self-insured for dental care, workers' compensation, general liability and unemployment insurance. General liability and workers'
compensation are administered by outside agencies. The City administers unemployment insurance. Self -i nsu rance transactions are accounted for
under the Insurance Funds. At June 30,2010, the Insurance Fund had a net deficit of $1,368,350.
A
INDEPENDENTAUDIT
The City Council requires an annual audit of the records and accounts of the City by an independent certified public accountant. To ensure internal
control, periodically the City conducts a request for proposal (RFP) process for auditing services. The accounting firm of Macias Gini & O'Connell
LLP was selected to perform this audit. The independent auditors' report precedes the basic financial statements and concludes that the City's
basic financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United
States of America.
CERTIFICATES OF ACHIEVEMENT
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 for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2009. These Certificates
of Achievement are prestigious national and state awards recognizing conformance with the highest standards for preparation of state and local
government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and
efficiently organized CAFR, whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles
and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of Achievement for the last seventeen
consecutive years. We believe our current report continues to conform to the Certificate of Achievement program requirements and we are
submitting it to GFOA this year.
ACKNOWLEDGMENTS
As always the professionalism, dedication and efficiency of the Financial Services Division Accounting staff made it possible for the timely
preparation of this report and are to be commended. I would also like to personallythank Ruby Paiste, Financial Services Manager, Cory Wadlow,
Supervising Accountant, Odette Bondoc, Accountant II, Tyson Mordhorst, Senior Programmer Analyst. Their work in preparing this year's CAFR is
greatly appreciated.
I would also like to thank you for your continued interest and support in planning and conducting the financial operations of the City in a responsible
and progressive manner.
Respectfully submitted,
:%! dff-�9�111
Jordan Ayers
Deputy City Managerllnternal Services Director
xii
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Lodi
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30,2009
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
governmentunits and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
mak"
� CANADA
COMMM
5M
President
Executive Director
Library
Boax,d
Library
CommunityI ( Parks and
Center Recreation
City Attorney
City of Lodi
Citizens
City Council
City Manager 11 11 City Clerk
Community Electric Utility Public Works
Development
Financial Budget/
Services Revenue/
Division Treasury Div
Xiv
Boards and
Commissions
Deputy City
Manager/internal
Services Director
Fire I I Police
Human Information
Resources Systems
Division I Division
DIRECTORY OF OFFICIALS AND ADVISORY BODIES
CITY COUNCIL
Phil Katzakian
Susan Hitchcock
Larry Hansen
Bob Johnson
Joanne Mounce
ADVISORY BODIES
Planning Commission
Library Board
Recreation Commission
Site Plan and Architectural Review Committee
Budgetand Finance Committee
PRINCIPAL ADMINISTRATIVE OFFICERS
Konradt Bartlam
Jordan Ayers
Steve Schwabauer
Randi Johl
Nancy Martinez
Kevin Donnelly
James Rodems
Wally Sandelin
Elizabeth Kirkley
Konradt Bartlam
Gary Benincasa
xv
Mayor
Mayor Pro Temp
Council Member
Council Member
Council Member
Lodi Improvement Committee
Lodi Arts Commission
Youth Commission
Lodi Senior Citizens' Commission
City Manager
Deputy City Manager
City Attorney
City Clerk
Library Services Director
Fire Chief
Community Center Director
Public Works Director
Electric Utility Director
Interim Community Development Director
Interim Police Chief
(This page intentionally left blank.)
FINANCIAL SECTION
The Financial Section is comprised of the Independent Auditors' Report, Management Discussion and Analysis,
Basic Financial Statements, including the notes, required Supplementary Information, and Supplementary
Information which includes Combining and Individual Fund Statements and Schedules.
Certified Public Accountants.
.... _ _ _ _ -._ _ . ___........... ._...
Sacramento -Walnut Creek • Oakland • Los Aalgoles -Century City • Ne:ypo;t Bean: • San Diego mgoCpa.Com
The Honorable Members of City Council
City of Lodi, California
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining
:Fund information of the City of Lodi, California (City), as of and for the year ended June 30, 2010, 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 opinions
on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits
contained in GovernmentAuditing 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 consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes 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, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the 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, 2010, and the respective changes in
financial position, and where applicable, cash flows, thereof for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with GovernmentAuditing Standards, we have also issued our report dated December 7,2010 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 grant agreements and other matters. 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
GovernmentAuditingStandards and should be considered in assessing the results of our audit.
31" S Street 212.1 N California Bl,d 505 14th Sheet Sl S S. nauiroa Sueet 2019 Century nark Cast 1201 Da,e Sueet 22S 8,,).d—y
tiudr :;00 Suite 750 Sth Hero Suite 325 Suite 5ti:'. Suite 680 Swte 1750
Sacrarnento `Nalnul Geek C7akland Los A,r<3eles Los Aa9eles Newport Eieacfi San Diegc
CA 95516 CA 44596 ,A 94612 CA 900171 CA. 9iXX,7 CA 92660 CAQ2101
The management's discussion and analysis, the schedule of funding progress — pension plan, the schedule of funding progress — OPEB plan, and schedule of
revenues, expenditures and changes in fund balance — budget and actual — for the General Fund are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United States of America. 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 opinions on the financial statements that collectively comprise the City's basic financial statements. The
introductory section, combining and individual nonmajor fund statements and schedules, and the statistical and continuing disclosure sections are presented for
purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is
presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits cF States, Local Governments, and
Non Profit Organizations, and is also not a required part of the basic financial statements of the City. The combining and individual nonmaj or fund statements
and schedules and the schedule of expenditures of federal awards have been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated, in all material respects in relation to the basic financial statements taken as a whole. The introductory, statistical
and continuing disclosure 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.
Certified Public Accountants
Sacramento, California
December7, 2010
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the Comprehensive Annual Financial Report is presented as discussion and analysis of the financial performance of the City of
Lodi (City) for the fiscal year ended June 30, 2010.
FINANCIAL HIGHLIGHTS
• The assets of the City exceeded its liabilities at the close of the 2010 fiscal year by $192,073,011 (net assets). Of this amount,
$34,700,948 is unrestricted net assets deficit, needed to meet the City's ongoing obligations to citizens and creditors.
• The City's total net assets increased by $6,921,462 in fiscal year 2010.
• As of June 30, 2010, the City's governmental funds reported combined ending fund balances of $16,698,471, a decrease of $311,847 in
comparison with the prior year. Of this amount, $8,508,892 is available for spending at the City's discretion (unreserved fund balance).
• At the close of the fiscal year, fund balance for the general fund was $4,285,216 (of which $3,896,576 is unreserved and undesignated) or
12.09 % of total general fund expenditures of $35,442,829.
• The City's total long-term liabilities decreased by $2,326,670 (0.90%) during the current fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements
are comprised of three components: (1) Government -wide financial statements, (2) Fund financial statements, and (3) Notes to the Financial
Statements. This report also includes other supplementary information in addition to the basic financial statements.
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.
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 or not the financial position of the City is
improving or deteriorating.
The statement of activities 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, such as revenues
pertaining to uncollected taxes and expenses pertainingto earned but unused vacation and sick leave.
3
Both of the 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 users fees and
charges (business -type activities). The governmental activities of the City include general government, public protection, public works, community
development, library, and parks and recreation. The business -type activities of the City include electric operations, wastewater operations, water
operations and publictransit operations.
Fund Financial Statements
The fund financial statements are designed to report information about groupings of related accounts, which are 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. Al of the funds of the City can be divided into the following three
categories: Governmental funds, Proprietary funds, and Fiduciaryfunds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the
government -wide financial statements. Most of the City's basic services are reported in governmental funds. These statements, however, focus
on (1) how cash and other financial assets can readily be converted to available resources and (2) the balances left at year-end that are available
for spending. Such information maybe useful in determining financial resources available in the near future to finance City programs.
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 funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains several individual governmental funds organized according to their type (special revenue, capital projects and debt service).
Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures,
and changes in fund balances for the general fund, which is considered to be a major fund. Data from the remaining governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of the non -major governmental funds is provided in the form of
combining statements elsewhere in this report.
The City adopts an annual budget for its general fund and special revenue funds. Budgetary comparison statements have been provided for the
general fund and the special revenuefunds to demonstrate compliance with this budget.
Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges customers, either outside customers,
or internal units or departments of the City. Proprietary funds provide the same type of information as shown in the government -wide financial
statements, only in more detail. The City maintains the following two types of proprietary 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 operations of the Electric, Wastewater, Water, all of which are considered to
be major funds and the Transit system, which is considered to be a nonmajor proprietary fund.
4
• Internal Service funds are used to report activities that account for various employee benefits and self-insurance activities and fleet
activities of the City. Because these activities predominantly benefit governmental rather than business -type functions, they have been
included within the governmental activities in the government -wide financial statements.
Fiduciaryfunds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. The activities of the Downtown
and Cherokee Lane special assessments, the Industrial Way -Beckman special assessment and various landscape and lighting districts are
accounted for and reported under the fiduciary funds. The activities of the Private Sector trust and the Holz bequest are also accounted for under
the fiduciary funds. Since the resources of these funds are not available to support the City's own programs, it is not reflected in the government -
wide financial statements. The accounting used for fiduciary funds is much like that used for proprietary funds.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government -
wide and fund financial statements.
Reauired Supplementary Information
In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information concerning
the City's progress in funding its obligation to provide pension and OPEB benefits to its employees, and a schedule comparing budget to actual
amounts in the General Fund.
Combininn Statements
The combining statements in connection with non -major governmental funds and fiduciary funds are presented immediately following the required
supplementary information on pensions.
5
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicatorof a government's financial position. The City assets exceeded liabilities by
$192,073,011 at the close of the current fiscal year.
Assets:
Current and other assets
Capital assets
Total assets
Liabilities:
Long-term liabilities outstanding
Other liabilities
Total liabilities
Net assets:
Invested in capital assets,
net of related debt
Restricted
Unrestricted (deficit)
Total net assets
Governmental
Activities
City of Lodi's Net Assets
Business -type
Activities
2= 2009 2010 2009
Total
2010 2009
$ 34,024,118
31,574,708
100,098,973
95,268,567
$ 134,123,091
126,843,275
135,959,897
138,412,794
190,452,081
186,710,027
326,411,978
325,122,821
169,984,015
169,987,502
290,551,054
281,978,594
460,535,069
451,966,096
39,232,444
37,182,469
209,828,660
214,205,305
249,061,104
251,387,774
10,320,208
7,739,079
9,080,746
7,687,694
19,400,954
15,426,773
49,552,652
44,921,548
218,909,406
221,892,999
268,462,058
266,814,547
113,308,321 115,035,793 100,232,601 95,533,308 213,540,922 210,569,101
13,233,037 13,492,490 13,233,037 13,492,490
(6,109,995) (3,462,329) (28,590,953) (35,447,713) (34,700,948) ( 38,910,042)
$ 120,431,363 125,065,954 71,641,648 60,085,595 $ 192,073,011 185,151,549
Assets. The City's total assets increased by $6,921,462 or 3.74°/x. The increase is primarily due to the following:
Governmental activities. Total assets for the governmental activities had an insignificant decrease of $3,487 resulting from offsetting increases
and decreases in current and capital assets.
Business -type activities. Total assets for the business -type activities increased by $8,572,460 or 3%. The increase is mainly attributed to the
increase in advance receivables from NCPA General operating reserves (GOR) of $5,106,885; increase in capital assets of $3,742,054, primarily
from construction in progress, buildings and improvements and machinery and equipment.
Liabilities. The City's total liabilities increased by $1,647,511 or 0.62°/x. The increase is primarily due to the following:
6
Governmental activities. Total liabilities for the governmental activities increased by $4,631,104. This increase is attributed to the increase in
OPEB obligations, $874,678; increase in compensated absences, $376,769; accrued progress payments for the Lodi Avenue Reconstruction
project, $608,279; unearned revenue from the Homeland Security grant, $378,807; and the increase in self-insurance liabilities of $2,398,631.
Other insig n ificant activities offset the difference.
Business -type activities. Total liabilities for the business -type activities decreased by $2,983,593 or 1.34%. The decrease is primarily attributable
to principal payments towards the various certificates of participations.
Net Assets. The City's overall financial position has increased during the fiscal year. The net assets have increased by $6,921,462 or 3.74°/x.
The largest portion ($213,540,922) of the City's net assets reflects its investment in capital assets net of any associated depreciation (e.g., land,
buildings and improvements, 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, $13,233,037 (6.89%) represents resources that are subject to external restrictions on how they may
be used. The remaining balance of unrestricted deficit amounts to $34,700,948. At the end of the current fiscal year, the City is able to report
positive balances in two categories of net assets for the government as a whole. Unrestricted net assets are negative for both the governmental
and business -type activities.
Refer to page 10 for analysis of the business -type activities unrestricted net assets.
7
Revenues
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Propertytaxes
Other taxes
Grants and contributions not restricted to
specific programs
Litigation - environmental lawsuits proceeds
Other
Total revenues
Expenses
General government
Public protection
Publicworks
Community development
Library
Parks and recreation
Intereston long-termdebt
Electric
Wastewater
Water
Transit
Total expenses
Changes in net assets before special item and
transfers
Special item -swap termination
Transfers
Changes in net assets
City of Lodi's Change in NetAssets
8,248,606
64,364,204
73,357,886
Governmental
6,124,805
Business -type
10,939,721
Activities
9,604,024
Activities
Total
4,832,465
2010
2009
201D
2009
2010
2009
$ 5,326,042
4,784,593
93,110,030
95,314,241 $
98,436,072
100,098,834
1,927,495
1,950,601
3,448,814
3,653,466
5,376,309
5,604,067
5,122,484
10,822,032
1,408,089
5,774,006
6,530,573
16,596,038
12,836,162
13,563,551
12,836,162
13,563,551
10,282,299
9,952,613
10,282,299
9,952,613
7,063,762 8,248,606
300,000 2,010,085
2,072,580 2,849,319 1,654,051 3,275,486
44,630,824 52,171,315 99,920,984 110,027,284
8,749,457
27,185,808
10,461,684
1,1 14,262
1,440,342
5,076,874
1,104,971
9,450,858
27,110,381
10,464,204
1,322,428
1,495,407
4,609,091
1,133,880
g
7,063,762
8,248,606
64,364,204
73,357,886
3,276,631
6,124,805
11,289,458
10,939,721
6,147,745
9,604,024
4,785,127
4,832,465
55,133,398
55,586,249
86,586,534
98,734,096
(10,502,574)
(3,414,934)
13,334,450
11,293,188
(8,979,000)
5,867,983
5,367,983
(5,867,983)
(5,367,983)
(4,634,591)
1,953,049
7,466,467
(3,053,795)
g
7,063,762
8,248,606
300,000
2,010,085
3,276,631
6,124,805
144,551,808
162,198,599
8,749,457
27,185,808
10,461,684
1,114,262
1,440,342
5,076,874
1,104,971
64,364,204
11,289,458
6,147,745
4,785,127
141,719,932
2,831,876
9,450,858
27,110,381
10,464,204
1,322,428
1,495,407
4,609,091
1,133,880
73,357,886
10,939,721
9,604,024
4,832,465
154,320,345
7,878,254
(8,979,000)
2,831,876 (1.1100,746)
Net assets at beginning of year, as previously
reported
Change in accounting principles
Restatementcf capital assets
Net assets at beginning of year, as restated
Net assets at end cf year
Analvsis of Channes in Net Assets
125,065,954 118,755,227 60,085,595 133,225,291
4,357,678 (70,085,901)
125,065,954 123,112,905 64,175,181 63,139,390
185,151,549 251,980,518
(65,728,223)
4,089,586
189,241,135 186,252,295
$ 120,431,363 125,065,954 71,641,648 60,085,595 $ 192,073,011 185,151,549
Governmental activities.
Net assets for the governmental activities decreased by $4,634,591 in the current fiscal year.
The key factors impacting the change in net assets are:
• Negative revenue growth
• Reduced development activity
• Decrease in personnel costs
• Charges for services increased by 11%, a net amount of $541,449 from the prior fiscal year largely from one-time revenue received from
NCPA for the conservation easement rights related to the Lodi Energy Center.
• Capital grants and contributions decreased by $5,699,548 or 53% from prior fiscal year. Decrease in capital contributions was mainly
attributable to the lack of new commercial or residential developments during the year.
• Property taxes —decreased by $727,389 or 5% compared to prior year. Continuing decline in market values falling below the assessed
values caused homes to be reassessed and affected property tax revenues in the current year.
• Other taxes increased by $329,686 or 3%. This was due to the increase in waste removal franchise fees ($295,733) and the increase in
cable television franchise fees ($34,457), in -lieu franchise fees from Electric ($34,710), increase in business license tax ($51,588) offset
by the decrease in gas and electric franchise fees ($63,680) and decrease in transient occupancytaxes ($23,122).
• Grants and contributions not restricted to specific programs decreased by $1,184,844 or 14%. Sales tax revenues declined by $1,154,981
and State motor vehicle license fees decreased by $29,863. Business close-outs and the continuing decline in both prices and consumer
spending on most taxable goods largely contributed to the decrease in sales tax revenue.
• Other revenues decreased by $776,739 or 27% from priorfiscal year. This decrease was primarily from the one-time sale of land on 217
E. Lockeford Street ($339,852) and the receipt of donations used for the Library renovation and HVAC projects ($555,000) in prior year.
Expenses for governmental functions totaled $55,133,398 a decrease of $452,851 from the priorfiscal year
GI
Business -type activities.
Business -type activities increased the City's net assets by $11,556,053 in the current year. The key elements of this increase are:
• Capital Contributions: Net decrease of $4,365,917.
Electric Fund - $68,322 —a decrease of $181,182 from prior year.
Wastewater Fund - $380,096 — a decrease of $1,703,211 attributed to infrastructure contributed from commercial development at
Reynolds Ranch in prior year, offset by various increases shown below.
Water Fund - $270,863 — a decrease of $254,229.
Transit Fund - $688,808 — a decrease of $2,227,295. The City received state funds in the prior year to build the Municipal Service Center
Fleet Services Shop ($1,850,000) and Prop. 1B funds used to purchase four transit buses ($394,964).
• Proceeds from litigation settlements - $300,000 - a decrease of $1,710,085 from prior year. The $300,000 was the last settlement
expected from the litigation relative to the PCE/TCE remediation case.
The City's Energy Cost Adjustment (ECA) was established with the intent to automatically adjust the electric rates for monthly fluctuations in the
City's purchased power expenses. Bulk power costs decreased in the current year and by way of the ECA charge, operating revenue decreased
by $4,336,249 in the current year.
Wastewater rates were increased during the year resulting in increased operating revenues of $2,237,172 or 24% in Wastewater Utility.
Electricfund expenses decreased by $8,993,682 or 12% primarily due to decreased purchased power costs of $8,856,461, decrease in interest
expense of $203,476 and decrease in personnel cost of $52,170.
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
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. Types of governmental funds reported by the City include the
General Fund, special revenue funds, debt service fund and capital projectsfunds.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $16,698,471, a decrease of
$311,847 in comparison to the prior year resulting from an overall decline in revenues.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of the general fund was
$3,896,576 while total fund balance was $4,285,216, an increase of $519,028 from prior year primarily from the increased transfer of cost of
services from the Electric Fund ($500,000). As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund
balance and total fund balance to total fund expenditures. Unreserved fund balance represents 10.99% of total general fund expenditures.
Proprietary Funds
The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail.
Unrestricted net assets at the end of the year for the Electric Fund were $459,178, Wastewater Fund were $6,896,205 and for the Transit Fund
$2,002,105. The Water Fund unrestricted net assets deficit was $37,948,441 and the Internal Services Funds unrestricted net assets deficit was
$3,244,573.
Other factors concerning the finances of these funds are discussed in the City's business -type activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
Differences between the original operating budget and the final amended operating budget in the General Fund were a net decrease in
appropriations of $8,662. The decrease in appropriations can be briefly summarized as follows:
• $259,097 decrease in general government
• $632,682 increase in public protection
• $382,828 decrease in publicworks
• $581 increase in parks
Significant differences between the final budget and the actual revenues and expenditures can be briefly summarized as follows:
• Taxes — a favorable variance of $187,270 was largely due to the increased receipts from the card rooms ($165,490), increase in property
tax in -lieu of vehicle license fees ($179,682), increase in cable TV franchise fees ($50,775), and increase in industrial waste franchise
($35,136) offset by a decrease in property taxes ($132,839) and various decreases.
• Intergovernmental revenues — an unfavorable variance of $506,684 was attributable to an unexpected downturn comprised primarily of
sales tax ($606,559) caused by the closures of several auto dealerships and the economy in general.
• Charges for services — a favorable variance of $442,077 was mainly from NCPA ($504,000) for the conservation easement related to the
Lodi Energy Center and offset by various decreases in other revenues.
• Fines, forfeits and penalties — a favorable variance of $162,354 resulted from enhanced revenues through moving violations ($22,765),
late payments for utilities ($126,609), parking fees ($12,044), and code enforcement ($11,795).
• Miscellaneous revenues — a favorable variance of $330,292 is attributable to the 35% surcharge received from the County for the
wastewater treatment services for County service area at Flag City ($76,708), reimbursement for personnel costs from the Delta Auto
Theft Task force ($155,755) and other various reimbursements ($97,829).
• For expenditures, a favorable variance between the final budget and actual expenditures of $375,516 was due to savings from several
vacancies and the continued overall effort to reduce spending and costs.
11
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital assets
The City's investment in capital assets for its governmental and business -type activities as of June 30, 2010, amounts to $326,411,978 (net of
accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery and equipment, vehicles,
infrastructureand construction in progress, The total increase in the City's investment in capital assets for the current fiscal year was $1,289,157,
a 0.40% (a 1.77% decrease in governmental activities and 2% increase in business -type activities) as shown in the table below.
Land
Buildings and Improvements
Machineryand Equipment
Vehicles
Infrastructure
Work of Art
Construction in Progress
Total
$ 135,959,897 $ 138,412,794 $ 190,452,081 $ 186,710,027 $ 326,411,978 $ 325,122,821
A significant increase in construction in progress compared to prior year was primarily due to the ongoing Phase III improvements to the White
Slough Pollution Control Facility; the Surface Water Treatment Plant design and pre -construction costs; the Lodi Public Library renovation and
HVAC projects; the reconstruction of Lodi Avenue project; the construction of DeBenedetti Park and G -Basin; and improvements at the Grape
Bowl. The increase in machineryand equipment is due to the completion of various water and sewer main replacement projects during the year.
Additional information on the City's capital assets can be found in Note 6 on pages 45-47 of this report
12
Changes in Capital Assets, Net of Depreciation
Governmental Activities
Business -type Activities
Total
2010
2009
2010
2009
2010
2009
$ 24,099,912 $
24,099,912 $
5,438,359$
5,438,359$
29,538,271 $
29,538,271
35,046,023
35,651,579
26,009,669
26,271,445
61,055,692
61,923,024
1,903,301
1,613,652
101,619,201
99,010,483
103,522,502
100,624,135
1,004,591
1,238,294
1,975,641
2,683,977
2,980,232
3,922,271
65,149,159
69,678,224
65,149,159
69,678,224
304,907
62,024
304,907
62,024
8,452,004
6,069,109
55,409,211
53,305,763
63,861,215
59,374,872
$ 135,959,897 $ 138,412,794 $ 190,452,081 $ 186,710,027 $ 326,411,978 $ 325,122,821
A significant increase in construction in progress compared to prior year was primarily due to the ongoing Phase III improvements to the White
Slough Pollution Control Facility; the Surface Water Treatment Plant design and pre -construction costs; the Lodi Public Library renovation and
HVAC projects; the reconstruction of Lodi Avenue project; the construction of DeBenedetti Park and G -Basin; and improvements at the Grape
Bowl. The increase in machineryand equipment is due to the completion of various water and sewer main replacement projects during the year.
Additional information on the City's capital assets can be found in Note 6 on pages 45-47 of this report
12
Long-term debt
At the end of the current fiscal year, the City had total bonded debt outstanding of $159,070,050. Of this amount, $22,265,000 is the outstanding
balance of the bonds issued to fund the new public safety building, refinancing of the performing arts center and the downtown and Cherokee
Lane improvements. The total of $136,805,050 from the business -type activities consists of $56,280,026 for the Wastewater Fund; and
$80,525,024 for the Electric Fund.
City of Lodi's Outstanding Debt
Governmental Business -type
Activities activities Intal
Certificates of Participation $ 22,265,000 136,805,050 159,070,050
The City's total bonded debt decreased by $4,608,022 during the current fiscal year
Bond Rating
In June 2010, Standard & Poor's Rating Services affirmed the rating on outstanding electric utility debt instrumentsan A- with a stable outlook as a
result of improved financial performance due to the implementation of various policies instituted by management. Fitch Rating Services upgraded
the rating on outstanding wastewater utility debt instrumentsto A+ with a stable outlook in May 2010, as part of its global ratings recalibration.
Additional information on the City's long-term debt can be found in Note 8 on pages 48-55 of this report.
ECONOMIC FACTORS AND NEXTYEAR'S BUDGET
The City of Lodi continues to take actions necessary to maintain a more sustainable city. Management has evaluated ways to make every City
service more efficient, streamlining and consolidating services where possible. The City has implemented pay stations to provide citizens more
options for paying utility bills and account information is made available online. Other efficiencies include consolidation of multiple recreational
programs, decentralization of purchasing and implementation of a single answer point for development permits. The City also reduced its
workforce by 11 % over the past five years, from 470 full-time budgeted employees in 2004-05 to 418 full-time budgeted employees in 2010-11.
Monthly work hours for many employees have been reduced through furloughs although the City continues to offer the same basic range of
municipal services.
The recession is creating an opportunity for the City to take advantage of low construction costs to proceed with major capital projects. They
include the reconstruction of East Lodi Avenue, the initial phase of construction of DeBenedetti Park, new improvements and handicapped access
to the Grape Bowl, and other projects. The 2010-11 budget proposes as many projects as possible focusing on maintenance and replacement of
existing facilities and projectsthat reduce the City's recurring operational costs.
The City Council adopted a new Comprehensive General Plan that maintains Lodi's compact urban character yet provides for jobs and economic
growth. In the future, Lodi will be a city accommodating a population of 99,000 and 51,000 jobs.
13
The 2010-11 budget has several issues that were taken into consideration: employee costs and contributions; ramifications of cutting costs in
prior budgets; impact of the new Lodi Energy Center; capital programs; and cost increases beyond the City's control and the continuing impact of
the recession.
Employee costs and contributions - The City continues to rely upon the previous concessions made with the various bargaining groups which
consequently averted mass employee layoffs and drastic service cuts. The City is appreciative of the sacrifices and services of its employees.
Their sacrifices have allowed the City to maintain high level of quality service to its citizens during a challenging time. The City has also offered
early retirement to reduce the workforce.
Ramifications of cutting costs in the FY 2009-10 budaet - In an effort to save money in FY 2009-10, management raised the Compensatory Time
Off (CTO) limits to increase the amount of time employees may accumulate earned overtime and encouraged employees to defer cashing out of
overtime. Consequently, in FY 2010-11 funds are budgeted to buy down CTO to reduce the liability carried in future years.
Impact of the new Lodi Energy Center - The Northern California Power Agency (NCPA) is building a 280 -megawatt, natural gas combined -cycle
power plant within the City on city -owned property. Lodi is a participant in the Lodi energy project. The project has created several opportunities
for Lodi to increase revenue, beyond simply participating in the project and realizing the long-term savings of more affordable electric rates. Lodi
will benefit with ongoing revenue of $1 million per year and one-time revenue of $2.3 million. This project will also help Lodi in the long-term by
strengthening its tax base significantly and in the short-term provide money to make a variety of improvements that the City could not afford
otherwise.
Capital programs — The 2010-11 budget includes approximately $12.2 million in capital projects, many of which are delayed maintenance and
replacement projects. The City has completed an assessment of the major buildings, the various parks, vehicles and equipment, and is
developing replacement schedules and funding prioritiesfor these assets.
Costs bevond the City's control — The cost of retirement and medical insurance is rising. The City has been advised to plan for a 2 percent
increase in retirement rates for the future. Total City retirement contribution for 2010-11 is estimated to be $7.2 million. Medical insurance costs
are estimated to increase by 6%. It is also anticipated that health insurancecosts will continue to rise every year for the next several years.
Economic Development
During this difficult economic time, the City has fared better than the surrounding area, as a whole. While not immune to the current foreclosure
crisis, -the City housing stock has seen fewer foreclosures and has maintained h oki ng values better than the surrounding communities.
The City's unemployment rate continues to track roughly 4 percent lower than that of San Joaquin County. The City's diversified economic base
continues to help the City maintain its revenue base.
Although agriculture is an important part of the City's past, present and future by providing residents with employment on farms and in processing
plants, there are even more jobs in food and plastics manufacturing and in health-related businesses.
Lodi Memorial Hospital, Blue Shield and Cottage Bakery have the highest year-round employment in the City, and large national and international
manufacturers such as General Mills and CertainTeed find the City an attractive base for their West Coast operations.
W
REQUEST FOR INFORMATION
This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances
and to demonstrate the City' accountability for the money it receives. If you have any questions about this report or need additional information,
contact the Financial Services Division of the City of Lodi at 310 W. Elm Street, Lodi, California, 95240.
15
(This page intentionally left blank.)
BASIC FINANCIAL STATEMENTS
The Government -wide Financial Statements provide abroad overview of the City's financial position and operating results. Information is
grouped by governmental activities or business -type activities.
The Fund Financial Statements report information about the City's Governmental Funds, Proprietary Funds, and the Fiduciary Fund.
The notes have an integral role in disclosing information essential to the fair presentation of the Basic Financial Statements.
GOVERNMENT -WIDE FINANCIAL STATEMENTS
ASSETS
Cash and investments
Accounts receivable, net
Property tax receivable
Interest receivable
Internal balances
Due from other governmental agencies
Restricted assets
Loan receivable
Advance receivable
Inventory
Other assets
Deferred charges
Capital assets, net:
Nondepreciable
Depreciable, net
TOTALASSETS
LIABILITIES
Accounts payable and accred liabilities
Accrued salaries and wages
Accrued interest
Unearned revenue
NetOPEB obligation
Long-term liabilities:
Due within one year
Due in more than one year
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Restrictedfor:
Capital projects
Debt service
Other purposes
Unrestricted (deficit)
TOTAL NET ASSETS
CT1Y CF LODI
STATEMENT OF NET ASSETS
June 30,2010
Governmental
Business -type
Activities
Activities
Total
$ 24,972,492
34,478,103 $
59,450,595
3,971,199
7,843,964
11,815,163
1,537,234
1,537,234
33,474
47,121
80,595
(1,225,173)
1,225,173
1,795,473
2,262,287
4,057,760
1,687,521
31,129,255
32,816,776
1,084,000
1,084,000
11,011,668
11,011,668
122,791
1,684,307
1,807,098
45.107
4,875
49,982
10,412,220
10,412,220
32,856,823
60,847,570
93,704,393
103,103,074
129,604,511
232,707,585
169.984.035
290,551,054
460,535,069
3,743,637
4,573,199
8,316,836
2,080,980
2,080,980
268,289
2,813,298
3,081,587
2,157,103
1,694,249
3,851,352
2,070,199
2,070,199
7,190,465
4,812,601
12,003,066
32,041,979
205,016,059
237,058,038
49.552.652
218,909,406
268,462,058
113,308,321
100,232,601
213,540,922
11,498,892
11,498,892
1,687,521
1,687,521
46,624
46,624
(6,109,995)
(28,590,953)
(34,700,948)
$
$
192,073,011
The notes to the financial statements are an integral part of this statement. 17
Functions/Programs
PRIMARY GOVERNMENT
Governmental activities:
General government
Public protection
Publicworks
Community development
Library
Parks & recreation
Interest on long-term debt
Total governmental activities
Business -type activities:
Electric
Wastewater
Water
Transit
Total primarygovemment
CITY OF LODI
STATEMENT OF ACTIVITIES
Year ended June 30,2010
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Net (Expense) Revenueand
Changes in NetAssets
Governmental Business -type
Activities Activities Total
$ 8,749,457
2,184,194 45,600
41,479
(6,478,184)
$
(6,478,184)
27,185,808
713,522 793,979
692,303
(24,986,004)
(24,986,004)
10,461,684
325,933 1,027,984
4,388,006
(4,719,761)
(4,719,761)
1,114,262
785,806
(328,456)
(328,456)
1,440,342
47,961 59,932
(1,332,449)
(1,332,449)
5,076,874
1,268,626
696
(3,807.552)
(3,807,5521
1,104,971
(1,104,971)
(1,104,971
55,133,398
5,326,042 1,927,495
5,122,484
(42,757,377)
(42,757,377)
64,364,204
69,663,689 81,508
68,322
5,449,315
5,449,315
14289,458
11,513,389 6,508
380,096
610,535
610,535
6,147,745
11.715.748
270,863
5,838,866
5,838,866
4,785,127
217,204 3,360,798
688,808
(518,317)
(518,317)
86,586,534
93,110,030 3,448,814
1,408,089
11,380,399
11,380,399
$ 141,719,932
98,436,072 5,376,309
6,530,573
(42,757,377)
11,380,399 $
(31,376,978)
General revenues:
Taxes:
Propertytaxes
12,836,162
12,836,162
Franchise taxes
8,657,976
8,657,976
Business license tax
1,241,958
1,241,958
Transient occupancytax
382,365
382,365
Grants and contributions not restrictedto specific programs
7,063,762
7,063,762
Investmenteamings
155,270
731,377
886,647
Litigation- environmental lawsuits proceeds
300,000
300,000
Other
1,917,310
922,674
2,839,984
Transfers
5,867,983
(5,867,983)
Total general revenues, special item and transfers
38,122,786
(3,913,932)
34,208.854
Change in net assets
Net assets, beginning of year, as previously reported
Understatement of capital assets
Net assets, beginning of year, as restated
Net assets, end of year
The rotes to the financial statements are an integral part of this statarrant.
18
(4,634,591) 7,466,467 2,831,876
125,065,954 60,085,595
4,089,586
185,151,549
4,089,586
125,065,954 64,175,181
189,241,135
120,431,363 71,641,648 $
192,073,011
FUND FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
Governmental Fund Types
Governmental funds consist of the General Fund, special revenue funds, debt service fund and capital projects
funds.
Major Governmental Fund:
General Fund
This fund is maintained to account for all financial resources that are not restricted as to their use. This includes
property and sales taxes, business tax receipts, franchise taxes and various subventions such as MotorVehicle In -
Lieu fees received from the State of California. With the exception of grant programs, General Fund resources
can be utilized for any legitimate governmental purpose.
Proprietary Fund Types
Proprietary funds consist of the enterprise funds and the internal service funds.
Major Enterprise Funds include:
Electric Fund
The City established this fund in order to account for the provision of electric services to the residents of the
City. All activities necessaryto provide such services are accounted for in this fund, including but not limited to,
source of supply, overhead, systems maintenance, customer service, engineering, administration, capital
improvements maintenance and debt service.
19
Wastewater Fund
This fund was established by the City in order to account for the provision of waste water collection and
treatment services to the residents of the City. All activities necessary to provide such services are accounted
for in this fund, including, but not limited to, administration, operations, maintenance, improvements and debt
service.
Water Fund
This fund was established by the City in order to account for the provision of water to the residents of the City
as well as some customers in the County. All activities to provide such services are accounted for in this fund,
including, but not limited to administration, operations, distribution, maintenance, capital improvements and
debt service.
Nonmajor Enterprise Fund:
Transit Fund
This fund is used to account for the operations of the Dial -A -Ride and the Grapeline bus system.
Fiduciary Fund Type
Private -purpose Trust Funds
These funds are used to account for assets held by the Library Board as trustee of the Lodi Public Library and for
assets held by the City in accordance with the trust agreement on behalf of the Hutchins Street Square.
Agency Fund
This fund was established to account for special assessments collected on the property tax roll by the City on behalf
of the property owners within the Industrial Way Beckman Districts and the Downtown and Cherokee Lane Districts
and various landscape and lighting districts around the City.
20
ASSETS
Cash and investments
Restricted assets
Receivables:
Accounts, net
Propertytaxes
Interest
Due from other funds
Due from other governmental agencies
Loan receivable
Inventory
Advances to other funds
Other assets
Total assets
LIABILITIESAND FUND BALANCES
Liabilities:
Accounts payable and other liabilities
Accrued salaries and wages
Due to other funds
Advances from other funds
Deferred revenue
Total liabilities
Fund balances:
Reserved
Unreserved reported in:
General Fund
Special revenue funds
Capital projectsfunds
Total fund balances
Total liabilities and fund balances
C MY OF LODI
BALANCESHEET
GOVERNMENTALFUNDS
June 30,2010
General
Fund
$ 2,304,189
2,691,686
1,537,234
7,770
1,327,820
125,065
844
305,560
29,524
Other Total
Governmental Governmental
Funds Funds
14,400,143 $
1,687,521
1,277,473
15,818
214,910
1,670,408
1,084,000
343,385
1,290
16,704,332
1,687,521
3,969,159
1,537,234
23,588
1,542,730
1,795,473
1,084,000
844
648,945
30,814
8,329,692 20,694,948 $ 29,024,640
1,880,010
1,328,421 $
3,208,431
2,080,980
2,080,980
1,542,730
1,542,730
1,874,118
1,874,118
83,486
3,536,424
3,619,910
4,044,476
8,281,693
12,326,169
388,640
7,800,939
8,189,579
3,896,576
3,896,576
962,927
962,927
3,649,389
3,649,389
4,285,216
12,413,255
16,698,471
$ 8,329,692
20,694,948 $
29,024,640
The notes to the financial statements are an integral part of this statement. 21
CITY OF LODI
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TOTHESTATEMENTOFNETASSETS
June 30,2010
Amounts reported for governmental activities in the statement of net assets are
different because:
Fund balances -total governmental funds
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds
Nondepreciablecapital assets
Depreciable capital assets, net
Long-term liabilities are not due and payable in the current period
and therefore are not reported in the governmental funds as follows:
Compensated absences
Long-term debt
Intereston long-term debt is not accrued in the funds, but rather is
recognized as an expenditure when due
Other long-term assets are not available to pay for current period expenditures and,
therefore, are deferred in the funds
Internal service funds are used by managementto charge the costs of general
liability insurance, workers' compensation insurance, health benefits insurance,
other insurance and the cost of operating and maintaining the City's fleet to
individual funds. The assets and liabilities of the internal service funds are
included in governmental activities in the statement of net assets
Net assets of governmental activities
The notes to the financial statements are an integral part of this statement. 22
$ 16,698,471
32,856,823
103,068,340
(7,525,374)
(22,651,576)
(268,289)
1,462,807
(3,209,839)
$ 120,431,363
CITY OF LODI
STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
Year ended June 30,2010
The notes to the financial statements are an integral part of this statement.
23
Other
Total
General
Governmental
Governmental
Fund
Funds
Funds
Revenues:
Taxes
$ 23,118,461
$
23,118,461
Licenses and permits
72,171
447,332
519,503
Intergovernmental revenues
7,772,071
4,806,529
12,578,600
Charges for services
1,343,199
2,772,900
4,116,099
Fines, forfeits and penalties
1,441,354
2,200
1,443,554
Investmentand rental income
516,304
407,097
923,401
Miscellaneous revenue
462,592
630,576
1,093,168
Total revenues
34,726,152
9,066,634
43,792,786
Expenditures:
Current:
General government
6,411,741
1,253,983
7,665,724
Public protection
23,854,905
610,583
24,465,488
Publicworks
1,471,779
2,911,292
4,383,071
Communitydevelopment
1,013,008
1,013,008
Library
1,322,052
1,322,052
Parks and recreation
2,234,349
1,945,470
4,179,819
Capital outlay
5,107,600
5,107,600
Debt service:
Interest and fiscal charges
12,578
1,097,851
1,1 10,429
Principal payments
135,425
590,000
725,425
Total expenditures
35,442,829
14,529,787
49,972,616
Deficiencyof revenues under expenditures
(716,677)
(5,463,153)
(6,179,830)
Other financing sources (uses):
Transfers in
5,867,983
5,304,707
11,172,690
Transfers out
(4,632,278)
(672,429)
(5,304,707)
Total other financing sources (uses)
1,235,705
4,632,278
5,867,983
Net change in fund balances
519,028
(830,875)
(311,847)
Fund balances, beginning of year
3,766,188
13,244,130
17,010,318
Fund balances, end of year
$ 4,285,216
12,413,255 $
16,698,471
The notes to the financial statements are an integral part of this statement.
23
CITY OF LODI
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCESOF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Year ended June 30,2010
Amounts reported for governmental activities are different because:
Net change in fund balances -total governmental funds
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
Capital outlays, capital contributions and depreciation expense are as follows
Capitalized capital outlays
Capital asset contributions
Depreciation expense
Long-term debt proceeds, net of discounts, provide cu rrent financial resources to governmental funds,
but issuing debt proceeds increases long-term liabilities in the statement of net assets. Repayments
of the principal are expenditures in the governmental funds, but the repayments
reduce long-term liabilities in the statement of net assets.
Repaymentsof principal areas follows:
Capital leases
Certificatesof participation principal
Internal service funds are used by managementto charge the costs of certain activities, such as health benefits
and self-insurance, costs of operation and maintenance of the City's fleet, to individual funds.
The net revenue (expenses)of the internal service funds are reported with
governmental activities.
Revenues in the statement of activities that do not provide current financial resources are not reported
as revenues in the funds.
Other expenses in the statement of activities that do not use currentfinancial resources are not reported as
expenditures in the governmental funds
Change in compensated absences
Change in accrued interest
Change in net assets of governmental activities
The notes to the financial statements are an integral part of this statement. 24
(311,847)
5,107,600
410,325
(7,969,375)
135,425
590,000
(2,603,557)
378,807
(377,427)
5,458
$ (4,634,591)
ASSETS
Current assets
Cash and investments
Restrictedcash and investments
Restrictedassets with fiscal agents
Receivables:
Accounts. net
Interest
Due from other governmental agencies
Advance receivable
inventory
Otherassets
Total current assets
Noncurrent assets:
Restrictedassets with fiscal agents
Advances to otherfunds
Deferredcharges
Capitalassets,net:
Nondepreciable
Depreciable, net
Total capital assets
Total noncurrentassets
TOTALASSETS
LIABILITIES
Current liabilities:
Accounts payable and other liabilities
Accrued interest
Unearned revenue
Self-insurance liability
Accrued compensated absences
Certificatesofparticipation payable
Water note payable
Total current liabilities
Noncurrent liabilities:
Self-insurance liability
Accrued wmpensated absences
Certificatesof participation payable
Water note payable
Net OPEB obligation
Pol I ution remed iationobl igation
Total noncurrent liabilities
TOTAL LIABILITIES
NETASSETS (DEFICIT)
Investedin capitalassets, netof relateddebt
Unrestricted(deficit)
TOTAL NETASSETS (DEFICIT)
CITY OF LODI
STATEMENTCIF NETASSETS
PROPRIETARY FUNDS
June 30,2010
Governmental
Activities -
Business -type Activities -Enterprise Funds internal
Nonmajor Fund Service
Electric Wastewater Water Transit Total Funds
12.125,835
5,450,747
5,538,004
13,689
11.011,668
1,484,712
35,624,655
9,467,762
6.213.346
37,044,222
43,257,568
52,725,330
88,349,985
1,145,511
2107.597
116,492
229.011
2.868.889
6,467,500
676.425
77,656,133
6,831,614
5,466,818
922,058
7.725
8,427
11,569
3.600
13,251,811
2,169,850
944,458
48.104,511
49,445,587
97,550,098
00,664,406
13,916,217
241,827
693.654
153,696
1,359.133
2,448,310
744,069
54,920,895
14,120,605
18,041,023
817
1,030,085
24,875
188,026
1,275
33,406,706
1,225,173
5,093.753
30,3 P.1 33
35,441,C 46
36,673,119
70,079,825
1,976,966
12,047
868,218
181,496
3,038,727
1,227,805
69,723,089
78,332,558 55,664,964 70,950,894
84,800,058 58,113,274 73,989,621
1,400,049 $
34,478,103 $
8,268,16C
18,041,023
709.539
10.918,382
353,817
7,843,964
2.040
832
47,121
9,886
2,253,860
2,262,287
34.734
14.196,469
11,011,668
34.734
18,205,027
1.684.307
121.947
4,875
14.293
4,008,558
86,291.730
8,416,326
1,208,895
2.169,850
535.206
1,225,173
709.539
10,412,220
1.435.960
60.847.570
4,064,109
12,760,509
129,604, 511
34,734
14.196,469
190,452,081
34.734
14.196,469
204,259,324
34.734
18,205,027
290.551054
8.451.060
1,208,895
4,573,199
535.206
2,813,298
709.539
1,694,249
4,064,109
20.376
403.083
57.884
4,228,022
181,496
1,938,810
13,893,347
4,657,199
4,865,858
67.643
1,488,137
67.643
132.577,028
1,227,805
2,070,199
69,723,089
67.643
205,016,059
11,¢60;!4980
2,006,453
218,909,406
3.090,749 48,906,738 34,038,645 14.196.469 100.232.601 34.734
459,178 6,896,205 (37,948,441) 2,002,105 (28,590,953) (3,244,573)
$ 3,549,927 55,802,943 (3,909,796) 16,198,574 $ 71,641,648 $ (3,209,839)
The rotes to the financial statements are an integral part of dds statement. 25
OPERATING R M N U E S
Charges for services
OPERATING EXPENSES
Personnel services
Supplies, materials and services
Utilities
Depreciation and amortization
Claims
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NONOPERATINGREVENUES(EXPENSES)
Investment income
Interestexpense
Rent
Operating grants
Litigationenvironmentallawsuits proceeds
Loss on disposal of capital assets
Other revenues
TOTAL NONOPERATINGREVENUES (EXPENSES)
INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONSAND TRANSFERS
Capital contributions
Transfers out
Net capital contributions and transfers
Change in net assets
NET ASSETS - BEGINNING OF YEAR, as previously reported
Understatementof Capital Assets
NETASSETS (DEFICIT)- BEGINNING OF YEAR, as restated
NET ASSETS (DEFICIT)- END OF YEAR
CITY OF LODI
STATEMENTOF REVENUES, EXPENSESAND
CHANGES IN NETASSETS
PROPRIETARYFUNDS
Yearended June 30,2010
Governmental
Activities-
Business-typeActivities- EnterpriseFunds Internal
Nonmajor Fund Service
Electric Wastewater Water Transit Total Funds
$ 69,663,689 11,513,389 11,715,748 217,204 $ 93,110,030$ 10,269,837
5,913,567 2,800,891 1,325,536 264,960
10,039,282 2,532,246 2,266,174 3,412,689
37,616,815 847.167 764.755 63.840
6,277,691 2,256,852 1,267,086 1,043,638
59,847,355 8,437,156 5,623,551 4,785,127
10,304,945
1,457,737
18,250,391
5,901,738
39,292,577
1,919
10,845,267
1,447
(51,063)
5,586,129
78,693,189
12,948,970
9,816,334 3,076,233 6,092,197 (4,567,923) 14,416,841 (2,679,133)
212,856
298,337
208,773
11.411
731.377
48,906
(4,516,849)
(2,831,600)
(51,063)
(7,399,512)
4,200
4.200
81,508
6.508
3,360,798
3,448,814
300,000
300,000
(20.702)
1473.14)
(493.833)
330,334
144,594
372,034
71,512
.918.474
26.670
(3,892,151)
(2,402,863)
356,613
3,447,921
2,490,480
75.576
5,924,183
673,370
6,448,810
(1,120,002)
11,926,361
(2,603,557)
68,322 380,096 270,863 688,808 1,408,089
(3,356,383) (1,451,478) (1,060,122) (5,867,983)
(3,288,061) (1,071,382) (789,259) 688.808 (4,459,894)
2,636,122 (398,012) 5,659,551 (431.194) 7,466,467 (2,603,5572
913,805 56,030,286 (13,488,264) 16,629,768 60,085,595 (606,282)
170,669 3,918,917 4,089,586
913,805 56,200,955 (9,569,347) 16,629,768 64,175,181 (606.282)
$ 3,549,927 55,802,943 (3,909,796) 16,198,574 $ 71,641,648 $ (3,209,839)
The notes to the financial statements are an integral part of this report.
26
Cash flows from operating activities:
Receiptsfrom customersand users
Receipts from interfund services provided
Cash paid to suppliers for goods & services
Paymentsto employees
Paymentsfor interfund services provided
Proceedsfrom litigationsefflements
Netcash provided by (used in) operating activities
Cash flows from noncapital financing activities:
Operatinggrants
Repaidfrom otherfunds
Repaid to other funds
Transfers out
Net cash provided by (used in) noncapital financing activities
Cashflows from capital and relatedfinancing activities:
Acquisition and construction of capital assets
Fees received from developers
Capitalgrants received
Principal paymentson debt
Interest paymentson debt
Netcash provided by (used in) capitaland relatedfinancing activities
Cash flows from investing activities:
Rentof City property
Interest on investments
Netcash provided by investingactivities
Net increase (decrease)in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents. end of year
Recenciliationto the statement of net assets:
Cash and invesbnents
Restricted cash and investments
Restricted assets with fxd agents -current
Total cash and cash equivalents
Recenciliationof operating income (loss)to net cash provided by
(used in) operating activities.
Operating Income(loss)
Adjustments to reconcileoperating income (loss) to
netcash provided by (used in) operating activities:
Depreciation and amortization
Proceeds from litigationsetdements
Other revenues
Change in assets and liabilities:
(Increase) decrease in accounts receivable
Increase in advance receivables
Decrease (increase) in due from other governmental agencies
(Increase)decrease in inventory
Decrease in other assets
Increase (decrease)in accounts payable and other liabilities
Increase (decrease)in compensated absences
Increase (decrease) in unearned revenue
Increase in self-insurance liability
Decrease in pollution remediation obligation
Increase in OPEB obligation
Netcash provided by (used in) operating activities
Noncashlnvestinc. Capital and FinananoActivities
Capital asset contributions
The notes to the financial stalia7tents— an integralpanof this sit
CITY OF LODI
STATEMENTOF CASH FLOWS
PROPRIETARY FUNDS
Year ended June 30,2010
Governmental
Business-typeActivities- EnterpriseFunds Activities-
NonmajorFund InternalService
Electric Wastewater Water Transit Total Funds
64,109,065
11,241,097
12,081,088
288.716 $
87,719.966 $
25,844
287.850
592,339
7.495
1,043,636
295,345
10269,837
(47,156,325)
(2,827,645)
(2,026,516)
(2,813,904)
(54,826,391)
(7,866,354)
(5,881,473)
(2,793,660)
(1,325,536)
(258,400)
(10,259,069)
(1,458,395)
(3,199)
(772,440)
(735,605)
(48,124)
(1,559,368)
(1,401)
(5,106,885)
300.000
300.000
11.353.918
4,847.352
8,300,926
(2,831,712)
21,670,484
970.932
61.508 6.508 4.026.956 4.114.972
110.120 110,120
(110.120) (ssn t9n)
(3,356,383) (1.451.478) (1,060,122) (5867,983]
(3,274,875) 4C,144,970) (950.002) 3.916.836 (1,753,011)
(934,206)
(780.541)
(3,932,424) (201,426)
(5,848,597)
14,416,841 $
321,476
270.863
592,339
1,267,085
1,043,636
501.988
501.988
(2,920,000)
(1.320.000)
(175.462)
(4,415,462)
(4,364781)
(2,833,2
(52,563)
(7,250,558)
(8,218,987)
(4,612,279)
(3,889,586) 300.562
(16,420,290)
4.200 4.200
238.322 315.936 250.305 10,163 814.726 63.576
238.322 315.936 250.305 14.363 818.926 63.576
98.378 (893.961) 3.711.643 1,400,049 4,316,109 1,034,508
17,476,204 13.192.393 28,450,802 59,121,399 7233,652
5 17,576,582 12,298,432 32,162,445 1,400,049 63,437,508 ,1
g 12,125,835 6,831,614 14,120,605 1.400.049 $ 34,478,103 $ 6,268,160
18.041.023 18,041.0233
5,450,747 5,466,818 817 10,918,382
17,576,582 12,298,432 32,162,445 1,400,049 $ 63,437,505 $ 8.268,160
9,816.334
3,076.233
6,092,197
(4,567,923) $
14,416,841 $
(2,679,133)
6,277,691
2,256,852
1,267,085
1,043,636
10,845,267
1,447
300.000
300.000
330.334
144,594
372,034
71,512
918.474
26,670
(606.715)
(338,063)
801
(943.977)
(1,401)
(5,106,885)
(5,106,885)
7.769
7,765
(19,663)
180
17,228
(2,255)
319
909
909
575
514.236
(220.852)
460,626
614.501
1.388.511
349,804
32,094
7,231
6.560
45.885
(658)
116.492
(87.501)
28.991
2,398,631
(229.046) (229,046)
874.676
68.322 58,620 235,610 $ 362,752
CITY OF LODI
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
June 30,2010
ASSETS
Cash and investments
Receivables:
Special assessments
TOTALASSETS
LIABILITIES
Agency obligations
TOTAL LIABILITIES
NET ASSETS
The notes to the financial statements are an integral part of this statement. 28
Private -Purpose
Trust Funds Agency Fund
$ 224,884 $ 585,172
13,850
224,884 599,022
599,022
599,022
$
224,884$
CITY OF LODI
STATEMENT OF CHANGES IN FIDUCIARY NETASSETS
FIDUCIARY FUNDS
Year ended June 30,2010
ADDITIONS
Investmentand rental income
Total additions
DEDUCTIONS
Current
Library
Total deductions
CHANGE IN NETASSETS
NETASSETS, BEGINNINGOFYEAR
NETASSETS, END OF YEAR
The notes to the fmancial statements are an integral part of this statement. 29
Private -Purpose
Trust Funds
$ 7,430
7,430
30,854
30,854
(23,424)
248,308
$ 224,884
(This page intentionally left blank.)
NOTES TO THE FINANCIAL STATEMENTS
CITY OF LODI
Notes to Basic Financial Statements
June 30,2010
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) The Financial Reporting Entity
The City of Lodi (City) was incorporated on December 6, 1906, as a municipal corporation under the General Laws of the State of California.
The City operates under a Council -Manager form of government and provides the following services: general government, public works,
community development, public protection (police and fire), public utilities, library, parks and recreation.
The accounting policies of the City conform to generally accepted accounting principles (GAAP) as applicable to governments in the United
States of America. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting
and financial reporting principles.
An elected five -member council governs the City of Lodi. As required by GAAP, these financial statements present the City and its component
units, entities for which the City is considered to be financially accountable. The component units, although legally separate entities, are, in
substance, part of the City's operations and therefore, their activities are blended with data of the City.
Blended Component Units
The blended component units of the City are as follows:
The Lodi Public Improvement Corporation (LPIC) was formed on April 26, 1988, for the purpose of rendering financial assistance to the City in
the issuance of the 1988 Certificates of Participation (refunded by the issuance of the 1991 Certificatesof Participation) to finance the expansion
of the City's White Slough Pollution Control Facility. Since then, several Certificates of Participation were issued to finance various major
projects (See Note 8).
The City Council constitutes the Board of Directors of LPIC. The funds of LPIC have been included in the Enterprise (Electric and Wastewater)
Funds and in the other governmental funds in the accompanying basicfinancial statements.
The Lodi Financing Corporation (LFC) was formed on October 12, 1999, for the purpose of assisting the City with the financing of the costs of its
environmental abatement program and enhancing the water supply of the City for the use, benefit and enjoyment of the citizens served by the
City. The City Council is the Board of Directors of LFC. The funds of LFC are included in the Water Fund in the accompanying basic financial
statements.
(b) Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the non -
fiduciary activities of the primary government and its component units. For the most part the effect of interfund activity has been removed from
31
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately
from business -type activities that rely, 20 a significant extent, on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct
expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or
applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded
from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as
separate columns in the fund financial statements.
(c) Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus and accrual basis of accounting, as
are the proprietary fund and private -purpose trust fund financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they
are levied. Grant and similar items are recognized as revenue as soon as all eligibility requirements have been met. Agency funds use the
accrual basis of accounting, but they do not have a measurement focus.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of
accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they
are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers property tax revenues
to be available if they are collected within 60 days of the end of the current fiscal year. At other revenues are considered to be available if they
are generally collected within 120 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as
under accrual accounting. However, debt service expenditures, as well as expenditures related to vacation, sick leave, claims and judgments,
are recorded only when payment is due.
Property taxes, other local taxes, licenses, intergovernmental revenues, and interest associated with the current fiscal period are all considered
susceptible to accrual and so have been recognized as revenues of the current fiscal period. AD other revenues are considered to be
measurable and available when the City receives cash.
32
CITYOF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
The City reportsthe following major governmental fund:
The General Fund is the City's primary operating fund. It accounts for all financial resources of the City except those required to be
accounted for in another fund.
The City reports the following major proprietary (enterprise) funds:
The Electric Fund accounts for the provision of electric services to the residents of the City. All activities necessary to provide such
services are accounted for in this fund, including but not limited to, source of supply, overhead, systems maintenance, customer service,
engineering, administration, capital improvements, and maintenance and debt service.
The Wastewater Fund accounts for the provision of wastewater collection and treatment services to the residents of the City. All
activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations,
maintenance, improvements and debt service.
The Water Fund accounts for the provision of water to the residents of the City as well as some customers in the County. All activities
to provide such services are accounted for in this fund, including, but not limited to administration, operations, distribution, maintenance,
capital improvements and debt service.
Additionally, the City reportsthe following fund types:
The Internal Service Funds account for the City's claims, benefits and fleet services.
The fiduciary funds account for assets held in trust for other agencies.
Private -Purpose Trust Funds are used to account for trust agreements under which the principal and income benefit
individuals, private organizations or other governments. They were established to account for assets held and invested by the
Library Board as trustee; and to account for assets held by the City in accordance with a trust agreement on behalf of the
Hutchins Square. These funds can only be spent in accordance with the trust agreements.
Agency Fund accounts for assets held by the City as a trustee or as an agent for individuals, private organizations, related
organizations and/or other governmental units. This fund was established to account for special assessments collected on the
property tax roll by the City on behalf of the property owners within the Industrial Way/Beckman Districts, the
Downtown/Cherokee Lane Districts and various landscape and lighting districts around the City.
33
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Private—sector standards of accounting and financial reporting issued priorto December 1, 1989, are followed in both the business -type activities
in the government -wide and the proprietary fund financial statements to the extent that those standards do not conflict with or contradict
guidance of the GASB. The City also has the option of the following subsequent private -sector guidance for their business -type activities and
enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private -sector guidance.
The effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this rule are charges to other
City departments from the Electric, Wastewater, Water and Transit Funds. These charges have not been eliminated because elimination would
distort the direct costs and program revenues reported in the statement of activities.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result
from providing services in connection with the fund's principal ongoing operations. The principal operating revenues of the City's enterprise
funds and internal service funds are charges for customer services including: electric, wastewater, water and public transportation fees.
Operating expenses for enterprise funds and internal service funds include the cost of services, administrative expenses, and depreciation on
capital assets. AD revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then unrestricted
resources as they are needed.
(d) Cash and Investments
The City maintains a cash and investment pool that is available for all funds of the City for the purpose of increasing interest earnings through
investment activities. Investments are generally stated at fair value with the exception of guaranteed investment contracts, which are stated at
cost. Income earned or losses arising from the investment of pooled cash are allocated to various funds based on month-end cash balances in
accordance with California Government Code Section 53647. Changes in fair value of investments are recognized as a component of
investment income.
Restricted assets represent the proceeds from debt and other cash and investments held by fiscal agents by agreement that meet the definition
of cash and cash equivalents, with the exception of a $2,169,850 guaranteed investment contract held in the Wastewater Fund which is a long-
term investment.
(e) Restricted Cash and Investments
The City accounts for certain settlement payments for environmental remediation as restricted with the understanding that these funds will be
used exclusively for environmental clean up, investigation or remediation expenses incurred by the City in the specified areas and that they will
not be used for the payment of legal or technical fees. These funds are accounted for in the Water Fund.
34
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(f) Restricted Assets with Fiscal Agents
In the Electric Enterprise Fund, restricted assets represent the proceeds of the 2008 Certificates of Participation reserved for debt service. In the
Capital Outlay Reserve Fund, the restricted assets represent the proceeds of the 2002 Improvement bonds reserved for debt service. In the
Wastewater fund, the restricted assets represent the proceeds of the 20038, the 2004A and 2007A Certificates of Participation issued for
improvementsto the City's wastewater collection, treatment and disposal system.
(g) Property Taxes
San Joaquin County is responsible for assessing, collecting and distributing property taxes in accordance with enabling legislation. Revenue
received is based on an allocation factor calculated by the County under the provisions of Proposition 13 plus a percentage of the increase in
market value in specific areas. The City's property tax is liened based on the assessed value listed as of the prior January 1 st for all real and
personal property located in the City. Property sold after the assessment date (January 1st) is reassessed and the amount of property tax
assessed is prorated. The assessed value at January 1,2008, upon which the 2009 levy was based, was $5,259,431,000.
Secured property taxes are levied on October 1 and are due in two installments on November 1 and February 1. The tax becomes delinquent
after December 10 and April 10, respectively. Unsecured property tax is levied on July 1, due on July 31 and becomes delinquent after August
31.
Property taxes levied for the year ended June 30, 2010, are recorded as receivables, net of estimated uncollectible amounts. Property taxes
paid to the City by the County within 60 days of the fiscal year end are considered "available" and are, therefore, recognized as revenue.
In 1993, the City made an agreementwith the San Joaquin County to participate in the Teeter Plan. The Teeter plan is an alternative method of
apportioning property tax money. The cities receive 95% of the property taxes in advance from the County and the 5% remaining after
reconciling the cities' balances at June 30. As part of the agreement, the County keeps the penalties and interest on the delinquent taxes.
h) Proposition 1A Borrowing by the State of California
Under the provisions of Proposition 1A and as part of the 2009-10 budget package passed by the California state legislature on July 28, 2009,
the State of California borrowed 8% of the amount of the property tax revenue, including those property taxes associated with the in -lieu motor
vehicle license fee, the triple flip in lieu sales tax, and supplemental property tax, apportioned to cities, counties and special districts (excluding
redevelopment agencies). The state is required to repaythis borrowing plus interest by June 30, 2013. After repaymentof this initial borrowing,
the California legislature may consider only one additional borrowing within a ten-year period. The amount of this borrowing pertaining to the City
of Lodi was $1,247,562. Authorized with the 2009-10 State budget package, the Proposition 1A Securitization Program was instituted by the
California Statewide Communities Development Authority ("California Communities"), a joint powers authority sponsored by the California State
Association of Counties and the League of California Cities, to enable local governments to sell their Proposition 1A receivables. Under the
35
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Securitization program, California Communities, acting solely as a conduit for the State of California, simultaneously purchased the Proposition
1A receivables and issued bonds ("Prop 1A Bonds") to provide local agencies with cash proceeds in two equal installments, on January 15, 2010
and May 3, 2010. The purchase price paid to the local agencies equaled 100% of the amount of the propertytax reduction. At transaction costs
of issuance and interest were paid by the State of California. Participating local agencies have no obligation on the bonds and no credit
exposure to the State. The City participated in the securitization program and accordingly property taxes have been recorded in the same
manner as if the State had not exercised its rights under the Proposition 1A. The receivable sale proceeds were equal to the book value and, as
a result, no gain or loss was recorded.
(i) Due From/Due To Other Funds, Advances To/Advances From Other Funds, and Internal Balances
During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. In the fund
financial statements, these receivables and payables are classified as "due from other funds" or "due to other funds." Long-term interfund loans
receivable are reported as "advances to other funds." The corresponding long-term interfund loans payable are reported as "advances from
other funds." In the government -wide financial statements, these receivables and payables are eliminated within the governmental activities and
business -type activities columns. Receivables and payables between the governmental activities and the business -type activities are classified
as internal balances.
Q) Transfers
In the fund financial statements, interfund transfers are recorded as transfers in (out) except for transactions that are described below:
Charges for services are recorded as revenues of the performing fund and expenditures of the requesting fund. Unbilled costs are
recognized as an asset of the performing fund at the end of fiscal year.
Reimbursements for expenditures, initially made by one fund that is properly applicable to another fund, are recorded as expenditures in
the reimbursing fund and as a reduction of expenditures in the fund that is reimbursed. Reimbursements are eliminated for purposes of
government -wide reporting.
(k) Long-term Obligations
In the government -wide financial statements and in the proprietaryfund type financial statements, long-term debt and other long-term obligations
are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund statement of net assets. Bond
premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of
the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related
debt. Gains or losses occurring from advance refunding are deferred and amortized as an expense for both governmental and business -type
activities.
36
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Loan Receivable
Loan receivable reported in the HOME Program & Community Development Block Grants Special Revenue Fund represent funds the City
loaned to a developer on November 15, 1995 for a low-income housing project. The City will receive principal and interest from the original loan
in 2025 and can use it for allowable projects or to make new loans.
(m) Advance Receivable
Advance receivable reported in the Electric Enterprise Fund represents the City's portion of the Northern California Power Agency's (NCPA)
General Operating reserve that is refundable upon demand by the City (See Note 13).
(n) Inventory
General fund inventories are recorded at cost and are recognized as expenditures when consumed rather than when purchased. For the
proprietary fund types, inventories are recorded at cost using the weighted average cost method, which approximates market, and expense is
recognized when inventories are consumed in operations.
(o) Deferred Charges
Deferred charges reported in the Electric Enterprise Fund include costs incurred in connection with the issuance of the 2002 Certificates of
Participation Series C & D amortized over 9.5 years and the 2008 Certificates of Participation Series A amortized over 24 years. It also includes
the buyout cost of the Calpine energy purchase contract amortized over 9.5 years. The deferred charges reported in the Wastewater Enterprise
Fund include costs incurred on the issuance of the 20039 and 2004A Certificates of Participation amortized over 20 years and the 2007A
Certificates of Participation amortized over 30 years.
(p) Capital Assets
Capital assets, which include land, buildings and improvements, machinery and equipment, vehicles, infrastructure (e.g., streets, streetlights,
traffic signals, sidewalks, and bridges), and electric lines, wastewater lines and storm drains are reported in the applicable governmental or
business -type activities columns in the government -wide financial statements and in the proprietary funds financial statements. Capital assets
are defined by the City as assets with individual cost of $3,000 or more and have an estimated useful life in excess of two years. Such assets
are recorded at historical cost. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital outlay is
recorded as expenditures in the General and other governmental funds and as assets in the government -wide financial statements to the extent
the City's capitalization threshold is met.
37
CITY C' LODI
Notes to Basic Financial Statements (continued)
June 30,2010
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset useful lives are not capitalized.
As required by the Governmental Accounting Standards Board Statement No. 34, beginning July 1, 2002, the City has capitalized infrastructure,
primarily its network of streets, as part of the capital assets shown in the governmental activities column on the government -wide statement of
net assets. This capitalization included infrastructurethat could be identified and has been acquired since July 1, 1980.
Depreciation of capital assets is provided on the straight-line basis over the following estimated useful lives:
Years
Buildings and improvements 3-40
Machinery and equipment 2-40
Vehicles 5-15
Infrastructure 10-50
(q) Compensated Absences/Vacation and Sick Leave
The City accrues for compensated absences, in the government -wide financial statements and the proprietary funds financial statements, to pay
its employees for the unused vacation, compensatory time, and miscellaneous leave. The City is not obligated to pay for unused sick leave if
employees terminate prior to retirement.
(r) Self-insurance
The City is self-insured for general liability, workers' compensation, dental benefits, unemployment and long-term disability. Various City funds
are charged premiums for the City's self-insurance liability, which is accounted for in an internal service fund. The accrued liability for estimated
self-insured claims represents an estimate of the eventual loss on claims arising priorto year-end including claims incurred but not reported.
(s) Fund Equity
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 balance represent tentative management plans that
are subject to change.
(t) Statement of Cash Flows
A statement of cash flows is presented for proprietary fund types. For purposes of reporting cash flows, the City considers all highly liquid
investments with maturities of three months or less when purchased and investments maintained in the pool to be cash equivalents.
38
(2)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(u) Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Actual results could differ from those estimates.
CASH AND INVESTMENTS
Cash and investments as of June 30, 2010 are classified in the accompanying financial statements as follows:
Statement of net assets:
Cash and investments
$
59,450,595
Restricted assets
32,816,776
Fiduciaryfunds cash and investments:
Private-purposetrust funds
224,884
Agency fund
585,172
Total cash and investments
$
93,077,427
Cash and investments as of June 30, 2010 consist of the following:
Cash on hand
$
2,471
Depositswith financial institutions
20,840,105
Investments
72,234,851
Total cash and investments
$
93,077,427
(a) Authorized Investments
The City has adopted an investment policy pursuant to Government Code Section 53601 which authorizes the City to invest in obligations of the
U.S. Treasury, U.S Government agency securities and instruments, commercial paper rated A-1 by Standard & Poor's or P-1 by Moody's
Commercial Paper Record, bankers' acceptances, certificates of deposit, mutual funds that invest in eligible securities, guaranteed investment
contracts, medium term notes as permitted by the Government Code, and the State of California Local Agency Investment Fund (LAIF). The
City is not authorized to enter into reverse repurchase agreements. The City selects its investments based on safety, liquidity and yield.
39
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(b) Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by the provisions of the debt agreements and to the extent that they are
permissible investments of funds of the City. The following table below identifies the permitted investment types authorized per the City's
investment policy. The table also identifies certain provisions that address interest rate risk, credit risk, and concentration of credit risk.
(c) Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the
maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. Information about the sensitivity of the
fair values of the City's investments to market interest rate fluctuations is provided by the following table that shows the maturity date of each
investment:
40
Maximum
Maximum % of
Maximum Investment
Minimum Credit
Permitted I nvestments/Deposits
Maturity
Portfolio
in One issuer
Quality
U. S Treasury Obligations
5 years
100%
AAA
U.S.Agency Securities
5 years
100%
AAA
Banker's Acceptances
180 days
40%
2596
AAA
Certificates of Deposit
5 years
100%
33%
Negotiable Certificates of Deposit
5 years
30%
Commercial Paper
270 days
40%
AAA
California State LocalAgency Investment Fund (LAIF)
Indefinite
100%
$50m per account
unrated
Money Market Mutual Funds
Indefinite
20%
AAA
Guaranteed investment contracts (GICs)
5 years
100%
AA -
Medium term Notes
5 years
30%
AAA
(c) Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the
maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. Information about the sensitivity of the
fair values of the City's investments to market interest rate fluctuations is provided by the following table that shows the maturity date of each
investment:
40
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30.2010
Investmentas of June 30,2010
LAI F
Money Market Mutual Funds
Held by bond trustee:
Money Market Mutual Funds
Guaranteed investment contracts (GICs)
Total investments subject to interest rate risk
Equities and options
Maturity Maturity
Less than One Year One to Five Years Total
$ 68,093,185 $ 68,093,185
141,190 141,190
1,748,520 1,748,520
2,169,850 2,169,850
$ 69,982,895 2,169,850 72,152,745
82,106
Total investments $ BIM851
Investments in equities are shares of stock received by the Library as an endowmentfrom a private citizen.
(d) Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by
the assignment of a rating by a nationally recognized statistical rating organization. The money market funds are registered under the Federal
Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and have a rating by S &P of "AAAm-
G," "AAA -mu or "AA -m" and rated by Moody's "Aaa," "Aal" or "Aa2." The GICs and LAW do not have a rating provided by a nationally
recognized statistical rating organization.
(e) Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the
California Government Code. Investments in LAIF and money market mutual funds are not subject to the concentration of credit risk disclosure.
(f) Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to
recover collateral securities that are in the possession of an outside party. The California Government Code and the City's investment policy do
not contain legal or policy requirements that would limit the exposure to custodial risk for deposits, other than the following provision for deposits:
The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging
securities in an undivided collateral pool held by a depository regulated under state law. The market value of the pledged securities in the
collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to
41
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured deposits. $16,604,373 of the City's
deposits with financial institutions, which exceeded federal depository insurance limits, was collateralized in this fashion.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a
government will not be able to recover the value of the investment or collateral securities that are in the possession of another party. The
California Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk
for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities.
Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or government
investment pools such as LAIF.
(g) Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the
oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial
statements at amounts based upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the
amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are
recorded on an amortized cost basis.
The total amount invested by all public agencies in LAIF at June 30, 2010 was $23.3 billion. LAIF is part of the California Pooled Investment
Account (PMIA), which at June 30, 2010 had a balance of $69.4 billion. Of this amount, 5.42% were invested in structured notes and asset-
backed securities. PMIA is not SEC -registered, but is required to invest according to California State Code. The average maturity of PMIA
investments was 203 days as of June 30,2010.
The Local Investment Advisory Board has oversight responsibility for LAIF. The Board consists of five members as designated by state statute.
The value of the pool of shares in LAIF, which maybe withdrawn, is determined on an amortized cost basis, which is different than the fair value
of the City's portion of the pool, Withdrawals from LAIF are done on a dollar for dollar basis.
In accordance with GASB Statement 31, investments are marked to fair values annually and an adjustment is made to each fund accordingly.
However, actual daily activity is done on a dollar to dollar basis and only a withdrawal from the pool size that jeopardizes pool participants would
cause the withdrawal to be done at market value.
42
(3)
(4)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
Receivablesof the General Fund, Electric, Wastewater and Water funds are reported net of uncollectible amounts. Total allowance provided for
uncollectible amounts related to receivables of the current period are as follows:
Uncollectibles related to late charges and services $
19,800
Uncollectibles related to electric sales and services
259,500
Uncollectibles related to wastewater services
66,400
Uncollectibles related to water sales and services
60,500
Total uncollectibles of the current fiscal year $
406,200
INTERFUND RECEIVABLES/PAYABLES
Interfund receivables and payables at June 30, 2010 are as follows:
Due from Due to Amount
Other governmental General $ 1,327,820
Other governmental Other governmental 214,910
$ 1,542,730
"Due to" and "due from" balances are recorded primarily when funds overdraw their share of pooled cash or when there are short-term loans
between funds. The $ 1,327,820 and $214,910 represent cash deficits in other governmental funds.
Advances from
General
Other governmental
Water
Advances to
Other governmental
Other governmental
Other governmental
Amount
$ 305,560
343,385
1,225,173
$ 1,874,118
The $305,560 from the General Fund to the other governmental is an advance used for the start up costs of a redevelopment agency. The
$343,385 advance from other governmental was used for the Lower Sacramento Road expansion project and other street projects. The
$1,225,173 advance from the Water Fund was used for the construction of Fire Station #-4-
43
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(5) TRANSFERS
Transfers for the year ended June 30, 2010, are summarized as follows:
Transfers out:
General $
Other governmental
Electric
Wastewater
Water
Transfers in
Other
General Governmental Total
4,632,278 $ 4,632,278
672,429 672,429
3,356,383 3,356,383
1,451,478 1,451,478
1,060,122 1,060,122
Total $ 5,867,983 5,304,707 $ 11,172,690
During the year, various interfund transfers were made to finance expenditures, subsidize operating losses and service debt.
Transfers out of $3,356,383 from the Electric Fund, $1,451,478 from Wastewater Fund, and $1,060,122 from Water Fund represent the cost of
services reimbursementto the General Fund.
The $4,632,278 transfers out from the General Fund to other governmental represent transfers of $1,013,602 to the Debt Service Fund for the
principal, interest and fiscal charges required to pay the 2002 Certificates of Participation; $1,166,095 to the Community Center and $494,130 to
the Recreation Fund; $38,100 to the Library Fund for the Library renovation and HVAC projects; $162,100 to Community Development; $371,480
to the Vehicle and Equipment Fund which include $306,480 for vehicle replacements and $65,000 for information systems replacements;
$704,000 to the Capital Outlay Reserve Fund for capital projects; and $682,771 to Streets for various street projects.
The transfer out of $672,429 from other governmental to other governmental includes $663,329 transferred from Community Center to Debt
Service Fund for the principal, interest and fiscal charges required to pay the 2002 Certificates of Participation; and transfer of $2,510 from the
Community Development, $3,400 from Recreation Fund, and $3,190 from the Community Center to the Vehicle and Equipment Fund for fleet
replacement.
44
CITY OF LODI
Notes to Basic Financial Statements(continued)
June 30,2010
(6) CAPITAL ASSETS
Capital assets activity of the primarygovernmentfor the year -ended June 30, 2010, was as follows:
Governmental activities
Capital assets, not being depreciated:
Land
Work of art
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings and improvements
Machinery and equipment
Vehicles
Infrastructure
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings and improvements
Machinery and equipment
Vehicles
Infrastructure
Total accumulated depreciation
Total capital assets, being depreciated, net
Governmental activities capital assets, net
Balance Balance
June 30,2009 Increases Decreases June 30,2010
$ 24,099,912 $ 24,099,912
62,024 242,883 304,907
6,069,109 3,551,424 (1,168,529) 8,452,004
30,231,045 3,794,307 (1,168,529) 32,856,823
57,497,939
903,668
58,401,607
9,391,739
867,159
(3,172) 10,255,726
9,243,947
141,286
(50,537) 9,334,696
124,938,445
980,034
125,918,479
201,072,070 2,892,147 (53,709) 203,910,508
21,846,360
1,509,224
23,355,584
7,778,087
577,510
(3,172) 8,352,425
8,005,653
374,989
(50,537) 8,330,105
55,260,221
5,509,099
60,769,320
92,890,321 7,970,822 (53,709) 100,807,434
108,181,749 (5,078,675) 103,103,074
$ 138,412,794 (1,284,368) (1,168,52$) 135,959,897
45
CITY CIF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Business -type activities
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings and improvements
Machineryand equipment
Vehicles
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings and improvements
Machineryand equipment
Vehicles
Total accumulated depreciation
Total capital assets, being depreciated, net
Business-typeactivities capital assets, net
Balance
June 30,2009 Balance
Restated Increases Decreases June 30,2010
$ 5,438,359
$ 5,438,359
53,305,763 4,344,218 (2,240,770) 55,409,211
58,744,122 4,344,218 (2,240,770) 60,847,570
36,987,436 678,764 37,666,200
147,374,081 3,254,612 (493,833) 150,134,860
8,365,153 174,525 (289,960) 8,249,718
192,726,670 4,107,901 (783,793) 196,050,778
10,715,991
44,274,012
940,540
4,241,647
11,656,531
48,515,659
5,681,176
882,861
(289,960)
6,274,077
60,671,179
6,065,048
(289,960)
66,446,267
132,055,491
(1,957,147)
(493,833)
129,604,511
$ 190,799,613
2,387,071
(2,734,603)
190,452,081
The business -type activities June 30, 2009 balancewas restated for wastewaterand water infrastructurethat were understated.
46
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Depreciation expense was charged to function/programs of the primary government as follows:
Governmental activities:
General government $ 673,552
Public protection 959,865
Publicworks 5,653,343
Community development 5,709
Library 12,520
Parks and recreation 664,386
internal service funds 1.447
Total depreciation expense - governmental activities $ 7,970,822
Business-typeactivities:
Electric $ 1,548,997
Wastewater 2,205,327
Water 1,267,086
Transit 1,043,638
Total depreciation expense - business -type activities $ 6,065,048
(7) OPERATING LEASES
The City is obligated under various operating leases for the use of buildings and office space. Total costs for such leases were $25,000 for the
year ended June 30,2010.
Future minimum lease payments required by lease agreements that have initial or remaining noncancellable lease terms of one year or more as
of June 30, 2010, are as follows:
Fiscal Years Ending
2011 $ 21,000
Total minimum lease payments required
under operating leases $ 21,000
47
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(8) LONG-TERM OBLIGATIONS
The following is a summary of debt transactions of the City for the year ended June 30,2010:
Governmental activities:
Compensated absences
2002 Certificates of Participation
Note payable
Capital leases
Self-insurance liability
Governmental activity long-term liabilities
Business -type activities:
Compensated absences
Pollution remediation obligation
California Safe Drinking Water Note Payable
Certificates of Participation:
2008 Certificates of Participation
Add deferred amounts:
For issuance premium
Less deferred amounts:
From refunding
Net
Interest Rates June 30
$ 7,274,132
3.0-5.096 22,855,000
5.0% 245,000
5.3-5.39% 277,001
6,531,336
$ 37,182,469
Interest Rates June 30,2009
3.41%
3.8-5.05%
Amounts
Due Within
Additions Reductions June 30,2010 One Year
2,374,780 (1,998,011) $ 7,650,901 $ 2,374,780
(590,000) 22,265,000 610,000
245,000
(L35,425) 141,576 141,576
4,064,109 (1,665,478) 8,929,967 4,064,109
6,438,889 (4,388,914) $ 39,232,444 $ 7,190,465
Amounts
Due Within
Additions Reductions June 30,2010 One Year
$ 1,845,335 403,083 (357,198) 1,891,220 $ 403,083
69,952,135 (229,046) 69,723,089
1,584,763 (L75,462) 1,409,301 181,496
60,685,000
572,897
60,685,000
(24,910) 547,987 24,909
(6,938,078) 301,656 (6,636,422) (301,656)
54,319,819 276,746 54,596,565 (276,747)
48
2002 Certificates of Participation C & D
Add deferred amounts:
For issuance premium
Total
2003 Certificates of Participation B
Add deferred amounts:
For issuance premium
Total
2004 Certificates of ParticipationA
Add deferred amounts:
For issuance premium
Total
2007 Certificates of ParticipationA
Add deferred amounts:
For issuance premium
Less deferred amounts:
From refunding
Net
Total Certificates of Participation
Business -type activity long-term liabilities
CITY CF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Amounts
Due Within
Interest Rates June 30,2009 Additions Reductions June 30,2010 One Year -
1.54 -5.25% 28,750,000 (2,920,000) 25,830,000 3,080,000
164,094
(65,637)
98,457
65,636
28,914,094
(2,985,637)
25,928,457
3,145,636
140,823,072
2.0-5.0% 4,045,000
(205,000)
3,840,000
210,000
58,453
(4,102)
54,351
4,102
4,103,453
(209,102)
3,894,351
214,102
2.0-5.5% 23,480,000
(1,010,000)
22,470,000
1,050,000
324,474
(21,276)
303,198
21,277
23,804,474
(1,031,276)
22,773,198
1,071,277
4.0-5.0% 30,215,000
233,848
(L05,000) 30,110,000 110,000
(8,252) 225.596 8,253
(767,616)
44,499
(723,117)
(44,499)
29,681,232
(68,753)
29,612,479
73,754
140,823,072
(4,018,022)
136,805,050
4,228,022
$ 214,205,305 403,083
(4,779,728) $
209,828,660
$ 4,812,601
Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the above
totals for governmental activities. At year-end, internal service funds self-insurance liability for $8,929,967 and $125,527 for compensated
absences were included in the above amounts. Also, for the governmental activities, compensated absences are generally liquidated by the
General Fund and the internal service funds.
49
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Long-term debt payable at June 30, 2010, comprised of the following individual issues:
California Safe Drinking Water Note Payable
The City entered into a contract on October 16, 1991, with the State of California Department of Water Resources to assist the City in financing
the construction of water wells enabling the City to meet safe drinking water standards established by the State. The original amount of the note
was $3,129,828 and is secured by the project and to be repaid with user fees collected by the Water Enterprise Fund. Semiannual payments of
$114,012, are payable each October 1 and April 1 through 2017.
Annual debt service requirements to maturity of water note payable are as follows:
Fiscal
Year
Ending
Business-typeActivities
June 30,
Principal
Interest
2011
$ 181,496
$ 46,528
2012
187,658
40,366
2013
194,263
33,762
2014
200,872
27,152
2015
207,780
20,244
2016-2017
437,232
18,815
Total
$ 1,409,301
$ 186,867
50
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Note Payable
The City issued a $245,000 promissory note to James E. Dean and Carol Dean, as trustees of the James E. Dean Family Trust, for the purchase
of 307 W. Elm Street property, which is the site of the new Public Safety Building. Interest is payable quarterly and principal is due on April 1,
2012.
Annual debt service requirements to maturity of the note payable are as follows:
Fiscal
Year
Ending
June 30,
2011
2012
Total
Certificates of Participation
Governmental Activities
Principal
245,000
$ 245,000
Interest
$ 14,700
11,025
$ 25,725
$5,000,000 California Statewide Communities Development Authority Water and Wastewater Revenue Bonds were issued on October 7, 2003.
The City of Lodi along with the City of Fort Bragg issued $9.855 million 2003 Series B revenue bonds through the California Statewide
Communities Development Authority (the "Authority") pooled financing program. The City of Lodi's portion is $5.0 million for the upgrade of its
wastewater facilities. Principal is payable annually on October 1 in amounts from $185,000 to $365,000 with final payment due October 1, 2023.
The City has pledged future wastewater revenues, net of specified operating expenses, to repay $5.0 million in wastewater revenue bonds. The
bonds are payable solely from wastewater customer net revenues. The total principal and interest remaining to be paid on the bonds is
$5,286,678. Principal and interest paid for the current year and total net revenueswere $381,400 and $6,104,000, respectively.
The Authority's Water and Wastewater Pooled Financing Program is available to California water and wastewater agencies to facilitate the
financing or refinancing of capital improvements. The program is available to California cities and special districts that operate water or
wastewater enterprises. The Authority is authorized pursuant to Chapter 5 of Division 7 of Title 1 of the California Government Code to issue
bonds to finance and refinance water and wastewater public capital improvements of local agencies located throughout California.
$27,360,000 Certificates of Participation (2004A COP) were issued on May 12, 2004 to provide funds to finance the costs of certain
improvements to the wastewater collection, treatment and disposal system of the City. Principal is payable annually on October 1 in amounts
from $170,000 to $2,070,000 with final payment due October 1, 2024. The City has pledged future wastewater revenues, net of specified
operating expenses, to repay these bonds. The total principal and interest remaining to be paid on the bonds is $31,952,612. Principal and
interest paid for the currentyear and total net revenueswere $2,138,700 and $6,104,000 respectively.
51
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
$30,320,000 Certificates of Participation (2007A COP) were issued on November 16, 2007 to provide funds to finance the costs of certain
improvements to the wastewater collection, treatment and disposal system of the City and to provide resources for the repayment of the 1991
Certificates of Participation (Wastewater Treatment Plant Expansion Refunding Project). Principal is payable annually on October 1 in amounts
from $105,000 to $2,980,000 with final payment due October 1, 2037. The City has pledged future wastewater revenues, net of specified
operating expenses, to repay these bonds. The total principal and interest remaining to be paid on the bonds is $60,422,738. Principal and
interest paid for the current year and total net revenueswere $1,631,500 and $6,104,000, respectively.
$26,745,000 Certificates of Participation (2002 COP) were issued in January 2002 to provide funds to finance the costs of constructing,
furnishing and equipping a new police building and jail for the City; to finance portions of certain other projects and to refund the outstanding
1995 and 1996 Certificates of Participation. As of June 30, 2010, there are no outstanding balances of these refunded Certificates. The 1995
Certificates of Participation (1995 COP) were sold in October 1995 to finance the City Downtown Revitalization and the Cherokee Lane
Beautification projects. The 1996 Certificates of Participation (1996 COP) were sold in August 1996 to finance the construction of the Hutchins
Street Square Conference and Performing Arts Center. Principal is payable annually on October 1 in amounts from $730,000 to $1,600,000 with
final payment due October 1,2031.
$21,225,000 Revenue Certificates of Participation 2002 Series C and $22,740,000 Revenue Certificates of Participation Series D were issued to
buyout the energy purchase agreement with Calpine.
In February 2001, the City entered into an energy purchase agreement (the Original Agreement) with Calpine Energy Services L.P. (Calpine) to
purchase 25 MW of energy at $65/mwh for a ten-year period beginning January 1, 2002. Since the execution of the OriginalAgreement, actions
of the State in connection with the energy market conditions, including the initiation of conservation programs, and other factors, have resulted in
lower electric load requirements and reduced energy costs throughout the State. As a result, the City's need for the energy purchased under the
Original Agreement to serve its load has been reduced. The Original Agreement was amended on September 4, 2002, and was divided into
three parts. The City sold its interests in the energy purchased under the Original Agreement to Calpine and nets the payments due from the
City with respect to its purchase of such energy against the payments due from Calpine with respect to its purchase of the City's rights to such
energy. On November 21, 2002, the City issued $21,225,000 Revenue Certificates of Participation 2002 Series C and $22,740,000 Revenue
Certificates of Participation 2002 Taxable Series D to buy out the amended contract in the amount of $42,406,175. Principal is payable annually
on July 1 in amounts from $110,000 to $5,195,000 with final paymentdue July 1, 2015.
The City has pledged future electric revenues, net of specified operating expenses, to repay these bonds. The total principal and interest
remaining to be paid on the bonds is $30,154,357. Principal and interest paid for the current year and total net revenues were $4,236,460 and
$20,339,011, respectively.
The City issued $60,685,000 Certificates of Participation (2008A COP) on July 24, 2008 to allow the City to prepay and cause the immediate
defeasance of the outstanding $46,760,000 Certificates of Participation (Electric System Revenue Certificates of Participation 2002 Series A
Variable Rate Certificates) and to pay $8,979,000 for the termination of a swap agreement related to the refunded 2002 certificates. Principal is
52
CITY OF LODI
Notes to Basic Financial Statements(continued)
June 30,2010
payable annually on July 1 in amounts from $2,390,000 to $5,090,000 with final payment due July 1, 2032. The City has pledged future electric
revenues, net of specified operating expenses, to repay these bonds. The total principal and interest remaining to be paid on the bonds is
$105,689,275. Interest paid for the current year and total net revenues were $2,957,775 and $20,339,011, respectively.
The various indentures contain significant limitations and restrictions on annual debt service requirements, maintenance of and flow of moneys
through various restricted accounts and minimum revenue bond coverage. The City is in compliance with all such significant limitations and
restrictions.
Annual debt service requirementsto maturityfor certificates of participation are as follows:
FiscalYear Ending
June 30.
2011
2012
2013
2014
2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2038
Total
Governmental Activities
Principal
Interest
$ 610,000 $
1,060,956
630,000
1,036,156
655,000
1,010,047
690,000
981,013
715,000
949,400
4,085,000
4,201,120
5,165,000
3,094,263
6,595,000
1,636,125
3,120,000
158,000
$ 22,265,000 $ 14,127,080 $
53
Business-tvoe Activities
Principal
Interest
4,450,000 $
6,899,699
4,700,000
6,708,685
6,075,000
6,457,944
6,325,000
6,151,475
6,610,000
5,828,957
27,870,000
24,652,287
28,850,000
18,475,869
31,540,000
10,976,750
19,515,000
3,746,125
7,000,000
536,500
142,935,000 $
90,434,291
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Capital Leases
The City has entered into a lease agreement for financing the acquisition of two fire trucks. This lease agreement qualifies as a capital lease for
accounting purposes and, therefore, has been recorded at the present value of its future minimum lease payments as of inception date. The
assets acquired through this capital lease are as follows:
Governmental
Activities
Asset:
Vehicles $ 883,037
Less accumulated depreciation (412,084)
Total $ 470,953
The presentvalues of future minimum capital lease payments as of June 30, 2010, are as follows:
Fiscal Years
Ending
2011 $ 148,003
Total minimum lease payments 148,003
Less amounts representing interest (6.427)
Presentvalue of minimum capital lease payments $ 141,576
Special Assessment District Debt
The City issued limited obligation improvement bonds on July 22, 1996, for the "Lodi Central City Revitalization Assessment District." These
bonds have no governmental commitment and debt service is recorded in an Agency Fund. These bonds were issued under the Improvement
Act of 1915 and will mature in the year 2011. The City's liability in the event of delinquent assessment shall not exceed the balance of the
established Reserve Fund. The amount outstanding as of June 30, 2010, is $320,000.
54
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Industrial Development Bonds
The City of Lodi has lent its name to the City of Lodi Industrial Development Authority for the purpose of issuing the following industrial
development bonds: Minton Corporation $5,000,000; Dart Corporation $8,000,000; Wallace Computer Services $3,000,000; and Luster -Cal
Nameplate Corporation $3,000,000. These bonds are special obligation bonds only, payable solely out of the bond revenues or other sources of
the above companies and are not a pledge of the general credit of the City. The City is not obligated for the redemption or administration of
these industrial development bonds.
Woodbridge Irrigation District Bonds
On October 8, 2003, the City lent its name to the Woodbridge Irrigation District (the "District") in the procurement of $11.745 million 2003
Revenue Certificates of Participation, to provide funds to finance the costs of construction of a new diversion dam on the Mokelumne River and
related facilities of the water district. A significant portion of the District's sources of payment for the 2003 Certificatesare expected to be derived
from amounts to be received by the Districtfrom the City of Lodi pursuantto an Agreement for purchase of water from the Woodbridge Irrigation
District by the City of Lodi, dated May 13, 2003 (the "Lodi Water Sales Agreement" ). Under the agreement, the City will purchase 6,000 acre feet
of water per annum from the Districtfor 40 years.
55
(9)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
NATURE AND PURPOSE OF REPORTED FUND EQUITY
The following is a summary of reserved, unreserved-designatedand unreserved-undesignatedfund balances at June 30, 2010:
Reserved for:
Library
Encumbrances
Advances to other funds
Inventory
Total Reserved
U nreserved-designated for:
Specific projects and programs
Total Designated
Unreserved- undesignated
Total Fund Balances
Other
General
Governmental
Total
$ 48,966
$
48,966
33,270
7,457,554
7,490,824
305,560
343,385
648,945
844
844
388,640
7,800,939
8,189,579
6,356,272 6,356,272
6,356,272 6,356,272
3,896,576 (1,743,956) 2,152,620
$ 4,285,216 12,413,255 $ 16,698,471
Reserved Fund Balance
Reserved represents that portion that is legally segregated for specific purposes and is not available for discretionary appropriation.
Unreserved -Designated Fund Balance
Designated represents that portion for which the City has made tentative plans.
Unreserved -Undesignated Fund Balance
Undesignated represents that portion which is available for budgeting in future periods.
56
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(10) DEFINED BENEFIT PENSION PLAN
(a) Plan Description
The City of Lodi contributes to the California Public Employees' Retirement System (PERS); an agent multiple -employer public employee 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- 400 Q Street, Sacramento, CA 95811.
(b) Funding Policy
Participants are required to contribute 7% (9% for safety employees) of their annual covered salary. The City makes the contributions required
of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate; the current rate is
11.727% for miscellaneous employees, 23.838% for fire and police employees, of annual covered payroll. The contribution requirements of plan
members and the City are established and may be amended by PERS.
(c) Annual Pension Cost
For the year ended June 30, 2010, the City's annual pension cost of $2,674,227 for the Safety Plan and $2,017,879 for the Miscellaneous Plan
were equal to the City's required contributions. The required contribution was determined as part of the June 30, 2007, actuarial valuation using
the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.75% investment rate of return (net of administrative
expenses) (b) projected annual salary increases that vary by age, length of service, and type of employment (c) 3.25% payroll growth, and (d)
3.00% inflation. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the
market value of investments over a fifteen -year period (smoothed market value). PERS unfunded actuarial liability is being amortized as a level
percentage of projected payroll on a closed basis. Amortization of the remaining period for the Safety Plan was 30 years and for the
Miscellaneous Plan was 21 years as cf June 30,2009.
57
CITY CF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(d) Trend Information
Three-YearTrend information ($ Amounts in Thousands):
SAFETY PLAN
MISCELLANEOUS PLAN
Annual
Percentage
Net
Fiscal Year
Pension
of APC
Pension
Ended
Cost (APC)
Contributed
Obligation
6/30/08
$ 2,519
100%
$0
6/30/09
2,761
100%
$0
6/30/10
2,674
100%
$0
MISCELLANEOUS PLAN
(e) Funded Status and Funding Progress
As of June 30, 2008, the most recent actuarial valuation date, the Safety Plan was 82% funded and the Miscellaneous Plan was 90% funded.
The actuarial accrued liability for benefits was $103 million for the Safety Plan and $118 million for the Miscellaneous Plan, and the actuarial
value of assets were $85 million for the Safety Plan and $106 million for the Miscellaneous Plan; resulting in an unfunded actuarial accrued
liability (UAAL) of $18 million for the Safety Plan and $12 million for the Miscellaneous Plan. The covered payroll (annual payroll of active
employees covered by the plans) were $10 million for the Safety Plan and $19 million for the Miscellaneous Plan, and the ratio of the UAAL to
the covered payroll was 178.4% and 63.7% for the Safety and Miscellaneous plans, respectively.
The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multi-year trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits.
58
Annual
Percentage
Net
FiscalYear
Pension
of APC
Pension
Ended
Cost (APC)
Contributed
Obligation
6/30/08
$2,277
100%
$0
6/30/09
2,184
100%
$0
6/30/10
2,018
100%
$0
(e) Funded Status and Funding Progress
As of June 30, 2008, the most recent actuarial valuation date, the Safety Plan was 82% funded and the Miscellaneous Plan was 90% funded.
The actuarial accrued liability for benefits was $103 million for the Safety Plan and $118 million for the Miscellaneous Plan, and the actuarial
value of assets were $85 million for the Safety Plan and $106 million for the Miscellaneous Plan; resulting in an unfunded actuarial accrued
liability (UAAL) of $18 million for the Safety Plan and $12 million for the Miscellaneous Plan. The covered payroll (annual payroll of active
employees covered by the plans) were $10 million for the Safety Plan and $19 million for the Miscellaneous Plan, and the ratio of the UAAL to
the covered payroll was 178.4% and 63.7% for the Safety and Miscellaneous plans, respectively.
The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multi-year trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits.
58
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
(11) POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
(a) Plan Description
The City sponsors a single -employer defined -benefit postemployment healthcare plan (Plan) to provide medical insurance benefits to eligible
retired employees and their spouses. The Plan does not issue a publicly available financial report. Medical coverage is provided through PERS
healthcare program. Employees who retire from the City and receive a PERS pension are eligible for postemployment medical benefits. The
City contributes the minimum amount provided under Government Code Section 22825 of the Public Employees Medical and Hospital Care Act.
In general, retirees must contribute any premium amounts in excess of the City contribution. However, as described below, a closed group of
active employees and retirees receive additional postemployment benefits.
Employees hired priorto the dates shown in the following table are allowed to convert their accumulated sick leave into postemployment medical
benefits at retirement as long as they have ten or more years of service with the City.
Group Hired priorto:
Executive Management
July 1, 1994
Mid -Management
July 1, 1994
Fire Mid -Management
July 1, 1994
Police Mid -Management
July 1, 1994
General Services
July 1, 1995
IBEW
July 1, 1995
Maintenance and Operators
July 1, 1995
Dispatchers
July 9, 1994
Police
October 10, 1994
Fire
December6, 1995
The most widely elected options are the "Bank option and the "Conversion" option. Under the "Bank option, accumulated sick leave amounts
are translated by specified formulas into a bank amount that is then used to pay postemployment healthcare premiums until the "Bank" is
exhausted. Under the "Conversion" option, the accumulated sick leave hours are converted by specified formulas into a period of time during
which the retiree will receive postemployment benefits. The number of hours is multiplied by 50% and converted to days. The City pays one
month's premium for employee and dependents for each day after conversion. For each year of employment in excess of ten years, 2.5% is
59
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
added to the 50% before conversion. The amount of premium paid will be the same as the premium paid by the City at the time of retirement. In
the event that the premium increases, the retiree pays the difference.
The City also allows a surviving dependent of a retiree to enroll in the Sick Leave Conversion program to purchase medical insurance at the
employee only premium for the same period as if the retiree had not died. Retirees are allowed to enroll in any of the available PERS medical
plans. The PERS minimum amount will continue for the life of the retiree and surviving spouse. The "Conversion" benefit will continue until the
end of a period that is based on accumulated sick leave at retirement.
(b) Funding Policy
Contribution requirements of the postemployment benefit are based on pay-as-you-go financing. For fiscal year 2009-10, the City contributed
$459,203, or 34.43%, of the actuarially required contributions.
(c) Annual OPEB Cost and Net OPEB Obligation
The City's annual other postemployment benefits (OPEB) cost is calculated based on the annual required contribution (ARC), an amount
actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not
to exceed thirty years.
The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes
in the City's net OPEB obligation:
Annual required contribution
$ 1,333,419
Interest on net OPEB obligation
47,821
Adjustment to annual required contribution
(47,359)
Annual OPEB cost (expense)
1,333,881
Contribution made
(459,203)
Increase in net OPEB obligation
874,678
Net OPEB obligation - beginning of year
1,195,521
Net OPEB obligation - end of year
$ 2,070,199
60
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation, are as follows:
(d) Funding Status and Funding Progress
As of January 1, 2010, the most recent actuarial valuation date, the funded status of the Retiree Health Plan was as follows:
Actuarial accrued liability (AAL)
Actuarial value of plan assets
Unfunded actuarial accrued liability (UAAL)
Funded ratio (actuarialvalue of plan assets/AAL)
Annual covered payroll (active plan members)
UAAL as percentage of annual covered payroll
(e) Actuarial Methods and Assumptions
$ 17,710,456
0
$ 17,710,456
0.0%
$ 9,409,782
188.21%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence
of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts
determined regarding the funded status of the plan and the annual required contribution of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented
as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
61
Percentage of
Net
Fiscal year
Annual
Annual OPEB
OPEB
ended
OPEB Cost
Cost Contributed
Obligation
06/30/2009
$ 1,785,173
33.03%
$ 1,195,521
06/30/2010
1,333,881
34.43%
2,070,199
(d) Funding Status and Funding Progress
As of January 1, 2010, the most recent actuarial valuation date, the funded status of the Retiree Health Plan was as follows:
Actuarial accrued liability (AAL)
Actuarial value of plan assets
Unfunded actuarial accrued liability (UAAL)
Funded ratio (actuarialvalue of plan assets/AAL)
Annual covered payroll (active plan members)
UAAL as percentage of annual covered payroll
(e) Actuarial Methods and Assumptions
$ 17,710,456
0
$ 17,710,456
0.0%
$ 9,409,782
188.21%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence
of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts
determined regarding the funded status of the plan and the annual required contribution of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented
as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
61
CITY CIF LODI
Notes to Basic Financial Statements(continued)
June 30,2010
Projections of benefits for financial purposes are based on the substantive plan (the plan as understood by the employer and plan members) and
include types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and
the plan members to that point. The actuarial methods and the assumptions used include techniques that are designed to reduce short-term
volatility in actuarial accrued liabilities and the actuarial value of assets, consistentwith the long-term perspectiveof the calculations.
In the January 1, 2010 actuarial valuation, the entry age normal cost method was used. The actuarial assumptions included a 4% discount rate
to calculate the present value of future benefit payments; an annual healthcare cost trend rate of 8.5% initially, reduced by .3 percent increments
to an ultimate rate of 5.5% in the eleventh year and beyond; the PERS minimum benefit will increase 5% per year; a 3.25% annual rate of
increase in payroll; assumed that 100% future eligible retirees will elect to maintain their enrollment in a PERS medical plan and qualify for the
City's minimum contribution; 75% of future retirees will enroll a spouse; and also assumed that 100% of General Services, Maintenance and
Operators and Dispatcherswill elect the conversion option and 50% of Executive Management, Mid Managementand Policewill elect the option.
The conversion option is not available to IBEW and Fire retirees. The unfunded actuarial accrued liability is amortized as a level of percentage of
expected payroll over thirty years.
Since the prior valuation in 2008, there have been several factors which decreased the City's GASB 45 Actuarial Accrued Liability. These
include (1) fewer participants covered under the Conversion option due to pre -retirement termination of employment or cessation of medical
coverage with the City; (2) updated actuarial assumptions and methods regarding coordination of the PERS minimum benefit and the Conversion
benefit, effect of Medicare premiums on the Conversion benefit, and assumed duration of the PERS minimum benefitfor widows; and (3) health
premium increaseswhich were lowerthan expected.
(12) CLAIMS AND BENEFITS
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to
employees; and natural disasters. The City is self-insured as discussed in the following paragraphs for which liabilities are recorded in the
Internal Service Fund -Insurance Funds.
The City is self-insured for general liability up to the first $500,000 per occurrencewith claims from $500,000 to $40,000,000 per occurrence and
in the aggregate insured through the California Joint Powers Risk Management Authority. The City never had any settlements that exceeded its
general liability insurance coverage (See Note 14).
The City is self-insured for workers' compensation up to the first $250,000 per claim. Any claims of $250,000 up to California statutory limits are
covered under a purchased policy through the membership with the Local Agency Workers' Compensation Excess Joint Powers Authority with
coverage up to $300,000,000 in the current year. The City never had any settlements that exceeded its workers' compensation insurance
coverage (See Note 14).
62
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
The City is fully self-insured for dental and unemploymentfor its employees.
General liability and workers' compensation claims are administered by an outside agency and all other claims are administered by the City. The
City has accrued a liability of $8,929,967 at June 30, 2010, for all self-insured claims in the Internal Service Fund -Insurance Funds that includes
an amount for incurred but not reported claims. The liability amount is based on the requirements of Governmental Accounting Standards Board
Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates
that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably
estimated. In the opinion of the City, the amounts accrued are adequate to cover claims incurred but not reported in addition to known claims.
Changes in the self-insurance liability for fiscal years ended June 30,2010 and 2009 areas follows:
Besinninq
FY 08-09 $ 5,986,000
FY 09-10 $ 6,531,336
(13) PARTICIPATION IN JOINT VENTURES
Northern California Power Agency
Current -Year
Claims and Changes Claim
in Estimates Payments
1,953,845 (1,408,509)
4,064,109 (1,665,478)
Ending
$ 6,531,336
$ 8,929,967
The City, along with thirteen other public agencies, is a member of the Northern California Power Agency (NCPA) that was formed in 1968 as a
joint powers agency. Its membership consists of eleven cities with publicly owned electric utility distribution systems, one irrigation district, one
public utility district, one port authority and four other associate member entities. NCPA is generally empowered to purchase, generate, transmit,
distribute and sell electrical energy. Members participate in the projects of NCPA on an elective basis. A commission comprising of one
representative from each member organization governs NCPA. The commission is responsible for the general management of the affairs,
property and business of NCPA. Under the direction of the general manager, the staff of NCPA is responsible for providing various
administrative, operating and planning services for NCPA and its associated power corporations.
Project Financing and Construction
NCPAs project construction and development programs have been individually financed by project revenue bonds collateralized by NCPAs
assignment of all payments, revenues and proceeds associated with its interest in each project. Each Project Participant has agreed to pay its
proportionate share of debt service and other costs of the related project, notwithstanding the suspension, interruption, interference, reduction or
63
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
curtailment of output from the project for any reason. Certain of the revenue bonds are additionally supported by municipal bond insurance credit
enhancements.
Increase in Non-defaultinq Proiect Participant's Original Proiect Entitlement Percentaae
Upon the failure of any Project Participant to make any payment, which failure constitutes a default under the Member Agreement for the
projects, and except as sales and transfers are made pursuant thereto, the Member Agreements provide that Project Entitlement for each non -
defaulting Project participant shall be automatically increased for the remaining term of the Member Agreement; pro rata with those of the non -
defaulting Project participant thereunder; provided, however, that the sum of such increase for any non -defaulting Project Participant shall not
exceed, without written consent of such non -defaulting Project Participant, an accumulated maximum of 25% of the non -defaulting Project
Participant's original Project Entitlement Percentage Share.
General Operating Reservewith NCPA
Members of NCPA established a general operating reserve in 1992 for the purposes of providing a vehicle to fund reasonably foreseeable
contingent liabilities. It was set up primarily to provide the following advantages: minimizes the number and dollar amount of reserve that might
otherwise be funded separately in connection with NCPA's individually financed operating plants, projects and programs; provides each member
with flexibility and unilateral control over the determination of what they will fund, how they will fund it and what expenditures from the reserve will
be made on their individual behalf. It provides funding for contingent liabilities that are not budgeted but that may require significant future
expenditures. The reserve is segregated by participant and is refundable on demand by the participant.
As of June 30, 2010, the City's balance in the NCPA General Operating Reserve, which has been credited with annual interest earnings and
settlements, is $11,011,668.
64
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Proiect Participation
The NCPA members and their percentage share at June 30, 2010, which is the most recent available data, are as follows:
Hydro Combustion Multiple Lodi
Geothermal Electric Turbine Capital Transmission Energy
NCPA MEMBERS Project Project Project#1 Facilities Project Center
Alameda
16.8825%
10.00%
21.820%
19.00%
30.3590%
%
BART
6.6000
Biggs
0.2270
.197
0.4082
0.2679
Gridley
0.3360
.350
0.7103
1.9643
Healdsburg
3.6740
1.66
5.833
6.6068
1.6428
Lodi
10.2800
10.37
13.393
39.50
18.4861
9.5000
Lompoc
3.6810
2.30
5.833
5.00
6.6194
2.0357
Palo Alto
22.92
11.0736
Plumas-Sierra Rural Electric Coop
.7010
1.69
1.817
1.4647
0.7857
Roseville
7.8830
12.00
36.50
14.1756
Santa Clara
44.3905
37.02
41.667
Silicon Valley Power
25.7500
Turlock Irrigation District
6.3305
Ukiah
5.6145
2.04
9.090
10.0963
17857
NON-MEMBERS
Azusa 2.7857
CDWR 33.5000
Modesto irrigation District 10.7143
PWRPA 2.6679
Bulk power purchased by the City through NCPA amounted to $37,548,115 during the year ended June 30, 2010 and is reflected in utilities
expense in the Electric Enterprise Fund.
65
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
NCPA Geothermal Proiect
A purchase power agreement with NCPA obligates the City for a 10.28% share of the operating costs and debt service of two of NCPA's 110-
megawattsteam powered plants, Project Number2 and Project Number 3, Outstanding long-term debt related to this project was approximately
$63 million at June 30. 2010.
In addition to federal geothermal leasehold, steam wells, gathering system and related facilities, the project consists of two electric generating
stations (Plant 1 and Plant 2). Each plant has two 55MW turbine generator units utilizing low temperature geothermal steam; associated
electrical, mechanical and control facilities; a heat dissipation system; a steam gathering system; a transmission tapline; and, other related
facilities. Geothermal steam for the project is derived from the geothermal property, which includes wellpads, access roads, steam wells and
reinjection wells.
Calaveras Hydroelectric Proiect
NCPA contracted to finance, manage, construct and operate Hydroelectric Project Number One for the licensed owner, Calaveras County Water
District. In exchange, NCPA has the right to the electric output of the project for 50 years from February 1982. NCPA has also the option to
purchase powerfrom the project in excess of the District's requirementsfor the subsequent 50 years, subjectto regulatory approval.
Under a power purchase agreement the City is obligated to pay 10.37% of the debt service and operating costs. At June 30, 2010,
approximately $458 million in long-term debt used to finance this projectwas outstanding.
NCPA Combustion Turbine Proiect
The project consists of five combustion turbine units; each nominally rated at 25 megawatts. Two such units are located in Roseville, two in
Alameda and one in Lodi. The project provides capacity during peak load periods and emergency capacity reserves. Excess capacity and
energy from the project are also sold to other entities from time to time. Under the NCPA power agreement, the City is obligated to pay 13.393%
of the debt service and operating costs. At June 30, 2010 approximately $4 million in long-term debt was outstanding.
Transmission Proiect
The project was undertaken to meet certain obligations of NCPA under the NCPA/PG & E Interconnection Agreement. The project includes an
ownership interest in PG & E's 230kv Castle Rock to Lakeville Substation Transmission Line in Sonoma County, additional firm transmission
rights in that Transmission Line, and a central scheduling and dispatch facility in service at the NCPA headquarters in Roseville, California.
Under a power purchase agreement, the City is obligated to pay 18.4861 % of the debt service and operating costs. At June 30, 2010,
approximately $0.9 million in long-term debt was outstanding.
66
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Caoital Facilities Proiect
The Project consists of one 49.9 megawatt natural gas-fired steam injected combustion turbine generator unit located in Lodi, California.
Wastewater is reclaimed from the City of Lodi's White Slough water pollution control facility, processed to eliminate contaminants, and used in
the turbine to produce steam for power enhancementand emissions control.
Under a power purchase agreement, the City is obligated to pay 39.5% of the debt service and operating costs. At June 30,2010, approximately
$55 million in long-term debt was outstanding.
Lodi Enerqv Center
The Lodi Energy Center project is a 280 MW base load, combined cycle, natural gas-fired, combustion turbine generating station (one gas
turbine and one steam turbine) currently being built in Lodi on city property. Total project cost is estimated at about $375 million and expected to
start producing electricity in June 2012.
Under a power purchase agreement, the City is obligated to pay 9.5% of the debt service and operating costs. At June 30, 2010, approximately
$396 million in long-term debt was outstanding.
67
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
The following are the most recent available audited condensed financial statements of NCPA:
Combined Balance Sheet
June
30,2010
(in thousands)
Assets
Liabilitiesand Capitalization
Current assets $
66,022
Current portion of long-term debt $
41,475
Restricted assets
508,400
Other current liabilities
43,179
Electric plant, net
410,304
Other liabilitiesand deferred credits
186,256
Other assets and deferred charges
186,839
Long-term debt, net
866,874
Net assets
33.781
Total assets $
1,171,565
Total liabilities and net assets $
1,171,565
Combined Statement of Revenues and Expenses
and Changes in net Assets
Combined Statement of Cash Flow
Year ended June 30,2010
Year ended June 30,2010
(in thousands)
(in thousands)
Sales for resale $
304,345
Net cash from operating activities $
97,890
Operating expenses
(257,851)
Net from investing activities
28,554
Other expenses
(29,903)
Net c ash from capital and related
Future recoverable costs
(5,251)
financing activities
252,751
Net revenues before refunds
11,340
Net cash from noncapital
Refundsto participants
(9,573)
and related financing activities
(49,485)
Increase in net assets
1,767
Increase in cash and cash equivalents
329,710
Net assets, beginning of year
32,014
Cash and cash equivalents, beginning
of year
110,269
Net assets, end of year $
33,781
Cash and cash equivalents end of year $
439,979
At June 30, 2010, NCPA's total outstanding long-term debt was $977,440,000 at an average interest rate of 5%. The current portion of long-term
debt at June 30,2010, was $41,475,000.
68
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Complete financial information for NCPA may be obtained at the following administration office:
Northern California PowerAgency
180 Cirby Way
Roseville, CA 95678
Transmission Agency of Northern California
The Transmission Agency of Northern California (TANG) was organized under the California Government Code pursuant to a joint powers
agreement entered into by fifteen Northern California utilities including the City of Lodi. The purpose of TANC is to provide electric transmission
or other facilities for the use of its members through its authority to acquire, construct, finance, operate and maintain facilities for electric power
transmission. The joint powers agreement provides that the costs of TANC's activities can be financed or recovered through assessment of its
members or user charges through transmission contracts with its members. Each TANC member has agreed to pay a pro rata share of the
costs to operate TANC and has the right to participate in future project agreements. The joint power agreement remains in effect until debt
obligations and interest thereon have been paid, unless otherwise extended by the members.
Increase in Non -defaulting ProiectParticipanfs Oriqinal Proiect Entitlement Percentage
Upon the failure of any Project Participant to make any payment, which failure constitutes a default under the Member Agreement for the
projects, and except as sales and transfers are made pursuant thereto, the Member Agreements provide that Project Entitlement for each non -
defaulting Project participant shall be automatically increased for the remaining term of the Member Agreement; pro rata with those of the non -
defaulting Project Participant thereunder; provided, however, that the sum of such increase for any non -defaulting Project Participant shall not
exceed, without written consent of such non -defaulting Project Participant, an accumulated maximum of 25% of the non -defaulting Project
Participant's original Project Entitlement Percentage Share.
California -Oregon Transmission Proiect
The project is a 339 -mile long, 500 -kilovolt alternating current transmission project between Southern Oregon and Central California. The project
is operated in coordination with the Pacific AC Intertie as a part of the California -Oregon Intertie (COI) within the Western System Coordinating
Council (WSCC) region. The WSCC approved rating of the COI is 4,800 MW and the Pacific Direct Current Intertie (PDCI) is 3,100 MW for a
combined total of 7,900 MW of transfer capability. Depending on the time of year, operational transfer capability of the combined COI and PDCI
is between 6,900 MW and 7,900 MW.
TANC, California Department of Water Resources (CDWR), Western Area Power Authority (WAPA), and five other parties have agreed to an
Interim Participation Agreement (IPA) under which project participant is granted a percentage entitlement in project transfer capability and is
required to pay a percentage of the costs. Pursuantto the IPA and a subsequent agreementwith WAPA, TANC is entitled to use approximately
1,242 MW, and is obligated to pay an average of approximately 73 percent of the operating costs associated with the project.
69
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Under the TANC joint powers agreement, the City is obligated to pay 1.89% of its debt service and operating costs. At June 30, 2009,
approximately $431 million in long-term debt was outstanding of which $14 million is considered current.
Complete financial information for TANC may be obtained at the following administration office:
Transmission Agency of Northern California
3100 Zinfandel Drive, Suite 600
Sacramento, CA 95670
(14) MEMBERSHIP IN INSURANCE POOLS
California Joint Powers Risk ManagementAuthority
The City is a member, along with 16 other individual cities and 4 joint powers authorities, of California Joint Powers Risk ManagementAuthority
(CJPRMA) organized under a Joint Powers Agreement pursuant to the California Government Code for the purpose cf sharing the risk of
catastrophic general liability, automobile liability and public officials' errors and omissions losses because adequate insurance is not available in
the commercial insurance market. CJPRMA has a twenty-one member Board of Directors, including a director from the City of Lodi. The Board
members elect officers of CJPRMA every two years.
The ultimate cost of the program to the City depends on the catastrophic losses of all members, as well as the City's own loss experience and
will be determined through an actuarial analysis of loss history during the ten-year period preceding the three years priorto the end of the current
program year. The City periodically pays deposits to the CJPRMA. These deposits are recorded as expenses in the year paid, as they are a
reasonable estimate of the actual cost of the program. During the year ended June 30, 2010, deposits of $82,607 were paid to CJPRMA for the
liability program.
The participants at June 30, 2010, are as follows: City of Alameda, Chico, Fairfield, Fremont, Livermore, Lodi, NCCSIF, Petaluma, Redding,
Richmond, Redwood Empire Municipal Insurance Fund, Roseville, San Leandro, San Rafael, Santa Rosa, Small Cities Organized Risk Effort,
Stockton, Sunnyvale, Vacaville, Vallejo, and Yolo County Public Agencies Risk Management Insurance Authority.
Complete financial information for CJPRMA may be obtained at the following administration office:
California Joint Powers Risk Management Authority
3252 Constitution Dr.
Livermore, CA 94551
70
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Local Agency Workers' Compensation Excess Joint Powers Authority
The City, along with thirty-two other public agencies, is a member of the Local Agency Workers' Compensation Excess Joint Powers Authority
(LAWCX), which was formed July 1992, for the purpose of sharing the risk of workers' compensation losses. LAWCX offers $150,000, 250,000,
$350,000, $500,000 and $1 million self-insured retentions (SIR) or a member can attach directly to the purchased excess insurance. LAWCX
covers the layer above the member SIR up to $5 million. The City of Lodi's self-insured retention is $250,000. LAWCX participates in the
California State Association of Counties Excess Insurance Authority (CSAC-EIA) to obtain coverage up to statutory limits. The City paid
$276,322 in deposits to LAWCX during the fiscal year ended June 30, 2010.
The participants at June 30, 2010, are as follows: Alameda, ABAG, BCJPIA, City of Benicia, CCCTA, Central San Joaquin Valley Risk Mgmt
Authority (CSJVRMA), City of Clovis, City of Coronado, City of Encinitas, FASIS, City of Gilroy, City of Livermore, City of Lodi, Town of Los
Gatos, City of Merced, MBASIA, MCLAIA, City of Morgan Hill, City of Newark, PARSAC, City of Placentia, PERMA, City of Roseville, City of San
Leandro, City of Santa Maria, City of Santee, Small Cities Org. Risk Effort (SCORE), City of South Lake Tahoe, City of Suisun City, City of
Vacaville, City of Vallejo, Vector Control JPA and City of Vista.
Complete financial informationfor LAWCX may be obtained at the following administration office:
Local Agency Workers' Compensation Excess Joint Powers Authority
1750 Creekside Oaks Drive, Suite 200
Sacramento, California 95833
California Transit Insurance Pool
The City, along with thirty-three other public agencies is a member of California Transit Insurance Pool (CaITIP), a joint powers insurance
authority which was formed for the purpose of sharing the risk of property damage, bodily injury, personal injury and public officials errors and
omissions losses for public transit systems.
Liability protection coverage is provided undertwo programs:
Program I applies to members who choose to utilizeCaITIP's claims administratorservices.
Proqram II applies to memberswith self-insured retentionswho choose to provide their own claims administrator services.
71
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
CaITIP purchases excess insurance over its $1,000,000 retention up to $20 million per occurrence. Each member is provided with $4 million in
excess of the pooled retention for a total of $5 million in coverage and has the option to choose one or both of two additional layers for the full
$20 million.
CaITIP also provides physical damage coverage to its members. This coverage program is optional for all members and offers damage or loss
protection for transit, staff and maintenance vehicles to transit operators. CaITIP self -insures to $100,000, under which members have the
option of five levels of deductible ranging from $500 to $10,000 per vehicle. Claims are administered by the CaITIP's adjuster.
The City paid $106,237 in deposits to CaITIP during the fiscal year ended June 30, 2010. There have been no reductions in insurance coverage
from the prioryear and there were no insurance settlements in excess of insurance coverage in any of the last three years.
Self -
Insured Limit Physical
Program Retention (in millions) Damage
City of Lodi Transit System I Prefunded 20 Yes
Complete financial information for CalTip may be obtained at the following administration office:
California Transit Insurance Pool
1750 Creekside Oaks Drive, Suite 200
Sacramento, California 95833
(15) DEFICIT IN FUND EQUITY
Nonmaior Governmental Fund — Community Development— A deficit in fund equity in the amount of $838,657 at June 30, 2010, is attributed to
the unprecedented decrease in development due to the stagnant economy. The fund deficit is decreasing compared to the prior year. The City
has taken corrective action by raising the related fees and reducing expenditures.
Nonmaior Governmental Fund — Community Center — A deficit in fund equity in the amount of $352,199 at June 30, 2010, is attributed to the
unexpected additional personnel costs due to early retirement; equipment purchases necessary to support operation; and the decline in
projected revenues. Revenue enhancements, re -organization and streamlining of services will be pursued in the future to adequately fund the
Community Center.
72
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Nonmaior Governmental Fund — Recreation Fund - A deficit in fund equity in the amount of $154,782 at June 30, 2010, is attributed to charges
for services coming in lower than expected; additional personnel costs for increased supervision for all of the aquatics areas; and increased
hours of operation. The recreation department will pursue expanded operations, program growth, enhanced revenue generation, and staffing
adjustments to adequately fund its operations in the future.
Nonmaior Governmental Fund — Public Safety Fund - A deficit in fund equity in the amount of $155,236 at June 30, 2010, is primarily due to the
expenditures incurred through the Homeland Security Grantwhich will be reimbursed in March 2011 per grant agreement.
Internal Service Funds - Benefits Fund — A deficit in fund equity in the amount of $1,930,874 at June 30, 2010, is attributed to the net OPEB
obligation setup in accordance with the requirements of GASB Statement No. 45. Net OPEB obligation as of June 30, 2010, was $2,070,199.
The City is still weighing its options whether to pre -fund the OPEB obligation or continue on a pay-as-you-go basis. It will be addressed during
the budget process.
Internal Service Funds - Insurance Fund — A deficit in fund equity in the amount of $1,368,350 at June 30, 2010, is attributed to the increase of
$2,398,631 in required workers' compensation reserves. Itwill be addressed during the budget process.
Proprietary Funds — Water Fund - The deficit in fund equity in the Water Fund of $3,909,796 was the result of the accrual of pollution
remediation obligation as required by the implementation of GASB Statement No. 49. The balance of the accrual as of June 30, 2010, was
$69,723,089. In January 2006, the City increased water rates specifically to address groundwater contamination cleanup. This increase is
generating approximately $3.0 million annually.
(16) EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended June 30, 2010, expenditures exceeded appropriations in the Community Center and the Recreation special revenue funds by
$55,389 and $89,292, respectively. These overexpenditures were funded by interfund loans from the General Fund.
(17) RESTATEMENTOF NETASSETS
In the prior year, some wastewater and water mains were expensed ratherthan capitalized resulting in an adjustment to the beginning net assets
of the Wastewater Fund and the Water Fund in the amount of $170,669 and $3,918,917, respectively.
(18) POLLUTION REMEDIATION OBLIGATION
Lodi relies on groundwater for its drinking water and in the late 1980's, PCE and TCE pollution was discovered in several municipal water supply
wells. Investigations conducted by the California Regional Water Quality Control Board in the early 1990's underthe Well Investigation program
73
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
revealed numerous areas where TCE was discharged, or where PCE from dry cleaning operations were discharged to the sewer system. In
1997, the Department of Toxic Substances Control and the City entered into a cooperative agreement whereby the City assumed a lead role in
the cleanup and agreed to pursue legal action against potentially responsible parties (PRPs). The City has settled with all the involved parties.
The City received a draft cleanup and abatement order to investigate the discharges of waste, clean up the waste and abate the effects of the
discharges of waste in conformance with the State Board's Resolution No. 92-49 Policies and Procedures for Investigation and Cleanup and
Abatement of Discharges Under the Water Code Section 13304 and with the Regional Boards' Water Quality Control Plan for the Sacramento
River and San Joaquin River. The City then engaged the services of Treadwell and Rollo to advise the City on courses of action in the
preparation of feasibility studies, remedial design, and remedial action plan to comply with the technical and reporting requirements of the State
Board. The City's total pollution remediation obligation as of June 30, 2010, is $69,723,089. This amount is an estimate and subject to changes
resulting from price increases or reductions, technology, or changes in applicable laws or regulations.
(19) COMMITMENTSAND CONTINGENCIES
Litigation and claims — The City has fully resolved all the litigation arising out of its groundwater contamination. Settlement and rate revenues
have amassed an $18 million dollar reserve which is expected to cover all costs through the next 10 years. Costs thereafter can be effectively
managed with new rate revenues. As such, the City Attorney does not anticipate a material effect on the City's financial condition.
The City owns a 1,000 acre wastewater treatment facility known as "White Slough" approximately 5 miles west of the contiguous city limit.
Neighboring farming and dairy operations are in litigation over elevated nitrate levels in the area. Efforts to join the City in the litigation have been
so far unsuccessful but are expected to continue. It is too early at this stage to estimate liability or damages if the City is joined in the action.
However, the City Attomey does not currently expect the matterto have a material effect on the City's financial condition.
All other actions against the City are under $75,000 or have no arguable cost and will therefore not have a material financial effect on the City.
Water Purchase Agreement with Woodbridge Irrigation District — The City obtains its municipal water supply from wells located within the
City, extracting water from the underground aquifer, which is replenished in part by flows of the Mokelumne River. To avoid being wholly
dependent upon wells and the possible impacts of eventual overdraft of the groundwater supply, the City made a commitment in 2003 to
purchase surface water supply from Woodbridge Irrigation Districtfor 40 years beginning in 2003. The agreement provides for the purchase of
6,000 acre feet per year and the City pays the District $1.2 million annually. Commencing on January 1 of the seventh year, the amount payable
to the District shall be increased by two percent (2%) per year or by the change in the Consumer Price Index whichever is higher but shall not
exceed five percent (5%).
Arbitrage Earnings Rebate Liability — Arbitrage earnings are defined as income earned on the unexpended tax-exempt certificate proceeds in
excess of that which would have been earned had the moneys been invested in securities with a yield of the effective rate of the certificates.
74
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2010
Currently, arbitrage earnings must be rebated to the United States Treasury every five years. There is no cumulative arbitrage liability as of June
30, 2010, for any of the City's outstanding Certificates of Participation.
(20) SUBSEQUENT EVENTS
On September 30, 2010, the City repaid the remaining balance ($1,409,301) of its loan with the Department of Water Resources. This loan was
used to assist the City in financing the construction of water wells enabling the City to meet safe drinking water standards established by the
State. The original amount of the note was $3,129,828 and was secured by the project and to be repaid with user fees collected by the Water
Enterprise Fund through 2017.
On October 1,2010, the City issued $9,015,000 Water Revenue Bonds, 2010 Series A and $29,650,000 Water Revenue Bonds, 2010 Series B
(Federally taxable - Build America Bonds) to finance the construction of the Surface Water Treatment Facility which is designed to pump water
from the Mokelumne River, treat and deliver it to the City's water distribution system.
(21) FUTURE GASB PRONOUNCEMENTS
In February of 2009, the GASB issued Statement No. 54, fund Balance Reporting and Governmental fund Type Definitions, which enhances
the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by
clarifying the existing governmental fund type definitions. The objective of this statement is to establish fund balance classifications that comprise
a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported
in governmental funds. This statement is effective for the City's year ending June 30, 2011.
75
(This page intentionally left blank.)
REQUIRED SUPPLEMENTARY INFORMATION
City of Lodi
Required Supplementary Information
Schedule of Funding Progress- Pension Plan
June 30,2010
(in thousands of dollars)
EntryAge
Actuarial
Actuarial Actuarial Accrued
Valuation Asset Value Liability
Plan Date (A) (B)
Safety 6/30/06
6/30/07
6/30/08
Miscellaneous 6/30/06
6/30/07
6/30/08
$ 73,211
Unfunded
Unfunded
Actuarial
Actuarial
Liability as
Accrued Funded
Covered Percentage of
Liability Ratio
Payroll Covered Payroll
[(B) - (A)l [(A) / (B)l
(C) _ {[(B) — (A)l/(C)}
$ 73,211
$ 88,372
$ 15,161
82.8%
$ 9,424
160.9%
79,126
94,644
15,518
83.6%
9,900
156.7%
84,853
103,447
18,594
82.0%
10,422
178.4%
90,676
101,994
11,318
88.9%
17,412
65.0%
98,377
108,528
10,151
90.6%
17,421
58.3%
105,760
117,537
11,777
90.0%
18,486
63.7%
77
City of Lodi
Required Supplementary Information
Schedule of Funding Progress — OPEB Plan
June 30,2010
(in thousands of dollars)
As, required by GASB Statement No. 45, the City will report three years of data in the above table, as the information becomes available in
subsequent years.
78
Actuarial
Normal
Annual
UAAL As a
Actuarial
Value
Accrued
Unfunded
Funded
Covered
Percentageof
Valuation
of Assets
Liability
Liability
Ratio
Payroll
Covered Payroll
Date
(A)
(B)
[(B) - (A)]
[(A) / (B)]
(C)
{[(B)—(A)]/(C)}
1/1/08
$ 0 $
23,323
$ 23,323
0%
$ 9,846
237%
1/1/10
0
17,710
17,710
00/0
9,410
188%
As, required by GASB Statement No. 45, the City will report three years of data in the above table, as the information becomes available in
subsequent years.
78
EXPENDITURES
CITY OF LODI
SCHEDULE OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCE- BUDGETAND ACTUAL
14,847.828
GENERALFUND
15.311.038
27.786
General government
8,417,969
Year ended June 30,2010
8,543,857
15.788
City Council
129.786
Budget
121.812
544
Variancewith
1,045,137
Original
Final
Actual
Final Budget
REVENUES
406,300
400,146
6,154
C ty Attorney
Taxes
$ 22,931,191
22.931.191
23,118,451 $
187.270
Licensesand permits
67,950
67,950
72.171
4.221
Intergovemmentalrevenues
8,278,755
8,278,755
7,772,071
(506,684)
Chargesfor services
901,122
901,122
1,343,199
442,077
Fines.fcrfeits and penalties
1,279,000
1,279,000
1,441,354
162.354
Investmentand rental inwme
449,475
449,475
516.304
66,829
Miscellaneousrevenue
132.300
132,300
462,592
330,292
Total revenues
34,039,793
34,039,793
34,726,152
686.359
EXPENDITURES
Current
14,847.828
15,338,824
15.311.038
27.786
General government
8,417,969
8,559,555
8,543,857
15.788
City Council
129.786
122.356
121.812
544
City Manager
1,045,137
1,040,544
1,033,538
7.006
CityClerk
416.820
406,300
400,146
6,154
C ty Attorney
462,890
435.367
393,430
41,937
Human Resources
538.183
502.942
454.400
48.542
Information Systems
965,135
945,490
920,911
24.579
Financial Services
1,605.070
1,620,062
1,618,792
1,270
Budget and Treasury
555,660
480.278
476,568
3,710
Non Departmental
1,190,534
1,096,779
992.144
104,635
Total general government
6,909,215
6,650,118
6.411,741
238,377
Public protection
Police
14,847.828
15,338,824
15.311.038
27.786
Fire
8,417,969
8,559,555
8,543,857
15.788
Total public protection
23,265,797
23,898,479
23,854,905
43.574
PublicWorks
1,913,401
1,530,573
1,471,779
58,794
Library
1,364,910
1,354,910
1,322,052
32.858
Parks
2,235,681
2,236,262
2,234,349
1,913
Debtservice
Interestand fiscal charges
12578
12.578
12.578
Principal payments
135,425
135,425
135.425
Total debt service
148,003
148.003
148.003
Total expenditures
35,827,007
35,818,345
35,442,829
375,516
DEFICIENCYOF REVENUES
UNDER EXPENDITURES
C1.787,214)
(1,778,552)
(716.677)
1,061,875
OTHER FINANCING SOURCES (USES)
Transfers in
5,867,983
5,857,983
5,867,983
Transfersout
(4,532,278)
(4,632,278)
(4,632,278)
Total otherfinancingsouroes(uses)
1,235,705
1,235,705
1,235,705
NET CHANGE IN FUND BALANCE
(551.509)
(542,847)
519,028
1,061,875
FUND BALANCE, beginningof year
3,945,711
3,945,711
3,766,188
(179,523)
FUND BALANCE, end ofyear $
3,394,202
3,402,864
4,285,216$
882,352
The note to the required supplementaryinformation is an integral Aar! of this schedule.
CITY OF LODI
Notesto the Required Supplementary Information
June 30,2010
Budgetary Data
The City adopts an annual budgetfor the general and special revenuefunds. These budgets are prepared in accordancewith generally
accepted accounting principles. As part of the City's internal controls, the City maintains budgetary controls. The objective of these
budgetary controls is to ensure compliance with the legal provisions embodied in the annual appropriated budget approved by the City
Council. The accompanying financial statements present budget and actual data only of funds for which an annual budget was adopted.
The budgets of capital projects are primarily "long-term" budgets that emphasize the major programs and capital project plans extending
over a number of years. Due to the long-term nature of these projects, "annual" budget and actual comparisons are not considered
meaningful. Formal budgetary integration is not employed for Debt Service Funds since effective budgetary control is alternatively
achieved through the bond indenture provisions. Accordingly, no budgetary information is included in the accompanying basic financial
statements for capital projects and debt service funds.
The City Council follows the following procedures in establishing the budgetary data reflected in the accompanying basic financial
statements:
Original Budget
On or priorto the first regular Council meeting in June of each year, the City Manager submits to the City Council a proposed
Financial Plan and Budgetfor the fiscal year commencing July 1. The budget includes proposed expenditures and the means of
financing them.
Budgeted revenues are adopted by the City Council at the time the budget is approved. Budgeted revenues are modified when
the tax base changes, when fees are modified or when new revenue sources are identified.
Public hearings are conducted during meetings of the City Council to obtain citizens' comments. Prior to July 1, the budget is
legally enacted through passage of a resolution.
Final Budget
The final budgetary data presented in the basicfinancial statements reflectsthe following changes to the original budget:
Budgeted expenditures represent original appropriations adjusted by budgettransfers and appropriation amendments.
The legal level of budgetary control (that is, the level at which expenditures can not legally exceed the appropriated
80
amount) is at the department level. The operating budget is prepared and controlled at the department level (e.g., city
clerk, city manager, etc.) for the General Fund. Special revenue fund expenditures, including transfers out, are approved
by Council at the fund level.
• The City Manager may transfer appropriations from one activity to another within a department without approval from the
City Council. All other appropriation adjustments during the year, whether transfers, increases or decreases, require City
Council approval.
81
(This page intentionally left blank.)
COMBINING AND INDIVIDUAL FUND STATEMENTS
AND SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
Nonmajor Governmental Funds include:
Special Revenue Funds accountfor the proceeds of specific revenue sources that are restricted by law or administrative action to
expenditures for specified purposes, other than those for major capital projects;
Debt Service Fund account for the accumulation of resources for the repayment of principal and interest on general long-term debt;
Capital Project Funds accountfor the financial resources to be used for the acquisition or construction of major capital facilities, other than
those financed by proprietary funds.
Assets
Cash and investments
Restricted assets
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30,2010
Receivables:
Accounts, net
Interest
Due from other funds
Due from other governmental agencies
Loan receivable
Other assets
Advances to other funds
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable and other liabilities
Due to other funds
Advances from other funds
Deferred revenue
Total liabilities
Fund Balances:
Special Capital
Revenue Projects Total
9,702,184 4,697,959$ 14,400,143
1,687,521 1,687,521
1,031110
246,363
1,277,473
12,314
3,504
15,818
214,910
1,585,733
214,910
1,670,408
34,729
1,670,408
1,084,000
1,719,736
1,084,000
1,290
Total fund balances
1,290
55,000
288,385
343,385
13,771,216
6,923,732$
20,694,948
1,229,147
99,274$
1,328,421
1,542,730
Reserved for advances to other funds
1,542,730
288,385
1,585,733
1,874,118
3,501,695
34,729
3,536,424
6,561,957
1,719,736
8,281,693
Reserved for encumbrances
6,191,332
1,266,222
7,457,554
Reserved for advances to other funds
55,000
288,385
343,385
Unreserved-designatedfor specific projects and programs
2,706,883
3,649,389
6,356,272
Unreserved -undesignated
(1,743,956)
(1,743,956)
Total fund balances
7,209,259
5,203,996
12,413,255
Total liabilitiesand fund balances
83
$ 13,771,216 6,923,732$ 20,694,948
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
Year ended June 30,2010
84
Special
Debt
Capital
Revenue
Service
Projects
Total
Revenues:
Licenses and permits
$ 447,332
$
447,332
Intergovernmental revenues
4,453,058
353,471
4,806,529
Charges for services
2,516,785
256,115
2,772,900
Fines, forfeits and penalties
2,200
2,200
Investmentand rental income
384,497
22,600
407,097
Miscellaneous revenue
311,282
319,294
630,576
Total revenues
8,115,154
951,480
9,066,634
Expenditures:
Current:
General government
1,253,983
1,253,983
Public protection
610,583
610,583
Pu bl icworks
2,911,292
2,911,292
Community development
1,013,008
1,013,008
Parks and recreation
1,945,470
1,945,470
Capital outlay
2,441,513
2,666,087
5,107,600
Debt service:
Interest and fiscal charges
1,086,931
10,920
1,097,851
Principal payments
590,000
590,000
Total expenditures
10,175,849
1,676,931
2,677,007
14,529,787
Deficiency of revenues under expenditures
(2,060,695)
(1,676,931)
(1,725,527)
(5,463,153)
Other financing sources (uses):
Transfers in
2,505,096
1,676,931
1,122,680
5,304,707
Transfers out
(672,429)
(672,429)
Total otherfinancing sources (uses)
1,832,667
1,676,931
1,122,680
4,632,278
Net change in fund balances
(228,028)
(602,847)
(830,875)
Fund balances, beginning of year
7,437,287
5,806,843
13,244,130
Fund balances, end of year
$ 7,209,259
5,203,996 $
12,413,255
84
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
SPECIAL REVENUE FUNDS
Community Center
This fund was established to account for the revenues and expenditures related to the activities of the Hutchins Street Square and Performing Arts
Theater.
Recreation
This fund was established to account for the revenues and expenditures related to the wide -range of recreation activities and programs offered to
the public.
Public Safety
This fund was established to account for the revenues and expenditures related to the City's share of property forfeited by persons convicted of
possession and selling illegal drugs and the State of California auto theft prosecution monies.
Community Development
This fund was established to account for development planning and project review services including land use entitlements, permit processing and
review/inspection of public improvements to ensure orderly physical growth and development of the City.
Streets Fund
This fund was established to account for the following:
Gas Tax
To account for revenues and expenditures apportioned to the City under the Streets and Highway Code. Portions of the tax rate
levied by the State of California on all gasoline purchases are allocated to cities throughout the State on a population basis.
These funds are restricted for expenditure by the State of California for street related purposes only.
Development Impact Mitigation Fees
To account for impact fees charged to provide for the building of various storm drains and street improvements needed to serve
new development. The fees are calculated on a per acre basis and are collected at subdivision final map approval or with building
permit stage effective November 4, 1991.
Measure K Sales Tax
To account for revenues and expenditures apportioned to the City for sales tax collections under Measure K. Expenditures for
administration, maintenance and construction must be for street -related projects.
85
Intermodal Surface Transportation Efficiency Act (ISTEA)
To account for revenues from the federal highway administration for programs including surface transportation program (STP) for
streets and roads, congestion mitigation and air quality program (CMAQ) and hazard elimination safety (HES)for street lighting
projects.
Transportation
This fund was established to account for the receipt of moneys from the State of California apportioned to the City for transportation purposes. The
State has designated 1/4% of the 6% sales tax levied statewide for local transportation purposes. Funding for this program was provided during
the 1971 legislative session with the enactment of the Transportation Development Act, which extended the 6% sales tax to include purchases of
gasoline. Revenues allocated to the City of Lodi under this program are divided into two categories: Article 8 funds, which are restricted for the
improvementand maintenance of street systems; and Article 4 funds, which are restricted for publictransit systems.
HOME Program and Community Development Block Grants
This fund was established to account for the City's HOME Program that provides adequate and affordable housing for low and very low-income
residents, and Community Development Block Grants provided to the City principally for low and moderate income residents to develop a suitable
living environment and expand economic opportunities.
86
CITY OFLODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS -SPECIAL REVENUE FUNDS
June 30,2010
87
HOME Program &
Community
Community
Public
Community
Development
Center
Recreation
Safety
Development
Streets
Transportation
Block Grants
Total
ASSETS
Cash and Investments
$
64,926
9,589,658
47,600
$
9,702,184
Receivables:
Accounts. net
6,857
12,924
27,450
9,337
974,542
1,031,110
Interest
384
2,340
9,590
12,314
Duefrom otherfunds
214.910
214,910
Due from other governmental agencies
409,113
874,543
386,752
1,670,408
Advances to other funds
55,000
55,000
Otherassets
1,290
1,290
Loan receivable
1,084,000
1,084,000
TOTALASSETS
3
6,857
12,924
501,873
11,677
11,718.243
47,600
1,472,042 $
13,771,216
LIABILITIESAND FUND BALANCES
LIABILITIES
Accounts payable and other liabilities
$
30,727
14,303
140.699
4.246
865,064
976
173,132 $
1,229,147
Due to otherfunds
328,329
153,403
846,088
214,910
1,542,730
Advances from other funds
288,385
288,385
Deferred revenue
516.410
1,901,285
1,084,000
3,501,695
TOTAL LIABILITIES
359,056
167,706
657,109
850,334
3,054,734
976
1,472,042
6,561,957
FUND BALANCES (DEFICIT)
Reserved for encumbrances
243,082
5,921,946
26,304
6,191,332
Reservedfor advances to otherfunds
55,000
55,000
Unreserved -designated for specific projectsand programs
2,686,563
20.320
2,706,883
Unreserved -undesignated
(352,199)
(154.782)
(398.318)
(838.657)
(1,743,956)
TOTAL FUND BALANCES(DEFICIT)
(352,199)
(154,782)
(155,236)
(838,657)
8,663,509
46,624
7,209,259
TOTAL LIABILITIESAND FUND BALANCES
$
6,857
12.924
501,873
11,677
11,718,243
47,600
1,472,042 $
13,771,216
87
CITY OF LODI
COMBINING STATEMENTOF RNENUES, EXPENDITURESAND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS- SPECIAL R N E N U E FUNDS
Year ended June 30,2010
88
HOME Program 8
Community
Community
Public
Community
Development
Center
Recreation
Safety
Development
Streets
Transportation
Block Grants
Total
REVENUES
Licensesand permits
$
447,332
$ 447,332
Intergovemmentahevenues
298,226
3,537,848
27.474
589,510
4,453,058
Charges for services
396,651
1,164,702
338,474
616.958
2,516,785
Fines, forfeitsand penalties
2,200
2.200
Investmentand rental income
232,856
77,365
1.644
72.632
384,497
Miscellaneousrevenue
4,912
3,481
150,671
152,218
311.282
Total revenues
634,419
1,245,548
302.070
936,477
4,379,656
27.474
589,510
8,115,154
EXPENDITURES
Current
General government
1,253.983
1,253,983
Public protection
610.583
610,583
Publicworks
2,321,782
589,510
2.911,292
Community development
1,013,008
1.013,008
Parks and recreation
1,945,470
1,945,470
Capital outlay
2,387,434
54,079
2,441,513
Total expenditures
1,253,983
1,945,470
10.175,849
DEFICIENCYOF REVENUES
UNDER EXPENDITURES
(619.564)
(699,922)
(308.513)
(76,531)
(329.560)
(26,605)
(2,060,695)
OTHER FINANCING SOURCES (USES)
Transfersin
1,166.095
494.130
162,100
682,771
2,505,096
Transfersout
(666,519)
(3.400)
(2.510)
(672.429)
Total otherfinancing sources (uses)
499,576
490,730
159,590
682.771
1,832,667
NET CHANGE IN FUND BALANCES
(119,988)
(209.192)
(308.513)
83,059
353.211
(26,605)
(228,028)
FUND BALANCES (DEFICIT), beginning cfyear
(232,211)
54,410
153,277
(921,716)
8,310,298
73,229
7,437.287
FUN D BALANCES (DEFICIT), end of year
$ (352,199)
(154,782)
(155,236)
(838,657)
8,663,509
46,624
$ 7,209,259
88
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURESAND CHANGES IN FUND BALANCE
BUDGETAND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30,2010
REVENUES
Charges for services
Investmentand rental income
Miscellaneous revenue
Total Revenue
EXPENDITURES
Current
General government
DEFICIENCY OF REVENUES UNDER
EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND DEFICIT, BEGINNING OF YEAR
FUND DEFICIT, END OF YEAR
89
COMMUNITY CENTER
FINAL
BUDGET ACTUAL VARIANCE
$ 443,578 396,651 $ (46,927)
250,000 232,856 (17,144)
4,912 4,912
693,578 634,419 (59,159)
1,198,594
1,253,983
(55,389)
(505,016)
(619,564)
(114,548)
1,166,095
1,166,095
(666,519)
(666,519)
499,576
499,576
(5,440)
(119,988)
(114,548)
(232,211)
(232,211)
$ (237,651)
(352,199) $
(114,548)
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURESAND CHANGES IN FUND BALANCE
BUDGETAND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS- SPECIAL REVENUE FUNDS
Year ended June 30,2010
REVENUES
Charges for services
Investment and rental income
Miscellaneous revenue
Total Revenue
EXPENDITURES
Current
Parks and recreation
DEFICIENCYOF REVENUES UNDER
EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total otherfinancing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF' YEAR
FUND DEFICIT, END OF YEAR
90
RECREATION
FINAL
BUDGET
ACTUAL
VARIANCE
$ 1,260,188
1,164,702$
(95,486)
90,000
77,365
(L2,635)
3,481
3,481
1,350,188
1,245,548
(104,640)
(505,990) (699,922) (193,932)
494,130 494,130
(3,400) (3,400)
490,730 490,730
(15,260) (209,192) (193,932)
54,410 54,410
$ 39,150 (154,782)$ (L93,932)
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURESAND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30,2010
REVENUES
I ntergovern mental revenues
Fines, forfeits and penalties
Investmentand rental income
Total Revenue
EXPENDITURES
Current
Public protection
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND DEFICIT, END OF YEAR
91
PUBLIC SAFETY
FINAL
BUDGET ACTUAL VARIANCE
$ 742,623 298,226 $ (444,397)
3,000 2,200 (800)
1,644 1,644
745,623 302,070 (443,553)
806,420 610,583 195,837
(60,797) (308,513) (247,716)
153,277 153,277
$ 92,480 (155,236)$ (247,716)
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURESAND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NBNMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30,2010
REVENUES
Licenses and permits
Charges for services
Miscellaneous revenue
Total Revenue
EXPENDITURES
Current
Community development
EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND DEFICIT, BEGINNING OF YEAR
FUND DEFICIT, END OF YEAR
92
COMMUNITY DEVELOPMENT
FINAL
BUDGET
ACTUAL VARIANCE
$ 580,645
447,332$
(33,313)
441,000
338,474
(.02,526)
244,146
150,671
(93,475)
1,265,791
936,477
(329,314)
1,126,074
1,013,008
113,066
139,717 (76,531) (216,248)
162,100 162,100
(2,510) (2,510)
159,590 159,590
299,307 83,059 (216,248)
(921,716) (921,716)
$ (622,409) (838,657)$ (216,248)
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURESAND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTALFUNDS'SPECIAL REVENUE FUNDS
Year ended June 30,2010
REVENUES
Intergovernmental revenues
Charges for services
Investment and rental income
Miscellaneous revenue
Total Revenue
EXPENDITURES
Current
Publicworks
Capital outlay
Total Expenditures
DEFICIENCY OF REVENUES
UNDER EXPENDITURES
OTHER FINANCING SOURCES
Transfers in
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
93
STREETS
FINAL
BUDGET ACTUAL VARIANCE
$ 4,217,866
3,537,848$
(680,018)
655,937
616,958
(38,979)
71,000
72,632
1,632
20,000
152,218
132,218
4,964,803
4,379,656
(585,147)
2,599,516 2,321,782 277,734
6,601,746 2,387,434 4,214,312
9,201,262 4,709,216 4,492,046
(4,236,459) (329,560)
682,771 682,771
3,906,899
(3,553,688) 353,211 3,906,899
8.310,298 8,310,298
$ 4,756,610 8,663,509$ 3,906,899
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURESAND CHANGES IN FUND BALANCE
BUDGETAND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30,2010
REVENUES
Intergovernmental revenues
Total Revenue
EXPENDITURES
Capital outlay
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNINGOF YEAR
FUND BALANCE, END OF YEAR
0
TRANSPORTATION
FINAL
BUDGET ACTUAL VARIANCE
$ 27,474 27,474 $
27,474 27,474
54.079 54.079
(26,605) (26,605)
73,229 73,229
$ 46,624 46,624 $
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURESAND CHANGES IN FUND BALANCE
BUDGETAND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS- SPECIAL REVENUE FUNDS
Year ended June 30,2010
REVENUES
Intergovernmental revenues
EXPENDITURES
Current
Publicworks
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNINGOF YEAR
FUND BALANCE, END OF YEAR
95
HOME PROGRAM and COMMUNITY DEVELOPMENT
BLOCK GRANTS
FINAL
BUDGET
751,256
ACTUAL VARIANCE
589,510 $ (161,746)
751,256 589,510 $ 161,746
(This page intentionally left blank.)
NONMAJOR GOVERNMENTAL FUNDS
CAPITAL PROJECT FUNDS
CAPITAL PROJECT FUNDS
Vehicle and Equipment
This fund was established to account for the financing and replacement of vehicles and equipment for all funds of the City with the exception of the
Enterprise Funds. Financing is primarily provided through transfers from other funds, interest earnings and sales of surplus property.
Library
This fund is used to account for the acquisition, construction and installation of capital facilities for the Library.
Hutchins Street Square
When the old Lodi High School burned down, the City purchased the property and renamed it Hutchins Street Square. The Old Lodi High Site
Foundationwas established and this organization organizes events to raise money for the capital restoration of Hutchins Street Square.
Capital Outlay Reserve
This fund was established to account for the entire City's construction projects and capital purchases in excess of $10,000 with the exception of
those funded through Enterprise Funds. Financing is provided primarily by operating transfers from other funds and from State and Federal grants.
Lodi Lake
This fund was established to account for moneys charged for activities held at Lodi Lake. The Council designated the monies to be used for Lodi
Lake capital projects.
97
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS- CAPITAL PROJECT FUNDS
June 30,2010
ASSETS
Cash and investments
Restricted assets
Receivables:
Accounts, net
Interest
Advances to other funds
TOTALASSETS
LIABILITIES
Accounts payable and other liabilities
Advances from otherfunds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES
Reserved for encumbrances
Reserved for advances to other funds
U n reserveddesignated for specific projects and programs
TOTAL FUND BALANCES
TOTAL LIABILITIESAND FUND BALANCES
Capital
Vehicle and Hutchins Outlay
Equipment Library Street Square Reserve
$ 2,147,719 62,139 2,181 2,378,113
1,687,521
Lodi
Lake Total
107,807 $ 4,697,959
1,687,521
246,363
246,363
3,454
50
3,504
288,385
288,385
$ 2,147,719 62,139 2,181 4,603,836
107,857 $
6,923,732
$ 3,820 45,523 15,024
34,907 $
99,274
1,585.733
1,585,733
34,729
34,729
3,820 45,523 1,635,486
34.907
1,719,736
3,289 1,245,615 17.318 1,266,222
288,385 288,385
2,140,610 16,616 2,181 1,434,350 55,632 3,649,389
2,143,899 16,616 2,181 2,968,350 72,950 5,203,996
$ 2,147,719 62,139 2,181 4,603,836 107,857 $ 6,923,732
98
REVENUES
Intergovernmental revenues
Charges for services
Investmentand rental income
Miscellaneous revenue
Total revenues
EXPENDITURES
Capital outlay
Debt service:
Interestand &qml charges
Total expenditures
DEFICIENCY OF REVENUE UNDER EXPENDITURES
OTHER FINANCING SOURCES
Transfers in
NETCHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS- CAPITAL PROJECT FUNDS
Year ended June 30,2010
Hutchins Capital
Vehicleand Street Outlay Lodi
Equipment Library Square Reserve Lake
$ 353,471
249,010 7,105
21,678 922
25,786 134,000 159,508
25.786 134,000 624,159 167,535
197,624 326,713
1,746,638 395,112
10,920
197,624 326.713 1,757,558 395.112
(171,838) M.713)
(1,133,399) (227.577)
Total
$ 353,471
256,115
22,600
319.294
951,480
2,666,087
10,920
2,677,007
(1,725,527)
380,580
38,100
704,000
1,122,680
208,742
(154,613)
(429,399)
(227.577) (602,847)
1,935,157
171,229 2.181
3,397,749
300,527 5,806,843
$ 2,143,899
16,616 2,181
2,968,350
72,950 $ 5,203,996
99
(This page intentionally left blank.)
INTERNAL SERVICE FUNDS
Internal Service Funds are maintained to account for the internal transfer of services between operating units of the City and to achieve a
level of operating efficiencythat may not be available if the same activities were performed by multiple organizations.
Fleet Services
This fund is used to account for the operation, maintenance and timely replacement of the City's fleet of vehicles which serve the
transportation needs of all city departments.
Benefits
These funds are used to account for the following employee benefits:
Dental
Chiropractic
Life/accidental insurance
Medical
Vision
Employee assistance program
Employee recognition program
Unemployment insurance
Flexible spending program
Long Term Disability
Insurance
These funds are used to account for the following insurances:
General Liability
Workers' Compensation
Other Insurance
CITY OF LODI
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
June 30,2010
ASSETS
Current assets:
Cash and investments
Receivables:
Accounts, net
Interest
Inventory
Other assets
Noncurrent assets:
Capital assets (net)
Total current assets
LIABILITIES
Current liabilities:
Accounts payable and other liabilities
Self-insurance liability
Accrued compensated absences
Noncurrent liabilities:
Self-insurance liability
Accrued compensated absences
NetOPEB obligation
Total liabilities
NETASSETS (DEFICIT)
Invested in capital assets, net of related debt
Unrestricted (deficit)
Total net assets (deficit)
Fleet
426,107
535,206
Services
Benefits
Insurance
Total
$ 132,679
159,274
7,976,207 $
8,268,160
67,643
2,040
2,040
154
255
9,477
9,886
121,947
121,947
14,293
14,293
34,734
34,734
289,514
173,822
7,987,724
8,451,060
74,602 34,497
426,107
535,206
4,064,109
4,064,109
57,884
57,884
4,865,858
4,865,858
67,643
67,643
2,070,199
2,070,199
200,129 2,104,696
9,356,074
11,660,899
34,734 34,734
54,651 (1,930,874) (1,368,350) (3,244,573)
$ 89,385 (1,930,874) (1,368,350) $ (3,209,839)
101
OPERATING REVENUES
Chargesfor services
OPERATING EXPENSES
Personnel services
Supplies, materials and services
Utilities
Depreciation and amortization
Claims
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NONOPERATING REVENUES
Investment income
Other revenues
TOTAL NONOPERATING REVENUES
Change in net assets
NETASSETS (DEFICIT)- BEGINNING OF YEAR
NETASSETS (DEFICIT) - END OF YEAR
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NETASSETS
INTERNAL SERVICE FUNDS
Year ended June 30,2010
Fleet
Services
Benefits Insurance
$ 1,211,132 6,360,018
955,023
186,441
1,919
1,447
21,570
1,166,400
44,732
44,732
44.653
$ 89,385
102
391,331
5,333,905
1,500,450
7,225,686
(865,668)
Total
2,698,687 $ 10,269,837
111,383
381,392
4,064,109
4,556,884
(1,858,197)
1,457,737
5,901,738
1,919
1,447
5,586,129
12.948.970
(2,679,133)
733
48,173
48,906
12,785
13,885
26,670
13,518
62.058
75,576
(852,150)
(1,796,139)
(2,603,557)
(1,078,724)
427,789
(606.282)
(1,930,874)
(1,368,350) $
(3,209,839)
Cash flows from operating activities:
Receiptsfrom customers and users
Receiptsfrom interfund services provided
Cash paid to suppliers for goods & services
Paymentsto employees
Net cash provided by (used for) operating activities
Cash flows from investing activities:
Intereston investments
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
CITY OF LODI
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
Year ended June 30,2010
Fleet
Services Benefits Insurance Total
$
13,999
11,845$
25,844
1,211,132
6,360,018
2,698,687
10,269,837
(185,058)
(5,992,895)
(1,688,401)
(7,866,354)
(955,681)
(391,331)
(111,383)
(1,458,395)
70,393
(10,209)
910,748
970,932
1,548 62,028 63,576
1,548 62,028 63,576
70,393 (8,661) 972,776 1,034,508
Cash and cash equivalents, beginning of year
62,286
167,935
7,003,431
7,233, 652
Cash and cash equivalents, end of year $
132,679
159.274
7,976,207$
8,268,160
Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:
Operating Income (loss) $
44,732
(865,668)
(1,858,19'4
(2,679,133)
Adjustments to reconcile operating income (loss)to
net cash provided (used for) by operating activities:
Depreciation and amortization
1,447
1,447
Other revenues
12,785
13,885
26,670
Change in assets and liabilities:
Decrease (increase) in accounts receivable
639
(2,040)
(1,401)
Decrease in inventory
319
319
Decrease in other assets
575
575
Increase (decrease) in accounts payable and other liabilities
24,553
(33,218)
358,469
349,804
Decrease in compensated absences
(658)
(658)
Increase in net OPEB obligation
874,678
874,678
Increase in self-insurance liability
2,398,631
2,398,631
Net cash provided (used for) by operating activities $
(10,209)
910,748$
970,932
103
(This page intentionally left blank.)
FIDUCIARY FUNDS
Private -purpose Trust Funds
These funds are used to accountfor trust agreements underwhich the principal and income benefit individuals, private
organizations or other governments.
Agency Fund
This fund was established to account for special assessments collected on the property tax roll by the City on behalf of the
property owners within the Industrial Way Beckman Districts and the Downtown and Cherokee Lane Districts.
CITY OF LODI
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
PRIVATE-PURPOSETRUST FUNDS
June 30,2010
Private -Purpose Trust Funds
Hutchins Street
Library Square Bequest Total
ASSETS
Cash and Investments $ 223,396 1,488 $ 224,884
TOTAL ASSETS 223,396 1,488 224,884
NETASSETS $ 223,396 1,488 $ 224,884
105
CITY OF LODI
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NETASSETS
FIDUCIARY FUNDS
Year ended June 30,2010
ADDITIONS
Investment income and donations
Total additions
DEDUCTIONS
Current
Library
Total deductions
CHANGE IN NETASSETS
NETASSETS, BEGINNING OF YEAR
NETASSETS, END OF YEAR
Private-PurposeTrust Funds
Hutchins Street
Library Square Bequest
$ 7,425
7,425
30,854
30,854
(23, 429)
Total
5 $ 7,430
5 7.430
30,854
30.854
5 (23,424)
246,825 1,483 248.308
$ 223,396
106
1,488$ 224,884
CITY OF LODI
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUND
Year ended June 30,2010
LIABILITIES
Agency obligations $ 698,295 99,273 $ 599,022
TOTAL LIABILITIES $ 698,295 99,273 $ 599,022
107
Special Assessments
Balance
Balance
711/09
Additions
Deductions
6130110
ASSETS
Cash and investments
$ 617,876
366,849
399,553 $
585,172
Special assessment receivable
78,336
13,850
78,336
13,850
Interest receivable
2,083
2,083
TOTAL ASSETS
$ 698,295
380,699
479,972 $
599,022
LIABILITIES
Agency obligations $ 698,295 99,273 $ 599,022
TOTAL LIABILITIES $ 698,295 99,273 $ 599,022
107
(This page intentionally left blank.)
STATISTICAL TABLES
STATIST ICAL SECTION
The Statistical Section provides detailed information as a framework for understanding the information in the financial statements, notes and
required supplementary information. This section presents additional data and analysis that may provide the readerwith valuable insight
regarding the demographics and the overall health of the City.
Contents
Panes
FinancialTrends
These schedules contain trend information to help the reader understand how the City's financial performance
and well-being has changed over time. 110-115
Revenue Capacity
These schedules contain information to help the reader assess the factors affecting the City's most significant
local revenue source, the property tax. 116-121
Debt Capacity
These schedules 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. 122-127
Demographicand Economic Information
These schedules offer demographicand economic indicatorsto help the reader understand the environment
within which the City's financial activities take place and to help make comparisons overtime and with other
governments. 128-130
Operating Information
These schedules contain information about the City's operations and resources to help the reader understand
how the City's financial information relates to the services the city provides and the activities it performs. 131-135
Sources
Unless otherwise noted, the information in these schedules are derived from the comprehensive annual financial
reports for the current year. The City implemented GASB Statement 34 for the fiscal year ended June 30,2003,
schedules presenting government -wide information include information beginning that year.
109
CITY OF LODI
NET ASSETS BY COMPONENT
LAST EIGHT FISCAL YEARS
(Dollar amounts in thousands)
FiscalYear
2010 2009 2008 2007 2006 2005 2004 2003
Governmental activities:
Invested in capital assets, net of related debt
$ 113,308 $
115,036 $
107,874 $
110,815 $
111,572 $
106,293
$ 100,749
$ 94,681
Restricted
13,233
13,492
15,043
15,044
14,526
13,465
11,205
12,811
Unrestricted
(6,110)
(3,462)
(4,162)
(3,968)
(8,838)
(8,801)
(9,437)
(7,334)
Total governmental activities net assets
$ 120,431 $
125,066 $
118,755 $
121,891 $
117,260 $
110,957
$ 102,517
$ 100,158
Business -type activities:
Invested in capital assets, net of related debt
$ 100,233 $ 95,533 $ 98,109 $
97,961 $
77,494 $
67,668 $
64,214 $
62,752
Restricted
8,657
8,711
10,969
2,351
2,578
240
Unrestricted
(28,591) (35,448) 26,460
6,417
1,880
7,445
(7,511)
(10,270)
Total business -type activities net assets
$ 71,642 $ 60,085 $ 133,226 $
113,089 $
90,343 $
77,464 $
59,281 $
52,722
Primary government:
Invested in capital assets, net of related debt
$ 213,541 $
210,569 $
205,983 $
208,776 $
189,066 $
173,961 $
164,963 $
157,433
Restricted
13,233
13,492
23,700
23,755
25,495
15,816
13,783
13,051
Unrestricted
(34,701)
(38,910)
22,298
2,449
(6,958)
(1,356)
(16,948)
(17,604)
Total primary government net assets
$ 192,073 $
185,151 $
251,981 $
234,980 $
207,603 $
188,421 $
161,798 $
152,880
Note: The City of Lodi 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 Lodi Financial Services Division
CITY OF LODI
CHANGES IN NETASSETS
LAST EIGHT FISCAL YEARS
Dollar amounts in thousands
Program Revenues
FiscalYear
2010
2009
2008
2007
2006
2005
2004
2003
Expenses
Chargesfor services
69,664
74,000
69,284
65.809
59,112
53,908
52.899
Govem mentalactiviti es
General government $
2,184 $
1,631 $
1,544 $
1,280 $
1.232 $
3,639 $
3,144 $
General government
$ 8.749 $
9,451 $
8,307 $
7.853 $
9,746 $
9.958 $
13,167 $
12,238
Public protection
27,186
27,110
25,531
23.328
22,105
22,253
19,162
16,632
Publicworks
10,462
10,464
12,224
10,599
13,229
12,377
11,868
10,946
Community development
1,114
1,323
2,027
2,130
2,290
54
49
50
Library
1,440
1,495
1,696
1,630
1,485
1,484
1,409
1,454
Parks and recreation
5.077
4.609
4.414
4.172
4.114
4,565
4.095
3,989
interest and fiscal charges
1,105
1,134
1.166
1,201
1,234
1,617
1,267
1.214
Total govemmentalactivitiesexpenses
55,133
55,586
55,365
50,913
54,203
52,254
50,968
46,473
Business-typeactivities
Electric
64.364
73,358
65,201
67.534
63,780
57.308
55,943
51.388
Wastewater
11.289
10.940
12.227
9,271
8,574
10,653
6,297
6,141
Water
6.148
9.604
9.920
9.875
8.256
11.748
7.489
12.879
Transit
4,785
4,832
3.908
3,577
3,643
3.018
3,064
5,389
Total business-typeactivitiesexpenses
86,586
98,734
91,256
90,257
84.253
82,727
72,793
75,797
Total primarygovemmentexpenses
$ 141,719 $ 154,320 $ 146,621 $ 141,170 $ 138,456 $134,981 $ 123,761 $ 122.270
Program Revenues
Govem mentalactiviti es
Chargesfor services
69,664
74,000
69,284
65.809
59,112
53,908
52.899
48.873
General government $
2,184 $
1,631 $
1,544 $
1,280 $
1.232 $
3,639 $
3,144 $
2,355
Public protection
714
844
837
582
563
623
525
541
Publicworks
326
358
755
295
320
461
430
335
Community development
786
749
1.085
1,174
1,630
2,731
2,547
1,772
Library
48
44
53
53
54
49
50
57
Parks and recreation
1,269
1.158
851
1,007
91.8
833
679
586
Operating grants and contributions
1,977
1951
2305
2.589
2.587
2.195
2.321
3,315
Capital grants and contributions
5,122
10,822
4,717
6,975
14,631
17.559
13,894
6.814
Total govemmentalactivitiesprogramrevenues
12,376
17,557
12,147
13,955
21,935
25,359
21,043
14,003
Business-typeactivities:
Chargesfor services:
Electric
69,664
74,000
69,284
65.809
59,112
53,908
52.899
48.873
Wastewater
11,513
9,276
9,091
8,524
8.927
8,085
6,560
6,760
Water
11,716
11,787
11,350
10,040
8,343
7,713
6,007
5.532
Transit
217
251
278
401
386
340
244
293
Operating grants and contributions
3,449
3,653
3,381
2,621
3,377
2,731
2,547
1,772
Capital grants and contributions
1,408
5,774
8,064
19,984
11,146
3,401
8,268
6,566
Total business -type activities program revenues
97,967
104,741
101,448
107,379
91,291
76,179
76,525
69,796
Total primary government program revenues
$ 110,343
$ 122,298
$ 113,595
$ 121,334
$ 113,226
$ 101,538
$ 97,566 $
83,799
Net(Expense)/Revenue
Govemmentalactivities $ (42,757)$ (38.029)$ (43.218)$ (36.958)$ (32,268)$ (26,895)3 (29,925)3 (32.470)
Business-typeactivities 11,381 6,007 10,192 17.122 7,038 (6.548) 3,732 (61001)
Total primary government net expense $ (31,376)$ (32,022)$ (33,026)$ (19.836)$ (25.230)$ (33,443) $ (26,193)$ (38,471)
(Continued)
111
CITY OF LODI
CHANGES IN NETASSETS (Continued)
LAST EIGHT FISCAL YEARS
(Dollar amounts in thousands)
B usi ness-typeactivities
FiscalYear
2010
2009
2008
2007
2006
2005
2004
2003
General Revenuesand Other Changes in Net
Assets:
300
2,010
8.892
6,222
6,700
9,150
865
Govem mentalactivities
Other
923
1,891
2,717
1,749
2,056
2,432
2,635
Taxes
Special item-forgivenessof debt
15,277
Property
$ 12.836 $
13,564 $
13,838 $
9,524 $
8,031 $
7,124 $
7.188 $
6.398
Franchisetaxes
8,658
8.357
9,338
9,609
8,721
8.918
8,381
7,624
Businesslicense tax
1,242
1,190
1,140
1,082
973
982
874
822
Transient occupancy tax
382
405
396
380
368
352
317
400
Grantsand contributions not restrictedto
7,064
8.249
9,593
14,772
14,215
13,193
11,895
12,069
Investmentearnings
155
467
1,008
874
328
150
125
269
Other
1,917
2.382
1,077
621
1,012
608
590
137
Transfers
5,868
5,368
3,693
4,727
4,923
4,008
2,915
2,981
Total govemmentalactivities
38,122
39,982
40,083
41.589
38.571
35,335
32,285
30,700
B usi ness-typeactivities
Investment earnings
731
1,385
2.028
2.380
2,008
1,880
2,242
6,457
Litigation -environmental lawsuits
300
2,010
8.892
6,222
6,700
9,150
865
2.728
Other
923
1,891
2,717
1,749
2,056
2,432
2,635
1.594
Special item-forgivenessof debt
15,277
Special item -swap termination
(8,979)
Transfers
(5.868)
(5.368)
(3,693)
(4,727)
(4,923)
(4,008)
(2,915)
(2.981)
Total business-typeactivities
(3,914)
(9,061)
9,944
5.624
5,841
24,731
2.827
7,798
Total primary government
$ 34,208 $
30,921 $ 50,027 $
47,213 $ 44,412 $ 60,056
$ 35,112 $
36.498
Change in Net Assets
Govemmentalactivities $ (4.635) $ 1,953 3 (3,135)$ 4.631 $ 6,303 $ 8,440 $ 2,360 3 (1,770)
Business-typeactivities 7,467 (3,054) 20,136 22,746 12.879 18.183 6,559 1.797
Total primary government $ 2.832 $ (1,101)$ 17,001 $ 27.377 $ 19,182 $ 26,623 3 8,919 $ 27
The City of Lodi implementedGASB 34 for the fiscal year ended June 30,2003. Information prior to the implementationof GASB34 is not
available.
Source: City of Lodi Financial Services Division
112
CITY OF LODI
FUND BALANCES, GOVERNMENTAL FUNDS
LASTTEN FISCALYEARS
(Dollar amounts in thousands)
Fiscal Year
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
General Fund
Reserved $ 389 $ 383 $ 1,150 $ 1,144 $ 1,321 $ 1,185 $ 1,296 $ 927 $ 856 $ 532
Unreserved 3,896 3,383 4,159 5,175 3,048 1,507 157 640 2,507 3,414
Total General Fund $ 4,285 $ 3,766 $ 5,309 $ 6,319 $ 4,369 $ 2,692 $ 1,453 $ 1,567 3,363 $ 3,946
All other governmentalfunds
Reserved $
7,801 $ 1,487 $
1,932 $
1,874 $
1,138 $
4,942 $
3,778 $
6,405 $
3,363 $
2,779
Unreserved, reported in:
Special revenue funds
963 6,540
7,433
6,651
6,271
1,400
534
2,322
1,814
2,439
Capital projectsfunds
3.649 5,217
5,504
6,200
5,663
5,650
5,720
7,655
17,905
1,695
Total all other governmental funds S
12.413 $ 13,244 $
14,869 $
14,725 $
13,072 $
11,992 $
10,032 $
16,382 $
23,082 $
6,913
Source: City of Lodi Financial5ervlces Division
S 16.698 S 17.010 S 20.178 S 21.044 S 17.441 S 14.684 S 11.485 S 17.949 S 26.445 $ 10.859
113
Revenues:
Taxes
Licensesand permits
Intergovernmentalrevenues
Charges for services
Fines and forfeitures
Investmentand rental income
Miscellaneous revenue
Total revenues
Expenditures:
Current:
General government
Public protection
Publicworks
Community development
Library
Parks and recreation
Capital outlay
Debt service:
Interest and fiwW charges
Principal payments
Total expenditures
Excess (deficiency)of revenues
Over (under) expenditures
CITY OF LODI
CHANGES IN FUND BALANCES CIE GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Fiscal Year
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
$ 23.118 $ 23,516 $ 24,712 $ 20,594 $ 18,094 $ 17,606 $ 16,908 $ 24,100 $ 23,043 $ 21,909
520
431
683
717
1,020
2,511
2,021
1,669
1,464
1,592
12,579
13,229
14,980
19,892
25,491
22,834
16,657
7,385
22,000
11,641
4,116
3,329
4.757
4,696
3,848
9,404
4.479
6,272
3,888
4,249
1,444
1,416
1,321
1,245
1,173
1,190
1,085
803
806
765
923
922
1,312
998
707
753
537
832
1,234
1,509
1,093
1.762
822
304
653
458
473
453
1,349
383
43,793 44,605 48.587 48,446 50,986 54,756 42,160 41,514 53,784 42.048
7.666
8,431
9,545
8,893
8,345
24,466
24,716
23,979
22,211
20,863
4.383
4,657
5,842
5,587
7,827
1,013
1,341
2,006
2,062
1,847
1,322
1,500
1.673
1,588
1,468
4,180
3,776
3.826
3.598
3,440
5,108
6,791
4,207
3,526
7,232
1.110
1.139
1.170
1,205
1,238
725
789
898
900
892
10,858 10,815 10,874 8,987 8.862
20,351 17,491 15,597 13,562 13,190
7,361 7,303 6,926 5,741 6,312
1,420 1,356 1,316 1,158 1,184
3,691 3,412 3.385 2,860 2,999
9,508 10,041 12,943 17,948 12,044
1,645 1,245 1,220 679 755
855 759 730 555 530
49,973 53,140 53,146 49,570 53,152 55,689 52,422 52,991 51,490 45,876
(6,180) (8.535) (4,559) (1,124) (2,166) (933) (10,262) (11,477) 2,294 (3,828)
114
Other financing sources (uses):
Transfers in
Transfers out
Capital lease proceeds
Proceedsfrom bond refunding
Payment to refunded bond escrow
Proceedsof certificates of participation
Residual equity transfer
Total otherfinancing sources (uses)
Net change in fund balances
Fund balances. beginningof year
Adjustmentto fund balance as previously reported
CITY OF LODI
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (Continued)
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Fiscal Year
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
11,173 10,609 7,058 8,863 9,142
(5,305) (5,242) (3,365) (4,136) (4,219)
8,017 9,774 11,209 12,500 9,355
(4,009) (6.859) (8,228) (13,052) (10,090)
124 883 148 670
13,269
(.3,269)
13,396
5,868 5,367 3,693 4,727 4,923 4,132 3,798 2,981 12,992
(65)
(312) (3,168) (866) 3,603 2,757 3,199 (6,464) (8,496) 15,286
(3,893)
17,010 20,178 21,044 17.441 14,684 11,485 17,949 26,445 10,859
13,628
300
1,124
Fund balances, end of year $ 16,698 $ 17,010 $ 20,178 $ 21,044 $ 17,441 $ 14,684 $ 11,485 $ 17,949 $ 26,445 $ 10.859
Debt service as a percentageof noncapital expenditures 4.3% 4.3% 4.4% 4.8% 4.9% 5.7% 5.096 5.1% 3.8% 3.996
Source: City of Lodi Finance Services Division
115
City of Lodi
TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Fiscal Year
Totals $ 29,978 $ 31,909 $ 34,640 $ 35,757 $ 32,617 $ 31,469 $ 28,324 $ 27,630 $ 26,346 $ 24,762 21%
Note: General governmental tax revenues are included in taxes, licenses and permits, intergovernmental revenues and miscellaneous revenues.
Source: City cf Lodi Financial Services Division
116
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
% Change
2001 to 2010
Property
$ 8,342
$ 8,887
$ 9,210
$ 9,289
$ 7,676
$ 6,771
$ 6,948
$ 6,191
$ 5,641
$ 5,322
57%
Sales& Use
6,873
8,028
9,296
10,137
9,812
9,183
8,533
8,709
8,300
8,028
-14%
Transient Occupancy
382
405
396
380
368
352
317
400
439
390
-2%
Franchise
1,681
1,415
976
929
890
821
800
730
931
820
105%
Documentary Transfer
117
114
125
235
355
353
240
207
172
158
-26%
Motor Vehicle in Lieu
4,377
4,784
4,797
4,635
4,402
4,606
2,767
3,430
3,276
3,051
43%
Public Protection
267
296
338
390
310
304
264
247
231
242
10%
Business License
962
1,038
1,140
1,082
973
982
874
822
787
736
31%
In Lieu Franchise
6,977
6,942
8,362
8,680
7,831
8,097
7,581
6,894
6,569
6,015
16%
Totals $ 29,978 $ 31,909 $ 34,640 $ 35,757 $ 32,617 $ 31,469 $ 28,324 $ 27,630 $ 26,346 $ 24,762 21%
Note: General governmental tax revenues are included in taxes, licenses and permits, intergovernmental revenues and miscellaneous revenues.
Source: City cf Lodi Financial Services Division
116
CITY OF LODI
ASSESSED VALUE AND ESTIMATEDACTUAL VALUE OF TAXABLE PROPERTY
LASTTEN FISCALYEARS
(Dollar amounts inthousandsl
Land
1,345,815
1,562,729
1,537,554
1,431,203
Fiscal
Year
1,027,462
960,166
889,262
832,788
Improvements
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Secured roll
$ 4,986,693$
5,156,706$
5,069,788$
4,799,141 $
4,254,184 $
3,877,398 $
3,619,116 $
3,381,945 $
3,096,937 $
2,880,201
Utility roll
2,423
2,031
2,035
2,773
3,654
3,782
3,893
3,352
3,379
3,484
Unsecured roll
270,315
263,648
258,687
242,082
216,065
215,469
202,785
207,095
198,678
177,040
Grossassessedvalue
5,259,431
5,422,385
5,330,510
5,043,996
4,473,903
4,096,649
3,825,794
3,592,392
3,298,994
3,060,725
Less exemptions (1)
332,701
265,154
243,259
229,049
220,590
217,077
212,102
200,957
190,252
185,473
Net assessed value
4,926,730
5,157,231
5,087,251
4,814,947
4,253,313
3,879,572
3,613,692
3,391,435
3,108,742
2,875,252
Land
1,345,815
1,562,729
1,537,554
1,431,203
1,226,293
1,107,776
1,027,462
960,166
889,262
832,788
Improvements
3,600,824
3,577,741
3,503,186
3,327,453
2,989,575
2,739,061
2,549,860
2,366,887
2,164,121
1,982,668
Personal property
312,792
281,915
289,770
285,340
258,035
249,812
248,472
265,339
245,611
245,269
Gross assessed value
5,259,431
5,422,385
5,330,510
5,043,996
4,473,903
4,096,649
3,825,794
3,592,392
3,298,994
3,060,725
Less exemptions (1)
332,701
265,154
243,259
229,049
220,590
217,077
212,102
200,957
190,252
185,473
Net assessed value
$ 4,926,730$
5,157,231 $
5,087,251 $
4,814,947$
4,253,313$
3,879,572 $
3,613,692$
3,391,435$
3,108,742$
2,875,252
Total Direct Tax Rate 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
(1) All exemptions (secured, utility, and unsecured rolls)are homeowners- $68,6323nd other- $264,069=$332,701
Note: In 1978, the voters of the State of California passed Propositionl3 which limited propertytaxes to a total maximum rate of 1% based upon the assessed value of the property being taxed.
Eachyear, the assessed value of property maybe increased by an "inflation factor' (limited to a maximum increase of 25%) . With few exceptions, property is only assessed at the time that it is
sold to a new owner. At that point, the propertybeing sold is reassessedat the purchase price. The assessed valuation data shown above representsthe only data currently available with respect
to the the actual market value of taxable propertyand is subject to the limitationsdescribed above.
Source: San Joaquin CountyAuditor-Controllel's Office
117
CITY OF LODI
DIRECTAND OVERLAPPING PROPERTYTAX RATES
LAST TEN FISCAL YEARS
(Rate per $100 of assessed value)
Source: San Joaquin County Tax Collector
118
Basic
Fiscal
Countywide
Year
Levy
School
All Other
Total
2010
1.0000
0.0575
0.0000
1.0575
2009
1.0000
0.0517
0.0000
1.0517
2008
1.0000
0.0478
0.0000
1.0478
2007
1.0000
0.0478
0.0000
1.0478
2006
1.0000
0.0570
0.0000
1.0570
2005
1.0000
0.0311
0.0000
1.0311
2004
1.0000
0.0475
0.0000
1.0475
2003
10000
0.0487
0.0000
1.0487
2002
1.0000
0.0002
0.0000
1.0002
2001
1.0000
0.0002
0.0000
1.0002
Source: San Joaquin County Tax Collector
118
Taxpayer
Lodi Memorial HospitalAssn
General Mills
Pacific Coast Producers
Calif Physicians Service Corp
Cottage Bakery Inc
Thule Hitch Systems
CertainteedCorp
Dart ContainerCorp,
Archer Daniels Midland Co Corp
Wine& Roses LLC
Dayton Hudson Corp
California Waste Removal System
GFLIP Limited Partners
Wells Fargo Bank
First Lodi Associates
Wallace Computer Service
Edmund N. Richmond
Principal Secured PropertyValuation
Other Secured Taxpayers
Exemptions relativeto securedtax roll
Total Secured Property Valuation
QTY OF LODI
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
(Dollar amounts in thousands)
Fiscal Year
2010 2001
Percent of
Total City
Taxable Taxable
Assessed Assessed
Value Rank Value
Percent of
Total City
Taxable Taxable
Assessed Assessed
Value Rank Value
$ 155,179
1
3.334%
147,574
2
3.171 $ 175,049 1 6.496%
86,021
3
L848 44,686 2 1658
51,083
4
1098
39,950
5
0.858
22,125
6
0.475
18,623
7
0.400
18,446
8
0.396 12,885 6 0.478
16,935
9
0.364
16,440
10
0.353
Source: San Joaquin CountyAssessor's Office 119
15,623
3
0.580
14,354
4
0.533
12,941
5
0.480
11,775
7
0.437
11,620
8
0.431
10,738
9
0.399
10,455
10
0.388
572,376
12.299
320,126
1 L880
4,414,317
94.850
2,560,075
95.003
332,701
7.149
185,473
6.883
$ 4,653,992
100.000 %
$ 2,694,728
100.000 %
Source: San Joaquin CountyAssessor's Office 119
CITY OF LODI
PROPERTYTAX LEVIESAND COLLECTIONS
LAST TEN FISCAL YEARS
(Dollaramounts in thousands)
1) Per agreement with San Joaquin County, the County providesthe City of Lodi with 100% of the
amount owed to the City for secured properties, regardlessof collection status. In exchange, the
County is entitled to 100% of revenues collected for interest and penalties. This agreement is
commonly referredto as the Teeter Plan.
Source: San Joaquin County Auditor/Controller's Office
120
Collected Within the
Total Collections
Fiscal Year of the Levy
to Date
Taxes
Levied for
Percent
Percent
Fiscal
the Fiscal
Of
Of
Year
Year
Amount
Levy (1)
Amount
Levy
2010
$ 8,291
$ 8,291
100.0%
$ 8,291
100.0%
2009
7,966
7,966
100.0%
7,966
100.0%
2008
8,167
8,167
100.0%
8,167
100.0%
2007
8,170
8,170
100.0%
8,170
100.0%
2006
7,815
7,815
100.0%
7,815
100.0%
2005
7,057
7,057
100.0%
7,057
100.0%
2004
6,570
6,570
100.0%
6,570
100.0%
2003
5,832
5,832
100.0%
5,832
100.0%
2002
5,757
5,757
100.0%
5,757
100.0%
2001
5,182
5,182
100.0%
5,182
100.0%
1) Per agreement with San Joaquin County, the County providesthe City of Lodi with 100% of the
amount owed to the City for secured properties, regardlessof collection status. In exchange, the
County is entitled to 100% of revenues collected for interest and penalties. This agreement is
commonly referredto as the Teeter Plan.
Source: San Joaquin County Auditor/Controller's Office
120
CITY OF LODI
ELECTRICITY SOLD BY TYPE OF CUSTOMER
LAST FIVE FISCALYEARS
Type of Customer
Billed Accounts
Billed Accounts
Billed Accounts
Billed Accounts
Billed Accounts
2010
2009
2008
2007
2006
CityAccounts
189
189
187
186
184
Contract Large Industrial
5
5
6
Contract Medium Industrial
1
1
2
Contract Small Industrial
1
0
1
Domestic Residential
22,525
22,506
22,510
22.938
22.860
Domestic Mobile Home Park
13
13
13
13
13
Dusk to Dawn
89
92
92
95
95
Large Commercial
357
377
380
375
359
Large Industrial
39
37
32
33
33
Medium Industrial
9
8
8
10
13
ResidentalLow Income
2,193
1,847
1,943
2,003
1,910
SmallCommerical
3.280
3.249
3.199
3.241
3,279
Small Industrial
10
10
9
A
a
Total
28.704
28.328
28.380
28,909
28.764
Infonnabon prior to the implementationof GASB 44 is not available.
Source: City of Lodi Financial Services Division
121
CITY OF LODI
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(Dollar amounts in thousands, except per capita)
Governmental Activities Business-typeActivities
Certificates
Fiscal
of
Year
Participation
2010
$ 22,265 $
2009
22,855
2008
23,420
2007
23,975
2006
24,510
2005
25,030
2004
25,530
2003
26,015
2002
26,745
2001
12,980
CITY OF LODI
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(Dollar amounts in thousands, except per capita)
Governmental Activities Business-typeActivities
Details regardingthe City's outstandingdebt can be found in the Note 8 of these financial statements.
(1) See Demographicand Economic Statisticstable for personal incomeand population.
Source: Cityof Lodi Financial Services Division
122
Total
Certificates
Total
Total
Loan
Notes
Governmental
of
Notes
Business -type
Primary
Percentof Personal
Per
Payable
Payable
Activities
Participation
Payable
Activities
Government
Income (1)
Capita (1)
$ 245
$ 22,510
$ 142,935
$ 1,409
144,344
$ 166,854
n/a %
2,626
245
23,100
147,175
1,585
148,760
171.860
n/a
2,714
94
245
23,759
139,760
1,755
141,515
165,274
8.94
2,608
187
245
24,407
121,675
1,918
123,593
148,000
8.12
2,335
279
245
25,034
125,340
2,077
127,417
152,451
8.90
2,427
368
245
25,643
126,615
2,230
128,845
154,488
9.43
2,473
456
245
26,231
148,675
2,378
151,053
177.284
11.43
2,917
543
245
26,803
117,515
2,521
120,036
146,839
9.85
2,427
622
245
27,612
75,285
2,660
77,945
105,557
7.36
1,776
12,980
59,931
2,794
62,725
75,705
5.37
1,292
Details regardingthe City's outstandingdebt can be found in the Note 8 of these financial statements.
(1) See Demographicand Economic Statisticstable for personal incomeand population.
Source: Cityof Lodi Financial Services Division
122
CITY OF LODI
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(Dollar amounts in thousands, except per capita)
Fiscal
Year
Certificates
of
Participation
Total
Percent of
Assessed
Value (1) of
Property
Per
Capita
2010
$ 22,265
$ 22,265
0.4 %
$ 350.36
2009
22,855
22,855
0.4
360.98
2008
23,420
23,420
0.4
369.62
2007
23,975
23,975
0.5
378.18
2006
24,510
24,510
0.5
390.18
2005
25,030
25,030
0.6
400.69
2004
25,530
25,530
0.7
420.12
2003
26,015
26,015
0.7
430.00
2002
26,745
26,745
0.8
450.02
2001
12,980
12,980
0.4
221.50
General bonded debt is debt payable with governmental fund resources and general obligation
bonds recorded in enterprise funds (of which, the City has none).
(1) Assessed value has been used because the actual value of taxable property is not readily
available in the State of California.
Source: City cf Lodi Financial Services Division
123
Assessed valuation (1)
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt Limit
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percent of debt limit
CITY OBE' LODI
LEGAL DEBT MARGIN INFORMATION
LASTTEN FISCALYEARS
(Dollar amounts in thousands)
FISCAL YEAR
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
$ 4,995,362
$ 5,227,580
$ 5,159,269
$ 4,887,074
$ 4,325,000
$ 3,951,862
$ 3,686,227
$ 3,464,195
$ 3,177,319
$ 2,942,348
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
1,248,841
1,306,895
1,289.817
1,221,769
1,081,250
987,966
921,557
866,049
794,330
735,587
15%
15%
15%
15%
15%
15%
15%
15%
15%
15%
187,326 196,034 193,473 183,265 162.188 148,195 138.234 129,907 119.149 110,338
$ 187,326
$ 196,034
$ 193,473
$ 183,265
$ 162,188
$ 148,195
$ 138.234
$ 129,907
$ 119,149
$ 110,338
096
0%
096
096
096
0$
096
096
096
096
The Government Code of the State of Califomia provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based
upon 25% of market value. Effectivewith the 1982 fiscal year, each parcel is now assessed at 100%of market value (as of the most recent change in ownership for that parcel). The
computation shown above reflect conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time the legal
debt margin was enacted by the State of Cal ifomiafor loca I govemements located within the state.
(1) Reflects City assessed valuationwith other exemptionsof $264.069 deducted for 2010.
Source: San Joaquin County Auditor -Controller's Mrs
124
CITY OF LODI
DIRECT AND OVERLAPPING GOVERNMENTALACTIVITIES DEBT
June 30,2010
OVERLAPPING TAX AND ASSESSMENT DEBT:
San Joaquin Community College District
Lodi Unified School District
City of Lodi 1915 Act Bonds
TOTAL OVERLAPPINGTAX AND ASSESSMENT DEBT
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
San Joaquin County Certificates of Participation
Lodi Unified School District Certificates of Participation
City of Lodi Certificates of Participation
TOTAL DIRECTAND OVERLAPPING GENERAL FUND DEBT
COMBINED TOTAL DEBT(2)
2009-10 Assessed Valuation
2009-10 Population
DEBT RATIOS
Percentage City's Share
Total Debt (3) Applicable (1) of Debt
$ 143,540,616 8.664 % $ 12,436,359
101,265,000 37.03 37,498,430
320,000 100.00 320,000
50,254,789
$ 185,740,000 9.703 % 18,022,352
49,580,000 37.03 18,359,474
22,265,000 100.00 22.265.000
58,646,826
$ 108,901,616
$ 5,259,431,000
63,549
Per Capita Value
Total Gross Debt $ 108,901,616 $ 1,714 2.07%
(1) Percent of overlapping agency's assessed valuation located within the boundaries of the City.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non -bonded capital lease
obligations.
(3) The June 30, 2010 information is not available so data as of September 1, 2010 was used to approximate the June 30, 2010 information.
SOURCE: California Municipal Statistics, San Francisco, CA
San Joaquin County Aud itors-Controller Office
State of California, Departmentof Finance, Demographic ResseaJrch Unit
CITY OF LODI
PLEDGED -REVENUE COVERAGE
LAST TEN FISCAL YEARS
(Dollars amounts in thousands)
Less:
Adjusted Adjusted Net
Fiscal Annual Operating Available Debt Service
Year Revenues (1)Exoenses(2) Revenue Principal Interest Total Coverage
Electric Revenue Certificates of Participation
2010 $
70,288
$ 49,949
$ 20,339
$ 2,920
$ 4,274
$ 7,194
2.83
2009
75,195
58,370
16,825
5,240
4,720
9,960
1.69
2008
74,923
54,437
20,486
2,305
3,961
6,266
3.27
2007
67,865
52,984
14,881
2,350
3,977
6,327
2.35
2006
61,066
51,131
9,935
_
3,613
3,613
2.75
2005
60,793
44,252
16,541
5,895
3,146
9,041
1.83
2004
56,347
45,045
11,302
2,150
3,261
5,411
2.09
2003
55,847
39,584
16,263
4,575
2,836
7,411
2.19
2002
49,858
61,039
(11,181)
1,100
1,646
2,746
(4.07)
2001
45,435
43,407
2,028
1,391
1,391
1.46
continued
126
CITY OF LODI
PLEDGED -REVENUE COVERAGE (continued)
LAST TEN FISCAL YEARS
(Dollars amounts in thousands)
Less:
Adjusted Adjusted Net
Fiscal Annual Operating Available Debt Service
Year Revenues (1) Expenses (2) Revenue Principal Interest Total Covera.De
Wastewater Certificates of Participation
2010 $
12,284 $
6,180
$ 6,104
$ 1,320
$ 2,832
$ 4,152
1.47
2009
10,764
5,921
4,843
1,270
2,882
4,152
1.17
2008
10,530
6,189
4,341
1,355
2,334
3,689
1.18
2007
9,881
5,287
4,594
1,315
2,017
3,332
1.38
2006
9,865
4,886
4,979
1,275
2,056
3,331
1.49
2005
9,232
4,781
4,451
540
2,210
2,750
1.62
2004
7,211
4,385
2,826
175
715
890
3.18
2003
7,428
4,380
3,048
160
639
799
3.81
2002
5,277
4,808
469
150
649
799
0.59
2001
5,175
4,336
839
145
658
803
1.04
2000
4,284
3,147
1,137
140
667
807
1.41
Includes all nongeneral obligation long term debt backed by pledged revenues.
Details regardingthe City's outstanding debt can be found in the Note 8 of these financial statements.
(1)Total operating revenues including investment earnings.
(2) Total operating expenses exclusive of in -lieu fees paid to the General Fund and depreciation and amortization.
Source: City of Lodi Financial Services Division
127
CITY OF LODI
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Personal Per
Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of
residence, rental income cf persons, personal dividend income, personal interest income, and personal current transfer receipts.
Per capita personal income is calculated as the personal income of residents cf a given area divided by the resident population of the area.
In computing per capita personal income, Bureau of Economic analysis uses the Census Bureau's annual midyear population estimates.
Source: State of California, Departmentof Finance, Demographic Reseach Unitand Departmentof Labor.
128
Population
San Joaquin
Population
Rank in Size
Income
Capita
Fiscal
Square
City
Percent
County
Percent
of California
(millions of
Personal
Unemployment
Year
Miles
Population
Chanute
Pooulation
of Countv
Cities
dollars)
Income
Rate
2010
13.92
63,549
0.%
694,293
9.2%
136
nla
nla
13.3%
2009
13.92
63,313
-0.1%
689,480
9.2%
135
nla
nla
12.2%
2008
13.92
63,362
-0.1%
685,600
9.2%
133 $
1,849
$ 29,178
7.1%
2007
13.17
63,395
0.9%
679,687
9.3%
129
1,822
28,743
6.1%
2006
12.81
62,817
0.6%
668,265
9.4%
131
1,713
27,272
5.5%
2005
12.81
62,467
2.8%
653,333
9.6%
131
1,639
26,239
5.9%
2004
12.79
60,769
0.4%
630,600
9.6%
130
1,551
25,527
6.5%
2003
12.69
60,500
1.8%
613,500
9.9%
179
1,490
24,620
6.9%
2002
12.62
59,431
1.4%
596,000
10.0%
129
1,435
24,150
6.6%
2001
12.60
58,600
1.2%
583,700
10.0%
126
1,411
24,086
6.4%
Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of
residence, rental income cf persons, personal dividend income, personal interest income, and personal current transfer receipts.
Per capita personal income is calculated as the personal income of residents cf a given area divided by the resident population of the area.
In computing per capita personal income, Bureau of Economic analysis uses the Census Bureau's annual midyear population estimates.
Source: State of California, Departmentof Finance, Demographic Reseach Unitand Departmentof Labor.
128
Emplover
Lodi Unified School District
Lodi Memorial Hospital
Pacific Coast Producers
Blue Shield
Cottage Bakery
General Mills
City of Lodi
Farmers & Merchants Bank
Walmart
Target
Valley Industries
Lodi Fab Industries. Inc
Total
CITY OF LODI
PRINCIPAL EMPLOYERS
CURRENTYEARAND NINEYEARSAGO
Current
9.148
Note: The City of Lodi implemented GASB 44 for the figeal year ended June 30,2006
129
Nine Years Ago
3
Percent
413
5
of Total City
Employees
Rank
Employment
3,301
1
12.64 %
1,360
2
5.21
1,200
3
4.59
850
4
3.25
700
5
2.68
494
6
1.89
457
7
1.75
336
8
1.29
285
9
1.09
165
10
0.63
9.148
Note: The City of Lodi implemented GASB 44 for the figeal year ended June 30,2006
129
Nine Years Ago
575
3
Percent
413
5
of Total City
Employees
Rank
Employment
2,247
1
8.60
650
2
2.49
530
4
2.03
575
3
2.20
413
5
1.58
183
10
0.70
226
6
0.86
200
7
0.77
191
9
0.73
200
8
0.77
35.02 5,415
20.73
CITY OF LODI
Source: City of Lodi Budget Document
130
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY DEPARTMENT LAST TEN FISCAL YEARS
2010
2009
2008 2007 2006 2005
2004
2003
2002
2001
Department:
Administration
31
32
19 35 33 37
36
37
34
34
Community Development
13
13
14 18 17 17
17
18
17
17
Electric
51
50
48 64 65 52
52
52
50
47
Financial Services
24
26
39 30 28 38
38
38
35
34
Fire
64
64
64 64 61 68
61
68
55
52
Library
14
14
14 16 14 15
15
15
14
14
Parks& Recreation
31
31
30 34 31 34
34
34
29
29
Police
125
125
125 116 117 117
116
117
115
114
PublicWorks
102
102
107 114 99 111
110
110
108
103
Total
455
457
460 491 465 489
479
489
457
444
Source: City of Lodi Budget Document
130
CITY OF LODI
OPERATING INDICATORS BY FUNCTION/PROGRAWDEPARTMENT (continued)
LAST FIVE FISCAL YEARS
General government:
Building permits issued
Business tax certificates:
Retail sales and service
Manufacturers and processors
Professions
Miscellaneous contractors, peddlers, delivery vehicles, etc.
Utilitybilling/customer service:
Numberof customers
Energy sales (KWH)
Peak demand (MW)
Public safety:
Police:
Major reported crimes
Total arrests
Dispatched calls for service
Fire:
Interior structurefire calls
Non-structuralfire calls
Hazardous materials calls
Emergencymedical calls
Total emergencycalls
Total numberof unitsdispatched
Publicworks:
Milesof streets resurfaced
Fleetjob orders completed
Trees planted
Water utility:
New connections
Water main breaks
Wastewater utility:
Average daily treatment (million gal/day)
Library:
Registered borrowers
Circulationof librarymaterials
Reference, research and informationalquestions answered
Annual attendance at libraries
Numberof programsoffered
Annual attendance at programs
Publicaccess computer usage
Community center:
Community center bookings
FiscalYear
FiscalYear
FiscalYear
FiscalYear
FiscalYear
2010
2009
2008
2007
2006
1,709
1,754
1,851
2,317
2.699
2,406
2,496
2,442
2,632
2,565
80
82
78
78
125
373
380
398
404
322
1,312
1,411
1,063
1,127
533
25,573
25,555
25,555
25,712
25,655
434,200,987
452,075,554
450,407,709
458,740,745
459,637,092
120
134
134
144
127
2,377
2,454
2.993
3,096
3,234
4,238
4,646
5,590
5,463
5,162
51,870
56,391
55,911
53,686
55.937
47
69
88
79
66
123
123
160
163
158
70
70
35
27
26
3,494
3,364
3,420
3,213
2,912
5,385
5,392
5,346
5,000
4,447
7,390
7,038
7,841
7,005
6,055
3
6
5
4
33
3,303
3,921
3,520
6,938
5,608
96
130
95
17
17
35
110
266
6
4
4
10
8
6.5MG
6.5MG
6.5MG
6.9MG
6.7MG
39,199
53.530
48,969
44,558
52,779
251,967
219,717
280,466
273,270
281,216
16,501
15,379
19,257
18,854
17.342
207,123
n/a
296,793
288,070
287,986
344
316
348
339
320
10,676
8,765
11,242
10,700
10,872
52,124
38,388
38,999
35,260
29.896
789
475
494
302
220
131
CITY OF LODI
OPERATING INDICATORS BY FUNCTION/PROGRAM/DEPARTMENT (continued)
LAST FIVE FISCALYEARS
I nstructionalclasses
Registered students
Yearly attendance
Parks and recreation:
After school program registration (number of participants/sites)
Adult sports
Program/Participation
Programsoffered
Partnerships
Tournaments
Youth/Teen sports
Program attendance
Programsoffered
Aquatics
Program attendance
Numberof programs
Note The City of Lodi implemented GASB 44 for the fscalyear ended June 30.2006
Information pnor to the implementation of GASB 44 is not available
Source: City of Lodi
FiscalYear
FiscalYear
FiscalYear
FiscalYear
FiscalYear
2010
2009
2008
2007
2006
583
507
530
478
509
3,525
3,316
5,550
3,548
4,369
13,355
14,050
14,410
14,429
15,369
1,92014
1,92014
3,014/4
145000/12
135,000/12
2,528
2,284
28,000
36,000
36,000
16
13
11
11
11
5
1
3
3
5
7
10
10
20
20
4,251
215,000
195,000
200,000
200,000
16
24
14
14
20
32,566
2,433
50,000
59,000
59,000
13
6
3
8
6
132
CITY OF LODI
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM/DEPARTMENT (continued)
LAST SIX FISCAL YEARS
General government:
Total square miles
Public safety:
Police:
Facilities:
Stations
Animal control facility
Police training facility (pistol range)
Vehicles:
Marked patrol cars
Motorcycles and scooters
Animal control vehicles
Other automobiles
Fire:
Facilities:
Fire stations
Vehicles:
Fire engines
Trucks/Trailers
Other automobiles
Publicworks:
Miles of streets
Miles of alleyways
Traffic signals
Street lights
Fiscal Year
2010 2009 2008 2007 2006 2005
133
13.92 13.92 13.92 13.17 12.81 12.81
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
23
25
25
25
28
28
5
5
5
5
4
1
2
2
2
2
3
3
37
38
40
41
41
41
4
4
4
4
4
4
7
7
6
6
5
5
6
6
9
8
7
7
10
12
7
10
11
11
202
202
200
184
198
100
16
16
16
16
16
14
62
62
64
66
64
60
7,270
7,270
7,270
7,270
7,203
6,995
CITY OF LODI
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM/DEPARTMENT (continued)
LAST SIX FISCAL YEARS
134
Fiscal Year
2010
2009
2008
2007
2006
2005
Parks and recreation:
Parks and squares
26
26
23
23
23
23
Park acreage
373
371
275
275
275
275
Boating facilities- launch lanes
1
1
1
1
1
1
Senior center
1
1
1
1
1
1
Community Centers
1
1
1
1
1
1
Swimming pools
4
4
3
3
3
3
Baseball/softball diamonds
24
24
26
26
26
26
Tennis courts
11
11
11
11
11
11
Skateboard park
1
1
1
1
1
1
Playgrounds
25
25
22
22
22
22
Ballpark
24
24
26
26
26
26
Soccer Field
22
22
22
22
22
22
Football Field
1
1
3
3
3
3
Handball/BasketballNolleyball Courts
10
10
8
8
8
8
Horseshoe Pits
6
6
7
10
10
10
Library:
Central library
1
1
1
1
1
1
Total items in collection
130,530
135,197
142,885
142,098
134,129
137,673
Integrated library system
1
1
1
1
1
1
Microfilm readers
1
1
1
1
1
1
Microfilm readerslprinters
1
1
1
1
1
1
Self check out machines
2
2
0
1
1
1
Electric utility:
Overhead lines 12kv (miles)
130
130
130
129
129
129
Overhead lines 60kv (miles)
13
13
13
13
13
13
Underground lines (miles)
155
154
153
151
151
151
134
CITY OF LODI
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM/DEPARTMENT (continued)
LAST SIX FISCAL YEARS
Water utility:
Water main lines
Water storage capacity (gallons)
Water wells
Water reservoirs
Wastewater utility:
Wastewater main lines (miles)
Treatment capacity
Wastewater treatment plant
Stormwater utility:
Stormwater main drain lines (miles)
Stormwater pump stations
Central parking district:
Parking structure
Parking spaces
Parking lots
191
194
Fiscal Year
189
182
2010
2009
2008 2007
2006
2005
237
233
233 238
235
230
1,100,000
1,100, 000
1,100, 000 1,100, 000
1,100, 000
1,100,000
26
26
26 26
26
25
2
2
2 2
2
2
191
194
194
189
182
182
8.5 MG
8.5 MG
8.5 MG
8.5 MG
8.5 MG
8.5 MG
1
1
1
1
1
1
124
161
119
161
115
114
14
14
14
14
13
14
1
1
1
1
1
1
2,453
2,453
2,453
2,453
2,453
2,453
25
25
25
25
25
25
Note: The City of Lodi implemented GASB 44 for the fiscal year ended June 30, 2006. Information prior to 2005 is
not readily available.
Source: City of Lodi Departments
135
(This page intentionally left blank.)
SINGLE AUDIT REPORTS
CITY OF LODI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30,2010
Federal Grantor
Pass-through Grantor or Direct
CFDA
Program Title
Number
U.S. Department of Housing and Urban Development
Direct:
Community Development Block Grants/Entitlement Grants
14.218
Passed through San Joaquin County Department of Planning and Building Inspection:
Community DevelopmentBIock GrantsEntitlement Grants
14.218
Community DevelopmentBlock Grants/Entitlement Grants
14.218
Community Development Block Grants/Entitlement Grants
14.218
Total U.S. Department of Housing and Urban Development
U.S. Department of Justice
Direct:
Public Safety Partnership and Community Policing Grants
Edward Byrne Memorial Justice Assistance Grant Program
Passed through San Joaquin County
Edward Byrne Memorial Justice Assistance Grant Program
Passed through City of Stockton
Edward Byrne Memorial Justice Assistance Grant Program
Total Edward Byrne Memorial Justice Assistance Grant Program
Total U.S. Department of Justice
Grant/Project
Number
B -09 -MC -06-0038
B -05 -UC -06-0038
B -06 -UC -06-0038
B -07 -UC -06-0038
16.710 2009 -RK- WX-0151
16.738 2007 -DJ -BX -0138
16.738 2009 -SB -B9-0539
Expenditures
411,596
9,949
71,839
96,126
589,510
73.112
23,802
63,996
16.738 2009 -DJ -BX -0574 3,404
91,202
164.314
See accompanying notes to the schedule of expenditures of federal awards.
137
CITY OF LODI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
FOR THE YEAR ENDED JUNE 30,2010
Federal Grantor
Pass-through Grantor or Direct
CFDA
Grant/Project
Program Title
Number
Number
Expenditures
U.S. Department of Transportation
Direct:
Federal Transit- Formula Grants
20.507
CA -90-Y389-00
126,546
Federal Transit - Formula Grants
20.507
CA -90-Y565-00
10,981
Federal Transit - Formula Grants
20.507
CA -90-Y736-00
(137,675)
Federal Transit - Formula Grants
20.507
CA -90-Y828-00
1,667,695
ARRA - Federal Transit - Formula Grants
20.507
CA -96-X052-00
453,161
Total Federal Transit - Formula Grants
2,120,708
Passed through California Department of Transportation:
ARRA - Highway Planning and Construction
20.205
ESPLE-5154(036)
713,682
Total U.S. Department of Transportation
2,834,390
U.S. Department of Energy
Direct:
ARRA - Energy Efficiency and Conservation Block Grant Program (EECBG)
81.128
DE-SC0002707
434.979
U.S. Department of Homeland Security
Passed through San Joaquin County:
Homeland Security Grant Program 97.067 2008-0006 378,807
Total Federal Awards $ 4,402,000
See accompanying notes to the schedule of expenditures of federal awards.
138
CITY OF LODI
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30,2010
NOTE1—GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30,20 10, presents the activity of all federal award programs of
the City of Lodi, California (City). The City reporting entity is defined in Note I of the City's basic financial statements. All federal awards received directly
from federal agencies, as well as federal awards passed through other government agencies, are included in the SEFA.
NOTE 2 — BASIS OF ACCOUNTING
The accompanying SEFA is presented using the modified accrual basis of accounting for grants accounted for in governmental fund types and the full accrual
basis of accounting for grants accounted for in proprietary fund types, as described in Note 1 of the City's basic financial statements.
NOTE 3 — CATALOG OF FEDERAL DOMESTIC ASSISTANCE
The CFDA numbers included in the accompanying SEFA were determined based on the program name, review of grant contract information and Office of
Management and Budget's Catalog of Federal Domestic Assistance.
NOTE 4 — SUBRECIPIENTS
Of the federal expenditures presented in the schedule, the City provided federal awards to subrecipients as follows:
Federal
Federal
CFDA Number
Amount Provided
to Subrecipients
Community Development Block Grants/
Entitlement Grants 14.218 $ 180,610
139
Certified Public Accouutam#�.
Sacramento • Walnut Cteek . Oakland. Los Angeles . Century City • '9e,port Beach . San Diego
The Honorable Members of City Council
City of Lodi, California
mgocpaxom
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDZTZNG
STANDARDS
We have audited the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund
information of the City of Lodi, California (City), as of and for the year ended June 30, 2010, which collectively comprise the City's basic financial statements
and have issued our report thereon dated December 7, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the
purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control
over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and
corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to
identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify
any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
2029 century Park I. ast 1201 Dov Street 225 Smadway
Suitt! 500 Suitt, 680 Suite 1750
LoS:u�<:lr'few> Newport Beach San Uicyo
C,A 9066) CA 926+0 CA 92101
140
3?};A"1 S Street
7.17.1 N Caliiurnkt Bl,d
5M lath Street
515 5 Fg,ueroa Street
Suae 3C'0
Suite 750
' th floor
Suite 325
Sacrrrmca,to
Walnut C,r,KA
C7nkldnd
Los Mclele5
0 a 95a 16
CA 94596
i;A 94612
CA 90071
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported
under GovernmentAuditing Standards.
We noted certain matters that we reported to the City Council of the City of Lodi, in a separate letter dated December 7,2010.
This report is intended solely for the information and use of the City Council, management, federal and state grantor agencies and pass-through entities and is not
intended to be and should not be used by anyone other than these specified parties.
Certified Public Accountants
Sacramento, California
December 7, 2010
141
Certified Public 1�CC�i1L#Ai1#S.
Sacramento • walnut Creek • Ciaklanti • Los kr, ,lv• Century City • Newport Seactr • San Diego
The Honorable Members of City Council
City of Lodi, California
mgocpa.com
INDEPENDENTAUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL
EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR
A-133
Compliance
We have audited the compliance of the City of Lodi, California (City), with the types of compliance requirements described in the OMB CircularA433
Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30,2010. The City's
major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance
with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City's management.
Our responsibility is to express an opinion on the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to
financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States,
Local Governments, and Non -Profit Organizations. Those standards and OMB Circular A -I33 require that we plan and perform the audit to obtain reasonable
assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major
federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a
legal determination ofthe City's compliance with those requirements.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each
of its major federal programs for the year ended June 30,2010. However, the results of our auditing procedures disclosed instances of noncompliance with those
requirements, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and
questioned costs as items 2010-1 and 2010-2.
142
3000 S Street 21.'.1 N. Cali(omra Blvd 505 14th Street 515 S Figueroa S''reet 7029 Century Hart, t:ast 1201 Dove Street 225 Dmadway
Sulle'$00 Suite, 750 5th floor Suite 325 Suite SM Suite 680 Suite 1750
Sacramee
ento walnut Crk Oakland Los Myeies 1 os AV1% Ne.vport Beach San Diego
CA 95!115 CA 94596 CA 94612 CA 900'71 CA 900n(j6'7 CA 92660 CA 92101
Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations,
contracts, and grants applicable to federal programs. hi planning and performing our audit, we considered the City's internal control over compliance with the
requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our
opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing
an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control
over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in
the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal
program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify
all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, we identified a deficiency in internal
control over compliance that we consider to be a significant deficiency as described in the accompanying schedule of findings and questioned costs as item 2010-
1. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit
attentionby those chargedwith governance.
The City's responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the
City's responses and, accordingly, we express no opinion on the responses.
This report is intended solely for the information and use of the City Council, management, federal and state grantor agencies and pass-through entities and is not
intended to be and should not be used by anyone other than these specified parties.
Certified Public Accountants
Sacramento, California
December 7,2010
143
Financial Statements:
Type of auditor's report issued:
Internal control over financial reporting:
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30,2010
Section I —Summary of Auditor's Results
Unqualified
• Material weaknesses identified? No
• Significant deficiencies identified that are
not consideredto be material weaknesses? None reported
Noncompliance material to financial
statements noted?
Federal Awards:
No
Internal control over major programs:
• Material weaknesses identified? No
• Significant deficiencies identifiedthat are
not consideredto be material weaknesses? Yes
Type of auditor's report issued on compliance
for major programs: Unqualified
Any audit findings disclosed that are required
to be reported in accordance with section
510(a) of Circular A- 13 3? Yes
144
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30,2010
Identification of major programs:
Federal Program Title
CFDA No.
Community Development Block Grants/Entitlement Grants
14.218
HighwayPlanning and Construction
20.205
Federal Transit — Formula Grants
20.507
Energy Efficiency and Conservation Block Grant Program (EECBG)
81.128
Homeland Security Grant Program
97.067
Dollar threshold used to distinguish
between type A and type B programs: $300,000
Auditee qualified as low-risk auditee? Yes
None
Section II —Financial Statement•Findings
145
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30,2010
Section III —Federal Award Findings and Ouestioned Costs
Reference Number: 2010-1
Federal Program Title: Community Development Block Grants/Entitlement Grants (CDBG)
Federal Catalog Number: 14.218
Federal Award Number and Year: B -09 -MC -06-0038; 2009
Federal Agency: U.S. Department of Housing and Urban Development (HUD)
Category of Finding: Reporting
Criteria:
OMB Circular A-102, the Common Rule —Subpart C — Post -Award Requirements; Section Al, Financial Reporting
(c) Federal Cash Transaction Report —
(1) Form.
(i) For grants paid by letter or credit, Treasury check advances or electronic transfer of funds, the grantee will submit the Standard Form 272, Federal
Cash Transactions Report, and when necessary, its continuation sheet, Standard Form 272a, unless the terms of the award exempt the grantee from
this requirement.
(ii) These reports will be used by the Federal agency to monitor cash advanced to grantees and to obtain disbursement or outlay information for each
grant from grantees. The format of the report may be adapted as appropriate when reporting is to be accomplished with the assistance of automatic
data processing equipment provided that the informationto be submitted is not changed in substance.
(4) Frequency and due date. Grantees must submit the report no later than 15 working days following the end of each quarter.
Condition:
In gaining an understanding of the City's procedures to ensure compliance with the reporting requirements over the CDBG program set forth by OMB Circular
A-133, we noted that the City does not submit Standard Form 272 (SF -272 reports).
Questioned Costs:
There are no questioned costs.
Context:
The City should have submitted four SF -272 reports during the year ended June 30,2010.
Effect:
Continued noncompliance could result in the City losing out on future CDBG grants.
146
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30,2010
Cause:
The City vw under the impression that the Integrated Disbursement and Information System (IDIS) satisfies all financial reporting requirements for the CDBG
program. However, in an Information Bulletin issued on August 23, 2010, the HUD Office of Community Planning and Development reminded grantees that
have converted to the IDIS that the SF -272 reports are still required to be completed and submitted to HUD on a quarterly basis.
Recommendation:
The City should develop procedures that will ensure compliance with the reporting requirements over the CDBG program set forth by OMB Circular A-133,
specifically -procedures to prepare and submit SF -272 reports no later than 15 working days following the end of each quarter.
Management Response:
Upon learning of this issue from the auditor, we immediately generated and submitted the required report to the local HUD office and are committed to submit
the report quarterly from that point forward.
147
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30,2010
Reference Number: 2010-2
Federal Program Title: Energy Efficiency and Conservation Block Grants (EECBG)
Federal Catalog Number: 81.128
Federal Award Number and Year: DE-SC0002707; 2009
Federal Agency: U.S. Department of Energy (DOE)
Category of Finding: Reporting
Criteria:
OMB Circular A-102, the Common Rule — Subpart C — Post -Award Requirements; Section .40, Performance Reporting
(b) Nonconstruction Performance Reports.
(1) Grantees shall submit annual performance reports unless the awarding agency requires quarterly or semi-annually reports. However, performance
reports will not be required more frequently than quarterly. Annual reports shall be due 90 days after the grant year, quarterly or semi-annual reports
shall be due 30 days after the reporting period. The final performance report will be due 90 days after the expiration or termination of grant support. If
a justified request is submitted by a grantee, the Federal agency may extend the due date for any performance report. Additionally, requirements for
unnecessary performance reports may be waived by the Federal agency.
The award agreement terms and conditions require quarterly reports.
OMB Circular A-102, the Common Rule —Subpart C — Post -Award Requirements; Section .41, Financial Reporting
(b) Financial Status Report—
(1) Form. Grantees will use Standard Form 260 or 269A (SF -260 or SF -269A), Financial Status Report, to report the status of funds for all nonconstruction
grants and for construction gmnts when required in accordance with paragraph Section .41 (e)(2)(iii) of this section.
(4) Due Date. When reports are required on a quarterly or semiannual basis, they will be due 30 days after the reporting period. When required on an
annual basis, they will be due 90 days after the grant year. Final reports will be due 90 days after the expiration or termination of grant support.
The award agreement terms and conditions require Standard Form 425 (SF -425) on a quarterly basis. The SF -425, Federal Financial Report, replaces SF -269
and SF -269A.
Per OMB memorandum M-09-21, Implementing Guidancefor the Reports on Use of Funds Pursuant to the American Recovery and ReinvestmentAct cf 2009
dated June 22,2009, Section 2. 1, Section 1512 of the Recovery Act requires reporting on the use of Recovery Act funding by recipients no later than the 10" day
after the end of each calendar quarter (beginning the quarter ending September 30,2009).
148
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30,2010
Condition:
During our testing of the reporting requirements set forth by OBM Circular A-133, we noted two quarterly performance reports, one Federal Financial Report,
and three Section 1512 reports were submitted after their respective due dates.
Questioned Costs:
There are no questioned costs.
Context:
The City submittedthree quarterly performance reports, four Federal Financial Reports, and four Section 1512 reports during the year ended June 30,20 10.
Effect:
Continued noncompliance could result in future EECBG grants being funding on a reimbursementbasis or the City losing out on future EECBG grants.
Cause:
Per management, the City is short-staffed and was unable to complete the tasks on a timely basis.
Recommendation:
The City should strengthen procedures to ensure compliance with the reporting requirements over the EECBG program set forth by OMB Circular A-133,
specificallyprocedures to submit quarterly performance reports and Federal Financial Reports no later than 30 days following the end of each quarter and Section
1512 reports no later than 10 days following the end of each quarter.
ManagementResponse:
Timelines are noted and the City will comply in future reporting periods.
149
None
CITY OF LODI
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30,2010
150
CONTINUING DISCLOSURES
UNAUDITED
CONTINUING DISCLOSURE REQUIREMENTS FORTHE CITY OF LODI AND THE LODI PUBLIC IMPROVEMENT CORPORATION
Fiscal Year 2009-10
The City of Lodi has executed Continuing Disclosure Certificates associated with the various debt issues outstanding by the Electric Utility,
Wastewater Utility and the Lodi Public Improvement Corporation. These Certificates were executed to satisfy provisions of Securities and
Exchange Commission Rule 15c2 -12(b) (5). The material provided herein applies to the various debt issues as noted. Data for each utility is
shown separately.
This Bond Disclosure Section included within the City's Comprehensive Annual Financial Report (CAFR) provides the information required by the
Continuing Disclosure Certificates. The CAFR, in turn, will be filed with the Municipal Securities Rulemaking Board. The CAFR may also be found
on the City's website at www.lodi.gov.
ANNUAL REPORT FOR ELECTRIC UTILITY
The Lodi Electric Utility has Continuing Disclosure requirements associated with its 2008A Series A Certificates of Participation, 2002 Series C
Certificates of Participation and 2002 Taxable Series D Certificates of Participation. The annual report includes, by reference, the audited financial
statement of the City of Lodi (including the Electric Utility).
The annual report also contains the following five (5) tables as required in the Certificates:
1. A table setting forth the City's power supply resources for the most recently completed fiscal year.
2. A table showing the average number of customers, sales, revenues and demand for the past five fiscal years.
3. A table showing the outstanding debt of joint powers agencies in which Lodi participates and the City of Lodi share of that debt for the
most recent fiscal year.
4. A table showing a summary of Operating Results for the past five fiscal years.
5. A table showing Lodi Electric Utility Department Rate Changes since November 1996 (applicable only to the 2002 Series C and D issues).
Reporting of Significant Events
The Certificates identify eleven (11) specific events that require special reporting. As of June 30, 2010, none of the specified events have
occurred. Further, there is no knowledge on the part of the City Council, officers or employees of the City of any impending Significant Event that
would require disclosure under the provisions of the Certificates.
151
Table 1 A table setting forth the City's power supply resources.
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
POWER SUPPLY RESOURCES
Source
Purchased Power?
Western
NCPA
Geothermal Project
Hydroelectric Project
Combustion Turbine Project No. 1
Capital Facilities, Unit One
Contracts, Exchanges and Bilaterals (4)
Total
Total Capacity and Energy Sold at Wholesale
City System Requirementfor Retail Load
Capacity
Available
Actual Energy
% of Total
(MW)(2)(5)
(MWh)
Energy
4.7
11,019
2.11%
13.3
87,457
16.74
26.2
52,171
9.99
9.4
43
0.01
19.6
10,198
1.95
70.0
361,494
69.20
143.2
522,382(5)(6)
100.00%
N/A
70,502
143.2
451,880
(1) Columns may not add to totals due to rounding.
(2) Non -coincident capacity available.
(3) Entitlements, flan allocations and contract amounts.
(4) Includes participation in NCPA/Seattle City Light exchange. See "OTHER NCPA PROJECTS—Power Purchase Contracts"
in the forepart of this Official Statement.
(5) Units at Backbone Output.
(6) Includessupply from exchanges and line losses.
152
Tab/e2 A table showing the average number of customers, sales, revenues and demand for the past five fiscal years.
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
CUSTOMER SALES, REVENUEAND DEMAND
Fiscal Years Ended June 30,
2006 2007 2008 2009 2010
Numberof Customers:
Residential
22,870
Commercial
2,455
Industrial
32
Other
182
Total Customers
25,539
Kilowatt-Hour(kWh) Sales:
31
22,928
22,523
22,465
21,981
2,423
2,714
2,696
3,163
33
32
37
31
182
187
188
194
25,566
25,456
25,386
25,369
Residential
159,540,557
159,247,195
Commercial
150,561,659
153,963,719
Industrial
141,462,582
133,816,956
Other
8,072,294
11,712,875
Total kWh sales
459,637,092
458,740,745
Revenues from Sale of Energy (2)
Residential
$ 24,259,736 $
27,013,494 $
Commercial
21,365,903
23,241,809
Industrial
11,666,005
13,470,620
Other
1,820,944
2,071,324
Total Revenuesfrom
Sale of Energy:
$ 59,112,588 $
65,797,247 $
Peak Demand (kW)
124.3
140.4
(1) Columns may not add to totals due to rounding.
Excludes revenues from California Energy CommissionTax.
Sources: City of Lodi, audited annual financial statements and Customer Information System reports.
153
153,563,188
155,146,983
129,429,938
12,267,600
450,407,709
27,127,049 $
25,173,286
14,591,885
2,132,120
153,487,430
155,206,324
131,059,764
12,322,036
452,075,554
150,811,587
146,644,990
125,000,860
11,563,550
434,020,987
29,016,776 $
27,642,199
26,883,557
24,901,256
15, 875, 038
15, 015, 036
2,224,567
2,105,196
69,024,340 $ 73,999,938 $ 69,663,688
132.4 117.4 119.6
Table 3 A table showing the outstanding debt of joint powers agencies in which Lodi participates.
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
OUTSTANDING DEBT OF JOINT POWERSAGENCIES
(DollarAmounts in Millions)
NCPA
Geothermal Project
Geysers Transmission Project
Calaveras Hydroelectric Project
Combustion Turbine Project No. 1
Capital Facilities Project Unit One
Lodi Energy Center Project
TANC
Bonds
Commercial Paper Notes
TOTAL*
$ 1,314.7
8.83% $ 116.1
* Columns may not add to totals due to independent rounding.
(1) Participation obligation is subjectto increase upon defaultof another project participant.
Such increaseshall not exceed, withoutthe written consentof a non -defaulting participant, an accumulated
maximum of 25% of such non -defaulting participant's original participation.
(2) Participant's project entitlement remainsthe same but share of debt has increasedto 10.64% due to change in debt participation
(3) Reflectsthe transfer of 34 MW of Lodi's interest in the NCPA Combustion Turbine Project No. 1 to the City of Roseville.
Lodi remains contractually obligated underthe related third phase agreement for its 34.78% entitlement share
through August 31,2010.
Source: City of Lodi.
154
Lodi's
Lodi's Share of
( Ji ig ?bt
Flnrtirinatinn(l)
outstanding DE
$ 88.0
10.28%
$ 9.0
1.7
18.48
0.3
468.0
10.37(2)
48.5
8.0
13.39(3)
1.1
63.0
39.50
24.9
255.0
9.50
24.2
431.0
1.89
8.1
NIA
$ 1,314.7
8.83% $ 116.1
* Columns may not add to totals due to independent rounding.
(1) Participation obligation is subjectto increase upon defaultof another project participant.
Such increaseshall not exceed, withoutthe written consentof a non -defaulting participant, an accumulated
maximum of 25% of such non -defaulting participant's original participation.
(2) Participant's project entitlement remainsthe same but share of debt has increasedto 10.64% due to change in debt participation
(3) Reflectsthe transfer of 34 MW of Lodi's interest in the NCPA Combustion Turbine Project No. 1 to the City of Roseville.
Lodi remains contractually obligated underthe related third phase agreement for its 34.78% entitlement share
through August 31,2010.
Source: City of Lodi.
154
Table 4 A table showing a summary of operating results for the past five fiscal years.
CITY OF LODI
Operating Revenues
Rate Revenue
ECA Revenue
Other Revenue (3)
Total Operating Revenue
Operating Expenses
Purchased Power
Non -Power Costs (4)
Total Operating Expenses
Net Revenue Available for Debt Service
Parity Debt Service
2002 C & D, 2008 A Bonds
Total Net Debt Service
Debt Service Coverage
Remaining Revenue Available for Other Purposes
Non -Operating Expenses
In -Lieu Transfer to General Fund
Other Changes in Working Capital (5)
Net Cash Flow Before Capital Expenditures
Beginning Operating Reserve
Changes in GOR
Net Deposit/Withdrawal from Reserves
Ending Operating Reserve
ELECTRIC SYSTEM
SUMMARY OF OPERATING RESULTS(')
Ending Fiscal Year June 30 (Dollars in 000s)
Actual 2006 (2) Actual 2007 (2) Actual 2008 Actual 2009 Actual 2010
$ 59,113
$ 65,809
65,110
$ 65,229
$ 62,613
3,613
6,327
4,174
8,771
7,050
1,953
2,056
5,639
1,195
625
61,066
67,865
74,923
75,195
70,288
41,170
43,362
42,862
46,405
37,943
9,961
9,622
11,575
11,965
12,006
51,131
52,984
54,437
58,370
49,949
9,935
14,881
20,486
16,825
20,339
3,613
6,327
6,266
9,960
7,194
3,613
6,327
6,266
9,960
7,194
2.75
2.35
3.27
1.69
2.83
6,322
8,554
14,220
6,865
13,145
(6,050) (6,779) (6,873)
(5,192) (1,562)
(4,920) 213 7,347
(6,942) (6,977)
(77) 6,168
7,342
3,632
5,470
14,513
13,854
1,210
1,625
1,696
(582)
5,877
(4,920)
213
7,347
(77)
6,168
$ 3,632
$ 5,470
$ 14,513
$ 13,854
$ 25,899
Source: Citv of Lodi
(1) As defined in the Installment Purchase Contract, which may or may not be on the same basis as Generally Accepted Accounting Principles.
(2) Certain amounts have been recast to reflect corrected coverage amounts.
(3) Other revenues for FY 08 include $3.25 million for the sale of the City's rights to the NCPA Combustion Turbine #1 to Roseville.
(4) Non -power costs include cost of services provided by other departments and does not include depreciation and amortization expense.
155
(5) Consists of non-cash accounting entries.
Table 5 A table showing Lodi Electric Utility Department Rate Changes since November 1996.
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
RATE CHANGES
Effective Date Percent Change
December2007 Established Solar Initiative Surcharge of $0.00125 per kilowatt-hour
August 2007 Implemented monthly Energy Cost Adjustment
December2005 Average 17% increase across all rate classes
December 2002 4.5% average rate increase
August 2001 Increased MCA for all but contract customers: 10%to 12% rate change
June 2001 Implemented MCA for residential and small commercial: 8% to 10% rate change
December 1998 5.00% rate decrease for small commercial/industrial customers
May 1998 2.50% general rate increase to fund public benefit programs
September 1997 4.5 to 5.5 cents per kilowatt-hour, non -demand, non -time -use, contract rate available for new large
commercial/industrial loads
December 1996 10% to 40% economic development discount on new small to medium commercial/industrial electric loads
November 1996 Economic Stimulus Rate Credit increased to 1.262 cents per kilowatt-hourfrom 0.4 cents per
kilowatt-hourfor largest primary service customers (estimated 19% reduction)
Source: City of Lodi.
156
ANNUAL REPORT FOR WASTEWATER UTILITY
The Lodi Wastewater Utility has Continuing Disclosure req u i rements associated with its 2007 Series A Certificates of Participation and 2004
Series Certificates of Participation. The annual report includes, by reference, the audited financial statement of the City of Lodi (including the
Wastewater Utility).
The annual report also contains the following five (5) tables as required in the Certificates:
1. A table setting forth the City's number of connections by user type for the past five fiscal years.
2. A table showing the proportion of service charge revenue by class of user for the most recent fiscal year (applicable only to the 2004
SeriesA issue).
3. A table showing the largest users by service charge revenues for the most recent fiscal year.
4. A table showing a schedule of service charges.
5. A table showing a summary of historic operating results and debt service coveragefor the pastfive fiscal years.
Additionally, the Certificatefor the 2007 Series A issue requires a description of any additional indebtedness incurred during the priorfiscal year
which is payable from the system net revenues on a parity with the installment payments.
Reporting of Significant Events
The Certificates identify eleven (11) specific events that require special reporting. As of June 30, 2010, none of the specified events have
occurred. Further, there is no knowledge on the part of the City Council, officers or employees of the City of any impending Significant Event that
would require disclosure under the provisions of the Certificates.
157
Table 1 A table setting forth the City's number of connections by user type for the past five fiscal years.
City of Lodi
Wastewater System
Number of Connections by User Type
as of June 30
and Percentage of Fiscal Year 2009-10 Service Charge Revenue by User Type
% of FY 09/10
Service Charge
User Type 2006 2007 2008 2009 2010 Revenue
Residential 22,511 22,571 22,277 22,227 21,974 73.3%
Commercial/Industrial 1,603 1,562 1,847 1,815 1,768 26.7%
Total All Users 24,114 24,133 24,124 24,042 23,742 100.0%
Source: City of Lodi
158
Table 2 A table showing the proportion of service charge revenue by class of userfor the most recent fiscal year.
City of Lodi
Wastewater System
Proportion of Service Charge Revenues by Class of User
Fiscal Year 2009-10
Percentage of Total Annual Service
User Type Charge Revenue
Single Family
Residential
Multiple Family Residential
Commercial/industrial
Total
Source: City cf Lodi
159
59.2%
14.2%
26.6%
100.0%
Table3 A table showing the largest users by service charge revenue for the most recent fiscal year.
User
Cottage Bakery
Lodi Unified School District
General Mills
City of Lodi
Pacific Coast Producers
Miller Packing Company
Lodi Memorial Hospital
Blue shield of California
Armourstruxx
Flame Mini Mart
City of Lodi
Wastewater System
Largest Users by Service Charge Revenues
Fiscal Year 2009-10
Type of Business
Specialty bakery, frozen dough
K-12,adult education
Cereals, bread mixes, snack foods
Government
Private label fruit canning
Hot dog producer
Health Care
Health Insurance
Armor producer
Gas station, liquor store
160
Service Charge
Revenue
$ 335,825
327,771
306,918
55,310
40,479
34,461
33,068
30,188
23,809
22,040
$ 1,209,869
Percentage of
Total
Annual Service
Charae Revenue
3.06%
2.99
2.80
0.50
0.37
0.31
0.30
0.28
0.22
0.20
11.03%
Table 4 A table showing the schedule of service charges.
For Residential Users (per month):
1 Bedroom ..................... .........
2 Bedrooms ............................
3 Bedrooms ............................
4 Bedrooms ...........................
5 Bedrooms ............................
6 Bedrooms ............................
7 Bedrooms ............................
For Commercial/Industrial Users:
Moderate Strength (annual pers Sewage Service Unit (SSU).......
High Strength:
Flow (annual per MG) ...........................................
BOD (annual per 1,000 Ibs.)....................................
SS (annual per 1,000lbs.).....................................
Grease Interceptor/Septic Holding Tank Waste within
City Limits (per 1,000 gal.) .....................................
Septic Holding Tank Waste Outside City Limits (per
1,000 gal.)...........................................................
Disposal to Storm Drain System (per MG) .................
Disposalto Industrial System:
Flow (per MG, annual basis) ....................
BOD (per 1,000 lbs., annual basis)............
Winery Waste (per 1,000 gallons) ............................
City of Lodi
Wastewater System
Schedule of Wastewater Service Charges
Service Charqe Service Charge
[effective July (effective J u ly
1, 20061 1.2007
161
Service
Service
Charge
Charge
(effective July
[effective July
1 2008
16.20091
$15.49
$16.03
$16.65
$20.81
20.65
21.37
22.19
27.74
25.81
26.71
27.74
34.68
30.98
32.06
33.29
41.61
36.14
37.40
33.84
48.55
41.30
42.74
44.38
55.48
46.46
48.08
49.93
62.42
$247.80
$256.33
$266.28
$332.88
2,092.01
2,164.00
2,247.10
2,808.88
345.24
357.12
370.83
463.54
215.86
223.29
231.86
289.83
182.80
189.09
196.35
245.44
388.06
401.41
416.82
521.03
192.00
198.61
206.24
257.80
1,309.48
2,218.78
2,808.88
22.82
20.34
463.54
185.10
191.47
198.82
289.83
Table 5 A table showing historic operating results and debt service coverage for the past five fiscal years.
Operating Revenues
Chargesfor Services
Capacity/Connection Fees
Non -Operating Revenues
Interest Income
Rent
Other
Total System Revenues
Operating Expenses
Personnel services
Supplies, Materials and services
Utilities
Total Operating Expenses
System Net Revenues
Parity Debt Service
1991 Installment Payments
2003 Installment Payments
2004 Installment Payments
2007 Installment Payments
Total Parity Debt Service
Debt Service Coverage
Non -Operating Expenses
Transfers (In)/Out
Total Non -Operating Expenses
Net Cashflow Before Capital Expenditures
Source: Financial Services Division
City of Lodi
Wastewater System
Historical Operating Results and Debt Service Coverage
Fiscal Years 2005- 06 through 2009-10
2005-06 2006-07 2007-08 2008-09
$8,206,016 $8,523,530 $9,091,220
720.588
569,234
103,345
265,788
9,864,971
2,163,754
1,998,725
723,387
4,885,866
4,979,105
922,153
176,202
259,618
9,881,503
2,289,035
2,314,233
683,669
5,286,937
4,594,566
799,516 800,755
378,523 379,748
2,152,825 2,151,194
3,330,864 3,331,697
1.49 1.38
1,057,533
1,057,533
$590,708
1,315,191
1,315,191
$(52,322)
162
836,862
165,931
435,935
10,529,948
2,996,028
2,394,804
798,652
6,189,484
4,340,464
311,127
380,873
2,144,438
852,239
3,688,677
1.18
575,326
575,326
$76,461
$9,276,217
428,586
221,422
838,007
10,764,232
2,984,049
2,067,646
869,129
5,920,824
4,843,408
426,022
2,134,856
1,591,200
4,152,078
1.17
1,451,478
1,451,478
$(760,148)
2009-10
$1 1,513,389
298,337
472,578
12,284,304
2,800,891
2,532,246
847,167
6,180,304
6,104,000
381,400
2,138,700
1,631,500
4.151.600
1.47
1,451,478
1,451,478
$500,922
Additional Indebtedness
The Wastewater Utility did not incur any additional indebtedness during the 2009-10 fiscal year which is payablefrom the system net revenues on
a parity with the installment payments.
163
ANNUAL REPORT FOR THE LODI PUBLIC IMPROVEMENT CORPORATION
The Lodi Public ImprovementCorporation has Continuing Disclosure requirements associated with its 2002 Certificates of Participation. The
annual report includes, by reference, the audited financial statement of the City of Lodi.
The annual report also contains the following five (5) tables as required in the Certificates:
1. A table setting forth the approved budget and actual results for the most recent fiscal year.
2. A table showing the comparative statements of revenue, expenditures and changes in fund balance for the general fund for the past five
fiscal years.
3. A table showing the assessed valuations for the last five fiscal years.
4. A table showing the secured property tax collections for the past ten fiscal years.
5. A table showing the ten largest locally secured taxpayers for the last fiscal year.
Reporting of Significant Events
The Certificates identify eleven (11) specific events that require special reporting. As of June 30, 2010, none of the specified events have
occurred. Further, there is no knowledge on the part of the City Council, officers or employees of the City of any impending Significant Event that
would require disclosure under the provisions of the Certificates.
Table 9 A table setting forth the approved budget and actual results for the most recent fiscal year.
Please referto the Schedule of Revenues, Expendituresand Changes in Fund Balance— Budget and Actual on page 75 of this Comprehensive
Annual Financial Report.
164
Table 2 A table showing the comparative statements of revenue expenditures and changes in fund balancefor the general fund for the
past five fiscal years.
Revenues:
Taxes
Licenses and permits
Intergovernmental revenues
Charges for services
Fines, forfeits and penalties
Investment and rental income
Miscellaneous revenue
Total revenues
Expenditures:
Current:
General government
Public protection
Publicworks
Library
Parks and recreation
Debt service:
Interest and fiscal charges
Principal payments
Total expenditures
Deficiency of revenues under expenditures
Otherfinancing sources (uses):
Transfers in
Transfers out
Total otherfinancing sources (uses)
Net change in fund balances
Fund balances, beginning of year
Fund balances, end of year
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GENERALFUND
LAST FIVE YEARS
141111111
$ 18,093,733
71,125
15,620,997
1,823,583
1,161,304
376,971
319,815
37,467,528
2007
20,594,293
83,964
16,091,446
1,854,575
1,241,051
380,375
210,495
40,456,199
2008
24,712,405
80,925
10,642,600
2,510,207
1,317,407
662,164
630,413
40,556,121
2009
23,516,164
61,783
8,967,410
1,055,137
1,415,174
231,181
446,404
35,693,253
2010
$ 23,118,461
72,171
7,772,071
1,343,199
1,441,354
516,304
462,592
34,726,152
8,344,970
8,893,677
9,545,370
6,922,096
6,411,741
20,686,173
21,775,531
23,771,574
24,463,771
23,854,905
6,577,776
3,871,311
3,935,366
2,967,402
1,471,779
1,468,178
1,587,714
1,672,910
1,499,720
1,322,052
3,434,361
3,597,718
3,826,450
2,160,035
2,234,349
56,026
282,393
40,849,877
(3,382,349)
6,892,824
(1,833,864)
5,058,960
1,676,611
2,692,330
$ 4,368,941
165
41,464
273,823
40,041,238
414,961
4,937,314
(3,401,814)
1,535,500
1,950,461
4,368,941
6,319,402
29,724
249,624
43,031,018
(2,474,897)
4,040,166
(2,575,809)
1.464,357
(1,010,540)
6,319,402
5,308,862
18,516
129,487
38,161,027
(2,467,774)
5,367,983
(4,442,883)
925,100
(1,542,674)
5,308,862
3,766,188
12,578
135,425
35,442,829
(716,677)
5,867,983
(4,632,278)
1,235,705
519,028
3,766,188
$ 4,285,216
Table 3 A table showing the assessed valuations for the last five fiscal years.
Please refer to the table shown in the Statistical Section on page 112.
Table4 A table showing the secured property tax collections for the past ten fiscal years.
Please refer to the table shown in the Statistical Section on page 115.
Table 5 A table showing the ten largest locally secured taxpayers for the last fiscal year.
Please refer to the table shown in the Statistical Section on page 114.
166
CITY OF LODI, CALIFORNIA
Report to City Council
For the Year Ended June 3 0,20 10
CITY OF LODI, CALIFORNIA
Report to City Council
For the Year Ended June 30,2010
Table of Contents
Page(s)
TransmittalLetter.........................................................................................................................................
RequiredCommunications......................................................................................................................... 2-3
Statusof Prior Year Recommendations..................................................................................................... 4-9
IV
,&-Az 6 CwMed Public A+ccou�tants.
$acramrnto • Walnut Creek • Oakland • irs Angeles • Century City • Newport Beach • San Diego
City Council
City of Lodi, California
mgocpa.com
We have audited the financial statements of the City of Lodi, California (City) for the year ended
June 30, 2010, and have issued our report thereon dated December 7, 2010. Professional standards
require that we provide you with information related to our audit. That information is included in the
Required Communications section of this report.
Also, in planning and performing our audit of the financial statements of the City for the year ended
June 30, 2010 we considered the City's internal controls in order to determine our auditing
procedures for the purpose of expressing an opinion on the financial statements, and not to provide
assurance on internal control over financial reporting.
We followed up on those matters we became aware of during the previous years' audits. Those
matters are included in the Status of Prior Year Recommendations section of this report. This report
does not affect our report dated December 7,2010, on the basic financial statements of the City.
This letter is intended solely for the information and use of City Council and management and is not
intended to be and should not be used by anyone other than these specified parties.
We would like to thank the City's management and staff for the courtesy and cooperation extended
to us during the course of our engagement. We have discussed our comments and suggestions with
management and would be pleased to discuss them further.
Certified Public Accountants
Sacramento, California
December 7,20 10
3000 S Sue:er 212; N. Coliforma Blvd, 5.05 14th 5treet 515 S. Fip eroa Street 2029 Crnlury Park East 1201 Dove Street. 225 Broadway
Sulu, 3N) Suitc 750 59t FI Xjr Su w :325 1 Suite 500 Some 020 Suee 1750
tancran,t do '.Walnut. Creek Oakland lAa An<leles Los Angl le, 111—lion Beach San Uw—q.
CA 45811, CA 95496 CA 9 (,U (A WXII e CA 9M67 CA 92EG0 CA 921; i
CITY OF LODI, CALIFORNIA
Report to City Council
Required Communications
For the Year Ended June 30,2010
Significant Audit Findings
Qualitative Aspects ofAccounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 to the financial statements. No new
accounting policies were adopted and the application of existing policies was not changed during the year
ended June 30,2010. We noted no transactions entered into by the City during the year for which there is
a lack of authoritative guidance or consensus. All significant transactions have been recognized in the
financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the City's financial statements
were:
• The self-insurance liability is based on the development of amounts from various consultants'
actuarial studies.
• The pollution remediation obligation is based upon estimated cash flows determined by an
engineering consultant's remedial action plan.
• The actuarial pension data contained in Note 10 to the financial statements and required
supplementary information (unaudited) is based on actuarial calculations performed in
accordance with the parameters set forth in GASB Statement No. 50 and GASB Statement No.
27, Accountingfo r Pensions by State and Local Government Employers.
• The actuarial data for other postemployment benefits contained in Note 11 to the financial
statements and required supplementary information (unaudited) is based on actuarial calculations
performed in accordance with GASB Statement No. 45, Accounting and Financial Reporting by
Employersfor Postemployment Benefits Other Than Pensions.
We evaluated the key factors and assumptions used to develop these estimates in determining that they
are reasonable in relation to the financial statements taken as a whole.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements. In addition, none of the misstatements detected as a
result of audit procedures and corrected by management were material, either individually or in the
aggregate, to each opinion unit's financial statements taken as a whole.
2
CITY OF LODI, CALIFORNIA
Report to City Council
Required Communications (Continued)
For the Year Ended June 30,2010
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be
significant to the financial statements or the auditor's report. We are pleased to report that no such
disagreements arose during the course of the audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated December 7, 2010.
Management Consultations with Other lndependentAccountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the governmental unit's financial statements or a determination
of the type of auditor's opinion that may be expressed on those statements, our professional standards
require the consulting accountant to check with us to determine that the consultant has all the relevant
facts. To our knowledge, there were no such consultations with other accountants.
OtherAudit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations
For the Year Ended June 30,2010
The following is a summary of the status of prior years' recommendations.
FROM YEAR ENDED JUNE 30,2007 -
INTERNAL SERVICE FUNDS
Condition
Internal service funds are expressly designed to function as cost -reimbursement devices. That is, an
internal service fund is simply a means of accumulating costs related to a given activity on an accrual
basis so that the costs can subsequently be allocated to the benefiting funds in the form of fees and
charges. During our audit of the City's financial statements for the period ending June 30,2007, we noted
that the internal service fund does not appear to be recovering the full cost of providing medical insurance
benefits to other funds and/or user departments.
We examined, on a test basis, monthly Ca1PERS invoice billings of health insurance premiums for active
participants enrolled in the health care plans offered by Ca1PERS, the cost of which were expensed in the
internal service fund, however, the revenue reported by the internal service funds were consistently less
than the related costs of the medical benefits provided. Absent a reconciliation of the enrolled participants
in the Ca1PERS health care plans and the City's internal payroll and Human Resources system, the costs
related to the Ca1PERS invoice billings of health insurance premiums could be permanently stranded in
the internal service fund, and therefore, the user departments not being charged their proportionate share
of the costs.
Recommendation
We encourage management and/or authorized employees to perform a monthly reconciliation of the
enrolled participants in the health care plans as reported by Ca1PERS in the monthly health insurance
invoice roster detail with the City's internal payroll system and HR records to ensure accuracy and
completeness of the roster. This strengthens control and ensures that the costs are properly and timely
allocated according to the user department or fund and that City is only being charged for current
employees at authorized rates.
Current Year Status
The City performed an annual reconciliation of fiscal year 2009-10 Ca1PERS health plan charges and
posted the necessary corrections to the appropriate funds. In addition, the City has developed procedures
and is now performing reconciliations and corrections on a monthly basis. Therefore, we consider our
recommendation implemented.
FROM YEAR ENDED JUNE 30,2005 -
INFORMATION TECHNOLOGY (IT)
Accounting System Development and Maintenance
Condition
While most procedures for the accounting system development and maintenance are in place, they are not
formally documented. Having the policies, procedures and standards formally documented should
address any ambiguity in implementation and reliance upon only a few key individuals.
Program changes are not always initiated, tested and approved by the functional users before being
applied to the production system.
4
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations (Continued)
For the Year Ended June 30,2010
The IS Division Programmer is not restricted from making changes in the production environment and is
also responsible for transporting changes and updates from the test environment to the production system.
Recommendation
Official policies, procedures and standards for the accounting system development and maintenance
should be documented and maintained. These policies, procedures and standards should ensure that:
o All new programs and changes are initiated and approved by the appropriate user management.
o The impact of new programs and updates are assessed in a test environment before
implementation in the production system.
o Programmers do not have update access to the production system, except for emergency fixes.
o Any emergency fix in the production system is properly logged.
o Program testing is reviewed and approved by someone other than the programmer.
o The process of moving programs into the production system is formal, well documented, and
performed by someone independent from programming.
Current Year Status
The IS Division has drafted a formal change control and patch management policy that incorporates
procedures and standards as recommended. Therefore, our recommendation is in the process of
implementation.
Current YearManaQement Response
The policy is due to be adopted at the December 15, 2010 City Council meeting.
Packaged Accounting Software and Systems Software— Selection Method
Condition
There is not currently a documented system and application software selection method outlined for the
City.
Recommendation
The City should document their system and application software selection processes and ensure that the
following areas are addressed:
o Business needs,
o Technical requirements,
o Analysis/comparison of several products
o Implementation issues, including conversion, and
o Cost/benefit analysis
The City should pursue the needs assessment for the new financial and billing system as noted below, but
the procedures for system and application acquisition should be documented.
Current Year Status
The IS Division has drafted a formal software selection and acquisition policy that incorporates
procedures and standards as recommended. Therefore, our recommendation is in the process of
implementation.
Current Year Management Resuonse
The policy is due to be adopted at the December 15,20 10 City Council meeting.
5
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations (Continued)
For the Year Ended June 30,2010
Packaged Accounting Software and Systems Software — Test Environment
Condition
The IS Division has implemented a test environment for application software, but not for system
software. Update and patches are being applied directly to the production system.
Recommendation
Procedures to test updates to system software should be implemented, either on a separate machine or as a
partition with the current AS400, to ensure that updates and upgrades are not applied directly to the
production system without proper testing beforehand.
Current Year Status
The IS Division has drafted a formal change control and patch management policy that incorporates
procedures and standards as recommended. Therefore, our recommendation is in the process of
implementation.
Current YearManagementResvonse
The policy is due to be adopted at the December 15,20 10 City Council meeting.
Computer Operations — Computer Room
Condition
The City has moved the computer room which now has a separate dedicated air conditioning system,
Uninterrupted Power Supply (UPS) and generator. The room is secured with standard lock and key
controlled by the IS Division staff and facilities maintenance. An intrusion alarm system and temperature
and water alarms have been installed and are monitored by a local security company. The room is
equipped with a sprinkler system for fire suppression.
Recommendation
The IS Division should consider replacing the water sprinkler system with a dry fire suppression system.
If local building ordinance requires the use of a water based system, the City should consider a dual
system with a pre -action type sprinkler.
Current Year Status
The City remains at risk of loss of financial data and information technology assets due to water-based
fire suppression system in the computer room. The City has considered replacing the water sprinkler
system with a dry fire suppression system and determined that the risk to the IT equipment is acceptable
given the cost of re -fitting the computer room, therefore we consider our recommendation implemented.
Computer Operations — Disaster Preparedness/Business Continuity Plans
Condition
The City currently has no disaster preparedness or business continuity plans in place.
Recommendation
The City should work to develop a comprehensive disaster preparedness and business continuity plan.
The plan, upon completion, should be thoroughly tested and provisions made for periodic reviews of the
plan.
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations (Continued)
For the Year Ended June 30,2010
Current Year Status
The City performs its own disaster recovery by doing two nightly backups on tapes and one weekly full
backup. One copy of the nightly backup is stored in the IS Division and another copy in the Public Safety
Building. Although best practices recommend that the backup tapes be stored at least 20 miles from the
primary data center, the City has no plans to change the secondary storage site. This puts the City at
increased risk of losing financial information as the backup tapes are subject to many of the same
environmental risks as the primary data center, such as floods, large fires or earthquakes. The City has
developed a disaster preparedness plan, however the plan has not been fully tested. Therefore, our
recommendation is in the process of implementation.
Current YearManagement Response
Management agrees. The City has received grant money to update certain hardware and software that
will allow high level of system and data redundancy and to fully test the plan by December 31,20 10.
Computer Operations — Service Level Agreements
Condition
Service level agreements between the IS Division and the user departments are not in place. Help -desk
services are provided, but without documented policies and agreements, an acceptable level of service
cannot be properly defined.
Recommendation
Service level agreements between the user departments and the IS Division should be instituted to define
the level of service to be expected.
Current Year Status
Service level agreements are in place for all departments, therefore we consider our recommendation
implemented.
Computer Operations — Unauthorized Use of Software
Condition
There are no procedures in place to ensure that there is no unauthorized use of software within the City.
Recommendation
The IS Division should institute official procedures for the review of software installed on computers at
least yearly. The City should make efforts to protect itself from the liability of employees using
unauthorized software. An alternative to the physical review of installed software is to require
administrator privileges on network computers in order to install any software.
Current Year Status
The City has elected the alternative of requiring administrator privileges on network computers in order to
install any software, and has successfully restricted the local administrative rights on all City computers.
Therefore, we consider our recommendation implemented.
7
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations (Continued)
For the Year Ended June 30,2010
Other Matters
Since 2005, the City has been in various stages of addressing our prior recommendations. Efforts to
implement several have been hampered by budgetary constraints and other higher priority undertakings.
Overall, of the seven IT findings and recommendations from our 2005 review that remained last year,
three have been implemented and the remaining four are in the process of being implemented. The
recommendations in the process of implementation are expected to be completed before the end of fiscal
year 2010-2011.
FROM YEAR ENDED JUNE 30.2004 -
CAPITAL ASSETS
Condition
During our audit of the City's financial statements for the year ended June 30, 2004, we noted that the
acquisition and construction of capital assets is maintained on a spreadsheet, outside of the City's
accounting system, which can lead to inaccurate recording and depreciation of capital assets.
Recommendation
We recommend that the City place into operation the JDE fixed asset module that records the City's
capital assets and automatically calculates depreciation. The system would support the City's deprecation
method and automatically post accumulated depreciation expense to the General Ledger module for a
specified accounting period.
The system provides methods to track assets, their beginning cost, current value, and method of
depreciation. Some of the advantages include:
I . Flexible Asset Numbering System — an unlimited number of assets can be maintained. The
assets can be grouped by many types of categories for reporting purposes.
2. User Defined Asset Control - Accumulated depreciation, depreciation expense and asset
master accounts can be user specified for each asset.
3. Reports - variety of reports can be produced including a listing of all assets by type, category
and description, method of depreciation, and all other information maintained in the master
file. The module could be programmed to also print reports listing assets with original cost
and current book value plus calculated depreciation for a specified period.
To reduce operating overhead, the City should consider hiring temporary staff for data entry into the
capital assets module.
Current Year Status
Condition unchanged. Prior recommendation remains.
Current YearManazement Response
Finance is currently in the initial stage of assessing the magnitude of this project and coordinating with
Information Systems Division to evaluate and establish a project plan. As of fiscal year 2009-10, the City
does not have the resources to do so.
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations (Continued)
For the Year Ended June 30,2010
FEDERAL TRANSIT ADMINISTRATION INDIRECT COSTS
Condition
We noted, during our review of the fiscal year 2003/2004 Federal Transit Administration (FTA)
apportionment that management had originally decided to use the apportionment to cover indirect costs.
Per our review of FTA guidelines, grantees who intend to seek FTA reimbursement for indirect costs
must prepare a cost allocation plan that has been approved by the FTA or another cognizant Federal
agency. Further inquiry determined that the cost allocation plan has not been approved in the prescribed
manner.
Recommendation
We recommend that the City perform a review of all grants and make the determination if indirect costs
can be applied against grant funds.
Current Year Status
The City engaged a consultant for a five-year period to perform an A-87 compliant cost allocation plan
and indirect cost rate services and secure cognizant agency approval, therefore our recommendation is in
the process of implementation.
Current YearManagement Response
A final report for the initial year of services is expected by January 2011.
CITY OF LODI
Agreed -Upon Procedures Report for
Gann Appropriations Limit
For the Fiscal Year Ending June 3 0,20 10
RO!
MACIAS GINI & OICONNELL LLP
Certified Public Accountants & Management Consultants
City Council
Lodi, California
SACRAMENTO
3000 S Street, Suite 300
Sacramento, CA 95816
916.928.4600
WALNUT CREEK
OAKLAND
LOS ANGELES
NEWPORT BEACH
SAN MARCOS
SAN DIEGO
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON
PROCEDURES RELATED TO THE ARTICLE XIII -B
APPROPRIATIONS LIMIT CALCULATION
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Worksheet of the City of Lodi, California (City) for the fiscal year ending June 30, 2010. These
procedures, which were agreed to by the City of Lodi, California and the League of California Cities (as
presented in the publication entitled Article XIII -B Appropriations Limitation Uniform Guidelines), were
performed solely to assist the City in meeting the requirements of Section 1.5 of Article XIII -B of the
California Constitution. The City's management is responsible for the Appropriations Limit Worksheet.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of the procedures
is solely the responsibility of those parties specified in this report. Consequently, we make no
representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
We obtained the completed worksheets setting forth the calculations necessary to establish
the City's appropriations limit and compared the limit and annual adjustment factors included
in those worksheets to the limit and annual adjustment factors that were adopted by resolution
of the City Council. We also compared the population and inflation options included in the
aforementioned worksheets to those that were selected by a recorded vote of the City
Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Worksheet, we added last year's appropriations
limit to the annual adjustment amount, and compared the resulting amount to this year's
appropriations limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations
Limit Worksheet to the worksheets described in No. 1 above.
Finding: No exceptions were noted as a result of our procedures.
1
www.mgocpa.com An Independent Member of the BOO Seidman Alliance
4. We agreed the prior year appropriations limit presented in the accompanying Appropriations
Limit Worksheet to the prior year appropriations limit adopted by the City Council.
Finding: No exceptions were noted as a result of our procedures.
We were not engaged to and did not perform an examination, the objective of which would be the
expression of an opinion on the accompanying Appropriations Limit Worksheet. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to our
attention that would have been reported to you. No procedures have been performed with respect to the
determination of the appropriation limit for the base year, as defined by Article XIII -B of the California
Constitution.
This report is intended solely for the information and use of the City Council and management of the City
and is not intended to be and should not be used by anyone other than these specified parties.
Certified Public Accountants
Sacramento, California
May 25,2010
2
CITY OF LODI
APPROPRIATIONS LIMIT WORKSHEET
FOR THE FISCAL YEAR ENDING JUNE 30,2010
Appropriation Limit, fiscal year ended June 30,2009, as adopted
Adjustment factors:
Population factor, for fiscal year ending June 30,2010, as adopted
Inflation factor, for fiscal year ending June 30, 2010, as adopted
Annual percentage increase
Annual adjustment
Appropriation limit, fiscal year ending June 30,2010, as adopted
$76,227,535
1.0042
1.0062
1.0104%
794,751
2009/10 Comprehensive
Annual Financial Report
City Council
December 15, 2010
Auditor's Opinion
❑ City engaged an independent auditor
through a competitive process
❑ Macias, Gini, O'Connell, LLP has given
the City aclean' opinion for the year
■ Reviewed financial records and found
them to be in compliance will all rules
and regulations in all material respects
■ Financial statements fairly present the
balances and operations of the City
z
Status of City's Financial Position
Highlights of Financial Records
❑ General Fund
■ Unreserved Fund Balance of $3,,896,,576
❑ About $65,,000 higher than projected for
budget purposes
❑ 9.6% of General fund revenues
■ Sufficient to fund Catastrophic Reserve (8%)
■ Partially funds Economic Reserve
3
Status of City's Financial Position
Highlights of Financial Records
❑ General Fund (cont.)
■ Budget to Actual Variances
❑ Property taxes down about $143,000
❑ Sales taxes down about $600,000
❑ Card room fees up about $165,000
❑ One Time Conservation Easement
generated $504,000
❑ Expenditure savings of about $375,,000
■ Vacancies
■ Prudent management
El
Single Audit
❑ 'Clean" opinion
❑ No questioned costs
❑ Findings related to reporting
requirements
■ Certain reports not filed timely
■ City will comply in future
5
Management Letter
❑ Review of City's Internal controls
■ No new findings this year
❑ 10 prior year findings
■ 7 closed with adoption of IT policies and other
City actions
❑ IT disaster preparedness plan needs to be fully
tested
❑ Fixed asset module recommendation will not be
implemented as staffing is not available
❑ Indirect rates calculation in progress by
consultant
A