HomeMy WebLinkAboutAgenda Report - December 18, 2013 I-01AGENDA ITEM T''`
CITY OF LODI
,. COUNCIL COMMUNICATION
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AGENDA TITLE: Review of City's Annual Financial Report (Fiscal Year 2012/13) by Macias, Gini &
O'Connell, LLP
MEETING DATE: December 18, 2013
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 2012/13:
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 be present to 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.
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 20th year and
the California Society of Municipal Finance Officers (CSMFO) for the 14th year in a row. A copy of the
GFOA certificate is included in the 2012/13 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 its
fiduciary responsibilities to the public.
Jordan Ayers
Deputy City Manager
KonradMartlam, City Manager
2012/13 Comprehensive
Annual Financial Report
City Council
December 18,, 2013
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
2
Status of City's Financial Position
Highlights of Financial Records
❑ General Fund
■ Unassigned Fund Balance of $7,,614,044
❑ Includes $54,,975 for Library
❑ About $500,000 higher than projected for
budget purposes
❑ 17.9% of General Fund revenues for
2013/14
■ Fully funds Catastrophic Reserve (8%)
■ Fully funds Economic Reserve (8%)
■ Surplus reserve amount of $807,258
3
Status of City's Financial Position
Highlights of Financial Records
❑ General Fund (cont.)
■ Budget to Actual Variances
❑ Revenues $1.0 million higher than budget
■ Sales taxes up about $470,000
■ Property taxes up about $104,000
■ Business license taxes up about $65,000
■ Card room fees up about $45,000
■ Late payment/re-connection fees up about $415,000
■ Police hiring grant down about $225,000
rd
Status of City's Financial Position
Highlights of Financial Records
❑ General Fund (cont.)
■ Budget to Actual Variances (cont.)
❑ Expenditures about $1.0 million under
budget
■ Salary and Benefits savings of about $575,000
■ Service and Supply savings of about $475,000
5
Single Audit
❑ 'Clean" opinion
❑ No questioned costs
❑ Findings related to reporting
requirements
■ Draft report included matching costs as
federal costs
■ City will develop and implement written
review procedures
0
Management Letter
❑ Review of City's Internal controls
■ No new findings
❑ Prior year findings
■ 1 closed; 2 remain open
❑ Closed -Deficit balance in Benefits Internal
Services Fund
❑ Open - IT disaster preparedness plan needs to be
fully tested
❑ Open -Fixed asset module implementation
Questions?
CITY OF LODI, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended June 30, 2013
ALAN NAKANISHI, MAYOR
PHIL KATZAKIAN, 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
Wendy Dowhower, Supervising Accountant
INTRODUCTORY SECTION
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30,2013
TABLE OF CONTENTS
INTRODUCTORY SECTION
Table of Contents
Letter of Transmittal
i
v
Certificate of Achievement for Excellence in Financial Reporting xiii
Organization Chart of the City of Lodi
xiv
Directory of Officials and Advisory Bodies
FINANCIAL SECTION xv
Independent Auditor's Report
MANAGEMENT'S DISCUSSION AND ANALYSIS
3
BASIC FINANCIAL STATEMENTS
Government -wide Financial Statements:
Statement of Net Position
Statement of Activities
17
Fund Financial Statements:
18
Balance Sheet —Governmental Funds
1921
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
22
Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds
23
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances
of Governmental Funds to the Statement of Activities
24
Statement of Net Position — Proprietary Funds
25
Statement of Revenues, Expenses and Changes in Net Position — Proprietary Funds
26
Statement of Cash Flows — Proprietary Funds
27
Statement of Fiduciary Net Position — Fiduciary Funds
29
Statement of Changes in Fiduciary Net Position - Fiduciary Funds
30
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, Expenditures and Changes in Fund Balance — Budget and Actual — General Fund
79
Note to the Required Supplementary Information
80
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet — Nonmajor Governmental Funds
83
Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds
Nonmajor Governmental Funds - Special Revenue Funds
84
Combining Balance Sheet —Nonmajor Governmental Funds — Special Revenue Funds
85
87
Combining Statement of Revenues, Expenditures and.Changes in Fund Balances — Nonmajor Governmental Funds — Special Revenue Funds
88
CITY OF WPI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS - continued
Schedules of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — Nonmajor Governmental Funds — Special Revenue Fund; 89
Nonmajor Governmental Funds - Capital Project Funds 95
Combining Balance Sheet — Nonmajor Governmental Funds — Capital Project Funds 96
Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds — Capital Project Funds 97
Internal Service Funds 99
Combining Statement of Net Position - Internal Service Funds 100
Combining Statement of Revenues, Expenses and Changes in Fund Net Position — Internal Service Funds 101
Combining Statement of Cash Flows - Internal Service Funds 102
Combining Statement of Fiduciary Net Position - Private -Purpose Trust Funds 103
Combining Statement of Changes in Fiduciary Net Position - Private -Purpose Trust Funds 104
Statement of Changes in Assets and Liabilities - Agency Fund 105
STATISTICAL TABLES (UNAUDITED)
Government -wide information:
Net Position by Component - Last Ten Fiscal Years
Changes in Net Position - Last Ten Fiscal Years
Fund information:
Fund Balances, Governmental Funds - Last Ten Fiscal Years
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years
Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years
Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years
Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years
Principal Property Taxpayers -Current Year and Seven Years Ago
Property Tax Levies and Collections - Last Ten Fiscal Years
Electricity Sold by Type of Customer - Last Eight Fiscal Years
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years
Ratios of General Bonded Debt Outstanding- Last Ten Fiscal Years
Legal Debt Margin Information - Last Ten Fiscal Years
Direct and Overlapping Governmental Activities Debt
Pledged -Revenue Coverage - Last Ten Fiscal Years
Demographic and Economic Statistics - Last Ten Fiscal Years
Principal Employers - Current Year and Nine Years Ago
Full -Time Equivalent City Government Employees By Department - Last Ten Fiscal Years
Operating Indicators by Function/Program/Department - Last Eight Fiscal Years
Capital.Asset Statistics by Function/Program/Department - Last Nine Fiscal Years
SINGLE AUDIT REPORTS
Schedule of Expenditures of Federal Awards
Notes to the Schedule of Expenditures of Federal Awards
107
108
109
111
112
114
115
116
117
118
119
120
121
122
123
124
127
128
129
130
132
135
137
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS - continued
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 Government Auditing Standards 138
Independent Auditor'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-133 140
Schedule of Findings and Questioned Costs 142
Schedule of Prior Year Findings and Questioned Costs 145
CONTINUING DISCLOSURES (UNAUDITED)
Annual Report for Electric Utility
Annual Report for Wastewater Utility
Annual Report for the Lodi Public Improvement Corporation and the Lodi Public Financing Authority
Annual Report for Water Utility
10
150
156
163
166
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CITY COUNCIL
ALAN NAKANISHI, Mayor
PHIL. KATZAKIAN, Mayor Pro
Tempore
COUNCILMEMBERS:
LARRY HANSEN
BOB JOHNSON
JOANNE MOUNCE
December 6, 2013
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 of Lodi:
KONRADT BARTLAM
City Manager
RANDI JOHL-OLSON
City Clerk
STEVE SCHWABAUER
City Attorney
The Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2013, is hereby submitted. Thisreport 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, 2013, 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 protect the 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 ENTITY AND 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 accordance with GASB Statement No. 14, as amended by GASB Statement No. 61.
The City was incorporated 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. 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:.
Number of
Facilities
Elementary and 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 62,930 and is contained in an area of 13.98 square 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 80
wineries within 10 miles of downtown. The employment base is diversified with 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.
Im
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, OBJECTIVES AND 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 Environment for Citizens
Ensure Efficient and Productive City Organization
Ensure Public Trust, and
Ensure the Development of 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
Enhance Access through Implementation of Information Systems Strategic Plan Provide Resources to 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 Public Arts, Cultural and Recreational Opportunities Pursue Efforts to 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 2012-13. The following projects are underway and
will see significant progress or be completed in 2013.
Surface Water Treatment Plant
The City historically relied 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. Construction began in March 2011 and was completed in November
2012. The plant is fully integrated into the water distribution system. Total cost for the plant was $34.5 million.
Vii
Grape Bowl Improvements
The Grape Bowl is a stadium that was originally constructed using Work Project Administration Funding during the 1940's. The City continues to
improve and update the facility. Significant improvements to lighting, disability access and installation of an all-weather surface were completed in
prior years. A $2.0 million project, using a combination of Community Development Block Grant and local funds to construct a concession and
restroom building, plaza area, and disability access and seating on the south concourse, was completed in fall 2013.
Reynolds Ranch
Reynolds Ranch is a planned development on the south eastern edge of the city that will eventually incorporate residential and commercial
development. Development continues with additional retail space completed in 2013. Looking forward, plans include additional retail space
scheduled for completion in 2014.
Water Meters and Water Infrastructure
Under 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 a seven year period. 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. To date, approximately 9,000 meters have been installed. Estimated
cost for the complete program is $42.5 million.
FINANCIAL INFORMATION, MANAGEMENT AND 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 2012-13, 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 unassigned fund balance in the General Fund of at least 16% of revenues and working capital balances
in the Water and Wastewater enterprise funds of at least 25% of operating expenses. Based on a reserve policy adopted in March 2011, the target
for the Electric enterprise fund working capital is $28.7 million for fiscal year 2012-13. The goals allow for variations from year-to-year to account for
economic and fiscal changes. The General Fund maintained an unassigned fund balance of $7,614,044 or 20.18%, of operating revenues at the
end of fiscal year 2012-13.
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 toprovide
detailed information regarding the City's investments and compliance with City policy and 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.
Under the 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. Pursuant to subsequent legislation adopted after Article XIII B,
the City is required to annually establish and adopt its appropriations limit by resolution. For 2012-13, the City's appropriations subject to limit were
$31,470,842 and the appropriation limit was $81,450,625 leaving appropriations at $49,979,782 below the limit.
Debt Administration
At June 30, 2013, the City had outstanding Certificates of Participation of $179,442,636. These liabilities are discussed in Note 8 of the Basic
Financial Statements and summarized below.
ix
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 2002 bonds were refunded by the issuance
of the 2012 Certificates of Participation.
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. The 2002 bonds were refunded by the issuance of the 2012 Certificates of Participation.
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 7, 2003, the City and the City of Fort Bragg issued Water and Wastewater revenue bonds (2003B) through the California Statewide
Communities Development Authority ("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 facilities.
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. These bonds were partially refunded in the current year.
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 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.
On October 1, 2010, the City issued $9,015,000 Water Revenue Certificates of Participation, 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.
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 necessary for marketing purposes, availability and cost
effectiveness.
x
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.
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 purchases for materials, equipment and services during 2012-13 were made pursuant to 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, 2013, the Insurance Fund had a net position of $2,464,809.
INDEPENDENT AUDIT
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, 2012. 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.
Xi
A Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of Achievement for the last twenty 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 personally thank Ruby Paiste, Financial Services Manager, Wendy
Dowhower, Supervising Accountant, Tyson Mordhorst, Senior Programmer Analyst and Nancy Spinelli, Accounting Clerk. 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,
df
Jordan Ayers
Deputy City Manager/Internal Services Director
xii
E A
Government Finance Officers Association
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, 2012
Executive Director/CEO
City of Lodi
Citizens
City Council
Library Boards and
Board I City Attorney I City Manager City Clerk 11 Commissions
Libra Deputy city
Library ' ManagerAntemal
Services Director
Parks, Rec. & Community
Cultural Development Electric Utility Public Works Fire Police
Services
i Number of Positions
Authorized: 410 Financial Budget/ Human Information
Budgeted: 381 Services Treasury Resources Systems
Division Division Division Division
FY 2012-2013
x;v
DIRECTORY OF OFFICIALS AND ADVISORY BODIES
CITY COUNCIL
Alan Nakanishi
Phil Katzakian
Larry Hansen
Bob Johnson
Joanne Mounce
ADVISORY BODIES
Planning Commission
Library Board
Recreation Commission
Site Plan and Architectural Review Committee
PRINCIPAL ADMINISTRATIVE OFFICERS
Konradt Bartlam
Jordan Ayers
Steve Schwabauer
Randi Johl-Olson
Dean Gualco
Larry Rooney
Jeff Hood
Wally Sandelin
Elizabeth Kirkley
Konradt Bartlam
Mark Helms
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
Parks, Recreation &
Cultural Services Director
Public Works Director
Electric Utility Director
Community Development Director
Police Chief
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.
INDEPENDENT AUDITOR'S REPORT
The Honorable Members of City Council
City of Lodi, California
Report on the Financial Statements
Sacramento
3000 S Street, Suite 300
Sacramento, CA 95816
916.928.4600
Walnut Creek
Oakland
LA/Century City
Newport Beach
San Diego
Seattle
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, 2013, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in
the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
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 Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend
on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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, 2013, and the respective_ changes in
financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
www.mgocpa.com
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the schedules of funding
progress for the pension plan and OPEB plan, and the schedule of revenues, expenditures and change in fund balance — budget and actual — for the General Fund
as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
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, the combining and individual nonmajor fund financial statements and schedules, the statistical section, the schedule of expenditures of
federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and the
continuing disclosure section are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules and the schedule of expenditures of federal awards are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the combining and individual nonmajor fund financial statements and schedules and the schedule of expenditures of federal awards are fairly stated
in all material respects in relation to the basic financial statements 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 do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 2, 2013 on our consideration of 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering City's internal control over financial reporting and compliance.
Sacramento, California
December 2, 2013
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, 2013.
FINANCIAL HIGHLIGHTS
• The assets of the City exceeded its liabilities at the close of the 2013 fiscal year by $255,021,098 (net position). Of this amount,
$15,984,880 is unrestricted.
• The City's total net position increased by $54,395,539 in fiscal year 2013.
• As of June 30, 2013, the City's governmental funds reported combined ending fund balances of $20,012,501, a decrease of $431,091 in
comparison with the prior year. Of this amount, $7,101,839 is available for spending at the City's discretion (unassigned fund balance).
• At the close of the fiscal year, fund balance for the general fund was $7,965,212, of which $7,614,044 is unassigned or 20.18% of total
general fund revenues of $37,723,271.
• The City's total long-term liabilities decreased by $53,420,185 (19.50%)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 position presents information on all of the City's assets and liabilities, with the difference between the two reported as net
position. Over time, increases or decreases in net position 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 position changed during the most recent fiscal year. All changes in
net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as revenues
pertaining to uncollected taxes and expenses pertaining to earned but unused vacation and sick leave.
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, recreation and cultural services. The business -type activities of the City include electric operations, wastewater
operations, water operations and public transit 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. All of the funds of the City can be divided into the following three
categories: Governmental funds, Proprietary funds, and Fiduciary funds.
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 may be 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 revenue funds 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.
I
• Internal Service funds are used to report activities that account for various employee benefits, self-insurance, 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.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. The activities of 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, they are 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.
Required 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 other post employment benefits (OPEB) to its employees, and schedules
comparing budget to actual amounts in the General Fund.
Combining 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 position may serve over time as a useful indicator of a government's financial position. The City's assets exceeded liabilities
by $255,021,098 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 position:
Net investment in capital assets
Restricted
Unrestricted (deficit)
Total net position
City of Lodi's Net Position
Governmental
Activities
2013 2012
$ 38, 750, 736
126,641,197
165,391,933
38,871,505
5,934,472
44,805,977
106,827,620
12,600,862
1,157,474
$ 120,585,956
35,198, 588
128,857,069
164,055,657
40,168,249
3,729,658
43,897,907
107,587,069
16,176,191
(3,605,510)
120,157,750
Business -type
Activities
2013
91,178,980
235,205,934
326,384,914
181,617,786
10, 331, 986
191,949,772
113, 008,124
6,599,612
14, 827,406
134,435,142
2012
103,092,730 $
225,752,808
328,845,538
233,741,227
13, 552, 502
247,293,729
109,582,092
6,533,121
(34,563,404)
81,551,809
Assets. The City's total assets decreased by $1,124,348. The decrease is primarily due to the following:
2013
129,929,716
361,847:131
491, 776, 847
220,489,291
16,266,458
2.36,755,749
219,835,744
19,200,474
15, 984, 880
$ 255,021,098
Total
2012
138,291,318
354;609,877
492,901,195
273, 909,476
17,282,160
291,191,636
217,169,161
22,709,312
(38,168,914)
201, 709; 559
Governmental activities. Total assets for the governmental activities had an increase of $1,336,276 or 0.81% resulting largely from the decrease
in debt service payments from the refunding of the 2002 Certificates of Participation ($1,182,736); the refund from San Joaquin County for
property tax administration overcharged in prior years, $695,795; revenue from recycled water, $320,000; and increase in rent from NCPA,
$439,013, offset by a decrease in loans receivable from the Lodi Hotel Investors, $1,084,000. Other insignificant activities offset the difference.
Business -type activities. Total assets for the business -type activities had a decrease of $2,460,624 or 0.75%. Capital assets increased by
$9,453,126 primarily from buildings and improvements, machinery and equipment, and vehicles, offset by the decrease in current and other assets
of $11,913,750, mainly from the decrease of restricted assets held by fiscal agent from the proceeds of the 2010 Water Certificates of Participation
($8,038,143) for the construction of the Surface Water Treatment Facility; decrease in cash and restricted cash due to other major projects, i.e.;
2
water meter program ($5,841,667); the decrease in development impact fees ($470,975); offset by the Greenhouse gas allowance of $2,018,000.
Other insignificant activities offset the difference.
Liabilities. The City's total liabilities decreased by $54,435,887 or 18.69%. The decrease is primarily due to the following:
Governmental activities. Total liabilities for the governmental activities increased by $908,070. This is attributed largely to the decrease in debt
service due to the refunding of the 2002 Certificates of Participation, $1,456,423, offset by the increase in self-insurance liability of $645,231.
Other insignificant activities offset the difference.
Business -type activities. Total liabilities for the business -type activities decreased by $55,343,957 or 22.38%. The decrease is primarily
attributable to the principal payments towards the various certificates of participation, $6,875,000; and the reduction of the pollution remediation
obligation of $45,448,874. Other insignificant activities offset the difference.
Net position. The. City's overall financial position has increased during the fiscal year. The net position has increased by $54,395,539, excluding
the restatement of $1,084,000, or 27.11%.
The largest portion ($219,835,744) of the City's net position 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 position, $19,200,474 (7.53%) represents resources that are subject to external restrictions on how they may
be used. The remaining balance of unrestricted net position amounts to $15,984,880. At the end of the current fiscal year, the City is able to
report positive balances in all categories of net position for the government as a whole. Unrestricted net position is positive for both the
governmental and business -type activities.
7
Revenues
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Property taxes
Othertaxes
Grants and contributions not restricted to
specific programs
Litigation -environmental lawsuits proceeds
Other
Total revenues
Expenses
General government
Public protection
Public works
Community development
Library
Parks and recreation
Interest on long-term debt
Electric
Wastewater
Water
Transit
Total expenses
Changes in net position before transfers
Transfers
Changes in net position
Net position at beginning of year,
as previously reported
Adjustment to loans receivable
Net position at beginning of year, as restated
Net position at end of year
Analysis of Changes in Net Position
City of Lodi's Change in Net position
Governmental Business -type
Activities
Activities
Total
2013
2012
2013
2012
2013
2012
$ 6,004,957
4,661,080
89,602,626
89,800,503 $
95,607,583
94,461,583
2,341,326
2,299,800
5,178,459
4,213,932
7,519,785
6,513,732
4,215,635
5,024,837
4,714,744
3,206,279
8,930,379
83231,116
12,217,633
12,102,780
12,217,633
12,102,780
10,804,737
10,825,658
10,804,737
10,825,658
9,382,422
9,277,277
9,382,422
9,277,277
1,106,400
1,106,400
2,024,143
2,184,288
1,755,400
1,810,063
3;779;543
3,994,351
46,990,854
46,375,720
102,357,629
99,030,777
149,348,483
145,406,497
8,943,223
9,380,968
8,943,223
9,380,968
25,929,936
25,432,210
25,929,936
25,432,210
10,546,173
10,247,617
10,5463173
10,247,617
1,049,897
1,003,008
1,049,897
1,003,008
1,341,845
1,381,524
1,341,845
1,381,524
2,932,819
2,912,632
2,932,819
2,912,632
416,322
1,032,716
416,322
1,032,716
61,106,066
62,599,298
61,106,066
62,599,298
13,422,950
17,440,897
13,422,950
17,440,897
(34,876,879)
7,953,480
(34,8763879)
7,953,480
4,140,592
4,255,963
4,140,592
4,255,963
51,160,215
51,390,675
43,792,729
92,249,638
94,952,944
143,640,313
(4,169,360)
(5,014,955)
58,564,900
6,781,139
54,395,539
1,766,184
5,681,567
1,261,227
(5,681,567)
(1,261,227)
1,512,206
(3,753,728)
52,883,333
5,519,912
54,395,539
1,766,184
120,157,750
123,911,478
81,551,809
76,031,897
201,709,559
199,943,375
(1,084,000)
(1,084,000)
119,073,750
123,911,478
81,551,809
76,031,897
200,625,559
199,943,375
$ 120,585,956
120,157,750
134,435,142
81,551,809 $
255,021,098
201,709,559
Governmental activities.
Net position for the governmental activities increased by $1,512,206 in the current fiscal year.
The key factors impacting the change in net position are:
• Charges for services increased by 29%, a net amount of $1,343,877 from the prior fiscal year largely from increased development activity
resulting in increased building permit fees ($232,245), plan check fees ($124,861), fire permit review and inspection fees ($80,747);
increase in revenues from late fees and utility reconnections, $319,600; revenue from recycled water, $320,000; increase in revenue
received from the After School program, $195,980; increase in police fees, $34,763; and $42,453 for Strike Team reimbursements.
• Capital grants and contributions decreased by $809,202 or 16% from the prior fiscal year. The decrease in capital contributions was
mainly attributable to the Prop 1 B funds used for the Lodi Avenue reconstruction project ($807,447), received in the prior year.
• Property taxes — increased by $114,853 or 0.9% compared to prior year. The economy is showing evidence of positive movement
particularly in the housing market. Rising home prices coupled with record lows in mortgage rates are helping the process to generate
sales, resulting in a slight increase in property tax revenues in the current year.
• Grants and contributions not restricted to specific programs increased by $105,145 or 1% basically from sales tax revenues which
increased by $104,008. The overall increase in sales tax is attributed to a general increase in consumer spending and steady increase in
auto sales spurred by low interest rates, easy credit and manufacturer's incentives.
• Other revenues decreased by $160,145 or 7% from prior fiscal year. This decrease is basically a reclassification of donations for the
Grape Bowl Improvements to capital contributions. The difference is offset by various small decreases in other revenues.
Expenses for governmental functions totaled $51,160,215, a decrease of $230,460 from the prior fiscal year.
Business -type activities.
Business -type activities increased the City's net position by $52,883,333 in the current year. The key elements of this increase are:
• Reduction of the pollution remediation obligation via water expenses of $45,448,874. A re-evaluation of the scope of the remaining
remedial work determined that much of the initially anticipated work is no longer necessary; as a result, the estimate has been revised to
reflect current anticipated level of remediation work.
• Wastewater and water rates were increased during the year resulting in increased charges for services revenues of $467,000 and
$357,813, respectively.
• Increase in capital contributions in the Transit Fund for the purchase of six CNG buses funded by federal funds (FTA), $1,839,790 and
Prop 1B, $946,950 and other projects funded by federal grants and Prop 113 funds (i.e.; facility upgrades, MSC solar project, $219,300;
Lodi Station Security improvements, $309,788).
• Increase in environmental lawsuits proceeds of $1,106,400 from PCE/TCE litigation.
• The City's Energy Cost Adjustment (ECA) was established with the intent to automatically adjust 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 $1,021,723.
• Operating grants and contributions increased by $964,527. The receipt of Greenhouse gas allowance (GHG) of $2,018,000, a new
revenue in the Electric Fund related to Assembly Bill 32: Global Warming Act, which set the 2020 greenhouse gas emissions reduction
into law and also adopted a regulation that established a system of market-based declining annual aggregate emission limits for sources
or categories of sources that emit greenhouse gases. In 2011, the California Air Resources Board (ARB) adopted the cap -and -trade
regulation. This program covers major sources of GHG emissions in the State such as refineries, power plants, industrial facilities, and
E
transportation fuels. The cap -and -trade program includes an enforceable emissions cap that will decline over time. The State distributes
allowances which are tradable permits, equal to emissions allowed under the cap.
• Operating expenses in the Transit Fund was reduced by $761,563 mainly from lower cost of operations. In prior years, the City of Gait
received their FTA allocations as a pass through the City, but beginning the FY 2012-13, Galt was no longer included in the City's urban
jurisdiction, hence, a reduction of $363,400. These reductions reduced the allocations from TDA and FTA in the current year.
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, unassigned 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 projects funds.
At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $20,012,501. This represents a
decrease of $431,091 in comparison to the prior year resulting from the increase in capital outlay and overall increase in expenditures offset by the
increase in total revenues and decrease in operating transfers out.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was
$7,614,044 while total fund balance was $7,965,212. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned
fund balance and total fund balance to total fund expenditures. Unassigned fund balance and total fund balance represent 21.86% and 22.87% of
total General Fund expenditures, respectively.
The fund balance of the General Fund increased by $1,676,259 during the current fiscal year. Key factors in this growth are as follows:
• Total revenues increased by $1,135,072, primarily from the recycled water revenue of $320,000; increase in rent,. $193,962; increase in
late fees, $240,500 and increase in reconnect fees, $79,100; increase in sales tax, $104,009; increase in property tax, $93,402 and real
property transfer tax $29,236; and increase in in reimbursable charges, $114,724. Other insignificant increase and decreases offset the
difference.
• Total expenditures increased by $1,406,314, primarily from the contribution to the other postemployment benefits (OPEB), $698,000;
increase in salaries, $522,976; increase in deferred compensation, $265,450, increase in overtime, $249,015, and increase in worker's
compensation benefits, $442,520; offset by the refund received from the County for prior years' overcharge of property tax administration,
$697,995.
• Transfers out for debt service decreased $717,771 due to the refunding of the 2002 certificates of participation; decrease in transfers to
Community Development, $40,200; decrease in transfers out to Parks, Recreation and Cultural Services, $467,825; decrease in transfers
for vehicle replacements, $310,000 and the decrease in transfer to the Capital Outlay Reserve in prior year, $643,072.
10
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 position at the end of the year for the Wastewater Fund was $14,258,298, Water Fund was $4,188,348 and for the Transit Fund,
$3,255,896. The Electric Fund unrestricted net position was ($6,875,136) and the Internal Services Funds unrestricted net position was $262,242.
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 budget and the final budget in the General Fund were a net increase in appropriations of $183,375. The increase
in appropriations can be briefly summarized as follows:
• $18,573 increase in general government
• $202 decrease in public protection
• $109,325 increase in public works
• $55,679 increase in library
Significant differences between the final budget and the actual revenues and expenditures can be briefly summarized as follows:
• Taxes — a favorable variance of $466,290 was due to positive variances in property tax ($104,387), real property transfer tax (21,179),
transient occupancy tax ($112,243), in -lieu of vehicle license fees ($75,237), card room tax ($44,566), business license tax ($64,962),
cable TV franchise fees ($41,251), and waste removal franchise fees ($26,872), offset by a negative variance in electric, gas and
industrial waste franchise ($24,407).
• Intergovernmental revenues — a favorable variance of $286,207 was mainly due to a positive variance in sales tax ($469,406) offset by a
negative variance in Police Hiring grant ($225,351).
• Fines, forfeits and penalties — a favorable variance of $310,670 resulted from a positive variance in late payment fees ($303,568) and
utility reconnection fees ($111,728), offset by a negative variance in vehicle code and moving violation fines ($116,077).
• For expenditures, a favorable variance between the final budget and actual expenditures of $1,050,368 was due to savings from
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, 2013, amounts to $361,847,131 (net of
accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery and equipment, vehicles,
infrastructure, works of art, and construction in progress. The total increase in the City's investment in capital assets for the current fiscal year was
$7,237,254, a 2.04% increase (a 1.72% decrease in governmental activities and 4.19% increase in business -type activities) as shown in the table
below.
A significant increase in machinery and equipment compared to prior year was primarily due to the ongoing improvements to the White Slough
Pollution Control Facility; the Surface Water Treatment Plant construction costs; and the water meter installation project. The increase in vehicles
was the addition of six CNG buses in the transit operations.
Additional information on the City's capital assets can be found in Note 6 on pages 49-51 of this report.
12
Changes in Capital Assets, Net of Depreciation
Governmental Activities
Business -type
Activities
Total
2013
2012
2013
2012
2013
2012
Land
$ 24,094,424 $
23,693,292 $
5,535,718 $
5,535,718 $
29,630,142 $
29,229,010
Buildings and Improvements
37,263,520
37,729,107
31,368,774
32,016,153
68,632,294
69,745,260
Machinery and Equipment
1,064,146
1,495,080
191,367,138
148,320,501
192,431,284
149,815,581
Vehicles
816,472
872,518
3,033,279
1,179,412
3,849,751
2,051,930
Infrastructure
57,023,439
61,364,827
57,023,439
61,364,827
Work of Art
304,907
304,907
304,907
304,907
Construction in Progress
6,074,289
3,397,338
3,901,025
38,701,024
9,975,314
42,098,362
Total
$ 126,641,197 $
128,857,069 $
235,205,934 $
225,752,808 $
361,847,131 $
354,609,877
A significant increase in machinery and equipment compared to prior year was primarily due to the ongoing improvements to the White Slough
Pollution Control Facility; the Surface Water Treatment Plant construction costs; and the water meter installation project. The increase in vehicles
was the addition of six CNG buses in the transit operations.
Additional information on the City's capital assets can be found in Note 6 on pages 49-51 of this report.
12
Long-term debt
At the end of the current fiscal year, the City had total bonded debt outstanding of $179,442,636. Of this amount, $19,568,577 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 $159,874,059 from the business -type activities consists of $37,621,906 for the Water Fund; $51,920,344 for the
Wastewater Fund; and $70,331,809 for the Electric Fund.
City of Lodi's Outstanding Debt
Governmental Business -type
Activities activities Total
Certificates of Participation $ 19,568,577 159,874,059 179,442,636
The City's total bonded debt decreased by $8,155,794 during the current fiscal year
Bond Rating
In June 2010, Standard & Poor's Rating Services affirmed the rating on outstanding electric utility debt instruments of 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 instruments to A+ with a stable outlook in May 2011, as part of its global ratings recalibration.
In October 2010, Standard & Poor's Rating Services issued a rating of AA- with a stable outlook in regards to the $38,665,000 Water Revenue
bonds. Moody's Investor Services assigned a rating of Aa3 to this new issue.
On August 1, 2011, Fitch Rating Services affirmed the rating on outstanding public improvement bonds at AA- and assigned an implied general
obligation bond rating of AA. The rating outlook was revised to stable from negative as a result of the City's successful improvement of its general
fund position and maintaining its low debt profile.
On August 7, 2012, Fitch Rating Services and Standard & Poor's Rating Services issued a rating of AA- and A with a stable outlook, respectively,
in regards to the $19,080,000 2012 Refunding bonds; and an A+ with a stable outlook rating from both rating agencies in regards to the
$17,105,000 2012 Refunding Wastewater Revenue bonds.
Additional information on the City's long-term debt can be found in Note 8 on pages 52-58 of this report
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The impacts of the global economic recession continue to affect Lodi's families, businesses, institutions and the City. Although economic times
continue to be somewhat difficult throughout the region, Lodi is growing. General Fund revenues are projected to increase for the .second
consecutive year.
This past year has seen the maturation of the Costco and Home Depot stores that opened in 2012 in a commercial development in the
southeastern corner of the City. Additional retailers are moving forward with plans to complete other sections of the development. The City also
13
received a favorable ruling on litigation regarding a Wal-Mart Environmental Impact Report and expects the retailer to be open for business late in
the fiscal year.
The viability of the General Fund continues to be of greatest concern. The General Fund is dependent upon tax revenues and is most vulnerable
to economic fluctuations. The City has reduced its workforce by 20% over the past nine years, from 470 full-time budgeted employees in 2004/05
to 377 full-time budgeted employees in 2013/14. Employee furloughs will be ending during the budget year. Although there have been reductions
in frequency, or delays in timeliness, the City nevertheless continues to offer the same basic range of municipal services.
The 2013-14 budget has several issues that were taken into consideration: employee costs and contributions; capital programs; and cost
increases beyond the City's control.
The City has been operating under annual concession agreements with all of its bargaining units. While concession agreements have allowed the
City to meet its budgetary requirements, such concession agreements are not conducive to long-term planning. Of the City's nine bargaining
units, eight have agreements that expired during FY 2011/12. The City has negotiated successor agreements with all of these units, along with
modifying the benefits for Executive, Council Appointees and Confidential employees. All nine bargaining unit agreements expire in fiscal year
2013/14.
Employee costs and contributions — Prior to the economic downturn, Lodi aggressively moved to manage employee expenses. Positions not
deemed vital to City operations were held vacant, and other departmental expenses were closely monitored. Importantly, as the economy
plummeted, in March 2009, City employees made a number of temporary salary and benefit concessions to reduce salary costs, including salary
reductions, furloughs, and waiving of the City's deferred compensation match. These concessions alone were valued at over $2.3 million for FY
2009-10, $2.7 million for FY 2010-11, and $3.0 million for FY 2011-12. Consequently, the City has largely avoided employee layoffs and drastic
service cuts so common in other cities.
As the City renegotiated with its bargaining units, three principal elements of successor agreements were to: (1) have all employees pay the full
share of the employee portion of pension costs; (2) cap the City's exposure to medical cost increases; and (3) establish a second tier retirement
benefit for new employees.
The City has also used early retirement to reduce its work force. Over the course of the last five years, the City has offered a retirement incentive
multiple times to selected employee classifications. As employees have accepted the incentive, the City has left the positions vacant. A total of
40 employees have taken advantage of the retirement incentive.
Capital programs — The City continues to utilize one-time funds for capital maintenance, rather than ongoing operations. In prior years, the City
assessed its physical plant and is using one-time funds generated by the Lodi Energy Center, to address deferred maintenance projects on its
buildings. Scheduled to be completed this year are a retrofit of a portion of the unused space in the City hall annex and resurfacing of the various
city owned parking lots in the downtown area as well as the improvements to the parking lot at the Municipal Services Center and Kofu Park.
Additionally, the FY 2013/14 budget allocates funding for the replacement of the City's financial and billing systems. The Municipal Service Center
/Kofu Park and financial/billing system projects are jointly funded by the General Fund and the enterprise funds. The above projects total $1.8.
million.
Costs beyond the City's control — While revenues have increased slightly, the cost of retirement and insurance continue to rise. In the last few
years, CalPERS has revised a number of its actuarial assumptions and policies. Rates for 2013/14 incorporate the impact of changes to the
14
discount rate approved in prior years. Rates for Miscellaneous plan employees rose 1.8 percent while Safety plan rates increased 4.3 percent.
Total additional cost to the City is about $330,000. Cal PERS has provided estimated rates for 2014/15 that reflect a projected cost increase of an
additional $735,000. For FY 2015/16 and beyond, the City expects rates to continue to increase, advised by the CalPERS chief actuary.
Preliminary estimates indicate that rates for the Miscellaneous plans could be in excess of 26 percent and Safety plans in excess of 48 percent of
salary for the 2019/20 fiscal year. Note that these cost increases fall solely on the employer portion of the rate. Estimated annual cost would be
about $5 million more than FY 2013/14.
A second cost increase that is a cause of concern is medical insurance. While the City has negotiated a medical insurance cap with its bargaining
units, costs are expected to increase and impact the net pay of the workforce. Staff is evaluating the impact of the Affordable Care Act and no
provision has been made in the budget.
A third cost increase that is a cause of concern is worker's compensation. The City is self-insured for worker's compensation costs. There has
been a gradual increase in the cost and severity of claims and the City expects that the actuarial liability will also increase.
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 housing values better than the surrounding communities.
The City's unemployment rate continues to track roughly 3 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, even more jobs can be found 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.
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
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BASIC FINANCIAL STATEMENTS
The Government -wide Financial Statements provide a broad 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 Funds.
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
Loans receivable
Advance receivable
Inventory
Other assets
Deferred charges
Capital assets, net:
Nondepreciable
Depreciable, net
TOTAL ASSETS
LIABILITIES
Accounts payable and accrued liabilities
Accrued salaries and wages
Accrued interest
Unearned revenue
Long-term liabilities:
Due within one year
Due in more than one year
TOTAL LIABILITIES
NET POSITION
Net investment in capital assets
Restricted for:
Capital projects
Debt service
Other purposes
Unrestricted (deficit)
TOTAL NET POSITION
The notes to the financial statements are an integral part of this statement.
CITY OF LODI
STATEMENT OF NET POSITION
June 30, 2013
Governmental Business -type
Activities Activities
35,531,414
3,824,364
23,644
19,953
(1,842,596)
752,684
10,355
44,707
142,127
9,918
234,166
30,473,620
96,167,577
165,391,933
30,930,224
8,547,280
23,941
1,842,596
1,791,183
36,375,125
132,401
5,270,130
2,990,628
9,489
3,265,983
9,436,743
225,769,191
326,384,914
4,924,299 6,296,973
714,085
211,203 2,634,331
84,885 1,400,682
3,779,267
10,470,090
35, 092,238
171,147,696
44,805,977
191,949,772
106,827,620
113,008,124
11,434,796
6,599,612
1,166,066
1,157,474
14,827,406
$ 120,585,956
134,435,142
17
Total
$ 66;461,638
12,371,644
23,644
43,894
2,543,867
36,385,480
177,108
5,270,130
3,132,755
19,407
3,500,149
39,910,363
321,936,768
491,776,847
11,221,272
714,085
2,845534
1,485,567
14,249,357
206,239,934
236,755,749
219;835,744
11,434,796
6,599,612
1,166,066
15,984,880
$ 255,021,098
CITY OF LODI
STATEMENT OF ACTIVITIES
Year ended June 30, 2013
General revenues:
Taxes:
Property taxes
Franchise taxes
Business license tax
Transient occupancy tax
Grants and contributions not restricted to specific programs
Investment earnings
Litigation - environmental lawsuits proceeds
Other
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year, as previously reported
Adjustment to loans receivable
Net position, beginning of year, as restated
Net position, end of year
The notes to the financial statements are an integral part of this statement.
18
12,217,633
12,217,633
8,734,866
Net (Expense) Revenue and
1,524,428
1,524,428
Program Revenues
Changes
in Net Position
9,382,422
43,719
Operating
Capital
1,106,400
1,106,400
Functions/Programs
Expenses
Charges for
Services
Grants and
Grants and
Governmental
Business -type
PRIMARY GOVERNMENT:
Contributions
Contributions
Activities
Activities
Total
Governmental activities:
General government
Public protection
$ 8,943,223
2,337,372
86,173
251
(6,519,427)
$
(6,519,427)
Public works
25,929,936
537,790
1,266,544
183,912
(23,941,690)
(23,941,690)
Community development
10,546,173
1,049,897
223,407
1,458,264
962,088
3,689,817
(5,670,861)
(5,670,861)
Library
Parks & recreation
1,341,845
43,850
26,521
408,367
(1,271,474)
408,367
(1,271,474)
Interest on long-term debt
2,932,819
416,322
1,404,274
341,655.
(1,186,890)
(1,186,890)
Total governmental activities
51,160,215
6,004,957
2,341,326
4,215,635
(416,322).
(38,598,297)
(416,322)
(38,598,297)
Business -type activities:
Electric
Wastewater
61,106,066
63,229,645
2,018,416
264,255
4,406,250
4,406,250
Water
13,422,950
13,747,216
29,338
353,604
353,604
Transit
(34,876,879)
12,441,039
633,246
767,350
48,718,514
48,718,514
Total business -type activities
4,140,592
43,792,729
184,726
89,602,626
2,526,797
5,178,459
3,653,801
4,714,744
2,224,732
55,703,100
2,224,732
55,703,100
Total primary government
$ 94,952,944
95,607,583
7,519,785
8,930,379
(38,598,297)
55,703,100 $
17,104,803
General revenues:
Taxes:
Property taxes
Franchise taxes
Business license tax
Transient occupancy tax
Grants and contributions not restricted to specific programs
Investment earnings
Litigation - environmental lawsuits proceeds
Other
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year, as previously reported
Adjustment to loans receivable
Net position, beginning of year, as restated
Net position, end of year
The notes to the financial statements are an integral part of this statement.
18
12,217,633
12,217,633
8,734,866
8,734,866
1,524,428
1,524,428
545,443
545,443
9,382,422
9,382,422
43,719
497,096
540,815
1,106,400
1,106,400
1,980,425
1,258,304
3,238,729
5,681,567
(5,681,567)
40,110,503 (2,819,767) 37,290,736
1,512,206 52,883,333 54,395,539
120,157,750 81,551,809 201,709,559
(1,084,000) (1,084,000)
119,073,750 81,551,809 200,625,559
$ 120,565,950 134,435,142 $ 255,021,096
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 Motor Vehicle 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 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 maintenance and debt service.
E
Sewer 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 Types
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
CITY OF LODI
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2013
The notes to the financial statements are an integral part of this statement. 21
Other
Total
General
Governmental
Governmental
Fund
Funds
Funds
ASSETS
Cash and investments
$
7,649,868
15,144,099
$ 22,793,967
Restricted assets
10,355
10,355
Receivables:
Accounts, net
3,301,609
500,130
3,801,739
Property taxes
23,644
23,644
Interest
6,632
6,273
12,905
Due from other funds
463,962
151,451
615,413
Due from other governmental agencies
67,391
685,293
752,684
Loans receivable
44,707
44,707
Inventory
3,339
3,339
Other assets
8,567
1,351
9,918
Total assets
$
11,521,673
16,546,998
$ 28,068,671
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and other liabilities
$
2,802,864
1,951,620
$ 4,754,484
Accrued salaries and wages
714,085
714,085
Due to other funds
615,413
615,413
Advances from other funds
1,842,596
1,842,596
Deferred revenue
39,512
90,080
129,592
Total liabilities
3,556,461
4,499,709
8,056,170
Fund balances:
Nonspendable
Inventory
3,339
3,339
Other assets
8,567
8,567
Restricted
Capital projects
11,390,089
11,390,089
Debt service
Other purposes
1,166,066
1,166,066
Committed
Video- related capital projects
277,209
277,209
Assigned
Encumbrances
65,392
65,392
Unassigned
7,614,044
(512,205)
7,101,839
Total fund balances
7,965,212
12,047,289
20,012,501
Total liabilities and fund balances
$
11,521,673
16,546,998
$ 28,068,671
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
TO THE STATEMENT OF NET POSITION
June 30, 2013
Amounts reported for governmental activities in the statement of net position 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
Nondepreciable capital 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
Deferred charge for issuance costs (to be amortized over life of debt)
Issuance premium (to be amortized as interest expense)
Unamortized gain on defeasance (to be amortized as interest expense)
Accrued interest
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 management to charge the costs of general
liability insurance, workers' compensation insurance, health benefits insurance,
other insurance, employee benefits 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 position
Net position of governmental activities
The notes to the financial statements are an integral part of this statement. 22
20,012,501
30,473,620
96,137,187
(6,584,077)
(19,325,000)
234,166
(977,910)
489,333
(211,203)
44,707
292,632
$ 120,585,956
CITY OF LODI
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year ended June 30, 2013
Other financing sources (uses)
Transfers in
5,367,990
Other
Total
Transfers out
General
Governmental
Governmental
Refunding bonds issued
Fund
Funds
Funds
Revenues:
(19,847,510)
(19,847,510)
Taxes
$ 23,022,370
$
23,022,370
Licenses and permits
62,582
858,549
921,131
Intergovernmental revenues
10,531,871
4,093,766
14,625,637
Charges for services
1,105,178
2,774,645
3,879,823
Fines, forfeits and penalties
1,628,870
2,600
1,631,470
Investment and rental income
979,100
410,282
1,389,382
Miscellaneous revenue
393,300
684,539
1,077,839
Total revenues
37,723,271
8,824,381
46,547,652
Expenditures:
Current:
General government
5,943,193
2,579,285
8,522,478
Public protection
25,920,654
361,031
26,281,685
Public works
1,555,833
2,975,881
4,531,714
Community development
1,110,620
1,110,620
Library
1,410,657
1,410,657
Parks and recreation
2,370,375
2,370,375
Capital outlay
6,270,442
6,270,442
Debt service:
Interest and fiscal charges
483,420
483,420
Bond issuance costs
244,908
244,908
Advance refunding escrow
1,689,269
1,689,269
Total expenditures
34,830,337
18,085,231
52,915,568
Excess (deficiency) of revenues over (under) expenditures
2,892,934
(9,260,850)
(6,367,916)
Other financing sources (uses)
Transfers in
5,367,990
7,177,737
12,545,727
Transfers out
(6,584,665)
(279,495)
(6,864,160)
Refunding bonds issued
20,102,768
20,102,768
Payment to refunded bond escrow agent
(19,847,510)
(19,847,510)
Total other financing sources (uses)
1,216,675
7,153,500
5,936,825
Net change in fund balances
1,676,259
(2,107,350)
(431,091)
Fund balances, beginning of year
6,288,953
14,154,639
20,443,592
Fund balances, end of year
$ 7,965,212
12,047,289 $
20,012,501
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 BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Year ended June 30, 2013
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 provide current financial resources to governmental funds,
but issuing debt proceeds increases long-term liabilities in the statement of net position. Repayments
of the principal are expenditures in the governmental funds, but the repayments
reduce long-term liabilities in the statement of net position.
Proceeds from long-term debt:
Refunding bonds issued
Bond premium
Cost of issuance
Payment to escrow agent for refunding
Internal service funds are used by management to 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 reported in the funds since they provide current financial resources are not reported
as revenues in the statement of activities this year since they were reported in the previous year.
Other expenses in the statement of activities that do not use current financial resources are not reported as
expenditures in the governmental funds.
Change in compensated absences
Amortization of gain on defeasance
Amortization of issuance costs
Amortization of bond premium
Change in accrued interest
Change in net position of governmental activities
The notes to the financial statements are an integral part of this statement. 24
$ (431,091)
6,270,442
450,223
(8,935,089)
(19,080,000)
(1,022,768)
244,908
21,536,779
2,338,797
(31,002)
114,651
(22,446)
(10,742)
44,858
44,686
$ 1,512,206
CITY OF LODI
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
June 30, 2013
LIABILITIES
Current liabilities:
Accounts payable and other liabilities
Accrued interest
Unearned revenue
Self-insurance liability
Accrued compensated absences
Certificates of participation payable
Total current liabilities
Noncurrent liabilities:
Self-insurance liability
Accrued compensated absences
Certificates of participation payable
Net OPEB obligation
Pollution remediation obligation
Total noncurrent liabilities
TOTAL LIABILITIES
NET POSITION
Net investment in capital assets
Restricted:
Debt service
Unrestricted
TOTAL NET POSITION
2,643,671
202,760
2,831,252
619,290
6,296,973
169,815
Govemmental
592,699
178,718
2,634,331
Activities -
868,218
532,464
Business -type Activities -Enterprise Funds
Internal
1,911,196
Nonmajor Fund
210,648
Service
ASSETS
Electric
Wastewater
Water
Transit
Total
Funds
Current assets:
9,241,038
5,637,231
4,748,373
1,175,434
20,802,076
Cash and investments
Restricted cash and investments
$ 6,636,200
13,695,513
9,044,659
1,553,852 $
30,930,224 $
12,737,447
Restricted assets with fiscal agents
12,164,989
747,074
15,983,265
5,309,947
1,367,714
15,983,265
18,222,010
65,856,556
Receivables:
36,777,206
149,924,982
Accounts, net
Interest
5,482,841
889,279
967,551
1,207,609
8,547,280
22,625
Due from other governmental agencies
3,683
7,602
11,794
862
23,941
7,048
Advance receivable
5,270,130
4,837
55,170
1,731,176
1,791,183
191,949,772
Loans receivable
132,401
3,857,860
43,278.921
5,270,130
132,401
15,609,290
Inventory
Other assets
2,672,122
22,226
296,280
2,990,628
138,788
Total current assets
32,362,366
8,214
15,374,745
1,275
31,669,941
4,493,499
9,489
83,900,551
12,905,908
Noncurrent assets:
57,537,219
54,450,401
18,865,186 $
134,435,142 $
292,632
Restricted assets with fiscal agents
2,169,850
2,169,850
Advances to other funds
633,571
1,209,025
1,842,596
Deferred charges
Capital assets, net:
2,200,961
687,020
378,002
3,265,983
Nondepreciable
Depreciable, net
763,785
4,184,004
3,483,657
1,005,297
9,436,743
Total capital assets
43,976,506
88,098,337
79,090,355
14,603,993
225,769,191
30,390
Total noncurrent assets
44,740,291
92,282,341
82,574,012
15,609,290
235,205,934
30,390
TOTAL ASSETS
46,941,252
95,772,782
84,161,039
15,609,290
242,484,363
30,390
79,303,618
111,147,527
115,830,980
20,102,789
326,384,914
12,936,298
LIABILITIES
Current liabilities:
Accounts payable and other liabilities
Accrued interest
Unearned revenue
Self-insurance liability
Accrued compensated absences
Certificates of participation payable
Total current liabilities
Noncurrent liabilities:
Self-insurance liability
Accrued compensated absences
Certificates of participation payable
Net OPEB obligation
Pollution remediation obligation
Total noncurrent liabilities
TOTAL LIABILITIES
NET POSITION
Net investment in capital assets
Restricted:
Debt service
Unrestricted
TOTAL NET POSITION
2,643,671
202,760
2,831,252
619,290
6,296,973
169,815
1,862,914
592,699
178,718
2,634,331
868,218
532,464
1,400,682
1,911,196
261,200
210,648
25,485
23,680
521,013
44,094
4,473,253
4.631,124
844,700
9,949,077
9,241,038
5,637,231
4,748,373
1,175,434
20,802,076
2,125,105
7,205,866
621.688
683,857
62,169
1,367,714
62,169
65,856,556
47,289,220
36,777,206
149,924,982
3,250,526
19,855,000
19,855,000
66,480,244
47.973,077
56,632,206
62169
171,147,696
10,518,561
75,721,282
53,610,308
61,380,579
1,237,603
191,949,772
12,643.666
3,857,860
43,278.921
50,262,053
15,609,290
113,008,124
30,390
6,599,612
6,599,612
(6,875,136)
14,258,298
4,188,348
3,255,896
14,827,406
262,242
$ 3,582,336
57,537,219
54,450,401
18,865,186 $
134,435,142 $
292,632
The notes to the financial statements are an integral part of this statement. 25
OPERATING REVENUES
Charges for services
OPERATING EXPENSES
Personnel services
Supplies, materials and services
Pollution remediation
Utilities
Depreciation and amortization
Claims
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES)
Investment income
Interest expense
Operating grants
Greenhouse gas allowance
Litigation -environmental lawsuits proceeds
Loss on disposal of capital assets
Other revenues
TOTAL NONOPERATING REVENUES (EXPENSES)
INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions
Transfers out
Net capital contributions and transfers
Change in net position
NET POSITION - BEGINNING OF YEAR
NET POSITION - END OF YEAR
The notes to the financial statements are an integral part of this statement.
CITY OF LODI
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
Year ended June 30, 2013
26
Governmental
Activities -
Business -type Activities - Enterer se Funds
Internal
Nonmajor Fund
Service
Electric
Wastewater
Water
Transit
Total
Funds
$ 63,229,645
13,747,216
12,441,039
184,726 $
89,602,626 $
12,684,277
5,279,504
3,089,930
2,272,568
316,744
10,958,746
932,989
10,811,560
1,900,710
2,882,547
2,228,469
17,823,286
7,015,049
(45,448,874)
(45,448,874)
39,238,460
683,508
683,635
64,971
40,670,574
21,007
1,749,059
4,283,528
2,566,638
884,216
9,483,441
1,448
2,503,895
57,078,583
9,957,676
(37,043,486)
3,494,400
33,487,173
10,474,388
6,151,062
3,789,540
49,484,525
(3,309,674)
56,115,453
2,209,889
92.508
301,347
97,256
5,985
497,096
23,981
(4,027,483)
('2,646,676)
(2,166,607)
(8,840,766)
633,246
2,526,797
3,160,043
2,018,416
2,018,416
1,106,400
1,106,400
(818,598)
(646,192)
(1,464,790)
652.380
227,530
269,335
109,059
1,258,304
104,927
(1,264.179)
(2.936,397)
(60,370)
1,995,649
(2,265,297)
128,908
4,886,883
853,143
49,424,155
(1,314,025)
53,850,156
2.338,797
264,255
29,338
767,350
3,653,801
4,714,744
(3,169,967)
(1,451,480)
(1,060,120)
(5,681,567)
(2,905,712)
(1,422,142)
(292,770)
3,653,801
(966,823)
1,981,171
(568,999)
49,131,385
2,339,776
52,883,333
2,338,797
1,601,165
58,106,218
5,319,016
16,525,410
81,551,809
(2,046,165)
$ 3,582,336
57,537,219
54,450,401
18,865,186 $
134,435,142 $
292,632
26
Cash flows from operating activities:
Receipts from customers and users
Receipts from intertund services provided
Cash paid to suppliers for goods & services
Payments to employees
Payments for intertund services provided
Proceeds from litigation settlements
Net cash provided by (used in) operating activities
Cash flows from noncapital financing activities:
Operating grants
Loaned to other funds
Repaid from other funds
Received -greenhouse gas allowance
Transfers out
Net cash provided by (used in) noncapital financing activities
Cash flows from capital and related financing activities:
Proceeds from Certificates of Participation
Fees received for water meter installations
Issuance costs - Certificates of Participation
Acquisition and construction of capital assets
Fees received from developers
Capital grants received
Principal payments on debt
Interest payments on debt
Net cash used in capital and related financing activities
Cash flows from investing activities:
Interest on investments
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
CITY OF LODI
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
Year ended June 30, 2013
(continued)
27
Governmental
Business -type
Activities - Enterprise Funds
Activities-
Fund
Internal Service
ElectricNonmajor
Wastewater
Water
Transit
Total
Funds
$ 69,441,625
13,898,065
12,566,669
293,785 $
96,200,144 $
90,907
147,230
147,230
12,664,277
(48,547,384)
(2,215,380)
(5,486,575)
(2,372,995)
(58,622,334)
(9,245,655)
(5,295,035)
(3,066,926)
(2,255,605)
(316,376)
(10,933,942)
(932,823)
(2,503)
(628,763)
(643,154)
(49,749)
(1,324,169)
1,106,400
1,106,400
15,743,933
7,986,996
5,287,735
(2,445,335)
26,573,329
2,596,706
633,246
1,346,495
1,979,741
(675,000)
(675,000)
96,429
96,429
2,018,416
2,018,416
(3,169,967)
(1,451,480)
(1,060,120)
(5,681,567)
(1,151,551)
(2,030,051)
(426,874)
1,346,495
(2,261,981)
157,378
157,378
585,965
585,965
(145,828)
(145,828)
(1,678,255)
(1,047,362)
(13,243,546)
(3,817,303)
(19,786,466)
6,226
29,338
2,529
38,093
2,576,216
2,576,216
(4,575,000)
(1,500,000)
(800,000)
(6,875,000)
(3,839,396)
(2,559,804)
(2,168,606)
(8,567,806)
('10,086,425)
(5,066,278)
(15,623,658)
(1,241,087)
(32,017,448)
66,125
165,006
89,308
9,726
330,165
28,632
4,572,082
1,055,673
(10,673,489)
(2,330,201)
(7,375,935)
2,625,338
14,229,107
13,386,914
41,011,360
3,884,053
72,511,434
10,112,109
$ 18,801,189
14,442,587
30,337,871
1,553,852 $
65,135,499 $
12.737,447
(continued)
27
Reconciliation to the statement of net position:
Cash and investments
Restricted cash and investments
Restricted assets with fiscal agents - current
Total cash and cash equivalents
Reconciliation of operating income (loss) to net cash provided by
(used in) operating activities:
Operating Income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization
Proceeds from litigation settlements
Other revenues
Change in assets and liabilities:
Decrease in loans receivable
Increase in accounts receivable
Decrease in advance receivables
Increase in due from other governmental agencies
Decrease (increase) in inventory
Increase in other assets
Increase (decrease) in accounts payable and other liabilities
Increase (decrease) in compensated absences
Increase in self-insurance liability
Decrease in pollution remediation obligation
Decrease in net OPER obligation
Net cash provided by (used in) operating activities
Noncash Investing, Capital and Financing Activities
Capital asset contributions
Book value of disposed capital assets
Defeasance of old costs of issuance
Costs of issuance paid out of debt proceeds
Refunding debt proceeds deposited into escrow
Defeasance of old debt
CITY OF LODI
STATEMENT OF CASH FLOWS - continued
PROPRIETARY FUNDS
Year ended June 30, 2013
$ 258,029
The notes to the financial statements are an integral part of this statement. 28
818,598
342,669
88,541
18,688,528
17,370,324
178,856
$ 436,885
646,192 1,464,790
Governmental
Business -type
Activities - Enterprise Funds
Activities-
ElectricNonmajor
Wastewater
Water
Fund
Transit
Total
Internal Service
Funds
$ 6,636,200
13,695,513
9,044,659
1,553,852 $
30,930,224 $
12,737,447
15,983,265
15,983,265
12,164,989
747,074
5,309,947
18,222,010
$ 18,801,189
14,442,587
30,337,871
1,553,852 $
65,135,499 $
12,737,447
$ 6,151,062
3,789,540
49,484,525
(3,309,674) $
56,115,453 $
2,209,889
1,749,059
4,283,528
2,566,638
884,216
9,483,441
1,448
1,106,400
1,106,400
652,380
227,530
269,335
109,059
1,258,304
104,927
112,987
112,987
(599,472)
(67,230)
(143,705)
(810,407)
(14,020)
6,306,302
6,306,302
(4,837)
(4,837)
466,169
(10,252)
(65,053)
390,864
(9,619)
(4,614)
(4,614)
920,977
(249,673)
(2,498,494)
(129,304)
(1,956,494)
29,751
{15,531)
23,004
16,963
368
24,804
166
645,231
(45,448,874)
(45,448,874)
$ 15,743,933
7,986,996
5,287,735
(2,445,335) $
26,573,329 $
(371,067)
2,596.706
$ 258,029
The notes to the financial statements are an integral part of this statement. 28
818,598
342,669
88,541
18,688,528
17,370,324
178,856
$ 436,885
646,192 1,464,790
CITY OF LODI
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
June 30, 2013
ASSETS
Cash and investments
Receivables:
Interest
TOTAL ASSETS
LIABILITIES
Agency obligations
NET POSITION
The notes to the financial statements are an integral part of this statement. 29
Private -Purpose
Trust Funds
$ 274,917 $
274,917
$ 274,917 $
Agency Fund
396,984
223
397,207
397,207
CITY OF LODI
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
Year ended June 30, 2013
ADDITIONS
Investment and rental income
DEDUCTIONS
Current
Library
CHANGE IN NET POSITION
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
The notes to the financial statements are an integral part of this statement. 30
Private -Purpose
Trust Funds
$ 20,270
4,077
16,193
258,724
$ 274,917
NOTES TO BASIC FINANCIAL STATEMENTS
CITY OF LODI
Notes to Basic Financial Statements
June 30, 2013
(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 Certificates of 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 basic financial 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.
The Lodi Public Financing Authority (LPFA) was created by a Joint Exercise of Powers Agreement between the City and the Industrial
Development Authority (IDA) on July 21, 2010, for the purpose of assisting the City in the financings of public capital improvements. The 2010
Water Revenue Certificates of Participation Series A and B were issued in October 2010 to provide funds for a new water treatment facility.
31
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
The City Council constitutes the Board of Directors of LPFA. The funds of LPFA have been included in the Enterprise (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 position 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
these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately
from business -type activities that rely, to 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. All 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.
32
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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. All other revenues are considered to be
measurable and available when the City receives cash.
The City reports the 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 reports the 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.
33
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Agency Funds account 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.
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. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
(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.
(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.
(f) Restricted Assets with Fiscal Agents
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.
34
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
In the Electric Enterprise Fund, restricted assets represent the proceeds of the 2002D and the 2008 Certificates of Participation restricted for
debt service. In the Capital Outlay Reserve Fund, the restricted assets represent the proceeds of the 2012 Refunding bonds restricted for debt
service. In the Wastewater fund, the restricted assets represent the proceeds of the 2004A and the 2007A Certificates of Participation issued for
improvements to the City's wastewater collection, treatment and disposal system. In the Water Fund, restricted assets represent the'proceeds of
the 2010A and 2010B Certificates of Participation issued for the purpose of providing funds to pay the cost of a new Water Treatment Facility.
(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, 2012, upon which the 2012-13 levy was based, was $4,973,587,000.
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, 2013, 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
governmental funds.
In 1993, the City made an agreement with 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) 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.
35
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(i) 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.
0) Long-term Obligations
In the government -wide financial statements and in the proprietary fund 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 position. 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.
(k) Loans Receivable
Loans receivable reported in the HOME Program & Community Development Block Grants Special Revenue Fund represent funds loaned to
first-time homebuyers. Loans receivable in the Electric Enterprise Fund represent loans to eligible industrial and commercial customers
participating in the Lodi Energy Efficiency Financing Pilot Project.
In December 2009, the City entered into a contractual relationship with the California Department of Housing and Community Development
(HCD) to administer a First-time Homebuyers Program. The loan program is intended to provide deferred down -payment assistance to first-time
homebuyers who are at or below 80% of the median income, for the purchase of homes within Lodi. The loan bears 2% interest and is due and
payable 30 years from close of escrow, upon transfer of the property or when the home is no longer owner -occupied, whichever comes first.
In October 2010, the City established a loan fund in its public benefits program from which G2 electric utility rate commercial and industrial
customers may borrow money to implement energy conservation projects in their facilities. The loan is at zero interest rate payable in two years
capped at $50,000 per customer. As of June 30, 2013, a total of seventeen loans to industrial and commercial customers have been approved.
36
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(1) 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 12).
(m) Inventory
Other governmental funds 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.
(n) Deferred Charges
Deferred charges reported in the Electric Enterprise Fund include costs incurred in connection with the issuance of the 2008 Certificates of
Participation Series A amortized over 24 years. The deferred charges reported in the Wastewater Enterprise Fund include costs incurred on the
issuance of the 2003B and 2007A Certificates of Participation amortized over 20 years and the 2012 Refunding Certificates of Participation
amortized over 11 years. Deferred charges reported in the Water Enterprise Fund include costs incurred in the issuance of the 2010 Certificates
of Participation Series A and B amortized over 30 years. Deferred charges reported in the governmental activities include costs incurred in the
issuance of the 2012 Refunding Certificates of Participation.
(o) 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.
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 position. This capitalization included infrastructure that could be identified and has been acquired since July 1, 1980.
37
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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
(p) 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.
(q) 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 prior to year-end including claims incurred but not reported.
(r) Net Position
In the government -wide and proprietary funds financial statements, net position is reported in one of three categories:
Net Investment in Capital Assets — This category consists of capital assets net of accumulated depreciation and reduced by
outstanding debt that is attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position — Assets restricted by external creditors, grantors, contributors, or laws or regulations of other governments
reduced by liabilities related to those assets.
Unrestricted Net Position — This category consists of all net position that do not meet the definition of net investment in capital assets
or restricted net position.
38
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(s) Fund Balance
Fund balances presented in the governmental fund financial statements represent the difference between assets and liabilities. GASB
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes the criteria for classifying fund balances into
specifically defined classifications and clarifies definitions for governmental funds. GASB Statement No. 54 requires that the fund balances be
classified in categories based upon the type of restrictions imposed on the use of funds. The City evaluated each of its funds at June 30, 2013
and classified fund balances into the following five categories:
Nonspendable — Amounts that cannot be spent because they are (1) not in spendable form, such as prepaid items, inventories and
long-term receivables for which the payment of proceeds are not restricted or committed with respect to the nature of the specific
expenditures of that fund or (2) legally or contractually required to remain intact.
Restricted — Amounts that are restricted by external parties such as creditors or imposed by grants, laws or regulations of other
governments or imposed by law through constitutional provisions or enabling legislation. The City has legislative restrictions on amounts
collected and reported in the City's various governmental funds.
Committed — Amounts that can only be used for specific purposes pursuant to constraints imposed by a formal action by the entity's
"highest level of decision-making authority", which the City considers to be an ordinance passed by the Lodi City Council.
Assigned — Amounts that have been allocated by action of the Lodi City Council in which the City's intent is to use the funds for a
specific purpose. Once assigned, funds may only be released by resolution of the City Council.
Unassigned — Amounts that constitute the residual balances that have no restrictions placed upon them and are reported in the General
Fund. For other governmental funds, as restrictions exceed available resources only deficit amounts are reported in the unassigned
category.
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.
The City does not have a policy on the order of spending unrestricted amounts when an expenditure is incurred for which amounts in any of the
unrestricted fund balance classifications could be used. Therefore, by default under GASB Statement No. 54, the City uses committed
resources first, then assigned resources and unassigned resources last as they are needed.
It is the City's policy to maintain an unassigned fund balance in the General Fund of at least 16% of revenues and working capital balances in the
Water and Wastewater enterprise funds of at least 25% of operating expenses and the target for the Electric enterprise fund working capital is
$28.7 million. The policy allows for variations from year-to-year to account for economic and fiscal changes.
39
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
The City Council also adopted a policy to establish the following reserves
Catastrophic reserve - To maintain the ability of the City to meet operational costs during times of declared emergency or major catastrophe,
the City shall designate General Fund balance of a minimum of 8% of annual General Fund revenues. This reserve may only be drawn upon
pursuant to an emergency as declared under the Municipal Code.
Economic reserve - To maintain the City's economic viability and to meet seasonal cashflow shortfalls, the City shall designate General Fund
economic reserve balance of a minimum of 8% of annual General Fund revenues. Funding the economic reserve will begin in the fiscal year
following full funding of the catastrophic reserve. Funding may only be disbursed upon a resolution of the City Council.
Once fully funded, if these reserves fall below 5% of annual revenues, the City Manager shall prepare a plan within three months of approval of
the City's Financial Statements. This plan will restore the 5% within 12 months and the 8% within 24 months.
(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.
(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.
(v) Implementation of New Governmental Accounting Standards
During the fiscal year ending June 30, 2013, the City implemented GASB Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre -November 30, 1989 FASB and AICPA Pronouncements. This statement incorporates into the GASB authoritative
literature certain accounting and financial reporting guidance that is included in FASB and AICPA pronouncements issued on or before
November 30, 1989.
During the fiscal year ending June 30, 2013, the City implemented GASB Statement No. 63, Financial Reporting of Deferred Outflows of
Resources, Deferred Inflows of Resources, and Net Position. This statement provides financial reporting guidance for deferred outflows of
resources and deferred inflows of resources, introduced and defined in GASB Concepts Statement No. 4. This statement incorporates deferred
outflows of resources and deferred inflows of resources into the definitions of the required components of the residual measure and by renaming
that measure as net positions, rather than net assets.
40
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(w) Future Implementation of New Governmental Accounting Standards
In March 2012, GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities. This statement establishes accounting and
financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that are currently
reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that are currently reported as
assets and liabilities. This statement is effective for the City's fiscal year ending June 30, 2014.
In March 2012, GASB issued Statement No. 66, Technical Corrections: 2092 — An Amendment of GASB Statements No. 90 and No. 62. This
statement amends Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, by removing the
provision that limits fund -based reporting of a state and local government's risk financing activities to the general fund and the internal service
fund type. This statement also amends Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre -
November 30, 1989 FASB and AICPA Pronouncements, by modifying the specific guidance on accounting for (1) operating lease payments that
vary from a straight-line basis, (2) the difference between the initial investment (purchase price) and the principal amount of a purchased loan or
group of loans, and (3) servicing fees related to mortgage loans that are sold when the stated service fee rate differs significantly from a current
servicing fee rate. This statement is effective for the City's fiscal year ending June 30, 2014.
In June 2012, GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions — An Amendment of GASB Statement No. 27.
The primary objective of this statement is to improve accounting and financial reporting by state and local governments for pensions. It also
improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities.
This statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions
with regard to providing decision -useful information, supporting assessments of accountability and interperiod equity, and creating additional
transparency. This statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental
Employers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate to pensions that are provided through pension
plans administered as trusts or equivalent arrangements that meet certain criteria. This statement will require the City to record a net pension
liability related to its defined benefit pension plans, as defined by the standard. This statement is effective for the City's fiscal year ending June
30, 2015.
ill
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(2) CASH AND INVESTMENTS
Cash and investments as of June 30, 2013 are classified in the accompanying financial statements as follows:
Statement of net position:
Cash and investments $ 66,461,638
Restricted assets 36,385,480
Fiduciary funds cash and investments:
Private -purpose trust funds 274,917
Agency fund 396,984
Total cash and investments $ 103,519,019
Cash and investments as of June 30, 2013 consist of the following:
Cash on hand $ 2,771
Deposits with financial institutions 4,815,799
Investments 98,700,449
Total cash and investments $ 103,519,019
(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, bankers' acceptances, certificates of deposit, negotiable certificates of
deposit, commercial paper, State of California Local Agency Investment Fund (LAIF), Investment Trust of California (CALTRUST), mutual funds
that invest in eligible securities, guaranteed investment contracts and medium term notes as permitted by the Government Code. The City is not
authorized to enter into reverse repurchase agreements. The City selects its investments based on safety, liquidity and yield.
42
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
The following table identifies the permitted investment types authorized per the City's investment policy. The table also identifies certain
provisions that address interest rate risk and concentration of credit risk.
Maximum Maximum % of Maximum Investment
Permitted Investments/Deposits Maturity Portfolio in One issuer
U.S. Treasury Obligations 5 years 100%
U.S. Agency Securities 5 years 100%
Banker's Acceptances 180 days 40% 25%
Negotiable Certificates of Deposit 5 years 30%
Commercial Paper 270 days 40%
California State Local Agency Investment Fund (LAIF) Indefinite 100% $50m per account
Money Market Mutual Funds Indefinite 20%
Guaranteed investment contracts (GICs) 5 years 100%
Medium term Notes 5 years 30%
Investment Trust of California (CALTRUST) Indefinite 100%
(b) Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by the provisions of the debt agreements as to the extent that they are
permissible investments of funds of the City.
(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 is 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:
43
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Investment as of June 30, 2013
LAI F
CALTRUST
Money Market Mutual Funds
Held by bond trustee:
Negotiable Certificates of Deposit
LAI F
Money Market Mutual Funds
Guaranteed investment contracts (GICs)
Total investments subject to interest rate risk
Equities and options
Total investments
Maturity
Maturity
Less than One Year
One to Five Years
Total
$ 39,021,007
$
39,021,007
39,004,582
39,004,582
151,064
151,064
702,040
5,350,963
6,053,003
1,844,357
1,844,357
10,335,008
10,335,008
2,169,850
2,169,850
52,053,476
46,525,395
98,578,871
121,578
$
98,700,449
Investments in equities are shares of stock received by the Library as an endowment from 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 mutual 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 -m" or "AA -m" and rated by Moody's "Aaa," "Aa1" or "Aa2." The GICs and LAIF do not have a rating provided by a nationally
recognized statistical rating organization. The CALTRUST Short term fund is rated "AA/S1+" by S&P while the CALTRUST Medium term fund is
rated "A or better." The negotiable certificates of deposit are all rated AAA.
In accordance with the City's investment policy in selecting authorized investments, consideration must be given to credit ratings and
collateralization of applicable instruments, however, the City does not have a minimum credit rating limitations policy.
44
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(e) Concentration of Credit Risk
The investment policy of the City contains certain limitations on the amount that can be invested in any one issuer beyond that stipulated by the
California Government Code. Investments in LAIF, CALTRUST, and money market mutual funds are not subject to the concentration of credit
risk disclosure. There are no investments with any one issuer greater than 5% of total investments.
(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
secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured deposits. $5,201,624 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) Investments in Investment Pools
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, 2013 was $21.9 billion. LAIF is part of the California Pooled Investment
Account (PMIA), which at June 30, 2013 had a balance of $58.8 billion. Of this amount, 1.96% was invested in medium-term and short-term
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 278 days as of June 30, 2013.
45
(3)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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.
The City is also a participant in the Investment Trust of California Joint Powers Authority Pool (CALTRUST). At June 30, 2013, the City's
investment in CALTRUST is $39 million. CALTRUST is an innovative partnership between the CSAC Finance Corporation and the League of
California Cities to provide a convenient method for local agencies to pool their assets for investment. The weighted average to maturity of
CALTRUST investments was as follows: CALTRUST Short Term, 15 months and CALTRUST Medium, 24 months. The Board of Trustees,
which is made up of experienced local treasurers and Investment Officers has oversight responsibility for CALTRUST. The value of the pool
shares in CALTRUST, which may be withdrawn, is determined on a fair value basis, which may be different than the amortized cost of the City's
portion of the pool. The total amount invested in CALTRUST by California public agencies, as of June 30, 2013 was divided among the following
asset classes: CALTRUST Medium Term was $667 million and CALTRUST Short term was $667 million.
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
Receivables of 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
Uncollectibles related to electric sales and services
Uncollectibles related to wastewater services
Uncollectibles related to water sales and services
Total uncollectibles of the current fiscal year
46
21,500
204,800
46,000
117,000
$ 389,300
(4)
(5)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
INTERFUND RECEIVABLES/PAYABLES
Interfund receivables and payables at June 30, 2013 are as follows:
Due from Due to Amount
Other governmental General $ 463,962
Other governmental Other governmental 151,451
$ 615,413
"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 $463,962 and $151,451 represent cash deficits in other governmental funds.
Advances from
Wastewater
Water
Advances to
Other governmental
Other governmental
Amount
$ 633,571
1,209,025
$ 1,842,596
The $633,571 advance from Wastewater Fund was used for the Impact Mitigation Fees update, $55,000; and $578,571 was used for the Grape
Bowl Improvements - Phase 3. The $1,209,025 advance from the Water Fund was used for the construction of Fire Station #4.
TRANSFERS
Transfers for the year ended June 30, 2013, are summarized as follows:
Transfers out:
General
Other governmental
Electric
Wastewater
Water
Total
Transfers in
Other
General
Governmental
Total
$
6,584,665 $
6,584,665
279,495
279,495
2,856,390
313,577
3,169,967
1,451,480
1,451,480
1,060,120
1,060,120
$ 5,367,990
7,177,737 $
12,545,727
47
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
During the year, various interfund transfers were made to finance expenditures, subsidize operating losses and service debt.
Transfers out of $2,856,390 from the Electric Fund, $1,451,480 from the Wastewater Fund, and $1,060,120 from the Water Fund represent the
cost of services reimbursement to the General Fund.
The transfer of $6,584,665 from the General Fund to other governmental represents transfer of $291,045 to the Debt Service Fund for the
interest required to pay the 2012 Refunding Certificates of Participation; $3,413,695 to Parks, Recreation and Community Services for operating
costs; $110,000 to Community Development for operating costs; $216,900 to the Vehicle. and Equipment Fund for vehicle replacements and
computer replacements; and $1,985,195 to the Capital Outlay Reserve Fund for various capital projects; and $567,830 to the Street Fund for
various streets projects
The transfer out of $279,495 from other governmental to other governmental includes $192,375 transferred from Parks, Recreation and
Community Services to Debt Service Fund for the interest required to pay the 2012 Refunding Certificates of Participation, and $20,000 for turf
replacement at the Grape Bowl; and transfer of $2,510 from the Community Development and $64,610 from the Parks, Recreation and
Community Services to the Vehicle and Equipment Fund for fleet replacement.
The transfer out from the Electric Fund to other governmental of $313,577 represents public benefits program funds transferred to the Capital
Outlay Reserve Fund, $280,000; and $33,577 to the Parks Capital Fund; for various capital projects.
48
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(6) CAPITAL ASSETS
Capital assets activity of the primary government for the year -ended June 30, 2013, 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
June 30, 2012
$ 23,693,292
304,907
3,397,338
27,395.537
64, 312,466
11, 064,153
9,696,959
133,783,793
218,857,371
26,583,359
9,569,073
8,824,441
72,418,966
117,395,839
101,461,532
Increases Decreases
401,132
5,944,218
6,345,350
1,283,191
136,928
350,934
1,871,529
3,642,582
1,748,778
567,862
406,980
6,212,917
8,936,537
(5,293,955)
(3,267,267)
(3,267,267)
(27,830)
(165,456)
(193,286)
(27,830)
(165,456)
(193,286)
Balance
June 30. 2013
$ 24,094,424
304,907
6,074,289
30,473,620
65,595,657
11,173,251
9,882,437
135,655,322
222,306,667
28,332,137
10,109,105
9,065,965
78,631,883
126,139,090
96,167,577
$ 128,857,069 1,051,395 (3,267,267) $ 126,641,197
49
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
Machinery and equipment
Vehicles
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings and improvements
Machinery and equipment
Vehicles
Total accumulated depreciation
Total capital assets, being depreciated, net
Business -type activities capital assets, net
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Balance
June 30, 2012 Increases Decreases
$ 5,535,718
38, 701, 024 14,120, 774
44,236,742 14,120,774
45,721,798
207,485,271
8,822,082
262,029,151
13,705,645
59,164, 770
7,642,670
80,513,085
181,516,066
596,499
51, 312,478
3,114,373
55,023,350
1,243,878
7,447,243
614,314
9,305,435
45,717,915
(48,920,773)
(48,920,773)
(839,588)
(2,471,773)
(3,311,361)
(20,990)
(1,825,581)
(1,846,571)
(1,464,790)
Balance
June 30, 2013
$ 5,535,718
3,901,025
9,436,743
46,318,297
257, 958,161
9,464,682
313,741,140
14,949,523
66,591,023
6,431,403
87,971,949
225,769,191
$ 225,752,808 59,838,689 (50,385,563) $ 235,205,934
50
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Depreciation expense was charged to function/programs of the primary government as follows:
Governmental activities:
General government
$
710,883
Public protection
1,022,380
Public works
6,352,497
Community development
6,084
Library
38,490
Parks and recreation
804,755
Internal service funds
1,448
Total depreciation expense - governmental activities
$
8,936,537
Business -type activities:
Electric
$
1,633,219
Wastewater
4,237,440
Water
2,550,560
Transit
884,216
Total depreciation expense - business -type activities
$
9,305,435
(7) OPERATING LEASES
The City is obligated under an operating lease for the use of facilities. Total costs for such lease was $21,000 for the year ended June 30, 2013.
Future minimum lease payments required by this lease agreement that has a remaining noncancellable lease term of one year or more as of
June 30, 2013, are as follows:
Fiscal Years Ending
2014
Total minimum lease payments required
under operating leases
51
21,000
$ 21,000
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(8) LONG-TERM OBLIGATIONS
The following is a summary of debt
transactions of the City for the year ended
June 30, 2013:
Amounts
Due Within
Governmental activities:
Interest Rates June 30, 2012
Additions
Reductions
June 30, 2013
One Year
Compensated absences
2002 Certificates of Participation
$ 6,804,825
1,841,177
(1,955,662)
$ 6,690,340
$ 1,841,177
3.0-5.0% 21,025,000
(21,025,000)
2012 Certificates of Participation
2.0-5.0%
19,080,000
Add deferred amounts:
19,080,000
For issuance premium
Less deferred amounts:
1,022,768
(44,858)
977,910
53,830
From refunding
Net
(511,779)
22,446
(489,333)
(26,936)
19,590,989
(22,412)
19,568,577
26,894
Note payable
6.0% 245,000
245,000
Self-insurance liability
8,471,831
1,911,196
(1,265,965)
9,117,062
1,911,196
Net OPEB obligation
3,621,593
1,283,605
(1,654,672)
3,250,526
Governmental activity long-term liabilities
$ 40,168,249
24,626,967
(25,923,711)
$ 38,871,505
$ 3,779,267
52
Business -type activities:
Compensated absences
Pollution remediation obligation
Certificates of Participation:
2010 Certificates of Participation A & 6
Add deferred amounts:
For issuance premium
Total
2008 Certificates of Participation A
Add deferred amounts:
For issuance premium
Less deferred amounts:
From refunding
Net
2002 Certificates of Participation C & D
2003 Certificates of Participation B
Add deferred amounts:
For issuance premium
Total
2004 Certificates of Participation A
Add deferred amounts:
For issuance premium
Total
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Interest Rates
Amounts
Due Within
June 30, 2012 Additions Reductions June 30, 2013 One Year
—
$ 1,863,923 521,012 (496,208) 1,888,727 $ 521,013
65,303,874 (46,148,874) 19,155,000
2.50-6.637% 37,890,000
(800,000) 37,090,000 825,000
53
551,606
(19,700)
531,906
19,700
38,441,606
(819,700)
37,621,906
844,700
3.8-5.05%
60,685,000
60,685,000
498,174
(24,909)
473,265
24,909
(6,033,112)
301,656
(5,731,456)
(301,656)
55,150,062
276,747
55,426,809
(276,747)
1.54-5.25%
19,480,000
(4,575,000)
14,905,000
4,750,000
2.0-5.0%
3,415,000
(225,000)
3,190,000
3,190,000
46,147
(4,102)
42,045
42,045
3,461,147
(229,102)
3,232,045
3,232,045
2.0-5.5%
20,330,000
(18,260,000)
2,070,000
260,644
(260,644)
20,590,644
(18,520,644)
2,070,000
53
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
2012 Certificates of Participation
Add deferred amounts:
For issuance premium
Less deferred amounts:
From refunding
Net
Total Certificates of Participation
Business -type activity long-term liabilities
2.0-5.0%
17,105,000
1,829,447
17,105,000 1,280,000
(124,734) 1,704,713 166,313
(1,660,873)
113,242
(1,547,631)
(150,988)
Amounts
(11,492)
17,262,082
1,295,325
166,573,430 17,273,574
Due Within
159,874,059
Interest Rates June 30, 2012 Additions
Reductions
June 30, 2013
One Year
2007 Certificates of Participation A
4.0-5.0% 29,875,000
(130,000)
29,745,000
140,000
Add deferred amounts:
For issuance premium
209,090
(8,253)
200,837
8,253
Less deferred amounts:
From refunding
(634,119)
44,499
(589,620)
(44,499)
Net
29,449,971
(93,754)
29,356,217
103,754
2012 Certificates of Participation
Add deferred amounts:
For issuance premium
Less deferred amounts:
From refunding
Net
Total Certificates of Participation
Business -type activity long-term liabilities
2.0-5.0%
17,105,000
1,829,447
17,105,000 1,280,000
(124,734) 1,704,713 166,313
(1,660,873)
113,242
(1,547,631)
(150,988)
17,273,574
(11,492)
17,262,082
1,295,325
166,573,430 17,273,574
(23,972,945)
159,874,059
9,949,077
$ 233,741,227 17,794,586
(70,618,027)
$ 180,917,786
$ 10,470,090
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 $9,117,062 and $3,250,526 for net OPEB
obligation 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.
Long-term debt payable at June 30, 2013, comprised of the following individual issues:
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,
2017.
54
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Annual debt service requirements to maturity of the note payable are as follows:
Fiscal
Year
Ending
Governmental Activities
June 30,
Principal Interest
2014
$ $ 14,700
2015
14,700
2016
14,700
2017
245,000 11,025
Total
$ 245,000 $ 55,125
Certificates of Participation
$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
$3,280,111. Principal and interest paid for the current year and total net revenues were $381,122 and $8,631,283, 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 certificates. The total principal and interest remaining to be paid on the certificates is $3,151,575. Principal
and interest paid for the current year and total net revenues were $1,705,213 and $8,631,283, respectively. These Certificates of Participation
were partially refunded in the current year.
55
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
$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
ranging 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 certificates. The total principal and interest remaining to be paid on the certificates is $55,635,988.
Principal and interest paid for the current year and total net revenues were $1,598,950 and $8,631,283, 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, 2013, 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 ranging from $730,000 to
$1,600,000 with final payment due October 1, 2031. These Certificates of Participation were refunded in the current fiscal year.
$21,225,000 Revenue Certificates of Participation 2002 Series C and $22,740,000 Revenue Certificates of Participation Series D were issued to
buy out 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 Original Agreement, 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 ranging from $110,000 to $5,195,000 with final payment due July 1, 2015.
The City has pledged future electric revenues, net of specified operating expenses, to repay these certificates. The total principal and interest
remaining to be paid on the certificates is $16,089,942. Principal and interest paid for the current year and total net revenues were $5,456,621
and $12,765,289, 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
56
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
payable annually on July 1 in amounts ranging 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 certificates. The total principal and interest remaining to be paid on the
certificates is $96,815,950. Principal and interest paid for the current year and total net revenues were $2,957,775 and $12,765,289, respectively.
On October 1, 2010, the City issued $9,015,000 Water Revenue Certificates of Participation, 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. Principal is payable annually on
June 1 in amounts ranging from $775,000 to $2,210,000 with final payment due June 1, 2040. The City has pledged future water revenues, net
of operation and maintenance costs, to repay these certificates. The total principal and interest remaining to be paid on the certificates is
$75,206,658. Principal and interest paid for the current year and total net revenues were $2,335,360 and $6,467,980, 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.
Current and advance refunding
The City issued $19,080,000 Certificates of Participation (2012 COP) on September 1, 2012 to allow the City to prepay and cause the immediate
defeasance of the outstanding $21,025,000 Certificates of Participation (2002 COP). As a result, the refunded bonds are considered to be
defeased and the liability has been removed from the Governmental Activities column of the Statement of Net Position. This current refunding
was undertaken to reduce total debt service payments over the next 19 years resulting in economic gain of $3,246,004 and a reduction of
$3,425,612 in future debt payments. The reacquisition price exceeded the net carrying amount of the old debt by $511,779. This amount is
being netted against the new debt and amortized over the life of the old debt which is the same as the refunding debt obligation. The total
principal and interest remaining to be paid on the bonds is $29,145,582. Principal is payable annually on October 1 in amounts ranging from
$260,000 to $1,605,000 beginning in 2016 with final payment due in 2031.
In addition, the City issued $17,105,000 Wastewater Revenue Refunding Bonds for an advance refunding of the $17,115,000 principal amount of
the 2004 Wastewater Revenue Certificates of Participation. The refunding was undertaken to reduce future debt service payments. The
reacquisition price exceeded the net carrying amount of the old debt by $1,660,873. This amount is being netted against the new debt and
amortized over the life of the old debt which is the same as the refunding debt obligation. At June 30, 2013, the unamortized deferred amount on
refunding was $1,547,631. The transaction also resulted in an economic gain of $854,477 and a reduction of $979,193 in future debt payments.
The City pledged future wastewater revenues, net of specified operating expenses, to repay these certificates. The total principal and interest
remaining to be paid on the bonds is $21,406,000. Principal is payable annually on October 1 in amounts ranging from $1,280,000 to $1,885,000
beginning in 2013 with final payment due in 2023. Principal and interest paid for the current year and total net revenues were $374,519 and
$8,631,283 respectively. At June 30, 2013, the remaining balance of the refunded debt is $17,115,000.
57
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Annual debt service requirements to maturity for certificates of participation are as follows:
Fiscal Year Ending
Governmental Activities
June 30,
Principal
Interest
2014 $
7,310,000
$ 844,813
2015
7,324,025
844,813
2016
260,000
840,913
2017
830,000
824,563
2018
860,000
794,912
2019-2023
4,880,000
3,380,935
2024-2028
6,205,000
2,023,235
2029-2033
6,045,000
511,398
2034-2038
2039-2040
Total $
19,080,000
$ 10,065,582
Industrial Development Bonds
Business -type
Activities
Principal
Interest
$ 10,185,000
$ 8,044,182
7,310,000
7,649,614
9,990,000
7,324,025
5,000,000
6,969,356
5,210,000
6,767,006
29,640,000
30,228,643
37,450, 000
22,168, 327
35,200,000
12,413,994
20,475,000
4,797,017
4,330,000
434,060
$ 164,790,000
$ 106,796,224
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 Certificates are expected to be derived
from amounts to be received by the District from the City of Lodi pursuant to 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 District for 40 years.
58
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(9) 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. Employees pay a portion of the contributions required of City employees at a range of
1% to 9%. The City is required to contribute at an actuarially determined rate; the current rate is 14.411% for miscellaneous employees,
31.335% 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, 2013, the City's annual pension cost of $3,500,602 for the Safety Plan and $2,253,549 for the Miscellaneous Plan
were equal to the City's required contributions. The required contribution was determined as part of the June 30, 2010, actuarial valuation using
the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.75% investment rate of return (net of administrative
expenses) (b) projected annual salary increases that vary by age, length of service, and type of employment (c) 3.25% payroll growth, and (d)
3.00% inflation. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the
market value of investments over a fifteen -year period (smoothed market value). PERS unfunded actuarial liability is being amortized as a level
percentage of projected payroll on a closed basis. The actuarial assumption used to determine the required contributions are the same as those
used to determine the funded status. Amortization of the remaining period for the Safety Plan was 28 years and for the Miscellaneous Plan was
21 years as of June 30, 2012.
59
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(d) Trend Information
Three -Year Trend information ($ Amounts in Thousands):
(e) Funded Status and Funding Progress
As of June 30, 2011, the most recent actuarial valuation date, the Safety Plan was 73.6% funded and the Miscellaneous Plan was 84.3% funded.
The actuarial accrued liability for benefits was $132 million for the Safety Plan and $143 million for the Miscellaneous Plan, and the actuarial
value of assets was $97 million for the Safety Plan and $120 million for the Miscellaneous Plan; resulting in an unfunded actuarial accrued
liability (UAAL) of $35 million for the Safety Plan and $23 million for the Miscellaneous Plan. The covered payroll (annual payroll of active
employees covered by the plans) was $10 million for the Safety Plan and $17 million for the Miscellaneous Plan, and the ratio of the UAAL to the
covered payroll was 333.5% and 132.0% for the Safety and Miscellaneous plans, respectively. The actuarial assumptions used for the June 30,
2011 valuation differ from those previously disclosed for the June 30, 2010 valuation as follows: (a) 7.50% discount rate (net of administrative
expenses), (b) 3.00% payroll growth, and (c) 2.75% inflation.
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.
m
SAFETY PLAN
Annual
Percentage
Net
Fiscal Year
Pension
of APC
Pension
Ended
Cost (APC)
Contributed
Obligation
6/30/11
$ 2,726
100%
$0
6/30/12
3,239
100%
$0
6/30/13
3,501
100%
$0
MISCELLANEOUS PLAN
Annual
Percentage
Net
Fiscal Year
Pension
of APC
Pension
Ended
Cost (APC)
Contributed
Obligation
6/30/11
$ 2,080
100%
$0
6/30/12
2,110
100%
$0
6/30/13
2,254
100%
$0
(e) Funded Status and Funding Progress
As of June 30, 2011, the most recent actuarial valuation date, the Safety Plan was 73.6% funded and the Miscellaneous Plan was 84.3% funded.
The actuarial accrued liability for benefits was $132 million for the Safety Plan and $143 million for the Miscellaneous Plan, and the actuarial
value of assets was $97 million for the Safety Plan and $120 million for the Miscellaneous Plan; resulting in an unfunded actuarial accrued
liability (UAAL) of $35 million for the Safety Plan and $23 million for the Miscellaneous Plan. The covered payroll (annual payroll of active
employees covered by the plans) was $10 million for the Safety Plan and $17 million for the Miscellaneous Plan, and the ratio of the UAAL to the
covered payroll was 333.5% and 132.0% for the Safety and Miscellaneous plans, respectively. The actuarial assumptions used for the June 30,
2011 valuation differ from those previously disclosed for the June 30, 2010 valuation as follows: (a) 7.50% discount rate (net of administrative
expenses), (b) 3.00% payroll growth, and (c) 2.75% inflation.
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.
m
(10)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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 prior to 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 prior to:
Executive Management
July 1, 1994
Mid -Management
July 1, 1994
Fire Mid -Management
December 6, 1995
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
December 6, 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
M
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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 2012-13, the City contributed
$1,654,672, or 127.55%, 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
$ 1,297,272
Interest on net OPER obligation
146,828
Adjustment to annual required contribution
(160,495)
Annual OPEB cost (expense)
1,283,605
Contribution made
(1,654,672)
Decrease in net OPEB obligation
(371,067)
Net OPEB obligation - beginning of year
3,621,593
Net OPEB obligation - end of year
$ 3,250,526
62
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation, are as follows:
Fiscal year
Annual
Percentage of
Net
ended
$ 17,011,467
Annual OPEB
OPEB
Annual covered payroll (active plan members)
OPEB Cost
Cost Contributed
Obligation
06/30/2011
$ 1,414,182
33.21%
$ 3,014,788
06/30/2012
1,221,126
50.31%
3,621, 593
06/30/2013
1,283,605
128.91%
3,250,526
(d) Funding Status and Funding Progress
As of January 1, 2012, the most recent actuarial valuation date, the funded status of the Retiree Health Plan was as follows:
Actuarial accrued liability (AAL)
$ 17,011,467
Actuarial value of plan assets
0
Unfunded actuarial accrued liability (UAAL)
$ 17,011,467
Funded ratio (actuarial value of plan assets/AAL)
0.0%
Annual covered payroll (active plan members)
$ 7,304,558
UAAL as percentage of annual covered payroll
232.9%
(e) Actuarial Methods and Assumptions
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.
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
63
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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, consistent with the long-term perspective of the calculations.
In the January 1, 2012 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; a 3.0% inflation rate; an annual healthcare cost trend rate of 9.0% initially, reduced by
.5 percent increments to an ultimate rate of 4.5% in the eleventh year and beyond; the PERS minimum benefit will increase 4% per year; a
3.25% annual rate of increase in payroll; assumed that 100% of 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 Dispatchers will elect the conversion option and 50% of Executive Management, Mid Management
and Police will 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 a closed thirty year period. As of January 1, 2012, the remaining amortization period
is 27 years.
Since the prior valuation in 2010, 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 demographic assumptions; and (3) the reduction in the assumed PEMHCA benefit increase rate. These
decreases were partially offset by the updated healthcare trend rate assumption.
(11) 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 occurrence with 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 13).
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 13).
The City is fully self-insured for dental and unemployment for its employees.
64
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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 $9,117,062 at June 30, 2013, 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, 2013 and 2012 are as follows:
Beginning
FY 11-12 $ 8,350,338
FY 12-13 $ 8,471,831
(12) PARTICIPATION IN JOINT VENTURES
Northern California Power Agency
Current -Year
Claims and Changes
Claim
in Estimates
Payments
1,520,134
(1,398,641)
1,911,196
(1,265,965)
Ending
$ 8,471,831
$ 9,117,062
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 three 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
NCPA's project construction and development programs have been individually financed by project revenue bonds collateralized by NCPA's
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
curtailment of output from the project for any reason. Certain of the revenue bonds are additionally supported by municipal bond insurance credit
enhancements.
65
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Increase in Non -defaulting Proiect Participant's Original 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.
General Operating Reserve with 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, 2013, the City's balance in the NCPA General Operating Reserve, which has been credited with annual interest earnings and
settlements, is $5,270,130.
:.
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Project Participation
The NCPA members and their percentage share at June
30, 2013, which
is the
most recent
available data,
are as follows:
Hydro
Combustion
Multiple
Lodi
NCPA MEMBERS
Geothermal
Electric
Turbine
Capital
Transmission
Energy
Project
Project
Project #1
Facilities
Project
Center
Alameda
BART
16.8825% 10.00%
21.820%
19.00%
30.7802%
/o
Biggs
0.2270
Gridley
0.1976.6000
0.3446
0.2679
Healdsburg
0.3360
0 .350
0.6248
1.9643
Lodi
3.6740
1.66
5.833
6.6947
1.6428
Lompoc
10.2800
10.37
13.393
39.50
20.6077
9.5000
Palo Alto
3.6810
2.30
5.833
5.00
6.7101
2.0357
22.92
Plumas-Sierra Rural Electric Coop
0.7010
1.69
1.817
PCWA
1.3112
0.7857
Roseville7
.8830
12.00
2.6679
Santa Clara
44.3905
37.02
41.667
36.50
13.0846
Turlock Irrigation District
6.3305
25.7500
Ukiah
5.6145
2.04
9.090
9.6106
10.2315
1.7857
NON-MEMBERS
Azusa
CDWR 2.7857
Modesto Irrigation District
33.5000
10.
Bulk power purchased by the City through NCPA amounted to $39,190,554 during the year ended June 30, 2013 and is reflected in4utilities
expense in the Electric Enterprise Fund.
67
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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 -
megawatt steam powered plants, Project Number 2 and Project Number 3. Outstanding long-term debt related to this project was approximately
$34 million at June 30, 2012.
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 Project
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 power from the project in excess of the District's requirements for the subsequent 50 years, subject to 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, 2012,
approximately $436 million in long-term debt used to finance this project was outstanding.
NCPA Combustion Turbine Project
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, 2012, there was no outstanding long-term debt related to this project.
Transmission Project
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 20.6077% of the debt service and operating costs. At June 30, 2012, there was
no outstanding long-term debt related to this project.
68
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Capital 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 enhancement and 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, 2012, approximately
$55 million in long-term debt was outstanding.
Lodi Energy 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) built in Lodi on city property.
Under a power purchase agreement, the City is obligated to pay 17.03% of the debt service and 9.5% of operating costs. At June 30, 2012,
approximately $396 million in long-term debt was outstanding.
The following are the most recent available audited condensed financial statements of NCPA;
Combined Balance Sheet
June 30, 2012
(in thousands)
Assets Liabilities and Net Assets
Current assets $ 68,042 Current portion of long-term debt $ 20 635
Restricted assets 221,700 Other current liabilities 59,846
Electric plant, net 684,399 Other liabilities and deferred credits 233,992
Other assets and deferred charges 212,421 Long-term debt, net 843,692
Net assets 28,397
Total assets $ 1,186,562 Total liabilities and net assets $ 1,186,562
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Combined Statement of Revenues, Expenses
and Changes in Net Assets
Year ended June 30, 2012
(in thousands)
Sales for resale
Operating expenses
Other expenses
Future recoverable costs
Net revenues before refunds
Refunds to participants
Increase in net position
Net assets, beginning of year
Net assets, end of year
$ 277,257
(241, 977)
(28,608)
6,514
Combined Statement of Cash Flow
Year ended June 30, 2012
(in thousands)
Net cash from operating activities $
Net from investing activities
Net cash from capital and related
financing activities
13,186
Net cash from noncapital
(12,788)
and related financing activities
398
Increase in cash and cash equivalents
27,999
Cash and cash equivalents, beginning
of year
$ 28,397
Cash and cash equivalents end of year
77,853
(880)
(158,227)
(12,131)
(93,385)
218,870
$ 125,485
At June 30, 2012, NCPA's total net outstanding long-term debt was $864,327,000 at an average interest rate of 5%. The current portion of long-
term debt at June 30, 2012, was $20,635,000.
Complete financial information for NCPA may be obtained at the following administration office:
Northern California Power Agency
180 Cirby Way
Roseville, CA 95678
Transmission Agency of Northern California
The Transmission Agency of Northern California (TANC) 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.
70
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
Increase in Non -defaulting Proiect Participant's Original 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 Project
The project is a 340 -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 Electricity Coordinating
Council (WECC) region. The WECC approved rating of the COI is 4,800 MW.
TANC, 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. Pursuant to
the IPA and a subsequent agreement with WAPA, and the purchase of entitlement, rights and title, and interest in the City of Vernon's share of
the project transmission assets, TANC is entitled to use approximately 1,362 MW, and is obligated to pay an average of approximately 80
percent of the operating costs associated with the project.
Under the TANC joint powers agreement, the City is obligated to pay 1.89% of its debt service and operating costs. At June 30, 2012,
approximately $370 million in long-term debt was outstanding of which $27 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
71
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
(13) MEMBERSHIP IN INSURANCE POOLS
California Joint Powers Risk Management Authority
The City is a member, along with 18 other individual cities and 8 joint powers authorities, of California Joint Powers Risk Management Authority
(CJPRMA) organized under a Joint Powers Agreement pursuant to the California Government Code for the purpose of sharing the risk of
catastrophic general liability, automobile liability and public officials' errors and omissions losses. 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 prior to 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, 2013, premiums of $1,625 were paid to CJPRMA for the
liability program.
The participants at June 30, 2013, are as follows: Alameda, Chico, Central San Joaquin Valley Risk Management Authority, Fairfield, Fremont,
Livermore, Lodi, Manteca, Municipal Pooling Authority of Northern California, Northern California Cities Self Insurance Fund, Petaluma, Pomona,
Public Entity Risk Management Authority, Redding, Redwood Empire Municipal Insurance Fund, Richmond, Roseville, San Leandro, San Rafael,
Santa Barbara Area Joint Powers Insurance Authority, 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
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
$293,700 in premiums to LAWCX during the fiscal year ended June 30, 2013.
72
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
The participants at June 30, 2013, are as follows: City of Alameda, Association of Bay Area Governments Shared Risk Pool (ABAG SHARP),
Bay Cities Joint Powers Insurance Authority (BCJPIA), City of Benicia, Contra Costa County Transit Agency (CCCTA), Central San Joaquin
Valley Risk Management Authority (CSJVRMA), City of Clovis, City of Coronado, City of Encinitas, Fire Agencies Self Insurance System (FASTS),
City of Gilroy, City of Livermore, City of Lodi, Town of Los Gatos, City of Merced, Monterey County Local Agencies Insurance Authority
(MCLAIA), City of Morgan Hill, City of Newark, City of Placentia, City of Pleasanton, Public Agency Risk Sharing Authority of California
(PARSAC), City of Roseville, Public Entity Risk Management Authority (PERMA), City of San Leandro, City of Santa Maria, City of Santee, Small
Cities Organized Risk Effort (SCORE), City of South Lake Tahoe, City of Suisun City, City of Vacaville, City of Vallejo, Vector Control Joint
Powers Agency (VCJPA) and City of Vista.
Complete financial information for LAWCX may be obtained at the following administration office:
Local Agency Workers' Compensation Excess Joint Powers Authority
1750 Creekside Oaks Drive, Suite 200
California Transit Insurance Pool Sacramento, California 95833
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 under two programs:
Program I applies to members who choose to utilize CalTIP's claims administrator services.
Program II applies to members with self-insured retentions who choose to provide their own claims administrator services.
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. .
73
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
The City paid $70,591 in premiums to CaITIP during the fiscal year ended June 30, 2013. There have been no reductions in insurance coverage
from the prior year 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
(14) DEFICIT IN FUND EQUITY
Nonmaior Governmental Fund — Parks Recreation and Community Services — A deficit in fund equity in the amount of $508,866 at June 30,
2013, (a reduction of $352,977 from prior year) is attributed to the City raising its fees, reducing full-time staffing, and using donations to help
offset the cost of repairs and maintenance in a concerted effort to eliminate this deficit.
Internal Service Funds - Benefits Fund — A deficit in fund equity in the amount of $2,204,516 at June 30, 2013, is attributed to the net OPEB
obligation set up in accordance with the requirements of GASB Statement No. 45. Net OPEB obligation as of June 30, 2013, was $3,250,526.
The City will continue to address annual funding to eliminate the deficit during the budget process.
(15) 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 (RWQCB) in the early 1990's under the Well
Investigation program revealed numerous areas where TCE was discharged, or where PCE from dry cleaning operations was 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's total litigation
based estimate of the pollution remediation was $70 million. The City has settled with all the involved parties.
74
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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 estimated total pollution remediation obligation as of June 30, 2013, is $19,855,000. This amount is an estimate and subject
to changes resulting from price increases or reductions, technology, or changes in applicable laws or regulations.
Over the course of the last several years, the City has performed remedial action on a number of the sites, conducted additional studies and
consulted with RWQCB staff. This additional work and consultation with regulatory agencies has determined that much of the work initially
anticipated will not be necessary. As a result, the estimate has been revised to reflect current anticipated level of remediation work necessary.
An adjustment of $45,448,874 is reflected as a reduction in expenses in the Water Fund in the current year. This adjustment represents a
reduction of estimated costs due to change in remedial tasks necessary to complete the remediation and the reduction in the number of years
necessary to monitor the groundwater contamination from 50 years to 30 years. The original estimate for remediation was $70.6 million and the
City has paid remediation costs to date of $5.3 million.
(16) COMMITMENTS AND CONTINGENCIES
have amassed a $16 million dollar reserve which is expected to cover all costs through the next 10 years. CLitigation and claims — The City has fully resolved all the litigation arising out of its groundwater contamination. Settlement and rate revenues
osts 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 Attorney does not currently expect the matter to 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 District for 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%).
75
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2013
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.
Currently, arbitrage earnings must be rebated to the United States Treasury every five years. There is no cumulative arbitrage liability as of June
30, 2013, for any of the City's outstanding Certificates of Participation.
(17) RESTATEMENT OF NET POSITION
In prior years, a loan receivable of $1,084,000 was reported in the HOME Program & Community Development Block Grants (CDBG) Special
Revenue Fund representing HOME and CDBG funds loaned to a developer in 1995 for a low-income housing project through the U.S.
Department of Housing and Urban Development's (HUD) Urban County program via San Joaquin County. Proceeds of the loan were originally
due to the City in 2025 to be available for future projects or new loans. However, due to the City's separation from HUD's Urban County program
and becoming a participant of HUD's Entitlement City program in 2009, it was confirmed that the loan proceeds will be retained by San Joaquin
County and not repaid to the City as originally stated.
(18) SUBSEQUENT EVENTS
On November 7, 2013, the City fully redeemed the outstanding balance of its allocable portion of the California Statewide Communities
Development Authority Water and Wastewater Revenue Bonds that 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 was $5.0 million for the upgrade of its wastewater facilities. Total principal and interest paid
for the redemption was $2,974,298.
76
REQUIRED SUPPLEMENTARY INFORMATION
Plan
Safety
City of Lodi
Required Supplementary Information
Schedule of Funding Progress - Pension Plan
June 30, 2013
(in thousands of dollars)
Miscellaneous 6/30/09
6/30/10
6/30/11
110,318
127,535
Entry Age
133,618
120,203
Actuarial
Actuarial
Actuarial
Accrued
Valuation
Asset Value
Liability
Date
(A)
(B)
6/30/09
$ 88,892 $
115,657
6/30/10
93,058
122,477
6/30/11
97,287
132,267
Miscellaneous 6/30/09
6/30/10
6/30/11
110,318
127,535
114,994
133,618
120,203
142,608
77
Unfunded
86.5%
Actuarial
86.1%
Accrued
Funded
Liability
Ratio
[(B) - (A)]
[(A) / (B)l
$ 26,765
76.9%
29,419
76.0%
34,980
73.6%
17,217
86.5%
18,624
86.1%
22,405
84.3%
18,696
Unfunded
17,856
Actuarial
16,970
Liability as
Covered
Percentage of
Payroll
Covered Payroll
(C)
{[(B) — (A)l/(C))
$ 11,409
234.6%
11,394
258.2%
10,489
333.5%
18,696
92.1%
17,856
104.3%
16,970
132.0%
City of Lodi
Required Supplementary Information
Schedule of Funding Progress — OPEB Plan
June 30, 2013
(in thousands of dollars)
Entry Age
Unfunded
Actuarial
Normal
Actuarial
Value
Accrued
Valuation
of Assets
Liability
Date
(A)
(B)
1/1/08
$ 0 $
23,323
1/1/10
0
17,710
1/1/12
0
17,011
Unfunded
Funded
Liability
Ratio
[(B) - (A)l
[(A) / (B)l
$ 23,323
17,710
17,011
78
Annual
Covered
Payroll
(C)
0% $ 9,846
0% 9,410
0% 7,305
UAAL As a
Percentage of
Covered Payroll
{[(B) — (A)l/(C)}
237%
188%
233%
CITY OF LODI
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND
BALANCE -
BUDGET AND ACTUAL
GENERAL FUND
Year ended June 30, 2013
Budget
Variance with
REVENUES
Original
Final
Actual
Final Budget
Taxes
Licenses and permits
$ 22,556,080
22,556,080
23,022,370 $
466,290
Intergovernmental revenues
94 ,880
84,680
62,582
(32,298)
Charges for services
10, 084, 330
10, 245,664
10, 531,871
286,207
Fines, forfeits and penalties
1,769,350
1,129,350
1,105,178
Investment and rental income
1,318,200
1,318,200
1,628,870
310,670(24J72)
Miscellaneous revenue
452,600
1,092,600
979,100
(113,500)
Total revenues
279,760
279,760
393,300
113,540
36,555,200
36,716,534
37,723,271
1,006,737
EXPENDITURES
Current:
General government:
City Council
City Manager
155,690
155,690
128,105
27,585
City Clerk
1,036,730
875,004
867,022
7,982
City Attorney
429,650
438,060
417,027
21,033
Human Resources
466,730
475,140
437,155
37,985
Information Systems
514,090
522,500
466,221
56,279
Financial Services
983,540
1,000,359
979,057
21,302
Budget and Treasury
1,517,320
1,564,975
1,478,812
86,163
Non Departmental
359, 470
367,880
359,701
9;179
Total general government
986,520
1,068,705
810,093
258,612
6,449,740
6,468,313
5,943,193
525,120
Public protection:
Police
Fire
16,844,700
16,693,125
16,341,056
352,069
Total public protection
9,480,940
9,632,313
9 ,579,598
52,715
26,325,640
26,325,438
25,920,654
404,784
Public Works
1,566,420
1,675,745
1,555,833
119,912
Library
1,355,530
1,411,209
1,410,657
552
Total expenditures
35,697,330
35,880,705
34,830,337
1,050,368
EXCESS OF REVENUES OVER
EXPENDITURES
857,870
835,829
2,892,934
2,057,105
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
5,367,990
5,367,990
5,367,990
Total other financing sources (uses)
(6,216 099) _ (6,584,665) (6,584 665)
848,109
1,216,675
1,216,675
NET CHANGE IN FUND BALANCE
9,761
(380,846)
1,676,259
2,057,105
FUND BALANCE , beginning of year
4,009,975
4,009,975
6,288,953
2,278,978
FUND BALANCE, end of year
$
4,019,736
3,629,129
7,965,212$
4,336,083
The note to the required supplementary information is an integral part of this schedule
79
CITY OF LODI
Note to the Required Supplementary Information
June 30, 2013
Budgetary Data
The City adopts an annual budget for the general and special revenue funds. These budgets are prepared in accordance with 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 prior to the first regular Council meeting in June of each year, the City Manager submits to the City Council a proposed
Financial Plan and Budget for 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 basic financial statements reflects the following changes to the original budget:
• Budgeted expenditures represent original appropriations adjusted by budget transfers and appropriation amendments.
The legal level of budgetary control (that is, the level at which expenditures can not legally exceed the appropriated
a
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 account for 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 account for the financial resources to be used for the acquisition or construction of major capital facilities, other than
those financed by proprietary funds.
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2013
Assets
Cash and investments
Restricted assets
Receivables:
Accounts, net
Interest
Due from other funds
Due from other governmental agencies
Loans receivable
Inventory
Other assets
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:
Nonspendable:
Inventory
Restricted for:
Capital projects
Debt service
Other purposes
Unassigned
Total fund balances
Total liabilities and fund balances
83
Special Capital
Revenue Projects Total
$ 6,421,227 8,722,872 $ 15,144,099
10,355 10,355
323,630 176,500
500,130
2,809 3,464
6,273
151,451
151,451
685,293
685,293
44,707
44,707
3,339
3,339
1,351
1,351
$ 7,633,807 8,913,191 $
16,546,998
$ 1,306,878 644,742 $
1,951,620
615,413
615,413
1,842,596
1,842,596
90,080
90,080
2,012,371 2,487,338
4,499,709
3,339 3,339
4,964,236 6,425,853 11,390,089
1,166,066 1,166,066
(512,205) (512,205)
5,621,436 6,425,853 12,047,289
$ 7,633,807 8,913,191 $ 16,546,998
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
Year ended June 30, 2013
84
Special
Debt
Capital
Revenues:
Revenue
Service
Projects
Total
Licenses and permits
Intergovernmental revenues
$ 858,549
$
858,549
Charges for services
4,093,
4,093,766
Fines, forfeits and penalties
2,758,114141
16,504
2,774,645
Investment and rental income
2,600
2,600
Miscellaneous revenue
401,381
8,901
410,282
Total revenues
328,048
356,491
684,539
8,442,485
381,896
8,824,381
Expenditures:
Current:
General government
Public protection
2,579,285
2,579,285
Public works
361,031
361,031
Community development
2,975,881
2,975,881
Parks and recreation
1110620
,,
1,110,620
Capital outlay
2,370,375
2,370,375
Debt service:
3,414,201
2,856,241
6,270,442
Interest and fiscal charges
Bond issuance costs
483,420
483,420
Advance refunding escrow
244,908
244,908
Total expenditures
12,811,393
1,689,269
1,689,269
483,420
4,790,418
18,085,231
Deficiency of revenues under expenditures
_(4,368,908)
(483,420)
(4,408,522)
(9,260,850)
Other financing sources (uses):
Transfers in
Transfers out
4,091,525
483,420
2,602,792
7,177,737
Refunding bonds issued
(279,495)
(279,495)
Payment to refunded bond escrow agent
20,102,768
20,102,768
Total other financing sources (uses)
(19,847,510)
(19,847,510)
3,812,030
483,420
2,858,050
7,153,500
Net change in fund balances
(556,878)
(1,550,472)
(2,107,350)
Fund balances, beginning of year
6,178,314
7,976,325
14,154,639
Fund balances, end of year
$ 5,621,436
6,425,853 $
12,047,289
84
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
SPECIAL REVENUE FUNDS
Parks, Recreation and Community Services
This fund was established to account for the revenues and expenditures related to the activitiesof the Hutchins Street Square and Performing Arts
Theater and the wide -range of parks and 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.
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.
85
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 114% 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
improvement and maintenance of street systems; and Article 4 funds, which are restricted for public transit 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
ASSETS
Cash and Investments
Receivables:
Accounts, net
Interest
Due from other funds
Due from other governmental agencies
Loans receivable
Inventory
Other assets
TOTALASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and other liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFICIT)
Nonspendable
Inventory
Restricted for:
Capital projects
Other purposes
Unassigned
TOTAL FUND BALANCES (DEFICIT)
TOTAL LIABILITIES AND FUND BALANCES (DEFICIT)
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
June 30, 2013
Parks,
Recreation &
HOME Program &
Community
Public
Community
Community
Services
Safety
Development
Streets
Transportation
Development
Block Grants
Total
$
114,232
853,943
5,453,052
$
6.421,227
66,500
1,796
216,155
39,179
323,630
161
473
2,175
2,809
21,570
129,881
151,451
187, 560
11,242
486,491
685,293
3,339
44,707
44,707
1,286
65
3,339
$ 71,125
301,953
877,847
5,812,505
39,179
531,198 $
1,351
7,633807
$ 116,029
463,962
4,509
2,046
841,443
21
342,830 $
1,306,878
38,792
112,659
615,413
579,991
7.545
12,054
2,046
6,826
848,269
75,709
90,080
2,012,371
38,813
531,198
3,339
3,339
4,964,236 4,964,236
289,899 875,801 366 1,166,066
(512.205) (612,20§1
(508,866) 289,899 875,801 4,964,236 366 5,621,436
$ 71,125 301,953 877,847 5,812,505 39,179 531,198 $ 7,633,807
87
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2013
88
Total
$ 858,549
4,093,766
2,758,141
2,600
401,381
328,048
8,442,485
2,579,285
361,031
2,975,881
1,110,620
2,370,375
3,414,201
12,811,393
(4,368,908)
4,091,525
(279,495)
3,812,030
(556,878)
6,178,314
$ 5,621,436
Parks
Recreation &
HOME Program &
9
Community
Public
CommunityCommunity
REVENUES
Services
Safety
Development
Streets
Transportation
Development
Block Grants
Licenses and permits
Intergovernmental revenues
$
858,549
Charges for services
1,703,288
430,310
2,524,177
39,097
1,100,182
Fines, forfeits and penalties
599,715
455,138
Investment and rental income
2,600
Miscellaneous revenue
389,003
447
1,147
10,784
Total revenues
73,636
104,777
149,635
2,165,927
433,357
1,564,188
_ 3,139,734
39,097
1,100,182
EXPENDITURES
Current
General government
Public protection
2,579,285
Public works
361,031
Community development
1,897,269
1,078,612
Parks and recreation
1,089,050
21,570
Capital outlay
2,370,375
Total expenditures
3,359,070
55,131
4,949,660
361,031
1,089,050
5,256,339
55,131
1,100,182
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES
(2,783 733)
72,326
475,138
(2.116,605)
(16,034)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
3,413,695
110,000
567,830
Total other financing sources (uses)
(276,985)
(2.510)
3,136710
_ 107,490
567,830
NET CHANGE IN FUND BALANCES
352,977
72,326
582,628
(1,548,775)
(16,034)
FUND BALANCES (DEFICIT), beginning of year
(861,843)
217,573
293,173
6,513,011
16,400
FUND BALANCES (DEFICIT), end of year
$ (508,866)
289,899
875,801
4,964,236
366
88
Total
$ 858,549
4,093,766
2,758,141
2,600
401,381
328,048
8,442,485
2,579,285
361,031
2,975,881
1,110,620
2,370,375
3,414,201
12,811,393
(4,368,908)
4,091,525
(279,495)
3,812,030
(556,878)
6,178,314
$ 5,621,436
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2013
REVENUES
Charges for services
Investment and rental income
Miscellaneous revenue
Total Revenue
EXPENDITURES
Current
General government
Parks and recreation
Total Expenditures
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
WE
PARKS, RECREATION &
COMMUNITY SERVICES
FINAL
BUDGET ACTUAL VARIANCE
$ 1,748,480
1,703,288 $
(45,192)
380,000
389,003
9,003
57,397
73,636
16,239
2,185,877
2,165,927
(19,950)
2,855,862
2,579,285
276,577
2,453,157
2,370,375
82,782
5,309,019
4,949,660
359,359
(3,123,142)
(2,783,733)
339,409
3,413,695
3,413,695
(276,985)
(276,985)
3,136,710
3,136,710
13,568
352,977
339,409
(861,843)
(861,843)
$ (848,275)
(508,866) $
339,409
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2013
REVENUES
Intergovernmental revenues
Fines, forfeits and penalties
Investment and rental income
Miscellaneous revenue
Total Revenue
EXPENDITURES
Current
Public protection
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
all
PUBLIC SAFETY
FINAL
BUDGET ACTUAL
$ 643,307
430,310 $
2,600
1,240
447
1,000
645,547
433,357
VARIANCE
(212,997)
2,600
(793)
(1,000)
(212,190)
677,636 361,031 316,605
(32,089) 72,326 104,415
203,034 217,573
$ 170,945 289,899 $ 104;415
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2013
REVENUES
Licenses and permits
Charges for services
Investment and rental income
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 BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
91
COMMUNITY DEVELOPMENT
FINAL
BUDGET ACTUAL VARIANCE
$ 531,730
858,549 $
326,819
393,970
599,715
205,745
970
1,147
177
140,000
104,777
(35,223)
1,066,670
1,564,188
497,518
1,185,040
1,089,050
95,990
(118,370)
475,138
593,508
110,000
110,000
(2,510)
(2,510)
107,490
107,490
(10,880)
582,628
593,508
293,173
293,173
$ 282,293
875,801 $
593,508
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2013
REVENUES
Intergovernmental revenues
Charges for services
Investment and rental income
Miscellaneous revenue
Total Revenue
EXPENDITURES
Current
Public works
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
92
STREETS
FINAL Variance with
BUDGET Actual Final Budget
$ 3,229,100
2,524,177 $
(704,923)
452,860
455,138
2,278
26,180
10,784
(15,396)
20,000
149,635
129,635
3,728,140
3,139,734
(588,406)
1,897, 310
1,897,269
41
4,421,424
3,359,070
1,062,354
6,318,734
5,256,339
1,062,395
(2,590,594)
(2,116,605)
473,989
567,830
567,830
(2,022,764)
(1,548,775)
473,989
6,513,011
6,513,011
$ 4,490,247
4,964,236 $
473,989
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2013
REVENUES
Intergovernmental revenues
EXPENDITURES
Capital outlay
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
93
TRANSPORTATION
FINAL
BUDGET ACTUAL VARIANCE
$ 39,200 39;097 $ (103)
55,614 55,131 483
(16,414) (16,034) 380
16,400 16,400
$ 14 366 $ 380
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2013
REVENUES
Intergovernmental revenues
EXPENDITURES
Current
General government
Public works
Community development
Total Expenditures
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
HOME PROGRAM and COMMUNITY DEVELOPMENT
BLOCK GRANTS
FINAL
BUDGET ACTUAL VARIANCE
$ 1,604,733 1,100,182 $ (504,551)
94
1,583,163
1,078,612 504,551
21,570
21,570
1,604,733
1,100,182 504,551
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.
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
Foundation was 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.
Parks Capital
This fund was established to account for the acquisition, construction and installation of capital facilities for the various city parks.
95
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECT FUNDS
June 30, 2013
96
Vehicle and
Hutchins
Capital
Outlay
Parks
ASSETS
Eauj[ment
_ Street Square
Reserve
Capital
Total
Cash and investments
Restricted assets
$ 2,481,432
2,181
4,631,451
1,607,808
$
8,722,872
Receivables:
10,355
10,355
Accounts, net
Interest
176,500
176,500
TOTAL ASSETS
$ 2,481,432
2,181
2,571
893
3,464
_
4,644,3771,785,201
$
8---- 91
LIABILITIES
Accounts payable and other liabilities
Advances from other funds
$ 88 189
287,002
269,551
$
644,742
TOTAL LIABILITIES
88,189___1,842,5966
1,264,025
578,571
1,551,027
848,122
2,487,338
FUND BALANCES
Restricted for:
Capital projects
2,393,243
2,181
3,093;350
937,079
6,425,853
TOTAL LIABILITIES AND FUND BALANCES
$ 2,481,432
=_
2,181
4,644,377
1,785,201
$
8,913,191
96
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECT FUNDS
Year ended June 30, 2013
REVENUES
Charges for services
Investment and rental income
Miscellaneous revenue
Total revenues
EXPENDITURES
Current
Capital outlay
Debt service:
Bond issuance costs
Advance refunding escrow
Total expenditures
DEFICIENCY OF REVENUE UNDER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Refunding bonds issued
Payment to refunded bond escrow agent
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
Hutchins
Vehicle and Street
Equipment Square
16,420
16,420
Capital
2,265,195
Outlay
Parks
Reserve
Capital
2,407
14,097
5,532
3,369
53,577
340,071
7,939
357,537
402,090 1,627,293 826,858
244,908
1,689,269
402,090 3,561,470 826,858
(385.670) (3,553,531) (469,321)
284,020
2,265,195
53,577
20,102,768
(19,847,510)
284,020
2,520,453
53,577
(101,650)
(1,033,078)
(415,744)
2,494,893
2,181 4,126,428
1,352,823
$ 2,393,243
2,181 3,093,350937,079
97
Total
16,504
8,901
356,491
381,896
2,856,241
244,908
1,689,269
4,790,418
(4,408,522)
2,602,792
20,102,768
(19,847,510)
2,858,050
(1,550,472)
7,976,325
$ 6,425,853
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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 efficiency that 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
This fund is used to account for the following employee benefits:
Dental Employee assistance program
Chiropractic Employee recognition program
Life/accidental insurance Unemployment insurance
Medical Flexible spending program
Vision Long Term Disability
Insurance
This fund is used to account for the following insurances:
General Liability
Workers' Compensation
Other Insurance
. •
ASSETS
Current assets:
Cash and investments
Receivables:
Accounts, net
Interest
Inventory
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
Net OPEB obligation
Total liabilities
NET POSITION
Net investment in capital assets
Unrestricted (deficit)
Total net position
CITY OF LODI
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
June 30, 2013
Fleet
65,323
17,906
169,815
Services
Benefits
Insurance
Total
$ 55,979
1,088,103
11,593,365
$ 12,737,447
22,625
7,205,866
22,625
31
605
6,412
7,048
138,788
3,250,526
138,788
30,390
3,315,849
9,134,968
30,390
225,188
1,111,333
11,599,777
12,936,298
86,586
65,323
17,906
169,815
1,911,196
1,911,196
44,094
44,094
7,205,866
7,205,866
62,169
62,169
3,250,526
3,250,526
192,849
3,315,849
9,134,968
12,643,666
30,390
30,390
1,949
(2,204,516)
2,464,809
262,242
$ 32,339
(2,204,516)
2,464,809 $
292,632
K1
OPERATING REVENUES
Charges for 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 position
NET POSITION - BEGINNING OF YEAR
NET POSITION - END OF YEAR
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
Year ended June 30, 2013
Fleet
Services
Benefits
Insurance
Total
$ 1:575,842 7,999,931 3,108,504 $ 12,684,277
708,335
877,258
21,007
1,448
13,140
1,621,188
224,654
5,812,927
579,559
6,617,940
324,864
1,911,196
2,236,060
932,989
7,015,049
21,007
1,448
2,503,895
10,474,388
(45,346) 1,382,791 872,444 2,209,889
213
68
281
(45,065)
77,404
$ 32,339
101
1,321
33,037
34,358
1,417,149
(3,621,665)
(2,204,516)
22,447
71,822
94,269
966,713
1,498,096
2,464,809
23,981
104,927
128,908
2,338,797
(2,046,165)
$ 292,632
Cash flows from operating activities:
Receipts from customers and users
Receipts from interfund services provided
Cash paid to suppliers for goods & services
Payments to employees
Net cash provided by (used for) operating activities
Cash flows from investing activities:
Interest on investments
CITY OF LODI
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
Year ended June 30, 2013
Fleet
(30,361)
1,047,314
1,608,385
Services
Benefits
Insurance
Total
$ 68
10,412
80,427 $
90,907
1,575,842
7,999,931
3,108,504
12,684,277
(898,284)
(6,739,091)
(1,608,280)
(9,245,655)
(708,169)
(224,654)
1,382,791
(932,823)
(30,543)
1,046,598
1,580,651
2,596,706
182 716
27,734 28,632
Net increase (decrease) in cash and cash equivalents
(30,361)
1,047,314
1,608,385
2,625,338
Cash and cash equivalents, beginning of year
86,340
40,789
9,984,980
10,112,109
Cash and cash equivalents, end of year
$ 55,979
1,088,103
11,593,365
$ 12,737,447
Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:
Operating Income (loss)
$ (45,346)
1,382,791
872,444
$ 2,209,889
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation and amortization
1,448
1,448
Other revenues
68
33,037
71,822
104,927
Change in assets and liabilities:
Decrease (increasse) in accounts receivable
(22,625)
8,605
(14,020)
Increase in inventory
(9,619)
(9,619)
Increase (decrease) in accounts payable and other liabilities
22,740
24,462
(17,451)
29,751
Increase in compensated absences
166
166
Increase in self-insurance liability
645,231
645,231
Decrease in net OPEB obligation
(371,067)
(371,067)
Net cash provided by (used for) operating activities
$ (30,543)
1,046,598
1,580,651
$ 2,596,706
102
FIDUCIARY FUNDS
Private -purpose Trust Funds
These funds are used to account for trust agreements under which 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 POSITION
PRIVATE -PURPOSE TRUST FUNDS
June 30, 2013
Hutchins Street
Library Square Bequest Total
ASSETS
Cash and Investments $ 273,411 1,506 $ 274,917
NET POSITION $ 273,411 1,506 $ 274,917
103
CITY OF LODI
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
PRIVATE -PURPOSE TRUST FUNDS
Year ended June 30, 2013
ADDITIONS
Investment income and donations
DEDUCTIONS
Current
Library
CHANGE IN NET POSITION
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
Library
$ 20,267
Hutchins Street
Square Bequest
3 $
4,077
16,190 3
Total
20,270
4,077
16,193
257,221 1,503 258,724
$ 273,411 1,506 $ 274,917
104
CITY OF LODI
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCYFUND
Year ended June 30, 2013
105
Special Assessments
Balance
Balance
7/1/12
Additions Deductions
6/30/13
ASSETS
Cash and investments
$ 366,130
509,708 478,854 $
396,984
Interest receivable
535
223 535
223
TOTAL ASSETS
$ 366,665
509,931 479,389$
397,207
LIABILITIES
Agency obligations
$ 366,665
30,542 $
397,207
105
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STATISTICAL TABLES
STATISTICAL 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 reader with valuable insight
regarding the demographics and the overall health of the City.
Contents
Pages
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance
and well-being has changed over time. 108-113
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. 114-119
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. 120-126
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment
within which the City's financial activities take place and to help make comparisons over time and with other
governments. 127-129
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. 130-134
Sources
Unless otherwise noted, the information in these schedules are derived from the comprehensive annual financial
reports for the current year.
107
CITY OF LODI
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Business -type activities
Net investment in capital assets
$ 113,008 $
109,582 $
104,858 $ 100,233 $
95,533 $ 98,109 $
Fiscal Year
77,494 $
67,668 $
64,214
Restricted
6,600
6,533
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
Governmental activities:
6,417
1,880
7,445
(7,511)
Total business -type activities net position
$ 134,435 $
81,552 $
76,032 $ 71,642 $
60,085 $ 133,226 $
113,089 $
Net investment in capital assets
$ 106,828 $
107,587 $
114,165
$ 113,308 $
115,036 $
107,874 $
110,815
$ 111,572 $
106,293 $
100,749
Restricted
12,601
16,176
14,894
13,233
13,492
15,043
15,044
14,526
13,465
11,205
Unrestricted
1,157
(3,606)
(5,148)
(6,110)
(3,462)
(4,162)
(3,968)
(8,838)
(8,801)
(9,437)
Total governmental activities net position
$ 120,586 $
120,157 $
123,911
$ 120,431 $
125,066 $
118,755 $
121,891
$ 117,260 $
110,957 $
102,517
Business -type activities
Net investment in capital assets
$ 113,008 $
109,582 $
104,858 $ 100,233 $
95,533 $ 98,109 $
97,961 $
77,494 $
67,668 $
64,214
Restricted
6,600
6,533
5,303
8,657
8,711
10,969
2,351
2,578
Unrestricted
14,827
(34,563)
(34,129) (28,591)
(35,448) 26,460
6,417
1,880
7,445
(7,511)
Total business -type activities net position
$ 134,435 $
81,552 $
76,032 $ 71,642 $
60,085 $ 133,226 $
113,089 $
90,343 $
77,464 $
59,281
Primary government
Net investment in capital assets
$ 219,836 $
217,169 $
219,023 $
213,541 $
210,569 $
205,983 $
208,776
$ 189,066
$ 173,961 $
164,963
Restricted
19,201
22,709
20,197
13,233
13,492
23,700
23,755
25,495
15,816
13,783
Unrestricted
15,984
(38,169)
(39,277)
(34,701)
(38,910)
22,298
2,449
(6,958)
(1,356)
(16,948)
Total primary government net position
$ 255,021 $
201,709 $
199,943 $
192,073 $
185,151 $
251,981 $
234,980
$ 207,603
$ 188,421 $
161,798
Source: City of Lodi Financial Services Division
CITY OF LODI
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Program Revenues
Fiscal Year
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
Expenses
Charges for services:
63,230
64,251
62,167
69,664
74,000
69,284
65,809
59,112
53,908
Governmental activities:
General government
$ 2,337 $
1,718 $
1,793 $
2,184 $
1,631 $
1,544 $
1,280
$ 1,232 $
3,639 $
General government
$ 8,943
$ 9,381
$ 8,262
$ 8,749
$ 9,451
$ 8,307
$ 7,853
$ 9,746
$ 9,958
$ 13,167
Public protection
25,930
25,432
25,113
27,186
27,110
25;531
23,328
22,105
22,253
19,162
Public works
10,546
10,248
9,305
10,462
10,464
12,224
10,599
13,229
12,377
11,868
Community development
1,050
1,003
973
1,114
1,323
2,027
2,130
2,290
54
49
Library
1,342
1,381
1,355
1,440
1,495
1,696
1,630
1,485
1,484
1,409
Parks and recreation
2,933
2,913
5.778
5,077
4,609
4,414
4,172
4,114
4,565
4,095
Interest and fiscal charges
416
1,033
1,075
1,105
1,134
1,166
1,201
1,234
1,617
1,267
Total governmental activities expenses
51,160
51,391
51,861
55,133
55,586
55,365
50,913
54,203
52,254
50,968
Business type activities:
Business -type activities
55,703
4,971
9,119
11,381
6,007
10,192
17,122
7,038
(6,548)
Electric
61,106
62,599
63,399
64,364
73,358
65,201
67,534
63,780
57,308
55,943
Wastewater
13,423
17,441
11,687
11,289
10,940
12,227
9,271
8,574
10,653
6,297
Water
(34,877)
7,953
8,188
6,148
9,604
9,920
9,875
8,256
11,748
7,489
Transit
4,141
4,256
4,132
4,785
4,832
3,908
3,577
3,643
3,018
3,064
Total business -type activities expenses
43,793
92,249
87,406
86,586
98,734
91,256
90,257
84,253
82,727
72,793
Total primary government expenses
$ 94,953
$ 143,640
$ 139,267
$ 141,719
$ 154,320
$ 146,621
$ 141,170
$ 138,456
$ 134,981
$ 123,761
Program Revenues
Governmental activities:
Charges for services:
63,230
64,251
62,167
69,664
74,000
69,284
65,809
59,112
53,908
52,899
General government
$ 2,337 $
1,718 $
1,793 $
2,184 $
1,631 $
1,544 $
1,280
$ 1,232 $
3,639 $
3,144
Public protection
538
500
643
714
844
837
582
563
623
525
Public works
224
166
356
326
358
755
295
320
461
430
Community development
1,458
993
1,601
786
749
1,085
1,174
1,630
2,731
2,547
Library
44
43
47
48
44
53
53
54
49
50
Parks and recreation
1,404
1,241
1,245
1,269
1,158
851
1,007
918
833
679
Operating grants and contributions
2,341
2,300
2,236
1,927
1,951
2,305
2,589
2,587
2,195
2,321
Capital grants and contributions
4,216
5,025
6,737
5,122
10,822
4,717
6,975
14,631
17,559
13,894
Total governmental activities program revenues
12,562
11,986
14,658
12,376
17,557
12,147
13,955
21,935
25,359
21,043
Business -type activities:
Charges for services:
Electric
63,230
64,251
62,167
69,664
74,000
69,284
65,809
59,112
53,908
52,899
Wastewater
13,747
13,280
13,090
11,513
9,276
9,091
8,524
8,927
8,086
6,560
Water
12,441
12,083
11,940
11,716
11,787
11,350
10,040
8,343
7,713
6,007
Transit
185
186
195
217
251
278
401
386
340
244
Operating grants and contributions
5,178
4,214
3,983
3,449
3,653
3,381
2,621
3,377
2,731
2,547
Capital grants and contributions
4,715
3,206
5,150
1,408
5,774
8,064
19,984
11,146
3,401
8,268
Total business -type activities program revenues
99,496
97,220
96,525
97,967
104,741
101,448
107,379
91,291
76,179
76,525
Total primary government program revenues
$ _112.058$
109,206
$ 111,183
$ 110,343
$ 122,298
$ 113,595
121,334
$ 113,226
$ 10.1,538 $
97,568
Net
Governmental activities
$ (38,598)
$ (39,405)
$ (37,203)
$ (42,757)
$ (38,029)
$ (43,218)
$ (36,958)
$ (32,268)
$ (26,895) $
(29,925)
Business -type activities
55,703
4,971
9,119
11,381
6,007
10,192
17,122
7,038
(6,548)
3,732
Total primary government net expense
$ 17,105
$ (34,434) $ (28,084) $ (31,376) $ (32,022) $ (33,026) $ (19,836) $ (25,230) $ (33,443) $
(26,193)
(Continued)
109
CITY OF LODI
CHANGES IN NET POSITION (Continued)
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Business -type activities:
Fiscal Year
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
General Revenues and Other Changes in Net Position:
Litigation -environmental lawsuits proceeds
1,107
-
300
2,010
8,892
6,222
6,700
9,150
Governmental activities:
Other
1,258
1,244
1,353
923
1,891
2,717
1,749
2,056
2,432
Taxes:
Special item -forgiveness of debt
Property
$ 12,218 $
12,103 $
12,698 $
12,836 $
13,564 $
13,838 $
9,524 $
8,031 $
7,124 $
7,188
Franchise taxes
8,735
8,712
8,692
8,658
8,357
9,338
9,609
8,721
8,918
8,381
Business license tax
1,524
1,628
1,246
1,242
1,190
1,140
1,082
973
982
874
Transient occupancy tax
546
486
426
382
405
396
380
368
352
317
Grants and contributions not restricted to specific programs
9,382
9,277
8,954
7,064
8,249
9,593
14,772
14,215
13,193
11,895
Investment earnings
44
132
133
155
467
1,008
874
328
150
125
Other
1,980
2,052
1,556
1,917
2,382
1,077
621
1,012
608
590
Special item -gain on sale of parkland
1,766 $
7,870
321
(1,101)
17,001
27,377
19,182
26,62
,919
Transfers
5,682
1,261
6,657
5,868
5,368
3,693
4,727
4,923
4,008
2,915
Total governmental activities
40,111
35,651
40,683
38,122
39,982
40,083
41,589
38,571
35,335
32,285
Business -type activities:
Investment earnings
497
566
575
731
1,385
2,028
2,380
2,008
1,880
2,242
Litigation -environmental lawsuits proceeds
1,107
-
300
2,010
8,892
6,222
6,700
9,150
865
Other
1,258
1,244
1,353
923
1,891
2,717
1,749
2,056
2,432
2,635
Special item -forgiveness of debt
Special item -swap termination
(8.979)
15,277
Transfers
(5,682)
(1,261)
(6,657)
(5,868)
(5,368)
(3,693)
(4,727)
(4,923)
(4,008)
(2,915)
Total business -type activities
(2,820)
549
(4,729)
(3,914)
(9,061)
9,944
5,624
5,841
24,731
2,827
Total primary government
$ 37,291 $
36,200 $
35,954 $
34,208 $ 30,921
$ 50,027 $ 47,213
$ 44,412
$ 60,066 $
35,112
Change in Net Position
Governmental activities
$ 1,513 $
(3,754) $
3,480 $
(4,635) $
1,953
$ (3,135) $
4,631
$ 6,303
$ 8,440 $
2,360
Business -type activities
52,883
5,520
4,390
7,467
(3,054)
20,136
22,746
12,879
18,183
6,559
Total primary government
$ 54,396 $
1,766 $
7,870
2,832
(1,101)
17,001
27,377
19,182
26,62
,919
Source: City of Lodi Financial Services Division
110
CITY OF LODI
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
$ 20,012 $ 20,444 $ 19,087 $ 16,698 $ 17,010 $ 20,178 $ 21,044 $ 17,441 $ 14,684 $ 11,485_
Implemented GASB 54 during the 2011 fiscal year changing the presentation of fund balance.
Source: City of Lodi Financial Services Division
111
Fiscal Year
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
General Fund
Reserved
$
$
$
$ 389
$ 383
$
1,150
$ 1,144
$ 1,321
$ 1,185
$ 1,296
Unreserved
3,896
3,383
4,159
5,175
3,048
1,507
157
Nonspendable
9
6
357
Committed
277
0
Assigned
65
50
136
Unassigned
7,614
6,233
5,654
Total General Fund
$
7,965
$ 6,289
$ 6,147
$ 4,285
$ 3,766
$
5,309
$ 6,319
$ 4,369
$ 2,692
$ 1,453
All other governmental funds
Reserved
$
$
$
$ 7,801
$ 1,487
$
1,932
$ 1,874
$ 1,138
$ 4,942
$ 3,778
Unreserved, reported in:
Special revenue funds
963
6,540
7,433
6,651
6,271
1,400
534
Capital projects funds
3,649
5,217
5,504
6,200
5,663
5,650
5,720
Nonspendable
3
1
Restricted
12,556
15,017
13,786
Unassigned
(512)
(863)
(846)
Total all other governmental funds
$
12,047
$ 14,155
$ 12,940
$ 12,413
$ 13,244
$
14,869
$ 14,725
$ 13,072
$ 11,992
$ 10,032
$ 20,012 $ 20,444 $ 19,087 $ 16,698 $ 17,010 $ 20,178 $ 21,044 $ 17,441 $ 14,684 $ 11,485_
Implemented GASB 54 during the 2011 fiscal year changing the presentation of fund balance.
Source: City of Lodi Financial Services Division
111
Revenues:
Taxes
Licenses and permits
Intergovernmental revenues
Charges for services
Fines and forfeitures
Investment and rental income
Contributions and donations
Miscellaneous revenue
Total revenues
Expenditures:
Current:
General government
Public protection
Public works
Community development
Library
Parks and recreation
Capital outlay
Debt service:
Interest and fiscal charges
Principal payments
Advance refunding escrow
Total expenditures
Excess (deficiency) of revenues
Over (under) expenditures
CITY OF LODI
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Fiscal Year
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
$ 23,022 $ 22,928 $ 23,061 $ 23,118 $ 23,516 $ 24,712 $ 20,594 $ 18,094 $ 17,606 $ 16,908
921
686
954
520
431
683
717
1,020
2,511
2,021
14,625
15,289
16,865
12,579
13,229
14,980
19,892
25,491
22,834
16,657
3,880
3,427
3,946
4,116
3,329
4,757
4,696
3,848
9,404
4,479
1,632
1,357
1,407
1,444
1,416
1,321
1,245
1,173
1,190
1,085
1,389
1,264
817
923
922
1,312
998
707
753
537
2,370
2,254
689
4,180
3,776
3,826
3,598
3,440
3,691
3,412
1,078
813
799
1,093
1,762
822
304
653
458
473
46,547
45,764
48,538
43,793
44,605
48,587
48,446
50,986
54,756
42,160
8,522
8,820
7,667
7,666
8,431
9,545
8,893
8,345
10,858
10,815
26,282
25,249
24,489
24,466
24,716
23,979
22,211
20,863
20,351
17,491
4,532
4,174
3,715
4,383
4,657
5,842
5,587
7,827
7,361
7,303
1,111
1,037
969
1,013
1,341
2,006
2,062
1,847
1,411
1.381
1.357
1,322
1,500
1,673
1,588
1,468
1,420
1,356
2,370
2,254
4,127
4,180
3,776
3,826
3,598
3,440
3,691
3,412
6,271
2,961
9,377
5,108
6,791
4,207
3,526
7,232
9,508
10,041
483 1,039 1,081 1,110 1,139 1,170 1,205 1,238 1,645 1,245
245 630 752 725 789 898 900 892 855 759
1,689
52,916 47,545 53,534 49,973 53,140 53,146 49,570 53,152 55,689 52,422
(6,369) (1,781) (4,996) (6,180) (8,535) (4,559) (1.124) (2,166) (933) (10,262)
112
(Continued)
CITY OF LODI
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (continued)
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Source: City of Lodi Finance Services Division
113
Fiscal Year
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
Other financing sources (uses):
Transfers in
12,546
14,486
11,881
11,173
10,609
7,058
8,863
9,142
8,017
9,774
Transfers out
(6,864)
(11,348)
(5,224)
(5,305)
(5,242)
(3,365)
(4,136)
(4,219)
(4,009)
(6,859)
Proceeds from sale of land
98
Capital lease proceeds
Refunding bonds issued
20,103
124
883
Payment to refunded bond escrow agent
(19,848)
Total other financing sources (uses)
5,937
3,138
6,755
5,868
5,367
3,693
4,727
4,923
4,132
3,798
Special item- sale of parkland
-
630
Net change in fund balances
(432)
1,357
2,389
(312)
(3,168)
(866)
3,603
2,757
3,199
(6,464)
Fund balances, beginning of year
20,444
19,087
16,698
17,010
20,178
21,044
17,441
14,684
11,485
17,949
Fund balances, end of year
$ 20.012 $
20,444 $
19,087
$ 16,698 $
17,010 $
20.178 $
21,044
$ 17,441
$ 14,684
$ 11,485
Debt service as a percentage of noncapital expenditures
5.5%
3.9%
4.3%
4.3%
4.3%
4.4%
4.8%
4.9%
5.7%
5.0%
Source: City of Lodi Finance Services Division
113
City of Lodi
TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Fiscal Year
Note: General governmental tax revenues are included in taxes, licenses and permits, intergovernmental revenues and miscellaneous revenues.
Source: City of Lodi Financial Services Division
114
% Change
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2004 to
Property $
7,955
$ 7,861
$ 8,285
$ 8,342
$ 8,887
$ 9,210
$ 9,289
$ 7,676
$ 6,771
$ 6,948
2013
14%
Sales & Use
9,350
9,246
8,663
6,873
8,028
9,296
10,137
9,812
9,183
8,533
10%
Transient Occupancy
545
486
426
382
405
396
380
368
352
317
72%
Franchise
1,758
1,734
1,715
1,681
1,415
976
929
890
821
800
120%
Documentary Transfer
120
91
95
117
114
125
235
355
353
240
-50%
Motor Vehicle in Lieu
4,143
4,151
4,317
4,377
4,784
4,797
4,635
41402
4,606
2,767
50%
Public Protection
325
295
250
267
296
338
390
310
304
264
23%
Business License
1,187
1,182
958
962
1,038
1,140
1,082
973
982
874
36%
In Lieu Franchise
6,977
6,977
6,977
6,977
6,942
8,362
8,680
7,831
8,097
7,581
-8%
Totals $
32,360
$ 32,023
$ 31,686
$ 29,978
$ 31,909
$ 34,640
$ 35,757
$ 32,617
$ 31,469
$ 28,324
14%
Note: General governmental tax revenues are included in taxes, licenses and permits, intergovernmental revenues and miscellaneous revenues.
Source: City of Lodi Financial Services Division
114
CITY OF LODI
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
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 - $64,112 and other- $263,671 =$327,783
Note: In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed.
Each year; the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only assessed at the time that it is
sold to a new owner. At that point, the property being sold is reassessed at the purchase price. The assessed valuation data shown above represents the only data currently available with respect
to the the actual market value of taxable property and is subject to the limitations described above.
Source: San Joaquin County Auditor -Controllers Office
115
2013
2012
2011
2010
Fiscal Year
2009 2008
2007
2006
2005
2004
Secured roll
$ 4,737,807
$ 4,738,823
$ 4,907,588
$ 4,986,693
$ 5,156,706
$ 5,069,788
$ 4,799,141
$ 4,254,184
$ 3,877,398
$ 3,619,116
Utility roll
2,382
2,382
2,423
2,423
2,031
2,035
2,773
3,654
3,782
3,893
Unsecured roll
233,398
226,651
270,600
270,315
263,648
258,687
242,082
216,065
215,469
202,785
Gross assessed value
4,973,587
4,967,856
5,180,611
5,259,431
5,422,385
5,330,510
5,043,996
4,473,903
4,096,649
3,825,794
Less exemptions (1)
327,783
314,448
321,138
332,701
265,154
243,259
229,049
220,590
217,077
212,102
Net assessed value
4,645,804
4,653,408
4,859,473
4,926,730
5,157,231
5,087,251
4,814,947
4,253,313
3,879 572
3,613,692
Land
1,227, 969
1,264,884
1,322,830
1,345,815
1,562,729
1,537,554
1,431,203
1,226,293
1,107,776
1,027,462
Improvements
3,445,328
3,401,792
3,534,778
3,600,824
3,577,741
3,503,186
3,327,453
2,989,575
2,739,061
2,549,860
Personal property
300,290
301,180
323,003
312,792
281,915
289,770
285,340
258,035
249,812
248,472
Gross assessed value
4,973,587
4,967,856
5,180,611
5,259,431
5,422,385
5,330,510
5,043,996
4,473,903
4,096,649
3,825,794
Less exemptions (1)
327,783
314,448
321,138
332,701
265,154
243,259
229,049
220,590
217,077
212,102
Net assessed value
$ 4,645,804
$ 4,653,408
$ 4,859,473
$ 4,926,730
$ 5,157,231
$ 5,087,251
$ 4,814,947
$ 4,253,313
$ 3,879,572
_$_3,613.L692
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 - $64,112 and other- $263,671 =$327,783
Note: In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed.
Each year; the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only assessed at the time that it is
sold to a new owner. At that point, the property being sold is reassessed at the purchase price. The assessed valuation data shown above represents the only data currently available with respect
to the the actual market value of taxable property and is subject to the limitations described above.
Source: San Joaquin County Auditor -Controllers Office
115
CITY OF LODI
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
(Rate per $100 of assessed value)
Source: San Joaquin County Tax Collector
116
Basic
Fiscal
Countywide
Year
Levy
School
All Other
Total
2013
1.0000
0.0646
0.0000
1.0646
2012
1.0000
0.0658
0.0000
1.0658
2011
1.0000
0.0626
0.0000
1.0626
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
Source: San Joaquin County Tax Collector
116
CITY OF LODI
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND SEVEN YEARS AGO
(Dollar amounts in thousands)
Fiscal Year
2013 2006
Information for 2005 and 2004 is not available.
Source: San Joaquin County Assessor's Office 117
Percent of
Percent of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Rank
Value
Value
Rank
Value
Lodi Memorial Hospital Assn
$ 147,153
1
3.291 %
General Mills
133,725
2
3.006
$ 152,102
1
3.768 %
Pacific Coast Producers
80,933
3
1.820
43,068
2
1.067
Calif Physicians Service Corp
57,739
4
1.206
Cottage Bakery Inc
43,695
5
0.889
25,341
4
0.628
Westcore Vine LP
24,109
6
0.505
Costco
20,014
7
0.447
Dart Container Corp
18,573
8
0.382
17,625
8
0.437
Archer Daniels Midland Co Corp
17,188
9
0.367
Certainteed Corp
15,390
10
0.340
18,842
7
0.467
Pacific Coast Producers Corp.
34,267
3
0.849
Kristmont West
21,961
5
0.544
Parinehs Exchange 2004 LLC
19,539
6
0.484
Fountains at Lodi LLC
13,031
9
0.323
Panattoni, Carl D ETAL
12,984
10
0.322
Principal Secured Property Valuation
558,519
12.665
358,760
8.889
Other Secured Taxpayers
4,179:288
94.768
3,895,424
96.575
Exemptions relative to secured tax roll
327.783
7.433
220,590
5.464
Total Secured Property Valuation
$ 4,410,024
100.000 %
$ 4,033,594
100.000 %
Information for 2005 and 2004 is not available.
Source: San Joaquin County Assessor's Office 117
CITY OF LODI
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
1) Per agreement with San Joaquin County, the County provides the City of Lodi with 100% of the
amount owed to the City for secured properties, regardless of collection status. In exchange, the
County is entitled to 100% of revenues collected for interest and penalties. This agreement is
commonly referred to as the Teeter Plan.
Source: San Joaquin County Auditor/Controller's Office
118
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
2013
$ 7,865
$ 7,865
100.0%
$ 7,865
100.0%
2012
7,754
7,754
100.0%
7,754
100.0%
2011
8,143
8,143
100.0%
8,143
100.0%
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%
1) Per agreement with San Joaquin County, the County provides the City of Lodi with 100% of the
amount owed to the City for secured properties, regardless of collection status. In exchange, the
County is entitled to 100% of revenues collected for interest and penalties. This agreement is
commonly referred to as the Teeter Plan.
Source: San Joaquin County Auditor/Controller's Office
118
CITY OF LODI
ELECTRICITY SOLD BY TYPE OF CUSTOMER
LAST EIGHT FISCAL YEARS
Type of Customer
Billed Accounts
2013
2012
2011
2010
2009
2008
2007
2006
City Accounts
204
195
197
189
189
187
186
184
Contract Large Industrial
5
5
Contract Medium Industrial
1
1
6
Contract Small Industrial
1
0
2
Domestic Residential
22,541
22,361
22,360
22,525
22,506
22,510
22,938
1
22,860
Domestic Mobile Home Park
13
13
13
13
13
13
13
13
Dusk to Dawn
88
92
89
89
92
92
95
95
Large Commercial
344
336
350
357
377
380
375
359
Large Industrial
40
38
40
39
37
32
33
33
Medium Industrial
11
9
9
9
8
8
10
13
Residental Low Income
2,582
2,531
2,258
2,193
1,847
1,943
2,003
1,910
Small Commerical
3,358
3,340
3,324
3,280
3,249
3,199
3,241
3,279
Small Industrial
9
11
11
10
10
9
9
9
Total
29,190
28,926
28,651
28,704
28,328
28,380
28,909
28,764
Information prior to the implementation of GASB 44 is not available.
Source: City of Lodi Financial Services Division
119
CITY OF LODI
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(Dollar amounts in thousands, except per capita)
Governmental Activities Business -type Activities
Details regarding the City's outstanding debt can be found in the Note 8 of these financial statements.
(1) gee uemograpnlc and tconomlc z:itausucs taole tor personal Income and population.
Source: City of Lodi Financial Services Division
120
Certificates
Total
Certificates
Total
Total
Fiscal
of
Loan
Notes
Governmental
of
Notes
Business -type
Primary
Percent of Personal
Per
Year
Participation
Payable
Payable
Activities
Participation
Payable
Activities
Government
Income (1)
Capita (1)
2013
$ 19,080
$ 245
$ 19,325
$ 164,790
$
$ 164,790
$ 184,115
9.43 %
2,926
2012
21,025
245
21,270
171,675
171,675
192,945
10.25
3,071
2011
21,655
245
21,900
177,150
177,150
199,050
10.58
3,186
2010
22,265
245
22,510
142,935
1,409
144,344
166,854
8.43
2,626
2009
22,855
245
23,100
147,175
1,585
148,760
171,860
8.74
2,714
2008
23,420
94
245
23,759
139,760
1,755
141,515
165,274
8.94
2,608
2007
23,975
187
245
24,407
121,675
1,918
123,593
148,000
8.12
2,335
2006
24,510
279
245
25,034
125,340
2,077
127,417
152,451
8.90
2,427
2005
25,030
368
245
25,643
126,615
2,230
128,845
154,488
9.43
2,473
2004
25,530
456
245
26,231
148,675
2,378
151,053
177,284
11.43
2,917
Details regarding the City's outstanding debt can be found in the Note 8 of these financial statements.
(1) gee uemograpnlc and tconomlc z:itausucs taole tor personal Income and population.
Source: City of Lodi Financial Services Division
120
CITY OF LODI
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(Dollar amounts in thousands, except per capita)
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 of Lodi Financial Services Division
121
Percent of
Certificates
Less Amounts
Assessed
Fiscal
of
Available for
Value (1) of
Per
Year
Participation
Debt Service
Net
Property
Capita
2013
$ 19,080
$ 10 $
19,070
0.4 %
303.04
2012
21,025
1,692
19,333
0.4
307.73
2011
21,655
1,692
19,963
0.4
319.55
2010
22,265
1,692
20,573
0.4
323.73
2009
22,855
1,692
21,163
0.4
334.26
2008
23,420
1,692
21,728
0.4
342.92
2007
23,975
1,692
22,283
0.4
351.49
2006
24,510
1,692
22,818
0.5
363.25
2005
25,030
1,692
23,338
0.6
373.61
2004
25,530
1,692
23,838
0.6
392.27
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 of Lodi Financial Services Division
121
CITY OF LODI
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(Dollar amounts in thousands)
Total net debt applicable to the limit as 10.8% 10.9% 10.8% 11.0% 10.8% 11.2% 12.2% 14.1% 15.7% 17.2%
a percent of debt limit
The Government Code of the State of California 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.
Effective with 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 a 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 Slate of California for local governments located within the state.
( 1) Reflects City assessed valuation with other exemptions of S263.671 deducted for 2013
Source: San Joaquin County Auditor -Controller's Office
122
FISCAL YEAR
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
Assessed valuation (1)
$ 4,709,916
$ 4,718,766
$ 4,926,130
$ 4,995,362
$ 5,227,580
$ 5,159,269
$ 4,887,074
$ 4,325,000
$ 3,951,862
$ 3,686,227
Conversion percentage
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
Adjusted assessed valuation
1,177,479
1,179,692
1,231,533
1,248,841
1,306,895
1,289,817
1,221,769
1,081,250
987,966
921,557
Debt limit percentage
15%
15%
15%
15%
15%
15%
15%
15%
15%
15%
Debt Limit
176,622
176,954
184,730
187,326
196,034
193,473
183,265
162,188
148,195
138,234
Total net debt applicable to limit
19,070
19,333
19,963
20,573
21,163
21,728
22,283
22,818
23,338
23,838
Legal debt margin
$ 157,552
$ 157,621
$ 164,767
$ 166,753
$ 174,871
$ 171,745
$ 160,982
$ 139,370
$ 124,857
$ 114,396
Total net debt applicable to the limit as 10.8% 10.9% 10.8% 11.0% 10.8% 11.2% 12.2% 14.1% 15.7% 17.2%
a percent of debt limit
The Government Code of the State of California 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.
Effective with 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 a 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 Slate of California for local governments located within the state.
( 1) Reflects City assessed valuation with other exemptions of S263.671 deducted for 2013
Source: San Joaquin County Auditor -Controller's Office
122
CITY OF LODI
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
June 30, 2013
OVERLAPPING DEBT:
San Joaquin Community College District
Lodi Unified School District
San Joaquin County Certificates of Participation
Lodi Unified School District Certificates of Participation
SUBTOTAL OVERLAPPING DEBT
DIRECT DEBT:
City of Lodi Certificates of Participation
City of Lodi - Note payable
SUBTOTAL DIRECT DEBT
TOTAL DIRECT AND OVERLAPPING DEBT(2)
2012-13 Assessed Valuation
2012-13 Population
DEBT RATIOS
(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.
SOURCE: California Municipal Statistics, San Francisco, CA
San Joaquin County Auditors -Controller Office
State of California, Department of Finance, Demographic Research Unit
123
Percentage
City's Share
Total Debt
Applicable (1)
of Debt
$ 125,821,425
8.865 %
$ 11,154,069
94,740,000
37.209
35,251,807
161,110, 000
9.821
15,822,613
39,800,000
37.209
14,809,182
77,037,671
19,080,000
100.00
19,080,000
245,000
100.00
245,000
19,325,000
$ 96,362,671
$ 4,973,587,000.
62,930
Per Capita
Value
Total Gross Debt $ 96,362,671
$ 1,531
1.94%
(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.
SOURCE: California Municipal Statistics, San Francisco, CA
San Joaquin County Auditors -Controller Office
State of California, Department of Finance, Demographic Research Unit
123
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) Expenses (2) Revenue Principal Interest Total Coverage
Electric Revenue Certificates of Participation
2013 $
63,974
$ 51,209
$ 12,765
$ 4,575
$ 3,839
$ 8,414
1.52
2012
65,220
50,164
15,056
3,270
4,021
7,291
2.07
2011
63,307
48,397
14,910
3,080
4,152
7,232
2.06
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
Source: City of Lodi Financial Services Division continued
124
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 Coverage
Wastewater Certificates of Participation
2013 $
14,305 $
5,674
$ 8,631
$ 1,500
$ 2,560
$ 4,060
2.13
2012
13,787
6,659
7,128
1,430
2,688
4,118
1.73
2011
16,508
5,972
10,536
1,370
2,748
4,118
2.56
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
Source: City of Lodi Financial Services Division continued
125
CITY OF LODI
PLEDGED -REVENUE COVERAGE (continued)
LAST TEN FISCAL YEARS
(Dollars amounts in thousands)
Includes all nongeneral obligation long term debt backed by pledged revenues.
Details regarding the City's outstanding debt can be found in the Note 8 of these financial statements
(1) and other revenue.
(2) depreciation and amortization.
Net of Build America Bonds interest subsidy.
Source: City of Lodi Financial Services Division
126
Less:
Adjusted
Adjusted
Net
Fiscal
Annual
Operating
Available
Debt Service
Year
Revenues (1)
Expenses (2)
Revenue
Principal
Interest (3)
Total
Coverage
Water Certificates of Participation
2013
$ 13,367
$ 6,899
$ 6,468
$ 800
$ 1,535
$ 2,335
2.77
2012
13,275
5,392
7,883
775
1,530
2,305
3.42
2011
14,051
5,662
8,389
1,409
874
2,283
3.67
Includes all nongeneral obligation long term debt backed by pledged revenues.
Details regarding the City's outstanding debt can be found in the Note 8 of these financial statements
(1) and other revenue.
(2) depreciation and amortization.
Net of Build America Bonds interest subsidy.
Source: City of Lodi Financial Services Division
126
CITY OF LODI
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
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 of persons, personal dividend income, personal interest income, and personal current transfer receipts.
Per capita personal income is calculated as the personal income of residents of 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, Department of Finance, Demographic Reseach Unit and Department of Labor.
127
Personal
Per
Population
San Joaquin
Population
Rank in Size
Income
Capita
Fiscal
Square
City
Percent
County
Percent
of California
(millions of
Personal
Unemployment
Year
Miles
Population
Change
Population
of County
Cities
dollars)
Income
Rate
2013
13.92
62,930
0.2%
698,414
9.0%
137 $
1,952
31,013
9.0%
2012
13.92
62,825
0.8%
695,750
9.0%
136
1,931
30,732
11.3%
2011
13.92
62,473
0.6%
690,899
9.0%
135
1,882
30,132
13.4%
2010
13.92
63,549
0.6%
694,293
9.2%
136
1,980
31,166
13.3%
2009
13.92
63,313
-0.1%
689,480
9.2%
135
1,967
31,071
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%
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 of persons, personal dividend income, personal interest income, and personal current transfer receipts.
Per capita personal income is calculated as the personal income of residents of 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, Department of Finance, Demographic Reseach Unit and Department of Labor.
127
CITY OF LODI
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Employer
Employees
Lodi Unified School District
3,650
Lodi Memorial Hospital
1,320
Pacific Coast Producers
1,000
Blue Shield
778
Cottage Bakery
509
General Mills
435
City of Lodi
377
Walmart
230
Farmers & Merchants Bank
190
Target
160
Valley Industries
1
CertainTeed
2
Total
8,649
Current
Nine Years Ago
Percent
Percent
of Total City
of Total City
Rank
Employment
Employees
Rank
Employment
1
13.97 %
2,940
1
11.25 %
2
5.05
1,121
2
4.29
3
3.83
800
3
3.06
4
2.98
5
1.95
6
1.67-
500
4
1.91
7
1.44
428
5
1.64
8
0.88
340
7
1.30
9
0.73
310
8
1.19
10
0.61
189
9
0.72
360
6
1.38
106
10
0.41
33.11
7,094
27.15
Note: The City of Lodi implemented GASB 44 for the fiscal year ended June 30, 2006.
128
CITY OF LODI
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY DEPARTMENT LAST TEN FISCAL YEARS
Fiscal Year
2013 2012 2011` 2010 2009 2008 2007 2006 2005 2004
Department:
Administration
10
12
13
31
32
19
35
33
37
36
Community Development
9
9
13
13
13
14
18
17
17
17
Electric
40
40
41
51
50
48
64
65
52
52
Financial Services
24
26
39
30
28
38
38
Fire
53
54
64
64
64
64
64
61
68
61
Internal Services
31
29
35
Library
11
12
14
14
14
14
16
14
15
15
Parks & Recreation
31
31
30
34
31
34
34
Parks, Recreation and Cultural Services
27
29
37
Police
104
103
125
125
125
125
116
117
117
116
Public Works
92
93
98
102
102
107
114
99
111
110
Total
377
381
440
455
457
460
491
465
489
479
Community Center, Human Resources and Information Systems were previously included in Administration. Budget, Financial Services, Human Resources
and Information Services are now Internal Services. Community Center, Parks & Recreation are now Parks, Recreation and Cultural Services.
Source: City of Lodi Budget Document
129
General government:
Building permits issued
Business tax certificates:
Retail sales and service
Manufacturers and processors
Professions
Miscellaneous contractors, peddlers, delivery vehicles, etc.
Utility billing/customer service:
Number of customers
Energy sales (KWH)
Peak demand (MW)
Public safety:
Police:
Major reported crimes
Total arrests
Dispatched calls for service
Fire:
Interior structure fire calls
Non-structural fire calls
Hazardous materials calls
Emergency medical calls
Total emergency calls
Total number of units dispatched
Public works:
Miles of streets resurfaced
Fleet job orders completed
Trees planted
Water utility:
New connections
Water main breaks
Wastewater utility:
Average daily treatment (million gal/day)
Library:
Registered borrowers
Circulation of library materials
Reference, research and informational questions answered
Annual attendance at libraries
Number of programs offered
Annual attendance at programs
Public access computer usage
CITY OF LODI
OPERATING INDICATORS BY FUNCTION/PROGRAM/DEPARTMENT (continued)
LAST EIGHT FISCAL YEARS
2,643
3,573
2,885
Fiscal Year
2,454
2,993
3,096
2013
2012
2011
2010
2009
2008
2007
2006
1,578
1,461
2,022
1,709
1,754
1,851
2,317
2,699
2,526
2,485
2,530
2,406
2,496
2,442
2,632
2,565
78
77
76
80
82
78
78
125
362
364
371
373
380
398
404
322
1,456
1,362
1,357
1,312
1,411
1,063
1,127
533
23,927
23,761
23,575
25,573
25,555
25,555
25,712
25,655
435,822,465
435,655,731
421,130,329
434,200,987
452,075,554
450,407,709
458,740,745
459,637,092
122
116
116
120.
134
134
144
127
2,643
3,573
2,885
2,377
2,454
2,993
3,096
3,234
3,825
4,350
4,410
4,238
4,646
5,590
5,463
5,162
50,124
46,756
52,061
51,870
56,391
55,911
53,686
55,937
67
57
56
47
69
88
79
66
209
163
121
123
123
160
163
158
58
41
69
70
70
35
27
26
3,882
3,820
3,752
3,494
3,364
3,420
3,213
2,912
5,823
5,620
5,753
5,385
5,392
5,346
5,000
4,447
7,954
7,855
7,835
7,390
7,038
7,841
7,005
6,055
6
6
6
3
6
5
4
33
1,803
1,953
2,810
3,303
3,921
3,520
6,938
5,608
131
96
130
95
8
7
8
17
17
35
110
266
14
10
8
6
4
4
10
8
5.10MG
6.5MG
6.5MG
6.5MG
6.5MG
6.5MG
6.9MG
6.7MG
51,594
47,147
43,927
39,199
53,530
48,969
44,558
52,779
215,293
217,742
248,250
251,967
219,711
280,466
273,270
281,216
16,270
14,463
16,234
16,501
15,379
19,257
18,854
17,342
224,762
222,148
210,279
207,123
n/a
296,793
288,070
287,986
407
432
388
344
316
348
339
320
14,443
12,993
13.133
10,676
8,765
11.242
10,700
10,872
45,871
47,428
58,990
52,124
38,388
38,999
35,260
29,896
130
(Continued)
Community center:
Community center bookings
Instructional classes
Registered students
Yearly attendance
Parks and recreation:
After school program registration (number of participants/sites)
Adult sports
Program/Participation
Programs offered
Partnerships
Tournaments
Youthr een sports
Program attendance
Programs offered
Aquatics
Program attendance
Number of programs
Note: The City of Lodi implemented GASB 44 for the fiscal year ended June 30. 2006.
Information prior to the implementation of GASS 44 is not available.
Source: City of Lodi
CITY OF LODI
OPERATING INDICATORS BY FUNCTION/PROGRAM/DEPARTMENT (continued)
LAST EIGHT FISCAL YEARS
3,643
3,889
4,251
Fiscal Year
24
16
23,414
34,366
2013
2012
2011
2010
2009
2008
2007
2006
718
698
926
789
475
494
302
220
580
307
536
583
507
530
478
509
2,819
3,713
3,438
3,525
3,316
5,550
3,548
4,369
13,925
13,925
14,217
13,355
14,050
14,410
14,429
15,369
1,715/20
3,232/20
1,920/4
1,920/4
1,920/4
3,014/4
145,000/12
135,000/12
2,246
2,420
2.528
2,528
2,284
28,000
36,000
36,000
16
15
16
16
13
11
11
11
2
3
5
5
1
3
3
5
6
12
7
7
10
10
20
20
3,643
3,889
4,251
19
24
16
23,414
34,366
32,566
13
25
13
131
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
CITY OF LODI
CAPITAL ASSET STATISTICS BY FUNCTIONlPROGRAM/DEPARTMENT (continued)
LAST NINE FISCAL YEARS
(Continued)
132
Fiscal Year
2013
2012
2011
2010
2009
2008
2007
2006
2005
General government:
Total square miles
13.92
13.92
13.92
13.92
13.92
13.92
13.17
12.81
12.81
Public safety:
Police:
Facilities:
Stations
1
1
1
1
1
1
1
1
1
Animal control facility
1
1
1
1
1
Police training facility (pistol range)
1
1
1
1
1
1
1
1
1
1
1
1
1
Vehicles:
Marked patrol cars
23
23
23
23
25
25
25
28
28
Motorcycles and scooters
5
5
5
5
5
5
5
4
1
Animal control vehicles
2
2
2
2
2
2
2
3
3
Other automobiles
37
37
37
37
38
40
41
41
41
Fire:
Facilities:
Fire stations
4
4
4
4
4
4
4
4
4
Vehicles:
Fire engines
6
6
7
7
7
6
6
5
5
Trucks/Trailers
6
5
5
6
6
9
8
7
7
Other automobiles
11
9
8
10
12
7
10
11
11
Public works:
Miles of streets
202
202
202
202
202
200
184
198
100
Miles of alley ways
16
16
16
16
16
16
16
16
14
Traffic signals
67
67
67
62
62
64
66
64
60
Street lights
7,270
7,270
7,270
7,270
7,270
7,270
7,270
7,203
6,995
(Continued)
132
CITY OF LODI
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAWDEPARTMENT (continued)
LAST NINE FISCAL YEARS
Parks and recreation:
Parks and squares
Park acreage
Boating facilities - launch lanes
Senior center
Community Centers
Swimming pools
Baseball/softball diamonds
Tennis courts
Skateboard park
Playgrounds
Ballpark
Soccer Field
Football Field
Handball/Basketball/Volleyball Courts/Bocce Courts
Horseshoe Pits
Library:
Central library
Total items in collection
Integrated library system
Microfilm readers
Microfilm readers/printers
Self check out machines
Electric utility:
Overhead lines 12kv (miles)
Overhead lines 60kv (miles)
Underground lines (miles)
Fiscal Year
2013
2012
2011
2010
2009
2008
2007
2006
2005
26
26
26
26
26
23
23
23
23
361
373
373
373
371
275
275
275
275
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
4
4
4
4
4
3
3
3
3
20
24
24
24
24
26
26
26
26
11
11
11
11
11
11
11
11
11
1
1
1
1
1
1
1
1
1
20
22
25
25
25
22
22
22
22
24
24
24
24
24
26
26
26
26
22
22
22
22
22
22
22
22
22
1
1
1
1
1
3
3
3
3
12
10
10
10
10
8
8
8
8
8
8
6
6
6
7
10
10
10
1
1
1
1
1
1
1
1
1
149,243
135,113
134,804
130,530
135,197
142,885
142,098
134,129
137,673
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
2
2
2
2
0
1
1
1
133
133
133
130
130
130
129
129
129
14
14
13
13
13
13
13
13
13
159
159
157
155
154
153
151
151
151
133
(Continued)
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
CITY OF LODI
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMMEPARTMENT (continued)
LAST NINE FISCAL YEARS
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
134
Fiscal Year
2013
2012
2011
2010
2009
2008
2007
2006
2005
236
236
236
237
233
233
238
235
230
4,100,000
1,100,000
1,100,000
1,100,000
1,100,000
1,100,000
1,100,000
1,100,000
1,100,000
28
27
27
26
26
26
26
26
25
3
2
2
2
2
2
2
2
2
196
196
196
191
194
194
189
182
182
8.5 MG
8.5 MG
8.5 MG
8.5 MG
8.5 MG
8.5 MG
8.5 MG
8.5 MG
8.5 MG
1
1
1
1
1
1
9
1
1
124
124
124
124
161
119
161
115
114
14
14
14
14
14
14
14
13
14
1
1
1
1
1
1
1
1
1
2,453
2,453
2,453
2,453
2,453
2,453
2,453
2,453
2,453
25
25
25
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
134
SINGLE AUDIT REPORTS
CITY OF LODI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2013
Federal Grantor
Pass-through Grantor or Direct
Program Title
U.S. Department of Housing and Urban Development
Direct:
Community Development Block Grants/Entitlement Grants - 2010-11 Program Year
Community Development Block Grants/Entitlement Grants - 2011-12 Program Year
Community Development Block Grants/Entitlement Grants - 2012-13 Program Year
Total Community Development Block Grants/Entitlement Grants
Passed through State of California Department of Housing and Community Development:
Home Investment Partnerships Program
Home Investment Partnerships Program - prior year loans with continuing
compliance requirements
Total Home Investment Partnerships Program
Passed through California State University of Fresno:
Sustainable Communities Planning Grant
Total U.S. Department of Housing and Urban Development
U.S. Department of Justice
Direct:
ARRA - Public Safety Partnership and Community Policing Grants
Edward Byrne Memorial Justice Assistance Grant Program
Total U.S. Department of Justice
CFDA
Grant/Project
Number
Number
Expenditures
14.218
B -10 -MC -06-0038
$ 138,959
14.218
B -11 -MC -06-0038
284,498
14.218
B -12 -MC -06-0038
522,310
945,767
14.239
09 -HOME -6271
21,570
14.239
09 -HOME -6271
44,707
66,277
14.703
CARIP0004-10
132,845
$ 1,144,889
16.710
2009-RK-WX-0151
250,449
16.738
2010 -DJ -BX -0941
2,374
$ 252,823
See accompanying notes. to the schedule of expenditures of federal awards.
135
CITY OF LODI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
Federal Grantor
Pass-through Grantor or Direct
Program Title
U.S. Department of Transportation
Direct:
Federal Transit - Formula Grants
Federal Transit - Formula Grants
Federal Transit - Formula Grants
Federal Transit - Formula Grants
Federal Transit - Formula Grants
ARRA - Federal Transit - Formula Grants
Total Federal Transit - Formula Grants
Passed through California Department of Transportation:
Highway Planning and Construction
Passed through State of California Office of Traffic Safety
State and Community Highway Safety
State and Community Highway Safety
Total State and Community Highway Safety
Alcohol Impaired Driving Countermeasures Incentive Grants I
Minimum Penalties for Repeat Offenders for Driving While Intoxicated
Passed through University of Berkeley:
Minimum Penalties for Repeat Offenders for Driving While Intoxicated
Passed through City of Stockton:
Minimum Penalties for Repeat Offenders for Driving While Intoxicated
Total Minimum Penalties for Repeat Offenders for Driving While Intoxicated
Total U.S. Department of Transportation
Total Federal Awards
CFDA
Grant/Project
Number
Number
Expenditures
20.507
CA -95-X169-00
$ 1,839,790
20.507
CA -90-Y565-00
80,656
20.507
CA -90-Y634-00
37,100
20.507
CA -90-Y736-00
71,181
20.507
CA -90-Z094-00
1,255,425
20.507
CA -96-X052-01
402,537
3,686,689
20.205
STPL-5154(040)
160,739
20.600
DD1331
17,379
20.600
PT1357
36,768
54,147
20.601
20564
25,570
20.608
PT1357
9,371
20.608
SC 11230
58,743
20.608
AL1160
18,861
86,975
4,014,120
$ 5,411,832
See accompanying notes to the schedule of expenditures of federal awards.
136
CITY OF LODI
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 1 — GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2013, presents the activity of all federal award programs of
the City of Lodi, California (City). The City reporting entity is defined in Note 1 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 — LOAN PROGRAM
The City participates in certain federal award programs that sponsor revolving loan programs, which are administered by the City. These programs maintain
servicing and trust arrangements with the City to collect loan repayments. The funds are returned to the programs upon repayment of the principal and interest
and programs funded by these repayments are reported as expenditures in the SEFA. The federal government has imposed certain continuing compliance
requirements with respect to the loans rendered under the programs. In accordance with Subpart B, Section 205 of the Office of Management and Budget
Circular A-133, the City has reported the value of total outstanding and new loans made during the current year.
The following is a summary of the loan program balances and activities that have continuing compliance requirements at June 30, 2013.
Program Title
Home Investment Partnerships Program
June 30, 2013
CFDA Loans
Number Outstanding
14.239 $ 44,707
137
Prior Year Loans
With Continuing Fiscal Year
Compliance 2013 Loan
Requirements Disbursements
$ 44,707 $ -
Sacramento
3000 S Street, Suite 300
Sacramento, CA 95816
916.928.4600
Walnut Creek
Oakland
LA/Century City
Newport Beach
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER San Diego
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS Seattle
The Honorable Members of City Council
City of Lodi, California
We have audited, 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, 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, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon
dated December 2, 2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine
the audit procedures that are appropriate in the circumstances 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. Accordingly, we do not express an opinion on the effectiveness of the City's internal
control.
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 a 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. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material
weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies
in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were
not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified. We did identify a deficiency in internal control, described in the accompanying schedule
of findings and questioned costs as item 2013-1 that we consider to be a significant deficiency.
138
w v w.m9ocpa.com
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 Government Auditing Standards.
City's Response to Findings
The City's response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The City's response was
not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of the Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an
opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
..�/'1'��.�.r�-cmc. �. �- t✓ �C�,� -�-C-� ..��i
Sacramento, California
December 2, 2013
139
Sacramento
3000 S Street, Suite 300
Certified Public Accoun ts. Sacramento, CA 95816
9tb.92s.aa00oo
Walnut Creek
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL Oakland
EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH WCenturyCity
OMB CIRCULAR A-133
Newport Beach
The Honorable Members of City Council
City of Lodi, California San Diego
Report on Compliance for Each major Federal Program Seattle
We have audited the City of Lodi's compliance with the types of compliance requirements described in the OMB Circular A-133 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, 2013. 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.
Management's Responsibility
Management is responsible for compliance with the requirement's of laws, regulations, contracts, and grants applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance
requirements referred to above. 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 Government Auditing 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-133 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 on compliance for each major federal program. However, our audit does not provide a legal
determination of the City's compliance.
Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with the types of 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, 2013.
140
www.:ngocpa.corn
Report on Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements
referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements
that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the
purpose of expressing an opinion on compliance for each major federal program 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. 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 attention by those charged with governance.
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 material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses. However, we identified a deficiency in internal control over compliance, as described in the accompanying schedule of findings and questioned
costs as item 2013-1, that we consider to be a significant deficiency.
The City's response to the internal control over compliance finding identified in our audit is described in the accompanying schedule of findings and questioned
costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the
response.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of
that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
Sacramento, California
December 2, 2013
141
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2013
Section I — Summary of Auditor's Results
Financial Statements:
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
■ Material weaknesses identified? No
■ Significant deficiencies identified that are
not considered to be material weaknesses? Yes
Noncompliance material to financial
statements noted? No
Federal Awards:
Internal control over major programs:
■ Material weaknesses identified? No
■ Significant deficiencies identified that are
not considered to be material weaknesses? Yes
Type of auditor's report issued on compliance for major programs: Unmodified
Any audit findings disclosed that are required
to be reported in accordance with section
510(a) of Circular A-133? Yes
142
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
Identification of major programs:
Federal Program Title CFDA No.
ARRA — Public Safety Partnership and Community Policing Grants 16.710
Federal Transit — Formula Grants (ARRA and non -ARRA) 20.507
Dollar threshold used to distinguish
between type A and type B programs:
Auditee qualified as low-risk auditee?
Reference Number: 2013-1
$300,000
Yes
Section II — Financial Statement Findings
Criteria:
Pursuant to Subpart C, section .300(d) of Office of Management and Budget (OMB) Circular A-133, Audits, of States, Local Governments, and Non -Profit
Organizations, the auditee shall prepare appropriate financial statements, including the schedule of expenditures of federal awards in accordance with section
.310." Per Section 310(b)(3), "the schedule of expenditures of federal awards shall provide total Federal awards expended for each individual Federal program
and the Catalog of Federal Domestic Assistance (CFDA) number or other identifying number when the CFDA information is not available."
Condition:
The expenditures for the Public Safety Partnership and Community Policing Grants were not properly reported on the first draft of the schedule of expenditures
of federal award (SEFA). The City had included the matching expenditures as federal expenditures, thus overstating the federal expenditures by $238,922.
Questioned Costs:
There are no questioned costs.
Effect:
The City inaccurately prepared the SEFA by overstating federal expenditures, which required an audit adjustment to correct. In addition, the City exposed itself
to the risk of an incorrect assessment of major programs.
143
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
Cause:
It appears that there was no formal review of federal expenditures reported on the SEFA.
Recommendation:
It is recommend that the City develop written policies and procedures that document the process for measuring and reporting federal expenditures as it pertains to
the SEFA and Federal Audit Clearinghouse Data Collection Form (SF -SAC) pursuant to the requirements of OMB Circular A-133. The new policies and
procedures should provide staff with the proper guidelines on the reporting requirements and provide a framework for ensuring consistency and continuity in the
identification and reporting of federal expenditures.
Management Response and Corrective Action:
Staff will develop written policies and procedures as recommended. The City is also in the process of implementing a new ERP system that has a specialized
grant and project accounting system that will ensure proper reporting and tracking of all the grants received by the City.
See Finding 2013-1 above.
Section [II — Federal Award Findings and Questioned Costs
144
CITY OF LODI
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2013
Financial Statement Findings
Reference Number: 2012-A
Criteria:
Under generally accepted accounting principles, 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
benefitting funds in the form of fees and charges.
Condition:
The City is not charging City funds their share of the City's Other Post Employment Benefits (OPEB) costs accumulating in its Benefits Internal Service Fund.
Context:
The Benefits Internal Service Fund's net deficit balance was $1,078,724, $1,930,874, $2,934,664, and $3,621,665 as of June 30, 2009, 2010, 2011, and 2012,
respectively.
Effect:
This condition resulted in an increase of $687,001 in the net deficit of the Benefits Internal Service Fund during the year ended June 30, 2012.
Cause:
The City is only charging City fiends their share of the City's OPEB costs that it has chosen to pay under a pay-as-you-go basis.
Recommendation:
Under generally accepted accounting principles, the City needs to charge City funds their share of the OPEB cost incurred in its Benefits Internal Service Fund as
opposed to limiting the charges to those costs actually paid.
Management Response and Corrective Action:
The City's practice of reflecting the total liability and expense of the Other Post Employment Benefits (OPEB) program in the Benefits Internal Service Fund
enhances transparency in reporting by showing the impact of this reporting requirement in one location. The deficit net assets will continue until the City fully
funds the actuarially calculated liability and expense that it is required to record. Staff will bring forward the deficit amount each budget cycle for Council
consideration.
Status:
For the year ended June 30, 2013, the City addressed our recommendation to develop a plan to begin charging funds and/or departments their share of the
Benefits Internal Service Fund's expenses, and as a result the net deficit balance of the Benefits Internal Service Fund decreased from $3,621,665 to $2,204,516.
The City will continue to address this deficit during its annual preparation of the City budget. Therefore, we consider our recommendation implemented and will
continue to monitor this issue in future audits.
145
CITY OF LODI
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
Federal Award Findings and Questioned Costs
Reference Number: 2012-1
Federal Program Title: ARRA — Public Safety Partnership and Community Policing Grants
Federal Catalog Number: 16.710
Federal Award Number and Year: 2009-RK-WX-0151; 2009
Federal Agency: U.S. Department of Justice
Category of Finding: Reporting
Criteria:
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 grants 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 Office of Community Oriented Policing Services within the U.S. Department of Justice requires the financial status report (SF -425) to be submitted on a
quarterly basis. The SF -425, Federal Financial Report, replaces SF -269 and SF -269A.
Per OMB memorandum M-09-21, Implementing Guidance for the Reports on Use of Funds Pursuant to the American Recovery and Reinvestment Act of 2009
dated June 22, 2009, Section 2. 1, Section 1512 of the Recovery Act requires reports on the use of Recovery Act funding by recipients no later than the 10`h day
after the end of each calendar quarter (beginning the quarter ending September 30, 2009) and for the Federal agency providing those funds to make the reports
publicly available no later than the 30`h day after the end of that quarter. Aimed at providing transparency into the use of these funds, the recipient reports are
required to include the following detailed information:
• Total amount of funds received; and of that, the amount spent on projects and activities;
• A list of those projects and activities funded by name to include:
o Description
o Completion status
o Estimates on jobs created or retained;
• Details on sub -awards and other payments.
CITY OF LODI
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
Condition:
It was noted that expenditures reported in the Federal Financial Reports and Section 1512 reports were not for the periods reported. The reports covering the
period of October 2011 through December 2011 reported expenditures to date of $585,296, which were the cumulative expenditures through September 2011 as
reported in the 2010 SEFA ($73,112), plus reported in the 2011 SEFA ($409,795), plus requested in the Drawdown Report for the period of July 2011 through
September 2011 ($102,389). The reports covering the period of January 2012 through March 2012 reported expenditures to date of $697,431, which were the
cumulative expenditures through December 2011 as reported in the 2010 SEFA ($73,112), plus reported in the 2011 SEFA ($409,795), plus requested in the
Drawdown Report for the period of July 2011 through September 2011 ($102,389), plus requested in the Drawdown Report for the period of October 2011
through December 2011 ($112,135).
Questioned Costs:
There are no questioned costs.
Context:
The Federal Financial Reports and Section 1512 reports were submitted quarterly for the year ended June 30, 2012. The Drawdown Reports for the period of
July 2011 through September 2011 ($102,389) plus the period October 2011 through December 2011 ($112,135) plus the period of January 2012 through March
2012 ($108,270) plus the period of April 2012 through June 2012 ($128,083) equals the expenditures reported in the SEFA of $450,877.
Effect:
Reporting expenditures in arrears will provide for non-current data and could mislead readers of the reports and provide false annual expenditure amounts.
Cause:
Per the Support Services Manager at the City of Lodi Police Department, the cause of the delay in the reporting of expenditures is due to the Federal Financial
Reports and Section 1512 reports being prepared and submitted at the end of a quarter before the Drawdown Reports are prepared and submitted.
Recommendation:
It is recommended that the City prepare the Drawdown Reports prior to preparing the Section 1512 reports and Federal Financial Reports to report current
expenditures for each quarter.
Management Response and Corrective Action:
Staff began implementing a corrective action as recommended, however, additional correction to rectify the reporting issue will be implemented in the immediate
reporting period.
Status:
During the fourth quarter of the year ended June 30, 2013, the City implemented procedures to correctly report the expenditures in the respective quarter they
were incurred. Therefore, our recommendation is considered implemented.
147
CITY OF LODI
SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
Reference Number: 2012-2
Federal Program Title: ARRA — 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
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 grants 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 Guidance for the Reports on Use of Funds Pursuant to the American Recovery and Reinvestment Act of 2009
dated June 22, 2009, Section 2. 1, Section 1512 of the Recovery Act requires reports on the use of Recovery Act funding by recipients no later than the 10th day
after the end of each calendar quarter (beginning the quarter ending September 30, 2009).
Condition:
It was noted that the City submitted three Federal Financial Reports and two quarterly performance reports after their respective due dates. The City was also
unable to provide two Section 1512 reports.
148
CITY OF LODI
SCHEDULE OF PRIOR YEAR FINDNGS AND QUESTONED COSTS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
Questioned Costs:
There are no questioned costs
Context:
Three of the four Federal Financial Reports, three of the four quarterly performance reports, and two of the four Section 1512 reports were sampled for the year
ended June 30, 2012.
Effect:
Continued noncompliance could result in future EECBG grants being funded on a reimbursement basis 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,
specifically procedures 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.
Management Response and Corrective Action:
All grant funds have been spent and the City is awaiting final instructions to close out the grant.
Status:
The City submitted their final reports for this grant in fiscal year 2012 and the City closed out the grant during the year ended June 30, 2013. Since there were no
reports to test in fiscal year 2013, this finding is considered resolved.
149
CONTINUING DISCLOSURES
UNAUDITED
CONTINUING DISCLOSURE REQUIREMENTS FOR THE CITY OF LODI, THE LODI PUBLIC IMPROVEMENT CORPORATION
AND THE LODI PUBLIC FINANCING AUTHORITY
Fiscal Year 2012-13
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 2008 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, 2013, 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.
150
Table 1 A table setting forth the City's power supply resources.
CITY OF LODI
ELECTRIC UTILITY DEPARTMENT
POWER SUPPLY RESOURCES
Source
Purchased Power (2)
Western
NCPA
Geothermal Project
Hydroelectric Project
Combustion Turbine Project No. 1
Capital Facilities, Unit One
Lodi Energy Center (6)
Contracts, Exchanges and Bilaterals (3)
Total
Total Capacity and Energy Sold at Wholesale
City System Requirement for Retail Load
Capacity
Available
Actual Energy
% of Total
(MW)(1)(4)
(MWh)
Energy
4.7
15,720
2.99%
13.3
87,354
16.59
26.2
27,764
5.27
9.4
102
0.02
19.6
865
0.16
26.6
64,453
12.24
70.0
330,290
62.73
169.8
526,548(4) (5)
100.00%
N/A
74,223
143.2
452,325
(1) Non -coincident capacity available.
(2) Entitlements, firm allocations and contract amounts.
(3) Includes participation in NCPA/Seattle City Light exchange. See "OTHER NCPA PROJECTS—Power Purchase Contracts"
in the forepart of Official Statement.
(4) Units at Backbone Output.
(5) Includes supply from exchanges and line losses.
(6) Lodi Energy Center came online mid -year.
151
Table 2 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, REVENUE AND DEMAND
Fiscal Years Ended June 30,
2009 2010 2011 2012 2013
Number of Customers:
Residential
22,465
21,981
22,251
22,244
22,369
Commercial
2,696
3,163
2,865
2,834
2,902
Industrial
37
31
39
37
39
Other
188
194
229
235
246
Total Customers
25,386
25,369
25,384
25,350
.25,556
Kilowatt -Hour (kWh) Sales:
Residential
153,487,430
150,811,587
144,256,683
149,814,375
151,814,834
Commercial
155,206,324
146,644,990
137,584,723
138,735,487
140,733,500
Industrial
131,059,764
125,000,860
128,072,575
135,620,441
131,473,405
Other
12,322,036
11,563,550
11,216,348
11,485,428
11,800,726
Total kWh sales
452,075,554
434,020,987
421,130,329
435,655,731
435,822,465
Revenues from Sale of Energy:
Residential
$ 29,016,776 $
27,642,200 $
24,513,202 $
25,606,368 $
25,377,978
Commercial
26,883,557
24,901,257
21,870,624
21,814,073
21,816,149
Industrial
15,875,038
15,015,036
13,914,539
14,876,828
14,173,951
Other
2,224,567
2,105,196
1,868,985
1,954,099
1,861,567
Total Revenues from
Sale of Energy:
$ 73,999,939 $
69,663,689 $
62,167,350 $
64,251,368 $
63,229,645
Peak Demand (MW)
117.4
119.6
123.9
116.0
123.3
Excludes revenues from California Energy Commission Tax.
Sources: City of Lodi, audited annual financial statements and Customer Information System
reports.
152
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 POWERS AGENCIES
(Dollar Amounts in Millions)
Outstanding Debt
NCPA
Hydroelectric Project $ 383.0
Capital Facilities Project Unit One 48.1
Lodi Energy Center Project 245.7
TANC
Lodi's Lodi's Share of
Partici pationtti Outstanding Debt
10.37%(2) $ 39.7
39.50 19.0
17.03 41.8
COTP 343.2 1.92(" 6.6
TOTAL' $ 1,020.0 10.50% $ 107.1
" Columns may not add to totals due to independent rounding.
(1) Participation obligation is subject to increase upon default of another project participant.
Such increase shall not exceed, without the written consent of a non -defaulting participant, an accumulated
maximum of 25% of such non -defaulting participant's original participation.
(2) Participant's project entitlement remains the same but share of debt has increased to 10.64% due to change in debt participation
(3) Lodi's actual obligation differs slightly from this percentage due to varying shares of certain series of TANC bonds relating to each TANC
member -participant's taxable portion and each TANC member -participant's participation or non -participation in acquisition of assets from
Vernon.
Source: City of Lodi.
153
Table 4 A table showing a summary of operating results for the past five fiscal years.
Operating Revenues
Rate Revenue
ECA Revenue
Other Revenue
Total Operating Revenue
Operating Expenses
Purchased Power
Non -Power Costs (Z)
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 Revenue/Expenses
Greenhouse gas allowance
In -Lieu Transfer to General Fund
Net Cash Flow Before Capital Expenditures
Beginning Operating Reserve
Changes in GOR
Net Deposit/Withdrawal from Reserves
Ending Operating Reserve
CITY OF LODI
ELECTRIC SYSTEM
SUMMARY OF OPERATING RESULTS t�)
Ending Fiscal Year June 30 (Dollars in 000s)
Actual 2009
$ 65,229
8,771
1,195
75,195
46,405
11,965
58,370
16,825
Actual 2010 Actual 2011
$ 62,613
7,050
625
70,288
37,943
12,006
49,949
20,339
9,960
7,194
9,960
7,194
1.69
2.83
6,865
13,145
(6,942) (6,977)
(77) 6,168
14,513
(582)
(77)
$ 13,854
13,854
5,877
6,168
$ 25,899
$ 59,676
2,491
1,140
63,307
35,282
13,115
48,397
14,910
Actual 2012 Actual 2013
$ 61,658
2,593
969
65,220
39,416
10,748
50,164
15,056
$ 61,888
1,341
745
63,974
39,191
12,018
51,209
12,765
7,232
7,291
8,414
7,232
7,291
8,414
2.06
2.07
1.52
7,678
7,765
4,351
2,018
(6,977)
(6,977)
(6,977)
701
788
(608)
25,899
28,455
30,384
1,854
1,141
1,306
701
788
(608)
28,454
30,384
31,082
Source: City 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) Non -power costs include cost of services provided by other departments and does not include depreciation and amortization expense.
154
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
July 2013 Established Electric Vehicle and Industrial Equipment Charging Rates
April 2009 Established Economic Development Rates updated July 2013
December 2007 Established Solar Initiative Surcharge of $0.00125 per kilowatt-hour
August 2007 Implemented monthly Energy Cost Adjustment
December 2005 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-hour from 0.4 cents per
kilowatt-hour for largest primary service customers (estimated 19% reduction)
Source: City of Lodi.
155
ANNUAL REPORT FOR WASTEWATER UTILITY
The Lodi Wastewater Utility has Continuing Disclosure requirements associated with its 2004 Series A Certificates of Participation, 2007 Series A
Certificates of Participation and the 2012 Refunding Lease Revenue Bonds. 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
Series A 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 coverage for the past five fiscal years.
Additionally, the Certificate for the 2007 Series A issue requires a description of any additional indebtedness incurred during the prior fiscal 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, 2013, 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.
156
Table 9 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 2012-13 Service Charge Revenue by User Type
% of FY 12/13
Service Charge
User Type 2009 2010 2011 2012 2013 Revenue
Residential 22,227 21,974 21,956 21,864 21,959 76.6%
Commercial/Industrial 1,815 1,768 1,785 1,819 1,851 23.4%
Total All Users 24,042 23,742 23,741 23,683 23,810 100.0%
Source: City of Lodi
157
Table 2 A table showing the proportion of service charge revenue by class of user for the most recent fiscal year.
City of Lodi
Wastewater System
Proportion of Service Charge Revenues by Class of User
Fiscal Year 2012-13
Percentage of Total Annual Service
User Type Charge Revenue
Single Family
Residential
Multiple Family Residential
Commercial/Industrial
Total
Source: City of Lodi
158
60.4%
16.2%
23.4%
100.0%
Table 3 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
Archer Daniels Midland
Blue shield of California
Del Castillo Foods
Total top ten users
Total System
City of Lodi
Wastewater System
Largest Users by Service Charge Revenues
Fiscal Year 2012-13
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
Agricultural processor
Health Insurance
Tortilla producer
159
I
Service Charge
Revenue
442,855
280,907
267,590
63,836
49,641
40,551
39,842
37,217
36,548
25,946
1,284,933
13,747,216
Percentage of
Total
Annual Service
Charge Revenue
3.22%
2.04
1.95
.46
.36
.29
.29
.27
.27
.19
9.34%
100.00%
Table 4 A table showing the schedule of service charges.
City of Lodi
Wastewater System
Schedule of Wastewater Service Charges
160
Service
Service
Service Charge
Service Change
Charge
Charge
(effective Jul v
(effective July
(effective July
(effective July
16, 2009)
1, 2010
1. 2011)
1, 2012)
For Residential Users (per month):
1 Bedroom ..............................
$20.81
$23.30
$24.47
$25.20
2 Bedrooms ............................
27.74
31.07
32.62
33.60
3 Bedrooms ............................
34.68
38.84
40.78
42.00
4 Bedrooms ............................
41.61
46.61
48.93
50.40
5 Bedrooms ............................
48.55
54.37
57.09
58.80
6 Bedrooms ............................
55.48
62.14
65.24
67.20
7 Bedrooms ............................
62.42
69.91
73.40
75.60
For Commercial/industrial Users:
Moderate Strength (annual per Sewage Service Unit (SSU)........
$332.88
372.84
$391.44
$403.20
High Strength:
Flow (annual per MG) ............................................
2,808.88
3,145.95
3,303.25
3,402.35
BOD (annual per 1,000 lbs.) ....................................
463.54
519.16
545.12
561.47
SS (annual per 1,000 lbs.) .....................................
289.83
324.61
340.84
351.07
Grease Interceptor/Septic Holding Tank Waste within
City Limits (per 1,000 gal.) .....................................
245.44
274.89
288.63
297.29
Septic Holding Tank Waste Outside City Limits (per
1,000 gal.)...........................................................
521.03
583.55
612.73
631.11
Disposal to Storm Drain System (per MG) .................
257.80
288.74
303.18
312.28
Disposal to Industrial System.-
ystem:Flow
Flow(per MG, annual basis) ....................
2,218.78
2,485.03
2,609.28
2,687.56
BOD (per 1,000 lbs., annual basis)............
20.34
22.78
23.92
24.64
Winery Waste (per 1,000 gallons) ............................
248.53
278.35
292.27
301.01
160
Table 5 A table showing historic operating results and debt service coverage for the past five fiscal years.
Operating Revenues
Charges for Services
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
2003 Installment Payments
2004 Installment Payments
2007 Installment Payments
2012 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 2008-09 through 2012-13
2008-09 2009-10
$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
Y, I JG,V IQ
1.17
1,451,478
1,451,478
$(760,148)
$11,513,389
298,337
2010-11
$13,089,679
220,600
2011-12
$13,2$0,216
216,108
2012-13
$13,747,216
301,347
472,578
3,198,194
290,819
256,868
12,284, 304
16,508,473
13,787,143
14,305,431
2,800,891
3,257,618
3,130,012
3.089,930
2,532,246
1,955,464
2,818,041
1,900,710
847,167
758,934
710,622
683,508
6,180,304
5,972,016
6,658,675
5,674,148
6,104,000
10,536,457
7,128,468
8,631,283
161
381,400
2,138,700
1,631,500
T, IJ I,VVV
1.47
1,451,478
1,451,478
$500,922
381,393
2,147,600
1,588,750
2.56
1,451,480
1,451,480
4,967,234
379,170
2,139,350
1,599,050
4,117,570
1.73
(778,092)
(778,092)
$3,788,990
381,122
1,705,213
1,598,950
374,519
4,059,804
2.13
1,451,480
1,451,480
$3,119,999
Additional Indebtedness
The Wastewater Utility did not incur any additional indebtedness during the 2012-13 fiscal year which is payable from the system net revenues on
a parity with the installment payments.
162
ANNUAL REPORT FOR THE LODI PUBLIC IMPROVEMENT CORPORATION AND THE LODI PUBLIC FINANCING AUTHORITY
The Lodi Public Improvement Corporation and the Lodi Public Financing Authority have Continuing Disclosure requirements associated with its
2002 Certificates of Participation and the 2012 Refunding Lease Revenue Bonds. 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.
6. A table showing the Employee -paid and City -paid employee portion of the retirement plan.
Reporting of Significant Events
The Certificates identify eleven (11) specific events that require special reporting. As of June 30, 2013, 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 1 A table setting forth the approved budget and actual results for the most recent fiscal year.
Please refer to the Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual on page 79 of this Comprehensive
Annual Financial Report.
163
Table 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.
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
Public works
Library
Parks and recreation
Debt service:
Interest and fiscal charges
Principal payments
Total expenditures
Deficiency of revenues under expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing 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
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
2011
23, 061,164
83,395
10,032,523
1,035,220
1,404,307
455,923
480,028
36,552,560
2012
22,928,438
79,745
10,449,364
682,156
1,355,101
807,270
286,125
36,588,199
2013
23,022,370
62,582
10,531,871
1,105,178
1,628,870
979,100
393,299
37,723,270
6,922,096
6,411,741
6,478,159
6,007,327
5,943,192
24,463,771
23,854,905
24,091,472
24,923,155
25,920,654
2,967,402
1,471,779
1,421,238
1,112,569
1,555,833
1,499,720
1,322,052
1,357,473
1,380,972
1,410,657
2,160,035
2,234, 349
2,191,102
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
164
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
6,427
141,576
35,687,447
865,113
5,379,186
(4,383,110)
996,076
1,861,189
4,285,216
6,146,405
33,424,023
3,164,176
5,370,230
(8,391,858)
3,021,628
142,548
6,146,405
6,288,953
34,830,336
2,892,934
5,367,990
(6,584,665)
1,216,675
1,676,259
6,288,953
7,965,212
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 115.
Table 4 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 118.
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 117.
Table 6 A table showing the Employee -paid and City -paid employee portion of the retirement plan.
Bargaining Units
Council appointees
Executive management
Confidential mid -management
Confidential
Fire mid -management
Fire
Mid -management
General services
Maintenance and operators
IBEW
Police mid -management
Police
Dispatchers
Pension Contributions
As of Fiscal Year Ended June 30, 2013
Employee Paid
7.0%
7.0
3.3
3.3
3.0
5.3
3.3
3.3
3.3
9.0
6.0
3.0
165
City Paid
3.7
3.7
6.0
3.7
3.7
3.7
3.7
7.0
3.0
4.0
Total Employee Share
7.0%
7.0
7.0
7.0
9.0
9.0
7.0
7.0
7.0
7.0
9.0
9.0
7.0
ANNUAL REPORT FOR WATER UTILITY
The Lodi Water Utility has Continuing Disclosure requirements associated with its 2010 Series A and B Certificates of Participation. The annual
report includes, by reference, the audited financial statement of the City of Lodi (including the Water Utility).
The annual report also contains the following four (4) tables as required in the Certificates:
1. A table setting forth the City's number of accounts and revenues by user type for the past five fiscal years.
2. A table showing the largest users by service charge revenues for the most recent fiscal year.
3. A table showing a schedule of selected rates effective January 1, 2013.
4. A table showing a summary of historic operating results and debt service coverage for the past five fiscal years.
Additionally, the Certificate for the 2010 Series A issue requires a description of any additional indebtedness incurred during the prior fiscal 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, 2013, 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.
166
Table 9 A table showing number of accounts and revenues by user type.
CITY OF LODI
WATER SYSTEM
Number of Accounts and Revenues by User Type
Commercial/Industrial/
Municipal Residential
Year Ending
Number of
Number of
December 31
Accounts
Revenue
Accounts
Revenue
2007
1,445
$ 2,043,731
21,533
$ 8,715,928
2008
1,470
2,184,496
21,449
9,429,594
2009
1,382
2,188,486
21,577
9,600,129
2010
1,383
2,097,001
21,622
9,604,412
2011
1,396
2,169,967
21,593
9,706,537
2012
1,432
2,329,957
23,399
8,411,315
Source: City of Lodi
167
Table 2 A table showing the largest users by service charge revenue for the most recent fiscal year.
User
Lodi Unified School District
City of Lodi
Pacific Coast Producers
General Mills
Cottage Bakery
Lodi Memorial Hospital
Heartland Steel Products
Temple Baptist Church
Miller Packing Company
CalTrans
Subtotal Top Ten Users
TOTAL SYSTEM
City of Lodi
Water System
Largest Users by Service Charge Revenues
Fiscal Year 2012-13
Type of Business
K-12, adult education
Government
Private label fruit canning
Cereals, bread mixes, snack foods
Specialty bakery, frozen dough
Health care
Steel products
Church
Hot dog producer
Government
168
$
Service Charge
Revenue
264,950
215,680
140,472
69,538
62,835
47,103
20,142
16,255
14,341
14,316
865,632
12,441,039
Percentage of
Total
Annual Service
Charge Revenue
2.13%
1.73
1.13
0.56
0.51
0.38
0.16
0.13
0.11
0.11
6.95%
100.00%
Table 3 A table showing selected rates effective January 1, 2013.
CITY OF LODI
WATER SYSTEM
Selected Rates Effective January 1, 2013
Percent Increase Current
Flat Rates ($/month)
Single Family Residential Unit ($/month)
1 Bedroom $29.17
2 Bedroom $35.03
3 Bedroom $41.99
Metered Water Rates
Service Charge ($/month)
Single Family Residential
Up to 3/4" Meter
$23.20
Multi -Family and Non -Residential
1" Meter
$37.66
1 1/2" Meter
$58.77
2" Meter
$73.43
Water Usage rates ($/CCF)
Single Family Residential
Tier 1 - 0 to 10 CCF/month
$0.90
Tier 2 - 11 to 50 CCF/month
$1.35
Tier 3 - Over 50CCF/month
$1.78
Multi -Family and Non -Residential
All Water Usage
0.90
Source: City of Lodi.
169
Table 4 A table showing historic operating results and debt service coverage for the past five fiscal years
New Treatment Plant Operations (net)
Utilities
CITY OF LODI
733,653
652,296
693,657
683,635
WATER SYSTEM
1,060,122
1,060,122
1,060,120
1,060,120
Historical Operating results and Debt Service Coverage
Total O & M Expenses
5,827,227
5,101,191
Fiscal Years 2008-09 through 2012-13
5,391,530
6,898,870
Net Revenue Available for Debt Service
6,582,501
2008-09 2009-10
2010-11
2011-12
2012-13
Gross Revenues
Meter Retrofit Program (7)
582,000
919,555
6,325,558
Water Sales (1)
$ 11,787,140 11,715,748
11,940,022
12,083,226
12,441,039
Investment Earnings
258,552 103,640
83,374
119,526
67,892
Water Impact Mitigation Fees
13,086 270,863
14,803
111,429
2,529
Meter Retrofit Installation Charges
2,283,363
1,653,399
675,815
585,965
Other Revenues (2)
350,950 372,034
359,979
285,093
269,335
Total Gross Revenues 12,409,728 12,462,285
14,051,577
13,275,089
13,366,850
Operating and Maintenance Expenses
Personnel Services (3)
1,471,463 1,325,536
1,359,227
1,856,131
2,272,568
Supplies, Materials and Services (3)
2,490,875 1,981,880
2,590,222
1,781,622
2,882,547
New Treatment Plant Operations (net)
Utilities
804,767
733,653
652,296
693,657
683,635
Administrative Overhead
1,060,122
1,060,122
1,060,120
1,060,120
1,060,120
Total O & M Expenses
5,827,227
5,101,191
5,661,865
5,391,530
6,898,870
Net Revenue Available for Debt Service
6,582,501
7,361,094
8,389,712
7,883,559
6,467,980
Debt Service
Meter Retrofit Program (7)
582,000
919,555
6,325,558
6,536,687
1991 California DWR SRF loan (4)
228,012
228,025
1,433,395
2010 Bonds (5)
849,968
2,304,811
2,335,360
Total Net Debt Service
228,012
228,025
2,283,363
2,304,811
2,335,360
Debt Service Coverage (6)
Debt Service Coverage
28.87 32.28
3.67
3.42
2.77
Debt Service Coverage
(excluding impact mitigation fees)
28.81 31.09
3.67
3.37
2.77
Net Remaining Revenues Available for Capital
6,354,489 7,133,069
6,106,349
5,578,748
4,132,620
Capital Improvement Projects
Meter Retrofit Program (7)
582,000
919,555
6,325,558
6,536,687
170
Other Water System Improvements (8)
Total Capital Improvement Projects
Net Change in Reserve
Water Enterprise Fund (9)
Beginning Cash Balance
Ending Cash Balance
782,382 3,932,424
1,364,382 3,932,424
4,990,107 3,200,645
17, 621, 590 13,469,170
$ 13,469,170 14,120,605
3,666,202
4,585,757
1,520,592
14,120,605
12,807,412
540,832
6,866,390
(1,287,639)
12,807,412
12,465,350
1,144,363
7,681,050
(3,548,520)
12,465,350
9,044,659
(1) Water sales reflect Council -adopted rate increases of 2.2% effective January 1, 2013.
(2) Includes rent, sales of City property, discounts, water reimbursements, and damage to property, water tap fees, DBCP reimbursements,
and other miscellaneous revenues. DBCP reimbursements are expected to decline beginning in Fiscal Year 2012-13 as new plant
becomes operational and groundwater draws diminish. PCE/TCE litigation revenues are excluded from Fiscal year 2005-06 through
2009-10. Fiscal year 2009-10 reflects one-time adjustments from prior years.
(3) PCE/TCE litigation expenses are excluded from Fiscal Year 2006-07 through Fiscal year 2010-11.
(4) Debt service on 1991 Loan was paid off in full on October 1, 2010.
(5) Reflects total debt service for the 2010 Water Revenue Bonds net of the 35% interest rate subsidy for the Series 2010B bonds.
(6) Coverage calculated based on Net Revenues divided by net Debt Service and Net Revenues less mitigation fees divided by Net Debt
Service.
(7) Annual capital costs of transition to water meters. Program expected to be completed in Fiscal Year 2017-18.
(8) Excludes costs of the Project to be funded from proceeds of the Series 2010 Bonds.
(9) Water Enterprise Fund balance includes both operating and capital reserves and is presented on a cash basis. Cash position is expected
to increase substantially upon completion of the water meter installation program.
Source: City of Lodi
171
CITY OF LODI, CALIFORNIA
Report to City Council
For the Year Ended June 30, 2013
Certified Public Accountants.
CITY OF LODI, CALIFORNIA
Report to City Council
For the Year Ended June 30, 2013
Table of Contents
Page(s)
TransmittalLetter.......................................................................................................................................... 1
Required Communications.........................................................................................................................2-3
Status of Prior Year Recommendations.....................................................................................................4-6
Sacramento
3000 S Street, Suite 300
Certified Public Accountants. Sacramento, CA 9
916.928.46004600
Walnut Creek
Oakland
City Council WCentury City
City of Lodi, California
Newport Beach
San Diego
We have audited the financial statements of the governmental activities, the business -types activities,
each major fund, and the aggregate remaining fund information of the City of Lodi, California (City), as Seattle
of and for the year ended June 30, 2013, and have issued our report thereon dated December 2, 2013.
Professional standards require that we provide you with information about our responsibilities under
generally accepted auditing standards, Government Auditing Standards, and OMB Circular A-133, as
well as certain information related to the planned scope and timing of our audit. We have communicated
such information in our letter to you dated June 6, 2013. Professional standards also require that we
communicate to you the information related to our audit that is included in the Required Communications
section of this report.
In planning and performing our audit of the financial statements of the City as of and for the year ended
June 30, 2013, in accordance with auditing standards generally accepted in the United States of America,
we considered the City's internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances 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 Accordingly, we do not express an opinion on the effectiveness of the City's internal
control.
During our audit for the year ended June 30, 2013, we followed up on our recommendations to address
conditions we identified during previous years' audits. The status of those recommendations is included
in the Status of Prior Year Recommendations section of this report. This report does not affect our report
dated December 2, 2013, on the basic financial statements of the City.
We also noted certain matters that we reported to management of the City of Lodi in a separate letter
dated December 2, 2013.
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.
Sacramento, California
December 2, 2013
www.mgocpa.com
CITY OF LODI, CALIFORNIA
Report to City Council
Required Communications
For the Year Ended June 30, 2013
Significant Audit Findings
Qualitative Aspects of Accounting 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. As described in
Note 1, the City adopted the provisions of Governmental Accounting Standards Board (GASB) Statement
No. 62 Codification of Accounting and Financial Reporting Guidance Contained In Pre- November 30,
1989 FASB and AICPA Pronouncements and GASB Statement No. 63, Financial Reporting of Deferred
Outflows of Resources, Deferred Inflows of Resources, and Net Position. 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 9 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, Accounting for Pensions by State and Local Government Employers.
• The actuarial data for other postemployment benefits contained in Note 10 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
Employers for 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 each opinion unit's financial statements.
The financial statements disclosures are neutral, consistent, and clear.
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.
CITY OF LODI, CALIFORNIA
Report to City Council
Required Communications (Continued)
For the Year Ended June 30, 2013
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 2, 2013.
Management Consultations with Other Independent Accountants
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.
Other Audit 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.
Other Matters
With respect to the supplementary information accompanying the financial statements (the combining and
individual nonmajor fund financial statements and schedules and the schedule of expenditures of federal
awards), we made certain inquiries of management and evaluated the form, content, and methods of
preparing the information to determine that the information complies with accounting principles generally
accepted in the United States of America, the method of preparing it has not changed from the prior
period, and the information is appropriate and complete in relation to our audit of the financial statements.
We compared and reconciled the supplementary information to the underlying accounting records used to
prepare the financial statements or the financial statements themselves.
With respect to other information accompanying the financial statements (the introductory, statistical, and
continuing disclosure sections), we read the information to determine that the information was not
materially inconsistent with the audited financial statements.
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations
For the Year Ended June 30, 2013
The following is a summary of the status of prior years' recommendations.
FROM YEAR ENDED JUNE 30, 2011 -
DEFICIT BENEFITS INTERNAL SERVICE FUND
Condition
For the year ended June 30, 2011, the revenue charged to user funds and/or departments by the City's
Benefits Internal Service Fund was $255,951 less than the Ca1PERS invoice billings of health insurance
premiums for active participants enrolled in the health care plans offered by CalPERS. 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 funds and/or
departments not being charged their proportionate share of the costs.
In addition, the City isn't recovering the expenses of its Benefits Internal Service Fund from user funds
and/or departments. Under generally accepted accounting principles, 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. This condition resulted in an increase in
the net deficit of the Benefits Internal Service Fund of $1,003,790 to $2,934,664.
Recommendation
Management and/or authorized employees should 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 Human Resources records to ensure accuracy and
completeness of the roster.
Furthermore, the City should develop a plan to begin charging funds and/or departments their share of the
Benefits Internal Services Fund's expenses as opposed to limiting the charges to their share of expenses
paid.
Prior Year Status
For the year ended June 30, 2012, the City has implemented our recommendation to perform a
reconciliation of members' plans reported and charged by Ca1PERS to the City's records.
However, the City has not addressed our recommendation to develop a plan to begin charging funds
and/or departments their share of the Benefits Internal Service Fund's expenses, and as a result the net
deficit balance of the Benefits Internal Service Fund increased from $2,934,664 to $3,621,665. As this
deficit has grown for four consecutive years, we have reported this issue as a reportable condition in the
Government Auditing Standards report.
Prior Year Management Response
The City's practice of reflecting the total liability and expense of the Other Post Employment Benefits
(OPEB) program in the Benefits Internal Services Fund enhances transparency in reporting by showing
the impact of this reporting requirement in one location. The deficit net assets will continue until the City
fully funds the actuarially calculated liability and expense that it is required to record. Staff will bring
forward the deficit amount each budget cycle for Council consideration.
4
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations (Continued)
For the Year Ended June 30, 2013
Current Year Status
For the year ended June 30, 2013, the City addressed our recommendation to develop a plan to begin
charging funds and/or departments their share of the Benefits Internal Service Fund's expenses, and as a
result the net deficit balance of the Benefits Internal Service Fund decreased from $3,621,665 to
$2,204,516. The City will continue to address this deficit during its annual preparation of the City
budget. Therefore, we consider our recommendation implemented and will continue to monitor this issue
in future audits.
FROM YEAR ENDED JUNE 30, 2005 -
INFORMATION TECHNOLOGY (IT)
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.
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 and has begun limited testing of the plan by
verifying that the backup tapes will restore correctly. The City has been testing one daily backup tape per
week. Although the City has begun limited testing, the plan has not been fully tested. Therefore our
recommendation remains in the process of implementation.
In order to fully implement the plan, the City should hire an outside firm to fully test the plan. The
system should be shut down completely as if it crashed or was lost in a fire, etc. Then the backup tapes
will be used to see if they can fully restore the system to where it used to be. Currently, the City is only
testing a small piece to see if the tapes work, but they aren't taking the whole system offline and trying to
start over from scratch.
Current Year Management Response
The City will explore suitable options for testing its Disaster Recovery Plan, taking into consideration
financial constraints and impacts to users. In the meantime, the City will continue to test and validate the
daily and weekly backup tapes to ensure their viability and reliability in the event of a disaster.
CITY OF LODI, CALIFORNIA
Report to City Council
Status of Prior Year Recommendations (Continued)
For the Year Ended June 30, 2013
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 ME 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:
1. 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. Recommendation continues.
Current Year Management Response
The City is in the process of procuring a replacement to the current financial system. The capital asset
module will be implemented in the new system.
6
CITY OF LODI
Agreed -Upon Procedures Report for
Appropriations Limit
For the Fiscal Year Ended June 30, 2013
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INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON Newport Beach
PROCEDURES RELATED TO THE ARTICLE XIII -B
APPROPRIATIONS LIMIT CALCULATION San Diego
City Council
Lodi, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Worksheet of the City of Lodi, California (City) for the fiscal year ended June 30, 2013. These
procedures, which were agreed to by City management and the League of California Cities (as presented
in its publication entitled Article XIII -B Appropriations Limitations 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 this procedure.
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 this procedure.
We compared the current year information presented in the accompanying Appropriations
Limit Worksheet to the worksheets described in procedure No. 1 above.
Finding: No exceptions were noted as a result of this procedure.
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Seattle
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 this procedure.
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.
Sacramento, California
November 22, 2013
CITY OF LODI
APPROPRIATIONS LIMIT WORKSHEET
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
Appropriation Limit, fiscal year ended June 30, 2012, as adopted
Adjustment factors:
Population factor, for fiscal year ended June 30, 2013, as adopted
Inflation factor, for fiscal year ended June 30, 2013, as adopted
Annual percentage increase
Annual adjustment
$77,891,729
1.0077
1.0377
1.04569%
3,558,896
Appropriation limit, fiscal year ended June 30, 2013 as adopted81.450.625