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Agenda Report - February 7, 2001 H-01
CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: REPORT TO THE COUNCIL — FINANCIAL AUDIT FOR FISCAL YEAR 99-00 MEETING DATE: February 7, 2001 PREPARED BY: Finance Director RECOMMENDED ACTION: That the City Council receive for file the following reports and financial statements submitted by KPMG LLP and the Finance Department for Fiscal Year 1999-00: • The Combined Annual Financial & Single Audit Report • The Management Letter • The SAS 61 Report (Report to City Council) BACKGROUND INFORMATION: The annual audit was conducted to reassure 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 Toss 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. KPMG LLP has issued an "unqualified opinion". Steven DeVetter, Partner and Marvin Dozier, Senior Manager of KPMG will be present to do the presentation and answer questions during the Council 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 also available to the public by contacting the Finance Department Accounting Manager or at the Lodi Public Library for reference. Certificate of Achievement The City received a Certificate of Achievement for Excellence in Reporting from the Government Finance Officers Association (GFOA) and the California Society of Municipal Finance Officers (CSMFO) for the seventh year in a row. Copies of these certificates are included in the 1999-00 Financial Report. Acknowledgments The Accounting staff of the Finance Department should be commended for their hard work and professionalism in preparing the City's Annual Financial Reports. It is due to their dedication to excellence and to the City that made Lodi recognized by the auditors and other professional financial organizations. FUNDING: None APPROVED: 1 7i4 -.-- H. Dixon Flynn - City Manager Vicky M Athie Finance Director 4. 1 Three Embarcadero Center San Francisco, CA 94111 January 17, 2001 The Honorable Members of the City Council City of Lodi, California: Dear Council Members: We have audited the general purpose financial statements of the City of Lodi, California (the City), as of and for the year ended June 30, 2000, and have issued our report thereon dated October 18, 2000. In planning and performing our audit of the financial statements of the City, we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinions on those financial statements. An audit does not include examining the effectiveness of internal control and does not provide assurance on internal control. We have not considered internal control since the date of our report. A material weakness is a condition in which the design or operation of specific internal control components does not reduce to a relatively low level the risk that errors or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. However, we noted no matters involving internal control and its operation that we consider to be material weaknesses as defined above. During our audit we noted certain matters involving internal control and other operational matters that are presented for your consideration. These comments and recommendations, all of which have been discussed with the appropriate members of management, are intended to improve internal control or result in other operating efficiencies and are summarized in the attachment. Our audit procedures are designed primarily to enable us to form an opinion on the financial statements, and therefore may not bring to light all weaknesses in policies or procedures that may exist. We aim, however, to use our knowledge of the City's organization gained during our work to make comments and suggestions that we hope will be useful to you. We would be pleased to discuss these comments and recommendations with you at any time This report in intended solely for the information of the City Council, City management and other within the City and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours. KIPMC0- LLQ 111 ... Ki-rtci r��rnn.si r :.,1111:r,•nu.3`,:,!,,�,�::.,;,t., THE NEW REPORTING MODEL Background After years of study and consideration of the needs of users of government financial statements, the Governmental Accounting Standards Board (GASB) issued its revolutionary new reporting model in June 1999. The new reporting model dramatically changes the presentation of governments' external financial statements. In the GASB's view, the objective of the new model is to enhance the clarity and usefulness of governmental financial statements to the citizenry, oversight bodies, investors and creditors. It will substantially affect the City's financial data accumulation and financial statement presentation processes. Some of the key aspects of the changes follow: Management's Discussion and Analysis (MD&A) — A comprehensive MD&A will now be included as required supplementary information. The MD&A will introduce the financial statements by presenting an analysis of the government's financial performance for the year and its financial position at year-end. The MD&A will be in addition to the transmittal letter currently required for Government Finance Officers Association (GFOA) award certificates, such as your city, but we expect that the GFOA will make changes in their requirements so as to avoid any duplication between the two documents. Government -Wide Reporting — The City will be required to report financial operations and net assets, not only at the fund perspective for governmental activities, but will also have to prepare statements at the government -wide level. This level will distinguish between government and business type activities. All information at the government - wide level will be reported using the economic resources measurement focus and accrual basis of accounting, as enterprise funds do under the current model. Fiduciary activities will be excluded from the government -wide level reporting. General government fixed assets, including infrastructure, and long term liabilities of the government will need to be reported with all the other governmental assets and liabilities. This means that the City will be preparing additional financial statements requiring new adjustments and analysis. Statement of Activities — Governments will now be required to use a "net program cost" format for the government -wide statements instead of a traditional operating statement. This new format groups revenues and expenses by functional categories (such as public safety, public works, etc.). The purpose of the new statement is to inform readers about the cost of specific functions and the extent to which they are financed with program revenues or general revenues of the government. Governments will have the option of reporting both direct and indirect program costs. Depreciation expense will now generally be reflected as a cost in the statement of activities. 1 Infrastructure Reporting — Historically, the City has not been required to record and report infrastructure assets in its financial statements. Under the new standard, the City must report infrastructure assets acquired within the last twenty-five years at historical cost. The standard provides several alternatives for determining historical cost of infrastructure assets. Although the standard generally requires depreciation of infrastructure assets, the City may not be required to depreciate these assets if it can demonstrate that it is preserving its infrastructure at approximately (or above) a disclosed condition level established by the City. Many government entities do not have the data readily available to prepare this information. As a result, considerable work and effort will be required to gather this information and to design systems to capture the data on a on-going basis. Fund Level Reporting — Fund level financial statements will still be required and will provide information about the City's fund types, including fiduciary funds and blended component units. General capital assets and long-term liabilities will only be reported at the government -wide level. Fund level reporting will continue to focus on fiscal accountability and reflect the flows and balances of current financial resources. The modified accrual basis of accounting will continue to be used at this level, except for proprietary and fiduciary funds which would continue reporting based on economic resources and the accrual method of accounting. A reconciliation between the fund and the government -wide statements will be required on the face of the fund statements. Finally, proprietary fund cash flow statements must be presented using the direct method. Presentation of Budgetary Information — The standard requires budgetary statements for the general fund and certain other governmental funds as required supplementary information. The original adopted budget of the City as well as the final revised budget must he presented. Actual results on a budgetary basis will need to be reconciled to the Generally Accepted Accounting Principles (GAAP) basis on the face of the statements. The effective date of the new pronouncement will require implementation by the City for its year beginning July 1, 2002. The magnitude of these changes and the time required to prepare for implementation should not be underestimated. We recommend the City begin to look at its systems, processes, resources and training to ensure that the required information will be available to ensure timely implementation. Further, we recommend that the City consider the cost of required changes to its systems and processes to ensure availability of necessary funds in its upcoming budget. 2 PROCUREMENT POLICIES AND PROCEDURES Documented policies and procedures are an excellent means of communicating practices. The City has recently done an excellent job of documenting policies and procedures related to fleet maintenance and travel. As the City continues to document its policies and procedures, we recommend that it focus on its procurement policies and procedures. At present, the City is following the purchase ordinance and the competitive bidding procedures established by the State of California. However, procurement procedures are not documented as they relate to the City. We recommend that the City establish its own procurement policies and procedures that will consider the City's activities, its accountability to the residents of Lodi and the present economic conditions in the area. These policies and procedures should be officially approved by the City Council and duly implemented throughout the City. An official procurement policy that provides efficient and practical purchasing procedures and effective controls to protect the City's resources, will facilitate the cost/benefit discussions of various internal controls and provide consistent guidance to staff. REVIEW OF WORKERS' COMPENSATION CLAIM DATA The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters; and injuries to employees. The City is self-insured for workers' compensation up to the first $250,000 per occurrence. The City's workers' compensation claims, along with claims for general liability, are administered by an outside agency and all other claims are administered by the City. We noted that the City has an internal database based from which monthly reports are prepared with information on the frequency and severity of workers' compensation claims for trend analysis. It was noted, however, that the City does not obtain claims reports from its third party administrator for reconciliation purposes. We recommend that the City obtain monthly or quarterly reports from its third -party administrator and reconcile the City's database with these reports. This will help ensure that the City's basis in analyzing claims status and trends during the year to assist in the determination of the reasonableness of the City's workers' compensation self-insurance liability and for managing its risks will be based on the most updated claim information. REVIEW OF EMPLOYEE DATA CHANGES During our review of the internal controls established in the human resource department, we noted that a person independent of the person who enters employee data changes does not review the changes prior to finalizing the human resources module. A review of the payroll information is conducted by Finance before payroll checks are issued. We recommend that an independent review of any changes made to employee data be performed soon after the changes have been made. This will help eliminate the time that is needed to reconcile payroll information before checks are issued. 3 Three Embarcadero Center San Francisco, CA 94111 January 30, 2001 The Honorable Members of the City Council City of Lodi, California Ladies and Gentlemen: We have audited the general purpose financial statements of the City of Lodi, California (the City) for the year ended June 30, 2000, and have issued our report thereon dated October 18, 2000. Under auditing standards generally accepted in the United States of America, we are providing you with the attached information related to the conduct of our audit. Our Responsibility Under Auditing Standards Generally Accepted in the United States of America We have a responsibility to conduct our audit in accordance with auditing standards generally accepted in the United States of America. In carrying out this responsibility, we planned and performed the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Because of the nature of audit evidence and the characteristics of fraud, we are to obtain reasonable, not absolute, assurance that material misstatements are detected. We have no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements, whether caused by error or fraud, that are not material to the financial statements are detected. In addition, in planning and performing our audit, we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements. An audit does not include examining the effectiveness of internal control and does not provide assurance on internal control. Significant Accounting Policies The significant accounting policies used by the City are described in note I to the financial statements. We noted no transactions entered into by the City during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance or consensus. KPMG 1 I P KPMO LLP a 1 7 unrted 01411, Vnlb.1,A:gl, . ,,mb..,I kPM(; Intr,raiun n, n Cy. , n.:,,,c.mm cti Pk, -. Management Judgments and Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. 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 markedly from management's current judgments. We evaluated the key factors and assumptions used to develop estimates and found them to be reasonable in relation to the financial statements taken as a whole. Audit Adjustments We proposed no corrections of the financial statements that could, in our judgment, either individually or in the aggregate, have a significant effect on the City's financial reporting process. In connection with our audit of your financial statements, we have not discussed with management any significant financial statement misstatements that have not been corrected for in your books and records as of and for the year ended June 30, 2000. Other Information in Documents Containing Audited Financial Statements Our responsibility for other information in the City's Comprehensive Annual Financial Report does not extend beyond the general purpose financial information identified in our report, and we have no obligation to perform any procedures to corroborate other information contained in the City's Comprehensive Annual Financial Report. We have, however, read the other information included in the City's Comprehensive Annual Financial Report, and no matters came to our attention that cause us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements. Disagreements With Management There were no disagreements with management on financial accounting and reporting matters that, if not satisfactorily resolved, would have caused a modification of our report on the City's financial statements. Major Issues Discussed With Management Prior to Retention 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. Difficulties Encountered in Performing the Audit We encountered no serious difficulties in dealing with management in performing our audit. This report is intended solely for the information and use of the City Council and Management and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, K`Pw(G icy Kiwu City of Lodi Presentation of Fiscal 2000 Audit Results February 7, 2001 Presenlntion of Fiscal 2000 Audit Results to the City of Lodi General Purpose Financial Statements • Unqualified opinion in fiscal 2000 • No material weaknesses in internal control over financial reporting Single Audit in Accordance with OMB Circular A-133 • Two major programs (Community Development Block Grants and Federal Transit Assistance) • No findings or questioned costs page 1 I'Ieselltilti0l1 of I=iSC iI 2000 Audit hesults 10 the City oI Lo)1, Economy $1.1 million increase in general fund balance, up from $0.4 million increase in the prior year. Undesignated general fund balance is 12% of operating expenses, which is up from 10% in the prior year., The City's goal is 15%. Accrued salaries and wages declined by approximately $.6 million from prior year due to 5 days being accrued in the current year versus twelve in the prior year. page 2 Plcselittlti011 of f -fiscal 2000 Audit Results to the City of Lodi Our responsibility under Auditing Standards Generally Accepted in the United States of America Significant accounting policies Management Judgments and Accounting Estimates Audit adjustments Other information in documents containing audited financial statements Disagreements with management Major issues discussed with management prior to retention Difficulties encountered in performing the audit page 3 Management Letter Comments r PresenldIIoII of Fiscal 2000 Audit Results to llie City of Lodi The New Reporting Model Procurement Policies and Procedures Review of Workers' Compensation Claim Data Review of Employee Data Changes page 4 esttlittition of 1- ist;t11 2000 Audit Results to the City of t 0(11 uestions nswe rs page 5 CITY OF LODI, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2000 STEPHEN J. MANN, MAYOR ALAN NAKANISHI, MAYOR PRO TEMP SUSAN HITCHCOCK, COUNCILMEMBER KEITH LAND, COUNCILMEMBER I'IIILLIP i'ENNINO, COUNCILMEMBER H. DIXON FLYNN, CITY MANAGER Prepared by the Finance Department Vicky McAthie, Finance Director/Treasurer Ruby Paiste, Accounting Manager Coriene Wadlow, Accountant II t 0 PREFACE The Comprehensive Annual Financial Report (CAFR) has been prepared in order to present the City of Lodi, California (City) monetary results of operations and financial condition as of June 30, 2000, as well as provide statistical information of general interest about the City. To achieve these goals, the City's CAFR was organized into the following four major sections: INTRODUCTION This section of the CAFR provides a comprehensive analysis of the City's financial position as of June 30, 2000, as well as summaries of significant policies and practices which affect the City's management of its financial affairs. The Introduction section also includes a directory of City officials and advisory bodies and an organization chart of the City. FINANCIAL REPORTS This section includes the primary financial statements of the City and is organized into three major areas: * Independent Auditors' Report • General Purpose Financial Statements including notes which summarize the City's financial position and results of operations at the "Fund" level. * Supplemental financial statements, which provide financial information for each of the City's funds and account groups organized by generic fund type: Governmental Funds (General, Special Revenue, Capital Project and Debt Service), Proprietary Funds, Fiduciary Funds and General Fixed Assets and General Long -Term Obligations. An overview introduces each of these supplemental financial statements which describes the purpose of each fund or account group. In accordance with generally accepted accounting principles, the City's financial reporting system is organized on a "fund" basis, which is described further on the following pages of this Preface. STATISTICAL TABLES This section includes the following demographic and financial tables which provide current and historical trend information for the City and is organized into four major areas: * Statistical overview * General financial trends of revenues, expenditures, property valuation and tax sources for the last ten years * Long-term indebtedness trends and characteristics • Demographic and economic base trends and characteristics 1 PREFACE - CONTINUED SINGLE AUDIT The City is required to undergo an annual single audit of its expenditures of federal awards in conformity with the provisions of the Single Audit Act Amendments of 1996. Information related to this single audit, including the schedule of expenditures of federal awards, findings and recommendations, and independent auditors' reports on the internal control structure and compliance with applicable laws and regulations, is also included in this report. The City's financial reporting system is organized on a "fund" basis consisting of three major fund types - Governmental, Proprietary and Fiduciary - and two self -balancing Account Groups. The City's various funds as summarized below have been established in order to segregate and identify those financial transactions and resources associated with providing specific activities or programs in conformance with special regulations, restrictions or limitations. GOVERNMENTAL FUNDS Most of the City's programs and functions are provided and financed through the following Governmental Funds, which are distinguished by their use of the "flow of current financial resources" measurement focus in determining financial position and changes in financial position: General Fund Debt Service Capital Project Funds Equipment Fund Library Capital Subdivision Capital Hutchins Street Square Capital Capital Outlay Reserve Fund Lodi Lake Capital Special Revenue Funds Police Special Revenue Fund Special Grants Fund Streets Fund Transportation Fund Community Development Block Grants Home Program PROPRIETARY FUNDS Proprietary funds are distinguished from Governmental funds by their similarity to private sector enterprises, as the intent is that the cost of providing services whether this service is provided to the public (Enterprise Funds) or internally to the organization (Internal Service Funds) - is to be financed or recovered primarily through user charges. Enterprise Funds may also be established to account for operations under which the City or an outside granting agency has decided that a periodic determination of net income under full accrual accounting is appropriate for capital maintenance, public policy, management control, accountability or other public purpose. The following four Enterprise Funds are used by the City: Electric, Sewer, Water and Transit. The Internal Service Funds are used to account for claims and benefits. ii PREFACE - CONTINUED FIDUCIARY FUNDS Also known as Trust and Agency Funds, the following funds are used to account for assets maintained by the City in a trustee capacity for private individuals, organizations or other governmental agencies: Expendable Trust Funds Agency Funds Private Sector Trust Special Assessments Hutchins Street Square Bequest Miscellaneous Expendable Trust ACCOUNT GROUPS Except for assets and liabilities associated with the Proprietary or Fiduciary fund types, the following self -balancing account groups are used for accounting control and accountability for the City's general fixed assets and the unmatured portion of principal outstanding on its general long-term obligations. General Fixed Assets Account Group General Long -Term Obligations Account Group Iii TABLE OF CONTENTS PREFACE page i INTRODUCTION Letter of Transmittal iv Certificate of Achievement for Excellence in Financial Reporting xvi Certificate of Award - Outstanding Financial Reporting xvii Organization Chart of the City of Lodi xviii Directory of Officials and Advisory Bodies xix FINANCIAL REPORTS GENERAL PURPOSE FINANCIAL STATEMENTS Independent Auditors' Report on General Purpose Financial Statements and Supplementary Schedule of Expenditures of Federal Awards 1 Combined Balance Sheet - All Fund Types and Account Groups 2 Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types and Expendable Trust Funds 4 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual - General and Special Revenue Funds 5 Combined Statement of Revenues, Expenses and Changes in Fund Equity - All Proprietary Fund Types 6 Combined Statement of Cash Flows - All Proprietary Fund Types 7 Notes to General Purpose Financial Statements 8 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress— Pension Plan 43 SUPPLEMENTAL FINANCIAL STATEMENTS General Fund Overview 45 Comparative Balance Sheets 46 Comparative Statements of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 47 Schedule of Expenditures by Department - Budgetary Level of Control - Budget and Actual Comparison 48 TABLE OF CONTENTS - continued page Special Revenue Funds Overview 49 Combining Balance Sheet 51 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 52 Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual 53 Debt Service Fund Overview 56 Comparative Statements of Revenues, Expenditures and Changes in Fund Balance 57 Capital Project Funds Overview 58 Combining Balance Sheet 59 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 60 Enterprise Funds Overview 62 Combining Balance Sheet 63 Combining Statement of Revenues, Expenses and Changes in Fund Equity 64 Combining Statement of Cash Flows 65 Internal Service Funds Overview 66 Combining Balance Sheet 67 Combining Statement of Revenues, Expenses and Changes in Fund Deficit 68 Combining Statement of Cash Flows • 69 Trust and Agency Funds Overview 70 Combining Balance Sheet 71 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Expendable Trust Funds 72 Combining Statement of Changes in Assets and Liabilities - Agency Funds 73 General Fixed Assets and General Long -Term Obligations Account Groups Overview 74 Comparative Schedule of General Fixed Assets 75 Schedule of General Fixed Assets by Function and Activity 76 Schedule of Changes in General Fixed Assets by Function and Activity 77 TABLE OF CONTENTS - continued Comparative Schedules of General Long -Term Obligations page 78 STATISTICAL TABLES (unaudited) General Governmental Revenues by Source - Last Ten Fiscal Years 79 General Governmental Expenditures by Function - Last Ten Fiscal Years 80 General Governmental Tax Revenues by Source - Last Ten Fiscal Years 81 Secured Tax Levies and Collections - Last Ten Fiscal Years 82 Assessed Full Cash Value of all Taxable Property - Last Ten Fiscal Years 83 Property Tax Rates - Direct & Overlapping Governments - Last Ten Fiscal Years 85 Special Assessment Billings and Collections - Last Ten Fiscal Years 86 Ratio of Net General Bonded Debt to Taxable Assessed Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years 87 Computation of Direct and Overlapping General Bonded Debt - June 30, 2000 1 88 Debt Ratios - June 30, 2000 88 Computation of Legal Debt Margin - June 30, 2000 89 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total Governmental Expenditures - Last Ten Fiscal Years 90 Revenue Bond Coverage - Last Ten Fiscal Years 91 Demographic Statistics - Last Ten Fiscal Years 92 Construction Activity - Last Ten Fiscal Years 93 Bank Deposits - Last Ten Fiscal Years 94 Principal Employers - June 30, 2000 95 Principal Taxpayers - June 30, 2000 96 Surety Bonds of Principal Officials — June 30, 2000 97 Gann Appropriation Limitation - Last Ten Fiscal Years 98 Personnel Authorized - Last Ten Fiscal Years 99 Schedule of Taxable Sales and Permits by Category — Last Ten Fiscal Years 100 Schedule of Business Tax Receipts Issued — Year ended June 30, 2000 102 Miscellaneous Statistics - June 30, 2000 103 TABLE OF CONTENTS - continued page SINGLE AUDIT Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 Schedule of Auditors' Results, Findings and Questioned Costs 104 105 106 107 109 Z 0 0 D 0 0 it z CITY COUNCIL STEPHEN J. MANN , Mayor ALAN NAKANISHI, Mayor Pro Tempore COUNCILMEMBERS: KEITH LAND SUSAN HITCHCOCK PHILLIP A. PENNINO October 18, 2000 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 Manager of the City of Lodi: H. DIXON FLYNN City Manager SUSAN BLACKSTON City Clerk RANDALL A. HAYS City Attorney The Comprehensive Annual Financial Report (CAFR) for the fiscal year ended lune 30, 2000, is hereby submitted. This report is provided to present the financial position, results of operations and cash flows of the City's funds as of lune 30, 2000, 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. 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. The CAFR is presented in four sections: introductory, a financial section, a statistical section and single audit section. The introduction includes the transmittal letter, the City's organization chart and a list of principal officials. The financial section includes the independent auditors' report on the general purpose financial statements and supplementary schedule of expenditures of federal awards, the financial statements and notes to the financial statements. The single audit section includes the schedule of expenditures of federal awards, notes to the schedule, reports on compliance and internal control based on the audit of the general purpose financial statements and on compliance and internal control with requirements applicable to each major program in accordance with OMB Circular A- 133. The statistical section includes selected financial and demographic information presented on a multi-year basis. THE REPORTING ENTITY AND SERVICES PROVIDED The funds and account groups 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 the Governmental Accounting Standards Board (GASB) Statement 14. iv The City provides a wide range of municipal services including public safety (police, fire and graffiti abatement), public utilities services (electric, water and sewer), transportation services (streets, flood control and transit) leisure, cultural and social services (parks and recreation, library and community center), and general government services (management, 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 13 Sanitation (solid waste) and Cable Television 2 Ambulance 1 Gas and Telephone 2 ECONOMIC CONDITION AND OUTLOOK Overview 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 57,935 and is contained in an area of 12.5 square miles. The City has grown steadily since incorporation in 1906 and is projected to grow to 70,500 people by the year 2007. 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. Lodi is built on a strong and broad based agricultural industry with national and industrial markets for its commodities and products. Wines, processed foods, nuts, fruit and milk are major commodities of the Lodi area and provide the basic material for food processing and packaging. These commodities support the operations of General Mills, Guild Winery and Pacific Coast Producers to name just three companies in the business of processing local agricultural commodities. In addition, Lodi 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. 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 Lodi. The City's focus on economic development has successfully encouraged numerous big industries to move to Lodi that collectively created hundreds of new jobs. Economic Development Lodi 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 developed long and short term economic development goals in conjunction with the Chamber of Commerce that resulted in the current revitalization projects for the downtown and Cherokee Lane areas. In addition to revitalization efforts, the City has adopted a number of incentives to retain and attract new businesses. These incentives included infrastructure improvements, regulatory Flexibility, tax credits and utility rate incentives. MAJOR GOALS, OBJECTIVES AND PROJECTS Overview To assist the citizens of Lodi understand where the City intended to concentrate expenditure of available resources, City Council, the City Manager and Department I -leads have established a hierarchy of planning statements for the City of Lodi. This hierarchy is comprised of major city goals, major city objectives and major city projects. Five major City goals were established as policy direction and focal points for the efforts of City staff. These goals include: Improve Customer Service Enhance Access to Information Ensure Efficient and Productive City Organization Enhance Quality of Life and Provide a Safe Environment for Citizens, and Develop the Lodi Economy City Council, the City Manager and Department Heads established sixteen major City objectives: Develop Short and Long Range Operational Plans Promote Commercial/Industrial Base Promote Public Relations and Marketing Efforts Provide Resources to Maintain City's Infrastructure Implement Information Systems Strategic Plan Continue to Use Partnerships to Advance City's Objectives Pursue Efforts to be Entrepreneurial Promote Urban Forestry Maintain City's Sense of Community Provide for a Balanced Community Encourage Public Arts, Cultural and Recreational Opportunities Provide Appropriate and Sufficient City Facilities Develop Effective Records Management Program Evaluate Telecommunications Opportunities Develop/Review Policies Relating to Providing Customer Service Provide Employee Training and Education Projects represent the foundation of the planning statements for the City of Lodi. These projects are designed to accomplish specific objectives and become the focus for organization wide effort. The following major City projects were planned in the 1999-2001 two-year budget document. As discussed above, economic revitalization continues to be an active focal point of the City in 1999-00. Other significant projects included: I) renovation and expansion of the Public Safety Building; 2) preparation of an Electric Utility Strategic master plan; 3) development of policy guidelines for replacement and financing of water and wastewater utility infrastructure; 4) provide street infrastructure that meets the demands of growth; 5) provide improvements to the railroad tracks and adjustments on Lockeford Street and Lodi Avenue; 6) prepare a comprehensive, professional Economic Development Strategy; 7) development of a green belt around the City of Lodi; and 8) formation of a redevelopment agency. vi Public Safety Building Remodel and Expansion The Public Safety Building is over thirty years old and it has many mechanical and design deficiencies. Remodeling this building to provide additional work space, parking and related site improvements are estimated to cost the City $17.4 million. The public safety building remodel will include a complete retrofit of the HVAC system, replacement of jail facility, full compliance with the Americans with Disabilities Act requirements, more space for public safety officers and a Police and Civic center parking structure. Electric Utility Master Plan With deregulation of the electric utility industry, the Electric Utility Department has been working to develop a long range strategic plan based on Federal and State legislation, the City's financial projections, debt structure, customer service needs, power generation, transmission and distribution assets. The objective of this plan is to provide the City with a guide for decisions related to Electric Utility that has to be made over the next 5 to 10 years. To remain competitive in a deregulated environment, the City must make significant changes in the way business is conducted. A previously completed financial plan established the foundation by which the City enters the competitive environment and moves forward with an integral plan. The risks associated with deregulation make this project the most critical the City will undertake in the next two years. Water/Wastewater Utility Service Improvements The City's aging water and sewer lines are in need of replacement at some time in the future. The City plans to develop policy guidelines for replacement and financing of these improvements. Public Road Improvements The City needs to provide street infrastructure to meet the demands of growth on the westside of town. Lower Sacramento Road is in need of widening and reconstruction from Kettleman Lane to Turner Road. Guild Avenue extension from Industrial Way to Lodi Avenue is being done as part of the City's industrial economic development program. The project includes completion of Thurman Street to Guild Avenue as well. Railroad Track Improvements This project will provide improvements to the railroad tracks and adjustments on Lockeford Street and Lodi Avenue. This project includes: removal of the Central California Traction Company tracks' in Lodi Avenue between Cherokee lane and the Union Pacific mainline tracks and reconstruction of Lodi Avenue including lighting; installation of concrete rail crossing surfaces; improvement of Lockeford Street and Victor Road. Economic Strategy of Lodi In April 1994, the City Council adopted goals to promote economic growth in targeted business districts and throughout Lodi. These goals provide a commitment by City Council and long-term direction to staff for the promotion of business growth and retention in the City. These goals include the formulation of a city wide Economic Development Strategic Plan. Greenbelt Policy The City of Lodi is surrounded by one of the most fertile and productive agricultural regions in the world. This land has been the base on which economic development has occurred in Lodi and northern San Joaquin County from the earliest days of settlement. As pressure for urban growth continues, the City needs a strategy to protect its green belt and agricultural assets. Accordingly, City staff plans to develop appropriate plans and policies to protect existing greenbelt from inappropriate development in our sphere of influence. vii Redevelopment Agency The greater parts of the historic business and residential areas of Lodi are located in the eastern third of the City. The age of the buildings and infrastructure in this area is between 40 to 90 years old. Many of the buildings reflect the charm of the buildings constructed between the 1890s and 1930s. Many long time residents and businesses continue to live and conduct business in this area. Over the last fifteen to twenty years, private investment has shifted to the City's newer areas in the west and south areas of the City and the number of resident property owners in the "Eastside" areas have decreased. Accordingly, this area has experienced a decline in the level of investment, property maintenance and relative property values. The City Council is committed to maintaining the historic and economic vitality of this area and accordingly, the City will form a Redevelopment Agency to preclude blight and decay and to encourage private investment. 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 budget is adopted annually. 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 1999-00, the City Council and City Manager made several supplemental budget appropriations the majority of which relate to capital projects. viii Fund Balance It is the City's goal to maintain and work toward an unreserved, undesignated fund balance in the General Fund and working capital balances in the Electric, Water and Sewer enterprise funds of at least 15% of operating expenditures. This goal was achieved in the enterprise funds for the fiscal year 1999-00. The General Fund maintained a fund balance of $3,788,220 or 13 % of operating expenditures at the end of fiscal year 1999-00. Carryover Policy The two-year Financial Plan and Budget format provides the City Council and staff with the opportunity to commit operating funds to services over a two-year time frame rather than the traditional one-year period. Under a one-year budget, appropriations lapse at the end of the fiscal year and favorable budget balances are no longer available for operating expenditures except when encumbered under contractual agreements. The two-year Financial Plan and Budget allows for the unexpended operating budget balances to be carried forward to the second year of the Financial Plan provided that the fund balance exceeds the required operating reserve. 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 terns are to be consistent with the City's cash flow needs. Investment reports are issued quarterly to the City Manager and City Council to provide detailed information regarding the City's investments and compliance with City policy and as required by state law. An important objective of the City's investment policy is to achieve a reasonable rate of return on public funds while minimizing risks and preserving capital. In evaluating the performance of the City's investment portfolio, investments are expected to yield a rate of return that regularly meets or exceeds an average rate of return on a three-month U.S. Treasury Bill. The City received an award from the Municipal Treasurer's Association of the United States and Canada for the Investment Certification Program. This award program is designed to recognize outstanding written investment policies and to provide professional guidance and assistance in developing and improving existing investment policies in the government sector. ' Appropriation Limitation Article XIII 13 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 govemment 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 1999-00, the City's appropriations subject to limit were $20,907,397 and the appropriation limit was $48,787,849, a favorable variance of $27,880,452. ix Debt Administration To fund the downtown revitalization the City issued a $1.97 million limited obligation improvement bonds for the Central City Revitalization Assessment District on July 22, 1996. These bonds have no commitment by the City. At June 30, 2000, the City had outstanding Certificates of Participation of $69,987,682. These liabilities are discussed in Note 7 of the General Purpose Financial Statements. 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 and 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. Interim Financial Reporting Monthly fmancial reports are prepared to present the City's financial condition and results of operation. These 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. Single Audit The City is subject to financial and compliance reporting required by the Single Audit Act Amendments of 1996 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 result of the City's single audit for the fiscal year ended June 30, 2000, provided no instance of material weaknesses in the internal control structure or significant violations of applicable laws and regulations. Competitive Bidding Policy All required purchases for materials, equipment and services during 1999-00 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 City's Claims and Benefits Fund. At June 30, 2000, the Claims and Benefits Fund had a deficit of $1,296,393. The City engaged the services of an actuary to evaluate the workers' compensation and the general liability programs. FINANCIAL HIGHLIGHTS As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for effectively managing the financial resources of the City. x General Government Functions The following table presents a summary of the general fund, special revenue funds, capital projects funds, expendable trust funds and debt service fund revenues for the fiscal year ended June 30, 2000, and the amount of increases and decreases in relation to prior year revenues. As provided and discussed below, revenues increased by $3,014,248 or 8.78 % from 1999. REVENUES 2000 1999 Variance Variance Amount % of Total Amount % of Total by Amount by Percent Taxes $ 19,800,885 53.02% $ 18,593,585 54.16% $ 1,207,300 6.49% Licenses and Permits 1,405,935 3.76% 1,266,630 3.69% 139,305 11.00% Intergovernmental Revenue 9,054,086 24.24% 8,493,204 24.74% 560,882 6.60% Charges for Services 4,611,212 12.35% 3,873,947 11.28% 737,265 19.03% Fines, Forfeitures and Penalties 714,051 1.91% 878,245 2.56% (164,194) -18.70% Investment and Rental Income 994,445 2.66% 981,922 2.86% 12,523 1.28% Miscellaneous Revenues 763,751 2.05% 242,584 0.71% 521,167 214.84% TOTAL, $ 37,344,365 100.00% $ 34,330,117 100.00% $ 3,014,248 8.78% Factors contributing to material changes in general government revenues from the prior year are provided below: 1. Taxes. Property taxes increased by $414,978, sales tax by $471,948, Measure K taxes by $143,613 along with various increases in other taxes account for a 6.49% increase in taxes. 2. Licenses and permits. The increase of $139,305 accounts for the continued rise in building permits and business licenses. 3. Intergovernmental revenue. The increase of $560,882 is primarily due to increase in Motor vehicle in -lieu of $787,875 offset by a decrease in other intergovernmental revenues. 4. Charges for services. The increase of $737,265 is mainly due to the increase in development impact fees from new subdivisions. 5. Fines, forfeitures and penalties. The decrease of $164,194 reflects the effectiveness of the new penalties imposed on delinquent utility accounts. More people are paying their bills on time to avoid the penalty. 6. Miscellaneous revenues. The increase of $52I,167 is due to an increase in the sale of City property of $193,815, an increase in donations of $150,000 and reimbursement for work for others of $105,495. xi Expenditures The following table presents a summary of general fund, special revenue funds, capital project funds, expendable trust funds and debt service fund expenditures for the fiscal year ended June 30, 2000, and the increases and decreases in relation to prior year amounts. Current expenditures increased by 5944,066 or 2.71% in 2000 over 1999. General Government Public Protection Public Works Library Parks and Recreation Capital Outlay Debt Service TOTAL Amount $ 7,812,738 11,430,276 5,038,519 1,089,971 2,669,872 $ 28,041,376 6,420,407 1,282,352 $ 35,744,135 EXPENDITURES 2000 1999 % of Total 27.86% 40.76% 17.97% 3.89% 9.52% 100.00% Amount % of Total $ 7,238,903 26.93% 5 11,224,603 41.76% 5,150,881 19.16% 1,032,669 3.84% 2,230,233 8.31% $ 26,877,289 100.00% 5 6,640,471 1,282,309 $ 34,800,069 $ Variance by Amount 573,835 205,673 (112,362) 57,302 439,639 1,164,087 (220,064) 43 944,066 Variance by Percent 7.93% 1.83% -2.18% 5.55% 19.71% 4.33% -3.31% 0.00% 2.71% Factors contributing to material changes in general government expenditures from the prior year are provided below: 1. General government. The increase of $573,835 is due to overall MOU increase in salaries and benefits of $306,000 and the increase in professional services for the Impact fee study and the revision of the Zoning Ordinance. 2. Public Protection. The increase of 5205,673 is due to increase in salaries and benefits offset by the decrease in PERS contribution. 3. Parks and Recreation. The increase of 5439,639 is due to the addition of new programs: Healthy Start, Lawrence/Heritage After school program, Camp Lodi Lake. It also includes salary and benefit increases. Enterprise Activities Enterprise funds are used to finance and account for the acquisition, operation and maintenance of City facilities and services that are entirely or predominantly supported by user charges. Enterprise operations are accounted for in such a manner as to show profit or loss as in comparable private enterprises. At June 30, 2000, the city operated four enterprise funds that include electric, sewer, water, and transit. Total fiscal year operating loss was $7,957,281 with fund equity ending at 576,693,938. This represents a 6.83% decrease over fiscal year 1998-99 in total fund equity. Additional enterprise fund financial information can be found in Note 18 of the general purpose financial statements. xii Internal Service Activities Internal service funds are used to account for financing goods or services provided by one department or agency to another on a cost reimbursement basis. At June 30, 2000, the City maintained one internal service fund for claims and benefits. The total fiscal year 1999-00 net operating loss before nonoperating revenue and transfers was $1,141,344 with a retained deficit balance of $1,296,393. Additional information can be found in Note 16 and 17 of the general purpose financial statements. Fiduciary Fund Operations The City maintains Expendable Trusts Funds to account for and administer bequests for the Hutchins Street Square/Community Center and the Library. Agency Funds are used to account for and administer the Special Assessment funds. INDEPENDENT AUDIT The City Council requires an annual audit of the records and accounts of the City by an independent certified public accountant. The accounting firm of KPMG LLP was selected to perform this audit. The independent auditors' report precedes the general purpose financial statements and concludes that the City's general purpose financial statements are presented fairly in all material respects in accordance with generally accepted accounting principles in the United States of America. CERTIFICATES OF ACHIEVEMENT The Government Finance Officers Association of the United States and Canada (GFOA) and the California Society of Municipal Finance Officers (CSMFO), both 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, 1999. These Certificates of Achievement are prestigious national and state awards recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized CAFR, whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a•period of one year only. The City has received a Certificate of Achievement for the last seven years (fiscal years ended June 30, 1993, 1994, 1995, 1996, 1997 , 1998 and 1999). We believe our current report continues to conform to the Certificate of Achievement program requirements and we are submitting it to GFOA and CSMFO. ACKNOWLEDGMENTS The professionalism, dedication and efficiency of the Finance Department Accounting staff made it possible for the timely preparation of this report and are to be commended. 1 would also like to thank Ruby Paiste, Accounting Manager, for her continued attention to detail and proactive approach to meeting future challenges such as GASB 34. 1 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, Vicky McAthie Finance Director xiv 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, 1999 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. President Executive Director The Government Finance Officers Association of the United States and Canada (GFOA) Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Lodi for this comprehensive annual financial report for the fiscal year ended June 30, 1999. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded the Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both general accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. 1999 was the 7th year that the City of Lodi received a Certification of Achievement. We believe our current ' report continues to conform to the program requirements, and we are submitting it to GFOA. Society ioCali rnaf of Municipal Jinance Officers Certificate of Award outstanding Financial Reporting 1998-99 Presented to the City of Lodi This certificate is issued it: recognition of meeting professional standards and criteria in reporting which reflect a high level of quality in the annual financial statements and in the underlying accounting system from which the reports were prepared! February 28, 2000 Cha , Professional ; echinical Standards Committee Dedicated to Excellence in Municipal Financial Management eft COMMUNITY CENTER LIBRARY BOARD Five Members LIBRARY i111111a+l Y l 911 Id IdiI (111 i1 ELECTRIC UTILITY COMMUNITY DEVELOPMENT CITY OF LODI CITY COUNCIL Mayor Four Councilmembers INSIZINISMON CITY MANAGER • XVIII BOARDS AND COMMISSIONS ARTS COMMISSION (1 1 Members) PERSONNEL BOARD OF REVIEW (3 Members) a PLANNING COMMISSION (7 Members) a SITE PLAN/ARCH REVIEW (5 Members) SENIOR CITIZENS COMMISSION (7 Members) PARKS AND RECREATION COMMISSION (5 Members) YOUTH COMMISSION (13 Members) 7. PARKS and RECREATION HUMAN RESOURCES CITY CLERK DIRECTORY OF OFFICIALS AND ADVISORY BODIES CITY COUNCIL Stephen J. Mann Alan Nakanishi Susan Hitchcock Keith Land Phillip Pennino ADVISORY BODIES Library Systems Advisory Board Council of Governments (COG) Citizens Advisory Committee Lodi Solid Waste Management Task Force Lodi Ad Hoc Transportation Committee Site Plan and Architectural Review Committee Old Lodi Union High School Site Foundation Board Lodi Senior Citizens' Commission PRINCIPAL ADMINISTRATIVE OFFICERS H. Dixon Flynn Randall Hays Susan Blackston Nancy Martinez Vicky McAthie Scott Kenley Charlene Lange Joanne Narloch Richard Prima Alan Vallow Konradt Bartlam Larry Hansen Ron Williamson xix Mayor Mayor Pro Temp Council Member Council Member Council Member Library Board Planning Commission Recreation Commission Lodi Arts Commission Personnel Board of Review East Side Task Force Gang Task Force Youth Commission City Manager City Attorney City Clerk Library Services Director Finance Director/Treasurer Fire Chief Community Center Director Human Resources Director Public Works Director Electric Utility Director Community Development Director Police Chief Parks & Recreation Director FINANCIAL REPORTS GENERAL PURPOSE FINANCIAL STATEMENTS Three Embarcadero Center San Francisco, CA 94111 Independent Auditors' Report The Honorable Members of City Council City of Lodi, California: We have audited the accompanying general purpose financial statements of the City of Lodi, California (the City), as of and for the year ended June 30, 2000, as listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governn►ent Auditing Standards. issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Lodi, California as of June 30, 2000, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 18, 2000 on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. The supplementary information listed 111 the accompanying table of contents reflecting the funding progress relative to the City's portion of the California Public Employees Retirement System on page 43 is not a required part of the basic general purpose financial statements, but is a disclosure required by the Governmental Accounting Standards Board (GASB), and we did not audit and do not express an opinion on such information. We have applied to the schedule of funding progress certain limited procedures prescribed by professional standards, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the schedule. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the City taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and is not a required part of the general purpose financial statements. The supplemental financial statements listed in the accompanying table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City. The schedule of expenditures of federal awards and supplemental financial statements have been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole. The statistical section listed in the accompanying table of contents is presented for the purpose of additional analysis and is not a required part of the general purpose financial statements of the City. Such additional information has not been subjected to the auditing procedures applied in our audit of the general purpose financial statements, and, accordingly, we do not express an opinion thereon. K`PW(G LL"p October 18, 2000 CITY OF LODI COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS June 30, 2000 Fiduciary Governmental Fund Type Proprietary Fund Type Fund Type Account Groups General General Special Capital Internal Trust and Fixed Long -Term Total General Revenue Projects Enterprise Service' Agency Assets Obligations (Memorandum Only) Assets and Other Debit Cash and investments (note 3) $ 3,197,509 3,205,749 5,784,985 21,463,089 2,153,460 1,226,596 $ 37,031,388 Restricted assets (notes 1 and 3) 1,098 35,992,088 35,993,186 Advance receivables (note 15) 1,084,000 2,372,487 3,456,487 Receivables: Accounts 1,878,624 2,173,773 73,000 4,399,576 99,425 1.598 6,625.996 Property taxes (note 4) 58.262 6,539 64,801 Interest 16,816 60,192 56,281 256,121 23,165 4,141 416,716 Due from other funds or governmental agencies (note 8) 155,469 2,738,085 37,283 3,999,345 6,930,182 Inventory 102,705 1,902,068 2,004,773 Deferred financing costs 210,909 210,909 Other assets 68,383 6,163 4,186 3,321 82,053 Fixed assets (note 5) 71,302.129 78,545,927 149,848,056 Other debit: Amount to be provided for general 1,085 1,085 long-term obligations 18,569,285 18,569,285 Total assets and other debit $ 5,477,768 9,261,799 5,960,271 141,903,975 2,280,236 1,235,656 78,545,927 18,569,285 S 263,234,917 See accompanying notes to general purpose financial statements. 2 CITY OF LODI COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS - continued June 30, 2000 Fiduciary Governmental Fund Type Proprietary Fund Type Fund Type Account Groups General General Special Capital Internal Trust and Fixed Long -Term Total General Revenue Projects Enterprise Service Agency Assets Obligations (Memorandum Only) Liabilities. Fund Emily and Other Credits Liabilities: Accounts payable and other liabilities $ 1,004,507 149,782 49,133 2,052,814 555,574 $ 3,811,810 Accrued salaries and wages 385,041 114,321 499,362 Accrued Interest 1,075,280 1,075,280 Due to other funds or other governmental agencies (note 8) 1,788,579 2,022,226 1,657,437 5,468,242 Accrued compensated absences (note 7) 300,000 958,145 4,683,774 5,941,919 Deferred revenue 1,372,563 884,466 2,257,029 Self-insurance reserve (notes 14 and 16) 3,576,629 3,576,629 Capitalized lease obligations (note 7) 375,511 375,511 Certificates of participation payable, net of discount (note 7) 55,544,269 13,510,000 69,054,289 Water note payable (note 7) 2.923,305 2,923,305 Total liabilides 1,689,546 3,310,924 2,071,359 65,210.037 3,576,629 555,574 18,569,285 94,983,356 Fund Equity : Contributed capital (notes 9 and 19) 14,222,636 14,222,636 Investment in general fixed assets 78,545,927 78,545,927 Retained eamings (defic(t) (notes 9 and 17) 62,471,302 (1,296,393) 61,174,909 Fund balances: (note 9) Reserved for library 178,933 178,933 Reserved for encumbrances 191,851 176,610 377,475 745,936 Reserved for inventory 102,705 102,705 Unreserved -designated 5,774,265 3,511,437 680,082 9,965,784 Unreserved -undesignated 3,314,731 3,314,731 Total fund equity (deficit) and other credits 3,788,220 5,950,875 3,888,912 76,693,938 (1,296.393) 680,082 78,545.927 168,251,561 Commitments and contingent liabilities (notes 6 and 20) Total liabilities, fund equity and other credits $ 5,477,768 9,261,799 5,960.271 141,903,975 2,280,236 1,235,656 78,545,927 18,569,285 $ 263,234,917 See accompanying notes to general purpose financial statements. 3 CITY OF LODI COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS Year ended June 30, 2000 Fiduciary Govemmental Fund Type Fund Type Special Debt Capital Expendable Total General Revenue Service Projects Trust (Memorandum Only) Revenues: Taxes S 17,573,705 747,630 1,479,550 S 19,800,885 Licenses and permits 1,405,935 1,405,935 Intergovernmental revenues 3,748,649 5,175,859 129,578 9,054,086 Charges for services 1,411,163 1,396,494 1,803,555 4,611,212 Fines, forfeits and penalties 714,051 714,051 Investment and rental income 572,239 192,011 217,880 12,315 994,445 Miscellaneous revenue 161,996 104,086 497,669 763,751 Total revenues 25,587.738 7,616,080 4,128.232 12,315 37,344,365 Expenditures: Current: General government 7,774.589 38,149 7,812,738 Public protection 11,353,514 78,762 11,430.276 Public works 4,493,714 544,805 5,038,519 Library 1.039.971 50,000 1,089,971 Parks and recreation 2,669,872 2,669,872 Capital outlay 4,100,801 2,319,606 6,420,407 Debt service: Interest and fiscal charges 777,352 777,352 Principal payments 505,000 505,000 Total expenditures 27,331,660 4,722,368 1,282,352 2,357,755 50,000 35,744,135 Excess (defidency) of revenues over (under) expenditures (1,743,922) 2,893,712 (1.282,352) 1,770,477 (37,805) 1,600,230 Other financing sources (uses): Operating transfers in (note 10) 3,995,011 1,189,021 1,282,352 3,248,692 33,571 9,748,847 Operating transfers out (note 10) (1,173,745) (2,013.493) (3,942,807) (7,130,045) Other (33,821) (33.821) Total other financing sources (uses) 2,821,266 (824.472) 1,282,352 (694,115) (250) 2,584,781 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 1.077,344 2,069,240 1,076,362 (37,935) 4,185,011 Fund balance, June 30, 1999 2.710,876 3,881,835 2,812,550 718,017 10,123.078 Fund balance, June 30, 2000 S 3,788,220 5,950,875 3,888,912 680,082 S 14,308,089 See accompanying notes to general purpose financial statements. 4 CITY OF LODI COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUNDS Year ended June 30, 2000 General Fund Special Revenue Funds Total (Memorandum Only) Variance Variance Variance Revised Favorable Revised Favorable Revised Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: Taxes S 17,155,319 17,573,705 418.386 667,000 747.630 80,630 17,822,319 18,321,335 S 499,016 Licenses and permits 1,342,629 1.405,935 63,306 1.342.629 1.405,935 63,306 Intergovernmental revenues 2.805,476 3.748,649 943.173 6.198.071 5,175,859 (1.022,212) 9,003.547 8,924.508 (79,039) Charges for services 1,387,702 1.411,163 23,461 853.000 1.396,494 543.494 2.240,702 2.807.657 566,955 Fines, forfeits and penalties 948,505 714,051 (234.454) 948,505 714,051 (234,454) Investment and rental income 550,835 572,239 21,404 172,000 192,011 20,011 722.835 764,250 41,415 Miscellaneous revenue 77,000 161,996 84,996 104,086 104,086 77,000 266,082 189,082 Total revenue 24,267,466 25,587,738 1,320.272 7,890,071 7.616,080 (273,991) 32,157,537 33.203,818 1,046,281 Expenditures: Current: General government 8.398,034 7,774,589 623,445 8,398,034 7,774,589 623,445 Public protection 11.665,761 11,353,514 312.247 103,969 76,762 27,207 11,769,730 11,430.276 339,454 Public works 4.572.357 4,493,714 78,643 2.361,552 544,805 1,816.747 6,933,909 5,038,519 1,895,390 Library 1.102,085 1,039,971 62.114 1,102,085 1.039,971 62.114 Parks and recreation 2,765.172 2,669.872 95,300 2,765,172 2,669,872 95,300 Capital outlay - t 6,051.724 4,100,801 1,950,923 6,051,724 4.100,801 1,950,923 Total expenditures 28,503,409 27,331,660 1,171,749 8.517,245 4,722,368 3,794.877 37.020,654 32.054,028 4,966,626 Excess (deficiency) of revenues over (under) expenditures (4,235,943) (1.743.922) 2.492,021 (627,174) 2,893,712 3,520.886 (4.863,117) 1,149,790 6,012,907 Other financing sources (uses): Operating transfers in 3,995,011 3,995.011 1.189,021 1,189,021 5.184,032 5,184,032 Operating transfers out (1,173.745) (1,173.745) (2,013,493) (2.013.493) (3,167,238) (3,187,238) Total other financing sources (uses) 2,821,266 2.821,266 (824.472) (824,472) 1,996,794 1,996,794 Excess (deficiency) of revenues and other financing sources over (under) expenditures and Other financing uses (1,414,677) 1,077,344 2,492,021 (1,451.646) 2,069,240 3,520,886 (2.866,323) 3,146,584 6,012,907 Fund balance, June 30 1999 2,710,876 2.710,876 3,881,635 3,881,635 6,592,511 6,592,511 Fund balance, June 30, 2000 5 1,296,199 3.788,220@ 2,492,021 2,429.989 5,950,875 3.520,886 3,726.188 9,739.095 $ 6,012.907 See accompanying notes to general purpose financial statements 5 CITY OF LODI COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND EQUITY ALL PROPRIETARY FUND TYPES Year ended June 30, 2000 Internal Total Enterprise Service (Memorandum Only) Operating revenues: Charges for services E 46,277,668 2,439,023 S 48,716,691 Operating expenses: Personnel services 5,388,889 175,495 5,564,384 Supplies, materials and services 17,283,792 2,664,891 19,948,683 Utilities 29,262,860 29262,860 Depreciation and amortization 2,299,408 2,299,408 Claims payments 955.716 955,716 Total operating expenses 54,234,949 3.796.102 58,031,051 Operating loss (7,957,281) (1,357,079) (9,314,360) Nonoperating revenues (expenses): Investment income (expenses), net 383,073 135,228 518,301 Rent 187,584 187.584 Fees received from developers 431,428 431.428 Other revenues 3.515,372 80,507 3,595,879 Total nonoperadngrevenues 4,517.457 215,735 4,733.192 Loss before operating transfers (3,439,624) (1,141,344) (4.581,168) Operating transfers in (note 10) 1,908,126 1,161,000 3,069,126 Operating transfers out (note 10) _ (5.887,728) (5,687,728) Total operating transfers (3.779.602) 1,161.000 (2,818,602) Net income (loss) (7.219,426) 19,658 (7,199,770) Add: Depredation on contributed assets 514,350 514.350 Net Increase (decrease) to retained eamings (6,705,078) 19,656 (6,885,420) Retained earnings (defidt), June 30, 1999 69,176,378 (1,316,049) 67,860,329 Retained earnings (defid0, June 30, 2000 62.471,302 (1.298,393) 61,174,909 Contributed capital. June 30. 1999 12,756,356 12.756.356 Depredation on contributed assets (514,350) (514,350) Contributed assets 1,980,630 1,960.630 Contributed capital, June 30, 2000 14,222,636 14,222,638 Total fund equity (deficit), June 30, 2000 (note 17) S 76,693,938 (1.296.393) S 75,397,545 See accompanying notes to general purpose financial statements. 6 CITY OF LODI COMBINED STATEMENT OF CASH FLOWS PROPRIETARY FUND TYPES Year ended June 30, 2000 Internal Total Enterprise Service (Memorandum Only) Cash flows from operating activities: Operating loss: $ (7,957,281) (1,357,079) S (9,314,360) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 2,299,408 2,299,408 Other revenues 3,515,372 80,507 3,595,879 Changes In assets and liabilities: Increase in accounts receivables (1,276,434) (36,048) (1,312,482) Increase in advance receivables (888,626) (888,626) (Increase) decrease in interest receivables (26,513) 2,456 (24,057) Decrease in due from other funds 1.040,998 1,040,998 Decrease in inventory 18,459 18,459 (Increase) decrease in other assets 61,012 (3,286) 57,726 Increase (decrease) in accounts payable and other liabilities 789,816 (32.501) 757,315 Decrease in accrued salaries and wages (180,936) (180,936) Increase in accrued interest 704,143 704,143 Increase in due to other funds 246,949 246,949 Decrease In accrued compensated absences (48,962) (48,962) Decrease in defend revenue (572,621) (572,821) Decrease in self-insurance reserves (210,415) (210,415) Net cash used in operating activities (2,275,216) (1,556,366) (3,831,582) Cash flows from noncapital financing activities: Operating transfers in 1,908,126 1,161,000 3,069,126 Operating transfers out (5687,728) (5,687,728) Fees received front developers 431,428 431,428 Net cash (used in) provided by non -capital financing activities (3,348,174) 1.161,000 �(2,167,174) Cash flows from capital financing activities: Proceeds from Certificates of Participation 10,731,895 10,731,895 Issuance costs - Certificates of Participation (834,837) Acquisition and construction of capital assets (4684,252) (4,884,252) Principal payments on debt (265,119) (265,119) Interest payments on debt (2.098.191) Capital contributed 1,852,074 (2,852, 1,852,07471) Net cash provided by capital financing activities 4,501,570 4,501,570 Cash flows from investing activities: Rent of City property 187,584 187,584 Interest on investments 2,637,756 135,228 2,772,984 Net cash provided by investing activities 2,825,340 135.228 2,960,568 Net increase (decrease) in cash and cash equivalents 1,703,520 (260.138) 1,443,382 Cash and cash equivalents at beginning of year 19,759,569 2,413,598 22,173,167 Cash and cash equivalents at end of year S 21.463.089 2,153,460 S 23,616,549 Noncash Investing. Capital and Financina Activities Enterprise Funds - The City received donated fixed assets valued at $ 128,556 for the year ended June 30, 2000. See accompanying notes to general purpose financial statements. 7 CITY OF LODI Notes to General Purpose Financial Statements June 30, 2000 (1) Summary of Significant Accounting Policies 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 govemment, public works, 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. The following is a summary of the more significant policies: (a) Reporting Entity The City of Lodi is governed by an elected five member council. 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. 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, the 1995 and 1996 Certificates of Participation to finance the Central City Revitalization Projects and the Performing Arts/ Conference Center, and the recent issuance of the 1999 Certificates of Participation to finance the Electric Systems improvements. The City Council constitutes the Board of Directors of LPIC. The funds of LPIC have been included in the Enterprise (Electric and Sewer) Fund and in the Capital Projects Fund in the accompanying general purpose 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. On June 29, 2000, the Lodi Financing Corporation issued Variable rate Certificates of Participation, Series 2000A. The City Council is the Board of Directors of LFC. The funds of LFC are included in the Water Fund in the accompanying general purpose financial statements. 8 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (b) Basis of Presentation - Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for in a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activity is controlled. The various funds are summarized by type in the general purpose financial statements. The City uses the following fund types and account groups: Governmental Fund Types Governmental Funds are those through which most governmental functions of the City are financed. The acquisition, use and balances of the City's expendable financial resources and the related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is upon determination of and changes in financial position, rather than upon net income determination. The following are the City's governmental fund types: General Fund: The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds: Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. Debt Service Fund: The DebtService Fund is used to account for the accumulation of resources for and the payment of general long-term debt principal, interest and related costs. Capital Projects Funds: The Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Proprietary Fund Types Proprietary Funds are used to account for the City's on-going organizations and activities that are similar to those often found in the private sector. The measurement focus is upon determination of net income and capital maintenance. The following are the City's proprietary fund types: Enterprise Funds: Enterprise Funds are used to account for operations that are (a) financed and operated in a manner similar to private business enterprises - where the intent is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; 9 CITY OF LODE Notes to General Purpose Financial Statements (continued) June 30, 2000 or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. Enterprise funds have been established for the Electric, Water, Sewer and Transit Divisions of the City. Internal Service Funds: Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City or to other governmental units, on a cost -reimbursement basis. Internal Service Funds have been established for the City's Claims and Benefits accounts. Fiduciary Fund Types Fiduciary Funds are used to account for assets held by the City in a trustee capacity or as an agent fpr individuals, private organizations, other governmental units and/or other funds. Agency Funds: Agency funds are used principally to account for collection of bond proceeds with no governmental obligation and payment of related bond principal and interest. Agency funds are custodial in nature and do not involve measurement of results of operations. Expendable Trust Funds: Expendable Trust Funds are used primarily to account for funds held by the governmental unit in a trustee capacity for individuals, private organizations, other governmental units and/or other funds. Expendable trust funds are accounted for in essentially the same manner as governmental finds. Account Groups Account groups are used to establish accounting control and accountability for the City's general fixed assets and general long-term obligations. The following are the City's account groups: General Fixed Assets Account Group: This account group is established to account for fixed assets of the City, other than those accounted for in the proprietary funds. General Long -Term Obligations Account Group: This account group is established to account for all long-term obligations of the City except those accounted for in the proprietary funds. 10 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (c) Basis of Accounting Governmental fund types are accounted for by using the modified accrual basis of accounting and the flow of current financial resources measurement focus. Revenues are recorded when they become both measurable and available. Revenues not considered available are recorded as deferred revenues. Expenditures are recorded when the liability is incurred, except for (a) unmatured interest on general long-term obligations which are recorded when due; and (b) the noncurrent portion of accrued vacation and sick leave, which is recorded in the General Long -Term Obligations Account Group. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual requirements of the numerous individual funds are used as guidelines. There are, however, essentially two types of revenues. In one, moneys must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, revenues arc recognized based upon the expenditures incurred. In the other, moneys are virtually unrestricted as to purpose of expenditure and are usually revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if the susceptible to accrual criteria are met. Property taxes are recognized as revenue in the year for which taxes have been levied, provided they are collected within 60 days after year end. Special assessments are recorded as revenue in the year the individual installments arc due. Sales tax revenues collected by the State on behalf of the City are recorded using the modified accrual basis of accounting. Licenses and permits, charges for services, fines and forfeitures and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash since they are generally not measurable until actually received. Investment earnings are recorded as earned since they are measurable and available. Proprietary fund types are accounted for by using the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the liability is incurred. Unbilled service revenue is accrued in proprietary funds. Fiduciary fund types are accounted for according to the nature of the fund. The City has Agency type funds which are purely custodial in nature (assets equal liabilities) and thus do not involve measurement of results of operations. In addition, the City has Expendable Trust funds that are accounted for in the same manner, as are other governmental funds. All of these funds are accounted for on the modified accrual basis of accounting. (d) Proprietary Fund Accounting The City has elected under GASB 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, to not apply all Financial Accounting Standards Board (FASB) Statements and Interpretations issued after November 30, 1989. As 11 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 required under GASB Statement No. 20, the City will continue to apply all applicable GASB pronouncements as well as Statements of Interpretations of FASB, Accounting Principles Board (APB) Opinions and Accounting Research Bulletins (ARBs) of the Committee on Accounting Procedure issued on or before November 30,1989, unless those pronouncements conflict or contradict GASB pronouncements. (e) Deferred Compensation Plans The City applies the provisions of Government Standards Board Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans (457 Plans). For 457 Plans in compliance with the 1996 Small Business Job Protection Act, the City neither has custody of the plan assets, nor directs or accounts for the plan investments, therefore, such plans are excluded from the financial statements. (f) Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of funds are recorded to reserve that portion of the applicable appropriation, is employed in the governmental funds. Open encumbrances are reported as reservations of fund balances since the commitments will be honored through subsequent years' budget appropriations. Amounts encumbered at year-end are reappropriated in the following year. Encumbrances do not constitute expenditures or liabilities. (g) 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 stated at fair value. Each fund's portion of this pool is shown on the combined balance sheet as "cash and investments". Investment earnings on the pooled investments, including any changes in fair value are allocated to various funds based on month-end cash balances in accordance with California code section 53647. (h) Restricted Assets In the Capital Projects Fund, restricted assets relate to the remaining balance of the proceeds of Certificates of Participation held and deposited by the Trustees in a Lease Payment Fund for the 1995 and 1996 Certificates of Participation. In the Enterprise (Electric) Fund, restricted assets represent the proceeds of the 1999 Certificates of Participation held by the trustee for the planned improvements of the city electric systems. (i) Advance Receivables Advance receivables reported in the Special Revenue Fund represent Community Development Block Grant (CDBG) funds and Home program funds the City loaned to a developer for a low-income housing project. The City will receive principal and interest from the original loan in thirty years and could use it for allowable projects or make new loans. 12 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Advance receivables reported in the Enterprise Fund represent the City's portion of the NCPA's General Operating reserve that is refundable on demand by the City. (See Note 15.) (j) Inventory General fund inventories are recorded at cost and are recognized as expenditures when consumed rather than when purchased. For the Proprietary fund types, inventories are recorded at cost using a method which approximates first in first out (FIFO) and expense is recognized when inventories are consumed in operations. (k) General Fixed Assets General fixed assets purchased are recorded as expenditures in the governmental funds and capitalized at cost in the General Fixed Assets Account Group. Capital leases for buildings, improvements and equipment are recorded in the General Fixed Assets Account Group and capital lease payable is recorded in the General Long -Term Obligations Account Group. Contributed fixed assets are recorded at estimated fair market value at the time received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assct useful lives arc not capitalized. Improvements considered to be infrastructure such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems are not capitalized as these assets are normally immovable and of value only to the City. Therefore, the purpose of stewardship for capital expenditures is satisfied without recording these assets. Depreciation has not been provided on general fixed assets, nor has interest been capitalized. (1) Fixed Assets - Proprietary Fund Types Fixed assets owned by the Proprietary Funds are stated at cost. Contributed fixed assets are recorded at estimated fair market value at the time received. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Years Buildings and improvements 3 - 40 Machinery and equipment 2 - 40 Vehicles 5 - 15 Depreciation recognized on contributed fixed assets is charged to contributed capital. 13 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (m) Compensated Absences/Vacation and Sick Leave Noncurrent accumulated vacation and vested sick leave benefits for governmental funds are recorded in the General Long -Term Obligations Account Group as a liability and also as an amount to be provided by future operations. The amount to be provided by future operations represents the total amount that would be required to be provided from the general operating revenues of the City if all the benefits were to be paid. The current portion, the amount expected to be paid in the next twelve months, is recorded as a liability of the responsible governmental fund. Enterprise Funds record vacation and sick leave as an expense and liability when earned by employees. (n) 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 reserve, which is accounted for as 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. (o) Total (Memorandum Only) Columns Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Such data are not comparable to a consolidation since interfund eliminations have not been made. (p) Statement of Cash Flows For purposes of reporting cash flows, the City considers all highly liquid investments with a maturity of three months or less when purchased and investments maintained in the pool to be cash equivalents. (q) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 14 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (2) 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 Tong -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 general purpose 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 general purpose financial statements: On or prior to the first regular Council meeting in June of each year, the City Manager submits to the City Council a proposed Two-year Financial Plan and Budget for two fiscal years commencing July 1. The budget includes proposed expenditures and the means of financing them. 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 an ordinance. 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. 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 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. Under a two-year budget, all operating appropriations lapse at the end of the second year except for funds that are encumbered. 15 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (3) Cash and Investments and Restricted Cash with Fiscal Agent The following is a detailed summary of cash and investments and restricted cash with fiscal agent at June 30, 2000: Pooled cash and investments: Demand deposits $ 2,406,844 Certificates of deposit 4,499,678 lnvestments 29,753,596 Total pooled cash and investments 36,660,118 Library Private Sector Fund: Shares of stocks 371,270 Total cash and investments 37,031,388 Restricted cash with fiscal agent 35,993,186 Total cash and investments and restricted cash with fiscal agent $ 73,024,574 (a) Cash The City's demand deposits and certificates of deposit at year-end are covered by either federal depository insurance or by collateral held by the custodial bank. The collateral pool of the custodial bank is equal to 110% of the uninsured deposits. (b) 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, agencies and instrumentalities, commercial paper rated A-1 by Standard & Poor's or P-1 by Moody's Commercial Paper Record, bankers' acceptances, repurchase agreements, mutual funds and the State of California Local Agency Investment Fund (LAIF). The City is also authorized to enter into reverse repurchase agreements. The City selects its investments based on safety, liquidity and yield. At no time during the year did the City borrow funds through the use of reverse repurchase agreements. The value of investments in the State of California Local Agency Investment Fund (LAIF) is equal to the fair value of the external investment pool shares. 16 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (c) Restricted Cash with Fiscal Agent This represents the balance of the 1995 and 1996 Certificates of Participation held by US Bank and proceeds of the 1999 Electric Utility Certificates of Participation held by Bank of New York. (d) Custodial Risk In accordance with GASB 3, deposits and investments are classified as to custodial risk by three categories as follows: Deposits: Category 1 Insured or collateralized with securities held by the City or by its agent in the City's name; Category 2 Collateralized with securities held by the pledging financial institution's trust department or agent in the City's name; Category 3 Uncollateralized. (Includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the City's name.) At year-end, the City's carrying amount of deposits was $2,406,844 and the bank balance was $2,621,643. Of the bank balance, $227,708 was covered by federal depository insurance or by collateral held by the City's agent in the City's name. The remaining balance of $2,393,935 was collateralized with securities held by the pledging financial institution or by its trust department or agent but not in the City's name. Investments: Category 1 Insured or registered, or securities held by the City or its agent in the City's name; Category 2 Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the City's name; Category 3 Uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the City's name. 17 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Investments and restricted cash with fiscal agent of the City as of June 30, 2000 are summarized below: Category Not Subject Carrying 1 to Categorization Amount Pooled investments: U.S. Treasury Notes $ 1,000,000 $ 1,000,000 Federal Agency Issues Federal Home Loan Mortgage 11,449,520 11,449,520 General Electric Medium Term Note 984,065 984,065 State of Califomia Local Agency Investment Fund (LAIF) 16,320,011 16,320,011 Total pooled investments 13,433,585 16,320,011 29,753,596 Investments held in trust: Shares of stocks 371,270 371,270 Restricted cash with fiscal agent 35,993,186 35,993,186 Total investments $ 13,804,855 52,313,197 $ 66,118,052 The custodial risk level indicated above is generally reflective of the risk assumed by the City during the year ended June 30, 2000. The LAIF is a special fund of the Califomia State Treasury through which local governments pool investments. Each governmental agency may invest up to $20,000,000 per account in LAIF. The City maintains two LAIF accounts. Investments in LAIF are highly liquid, as deposits can be converted into cash within twenty-four hours without loss of interest. Investments in LAIF are secured by the full faith and credit of the State of California. Information is not available to the City to assess the amount, if any, of LAIF invested by trustees in derivatives. 18 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (4) 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 March 1st for all real and personal property located in the City. Property sold after the assessment date (March I st) is reassessed and the amount of property tax assessed is prorated. The assessed value at March 1, 1999, upon which the 1999 levy was based, was $2,874,167,000. Secured property taxes are levied on October 1 and are due in two installments on November 1 and February I. The tax becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is levied on July I, due on July 31 and becomes delinquent on August 31. Property taxes levied for the year ended June 30, 2000, are recorded as receivables, net of estimated uncollectible amounts. Property taxes paid to the City by the County within 60 days of the fiscal year end are considered "available" and are, therefore, recognized as revenue. In 1993, the City made an 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. (5) Fixed Assets Fixed assets owned by the City are either recorded in the General Fixed Assets Account Group or in the Proprietary Fund types. Activity for the year ended June 30, 2000, consists of the•following: Beginning Transfers and Ending General Fixed Assets Balance Additions Retirements Balance Land $ 18,660,423 645,207 (193,815) $ 19,111,815 Buildings and improvements 24,015,010 24,015,010 Machinery and equipment 4,023,378 575,146 4,598,524 Vehicles 4,135,263 185,164 4,320,427 Construction in progress 25,074,956 599,204 (16,531) 25,657,629 Capital lease assets 955,351 (112,829) 842,522 Total $ 76,864,381 2,004,721 (323,175) $ 78,545,927 19 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Enterprise Funds Land $ 5,125,287 $ 5,125,287 Buildings and improvements 23,321,734 23,321,734 Machinery and equipment 58,065,588 2,124,428 60,190,016 Vehicles 2,688,200 305,560 2,993,760 Construction in progress 5,176,526 2,584,361 7,760,887 Subtotal 94,377,335 5,014,349 99,391,684 Less accumulated depreciation (25,830,074) (2,259,481) (28,089,555) Net enterprise funds fixed assets $ 68,547,261 2,754,868 $ 71,302,129 (6) Operating Leases The City is obligated under various operating leases for the use of buildings and office space. Future minimum lease payments required by lease agreements that has initial or remaining noncancellable lease terms of one year or more as of June 30, 2000, are as follows: Fiscal Years Ending 2001 $ 96,893 2002 82,893 2003 18,000 2004 18,000 Total minimum lease payments required under operating leases $ 215,786 20 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (7) Long -Term Obligations and Capitalized Lease Obligations The following is a summary of debt transactions of the City for the year ended June 30, 2000: Interest Rates June 30, 1999 Additions Retirements June 30, 2000 General Long -Term Obligations Account group: Compensated absences $ 4,581,400 102,374 $ 4,683,774 1995 Certificates of Participation 5.10-5.9% 4,525,000 170,000 4,355,000 1996 Certificates of Participation 5-10-5.9% 9,490,000 335,000 9,155,000 Capitalized lease obligations: IBM Corporation 7.40% 9,724 9,724 - IBM Corporation 6.12% 118,346 46,668 71,678 West America Bank 5.39% 370,425 66,592 303,833 498,495 122,984 375,511 Total General Long -Term Obligations Account Group 1 $ 19,094,895 102,374 627,984 $ 18,569,285 Enterprise Funds: California Safe Drinking Water Note Payable ' 3.41% $ 2,891,932 156,491 125,118 $ 2,923,305 1991 Certificates of Participation, net of $383,602 discount 4.50 - 6.60% 9,761,923 125,525 9,636,398 1999 Certificates of Participation, net of $549,812 discount 5.0 - 5.75% 43,407,871 43,407,871 2000 Environmental Abatement Certificates of Participation 2,500,000 2,500,000 Total Enterprise Funds $ 12,653,855 46,064,362 250,643 $ 58,467,574 Long-term debt payable at June 30, 2000, comprised the following individual issues: California Safe Drinking Water Note Payable The City entered into a contract on October 16, 1991, with the State of California Department of Water Resources to assist the City m financing the construction of water wells enabling the City to meet safe drinking water standards established by the State. The note is secured by the project and a pledge of user fees collected by the Water Enterprise Fund. Semiannual payments of $114,006, are payable each October 1 and April 1 through 2016. 21 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Certificates of Participation $11,170,000 Certificates of Participation (1991 Wastewater Treatment Plant Expansion Refunding Project), were sold in December 1991 to refinance the 1988 Wastewater Treatment Plant Expansion Project at a lower interest rate with approximately $1,400,000 of additional proceeds. Principal is payable annually on August 1 in amounts from $100,000 to $760,000 with final payment due August 1, 2026. $5,000,000 Certificates of Participation (1995 COP), were sold in October 1995 to finance the City Downtown Revitalization and the Cherokee Lane Beautification projects. Principal is payable annually on October 1 in amounts from $150,000 to $300,000 with final payment due October 1, 2015. $10,120,000 Certificates of Participation (1996 COP), were sold in August 1996 to finance the construction ofihe Hutchins Street Square Conference and Performing Arts Center. Principal is payable annually on October 1 in amounts from $310,000 to $605,000 with final payment due October 1, 2016. $25,310,000 1999 Series A and $18,647,683 1999 Series B Revenue Certificates of Participation were sold on August 18, 1999, to provide funds to finance the costs of certain improvements to the distribution and transmission facilities of the City's Electric System. Principal is payable in amounts of $625,000 to $945,000 for Series A beginning January 15, 2015 with final payment in January 15, 2032. Series B principal payments ranges from $ 1.553 million to $ 1.274 million with final payment on January 15, 2032. These certificates were issued with variable interest rates hence the City entered into an agreement that allows Salomon Brothers Holding Company to enter into fixed interest rate swap when the market is favorable. $2,500,000 Variable rate Certificates of Participation were issued on June 29, 2000, for the Environmental Abatement Program. Repayment of the bonds is contingent upon litigation settlements. The annual principal and interest requirements to amortize all debt outstanding as of June 30, 2000, are as follows: Year Ending Water Note Payable June 30, Principal Interest 2001 $ 129,422 98,590 2002 133,872 94,140 2003 138,476 89,536 2004 143,239 84,773 2005 148,165 79,848 Thereafter 2,230,131 662,508 $ 2,923,305 1,109,395 1991 Certificates of Participation Principal Interest 145,000 658,070 150,000 648,920 160,000 639,000 175,000 627,975 185,000 616,135 9,205,000 8,022,705 10,020,000 11,212,805 1995 Certificates of Participation Principal Interest 180,000 190,000 195,000 205,000 215,000 3,370,000 4,355,000 247,201 238,411 229,074 219,171 208,564 1,272,789 2,415,210 22 1996 Certificates of Participation Principal Interest 350,000 365,000 380,000 400,000 420,000 7,240,000 9,155,000 498,515 481,796 463,818 444,508 423,798 2,802,208 5,114,643 1999 Certificates of Participation Principal Interest 43,957,683 43,957,683 Grand Total Principal & Interest 1,391,435 $ 3,698,233 1,391,435 3,693,574 1,391,435 3,686,339 1,391,435 3,691,101 1,391,435 3,687,945 71,761,953 150,524,977 78,719,128 $ 168,982,169 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 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. The present value of future minimum capital lease payments as of lune 30, 2000, are as follows: Fiscal Years Ending 2001 $ 136,861 2002 113,525 2003 86,576 2004 86,168 Total minimum lease payments 423,130 Less amounts representing interest (47,619) Present value of minimum capital lease payments $ 375,511 Special Assessment District Debt In accordance with the Governmental Accounting Standards Board Statement No. 6, special assessment districts "Industrial Way and Beckman Road" debt service for which the City has no governmental commitment is recorded in an Agency Fund. These bonds were issued under the Improvement Act of 1911 during 1979 and mature in the year 2000. The City is not obligated in any manner in the event of default on the debt. The City has also issued limited obligation improvement bonds on July 22, 1996, for the " Lodi Central City Revitalization Assessment District." These bonds have no governmental commitment and debt service is recorded in an Agency Fund. These bonds were issued under the Improvement Act of 1915 and will mature in the year 2011. The City's liability in the event of delinquent assessment shall not exceed the balance of the established Reserve Fund. The amount outstanding as of June 30, 2000, is $1,615,000. Industrial Development Bonds The City of Lodi has lent its name to the City of Lodi Industrial Development Authority for the purpose of issuing the following industrial development bonds: Minton Corporation $5,000,000; Dart Corporation $8,000,000; and Wallace Computer Services $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. 23 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (8) Due To/From Other Funds or Governmental Agencies Individual fund interfund receivable and payable balances, as well as amounts due from other government agencies, by fund type at June 30, 2000, are as follows: Due To Other Due From Other Due To Due From Government Government Fund Other Funds Other Funds Agencies Agencies General Fund: County of San Joaquin - grant $ $ $ $ 53,322 CHP Patrol 2,147 Capital outlay reserve 100,000 Sub Total General Fund 100,000 55,469 Special Revenue Funds: Community Development Block Grant/Home Program 1,007,113 1,038,590 Transportation Fund 45,030 Police Special Revenue Fund 8,158 Streets Fund 1,052,143 736,436 16,244 Federal -Streets grant 622,950 Sub Total Special Revenue Funds 1,052,143 1,052,143 736,436 1,685,942 Capital Projects Funds: Hutchins Street Capital 73,000 Capital outlay reserve 1,949,226 16,520 20,763 Sub Total Capital Projects Funds 2,022,226 16,520 20,763 Enterprise Funds: Electric fund 3,496,663 Sewer fund 42,773 Water fund 23,706 Transit Fund 1,657,437 436,202 Sub Total Enterprise Funds 1,657,437 3,563,143 436,202 Total $ 4,731,806 $ 4,731,806 $ 736,436 $ 2,198,376 Amounts due to other funds from the Community Development Block Grants, Transportation and Transit funds represent interfund payable/receivable for overdraws of their share of the pooled cash account. Amounts due from other government agencies represent expenditures made by the City for various grant programs not 24 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 reimbursed by the State of California or Federal Government prior to June 30, 2000. Due to other government agencies represent a loan from the San Joaquin County Council of Governments for the Hi -way 99 and Hi -way 12 Interchange project. (9) Nature and Purpose of Reported Fund Equity The following is a summary of restricted, reserved, unreserved -designated and unreserved undesignated fund balances and/or retained earnings at June 30, 2000: Governmental Fund Types Special Capital Internal Trust & General Revenue Projects Enterprise Service Agency Total Reserved for: Library $ 178,933 $ 178,933 Encumbrances 191,851 176,610 377,475 745,936 Inventory 102,705 102,705 Total Reserved 473,489 176,610 377,475 1,027,574 Unreserved -Designated for: Specific projects and programs Total Designated 5,774,265 3,511,437 5,774,265 3,511,437 680,082 9,965,784 680,082 9,965,784 Unreserved - Undesignated Fund Balance 3,314,731 3,314,731 Retained earnings (deficit) 62,471,303 (1,296,393) 61,174,910 Contributed Capital 14,222,636 14,222,636 Total Fund Balances/Retained earnings (deficit) $ 3,788,220 5,950,875 3,888,912 76,693,939 (1,296,393) 680,082 $ 89,705,635 Reserved Fund Balance and/or Retained Earnings Reserved represents that portion that is legally segregated for specific purposes and is not available for discretionary appropriation. Unreserved -Designated Fund Balance Designated represents that portion for which the City has made tentative plans. Unreserved -Undesignated Fund Balance Undesignated represents that portion which is available for budgeting in future periods. 25 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (10) Operating Transfers Total operating transfers by fund for the year ended June 30, 2000, were as follows: Operating Operating Fund Transfers In Transfers Out General Fund $ 3,995,011 $ 1,173,745 Special Revenue Funds 1,189,021 2,013,493 Debt Service Fund 1,282,352 Capital Projects Funds 3,248,692 3,942,807 Enterprise Funds 1,908,126 5,687,728 Internal Service Funds 1,161,000 Expendable Trust Fund 33,571 $ 12,817,773 $ 12,817,773 (11) 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 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 fmancial report may be obtained from their Executive Office- 400 P Street, Sacramento, CA 95814. (a) Funding policy Participants are required to contribute 7% (9% for safety employees) of their annual covered salary. The City makes the contributions required of City employees on their behalf -and for their account. The City is required to contribute at an actuarially determined rate; the current rate is 0.0% for miscellaneous employees, 0.0% for fire employees and 0.613% for police employees, of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. 26 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 •(b) Annual Pension Cost For fiscal 2000, the City's annual pension cost of $66,012 for PERS was equal to the City's required and actual contributions. The required contribution was determined as part of the June 30, 1997, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 8.25% investment rate of return (net of administrative expenses) (b) projected annual salary increases that vary by age, length of service, and type of employment, and (c) 3.75% payroll growth. The actuarial value of PERS assets was determined using techniques that smooth the effects of short term volatility in the market value of investments over a three-year period (smoothed market value). PERS unfunded actuarial liability is being amortized as a level percentage of projected payroll on a closed basis. (d) Trend Information Three -Year Trend information ($ Amounts in Thousands): Annual Percentage Nct Fiscal Year Pension of APC Pension Ended Cost (APC) Contributed Obligation 6/30/98 $ 857 l00% $0 6/30/99 583 l 00% $0 6/30/00 66 1 00% $0 (13) Post -Retirement Health Care Benefits The City provides no post -employment benefits for its employees. However, employees who retire with at least ten years of service may elect to convert all accrued sick leave at the time of retirement to establish an individual medical insurance account. Depending on the bargaining unit of the employee, the value of the insurance account shall be determined by the following options: a) Option I (available to Management and Mid -management Employees only) The number of accumulated hours shall be reduced by 16-2/3% and the remaining balance converted into days. The days are then multiplied by the current monthly premium being paid for the employee and, if applicable, his/her dependents. Fifty percent of that amount will be placed into an account to be used by the City to pay medical insurance premiums for the employee and, if applicable, his/her dependents. For each year of employment over ten years, 2.5% will be added to the 50% used in determining the account amount. Total premiums shall be paid from the account until its depletion, at which time the benefit ceases. 27 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 b) Option 11 (available to all employees) Calculation is the same as Option I except that any increase in premiums must be paid by the employee. c) Option III (available to all employees) A retiring employee will be able to choose a cash pay-off of accumulated sick leave at the rate of 30% of base pay per hour. (14) 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 up to certain limits for certain losses as discussed in the following paragraphs for which reserves are recorded in the Internal Service Fund. The City is self-insured for general liability up to the first $500,000 per occurrence with claims from $500,000 to $15,000,000 per occurrence and in the aggregate insured through the California Joint Powers Risk Management Authority. (See note 16) 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. (See note 16) The City is fully self-insured for dental, unemployment and long-term disability for its employees. General liability and workers' compensation claims are administered by an outside agency and all other claims are administered by the City. The City has accrued a liability of $3,576,629 at June 30, 2000, for all self-insured claims in the Internal Service Fund that includes an amount for incurred but not reported claims. The reserve 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. The self-insurance reserve as of June 30, 2000, has been determined by the City based on recommendations from an independent actuarial valuation. In the opinion of the City, the amounts accrued are adequate to cover claims incurred but not reported in addition to known claims. 28 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Changes in the self-insurance reserve for fiscal years ended June 30, 2000 and 1999, arc as follows: Current -Year Claims and Changes Claim Beginning in Estimates Payments Ending FY 98-99 $ 3,787,044 1,187,173 (1,187,173) $ 3,787,044 FY 99-00 $ 3,787,044 1,000,299 (1,210,714) $ 3,576,629 (15) Participation in Joint Ventures Northern California Power Agency The City, along with fourteen other public agencies, is a member of the Northern California Power Agency (NCPA) which 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 shipping port, one public utility district and one associate member, a rural electric cooperative. NCPA is generally empowered to purchase, generate, transmit distribute and sell electric energy. Members participate in the projects of NCPA on an elective basis. Therefore, the participation percentage varies for each project. A commission comprising 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. Increase in Non -defaulting Project Participant's Original Project 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. 29 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 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, 2000, the City's balance in the NCPA General Operating Reserve, which has been credited with annual interest earnings and settlements, is approximately $2.4 million. Project Participation The NCPA members and their percentage share at June 30, 2000, which is the most recent available data, are as follows: Alameda Biggs Gridley lIealdsburg Lodi Lompoc Palo Alto Plumas-Sierra Rural Electric Cooperative Roseville Santa Clara Turlock Irrigation District Ukiah Geothermal Project 16.8825 0.1225 0.2360 2.9465 9.9620 3.6810 0.4920 3.9785 44.3905 12.8940 4.4145 30 l lyd ro Electric Project Combustion Turbine Project #1 Multiple Capital Facilities 10.00 13.092 19.00 1.66 10.37 2.30 22.92 1.69 12.00 37.02 3.500 34.780 3.500 1.090 13.584 25.000 39.50 5.00 36.50 Transmission Project 30.3590 0.4082 0.7103 6.6068 18.4861 6.6194 11.0736 1.4647 14.I756 2.04 5.454 10.0963 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 • Truckee -Donner Public Utility District, a member since 1989, obtains its power and dispatch services from Sierra Pacific Power, but relies on NCPA for legislative representation and other utility services. Bulk power purchased by the City through NCPA amounted to $27,722,088 during the year ended June 30, 2000 and is reflected in utilities expense in the enterprise fund. NCPA Geothermal Project A purchase power agreement with NCPA obligates the City for a 9.96% 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 $415 million at June 30, 1999. As a result of high plant generation of NCPA and others in the same area, the Geothermal Project experienced greater than anticipated declines in steam production on its leasehold properties and the unit cost of the geothermal power is higher than originally planned. NCPA has taken several other steps to further slow the decline of the steam field. In April 1996, the conversion of one turbine unit to low pressure operation was completed and the Southeast Geysers Effluent pipeline Project is in operation. Based on current protocol and forecasted operation of these enhancements, NCPA now expects to maintain an annual average generation level from the Project better than 150 megawatts through the year 2000. Calaveras Hydroelectric Project NCPA contracted to fmance, 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, 1999, approximately $547 million in long-term debt used to fmance this project was outstanding. NCPA Combustion Turbine Project In October 1984, NCPA financed a five -unit, 125 -megawatt combustion turbine project. The project, built in three member cities, began full commercial operation in June 1986, providing reserve and peak power. Under the NCPA power agreement, the City is obligated to pay 34.78% of the debt service and operating costs. At June 30, 1999 approximately $43 million in long-term debt was outstanding. 31 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 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. At June 30, 1999, approximately $10 million in long-term debt was outstanding. Multiple -Capital Facilities Project The Project consists of two separate components: (1) A 49.9 megawatt combustion turbine, "Unit One", located in Lodi, California and owned and operated by the NCPA; (2) Improvements to the electric system owned and operated by the City of Lodi. Each of these components is supported by separate and unrelated member participation agreements. Under a power purchase agreement, the City is obligated to pay 39.5% of the debt service and operating costs. At June 30, 1999, approximately $147 million in Tong -term debt was outstanding. The following are the most recent available audited condensed financial statements of NCPA: Combined Balance Sheet June 30, 1999 Assets Liabilities and Capitalization Current assets $ 43,177,000 Current portion of long-term debt $ 57,595,000 Restricted assets 285,755,000 Other current liabilities 90,436,000 Electric plant, net 619,441,000 Other liabilities and deferred credits 32,954,000 Other assets and deferred charges 357,731,000 Long-term debt 1,104,589,000 Accumulated net revenues 20,530,000 Total assets $ 1,306,104,000 Total liabilities and capitalization $ 1,306,104,000 32 Combined Statement of Revenue and Year ended June 30, 1999 Sales to participants for resale $ Operating expenses Other revenues (expenses) Future recoverable costs Net revenues before refunds Refunds to participants Net revenues Accumulated net revenues, beginning of year Accumulated net revenues, end of year $ CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Expenses 176,067,000 (103,351,000) 1,164,000 (54,014,000) 19,866,000 (25,681,000) (5,815,000) 26,345,000 20,530,000 Combined Statement of Cash Flows Year ended June 30, 1999 Net cash provided by operating activities $ 135,962,000 Net cash provided by investing activities 24,322,000 Net cash used in capital and related financing activities (226,591,000) Net cash used in noncapital and related financing activities 3,845,000 Increase in cash and cash equivalents (62,462,000) Cash and cash equivalents beginning of year 139,172,000 Cash and cash equivalents end of year $ 76,710,000 At June 30, 1999, NCPA's total outstanding long-term debt was $1,162,184,000 at an average interest rate of 6.5%. June 30, 1999, was $57,595,000. Complete financial information for NCPA may be obtained at the following administration office: Northern Califomia Power Agency 180 Cirby Way Roseville, CA 95678 Transmission Agency of Northern California The current portion of long-term debt at 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. 33 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Increase in Non -defaulting Project Participant's Original Project 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 Transtnission Project TANC is a participant and also the Project Manager of the California -Oregon Transmission Project,(Project), a 339 -mile long, 500 -kilovolt alternating current transmission project between Southern Oregon and Central California. As a Project Manager, TANC is responsible for the overall direction and coordination of all project development, construction work, operations and maintenance and for general and administrative support. The project was declared commercially operable on March 24, 1993 and provides a third transmission path or "intertie", between the electric systems of the Pacific Northwest and those in California. The major environmental requirements for the Project have been successfully met and completed. In connection with its participation in the Project, TANC has an entitlement percentage in Project transfer capability and construction cost sharing of 85.2557%. TANC has incurred costs for Project construction of approximately $432.8 million as of June 30, 1999. These costs have been capitalized by TANC since they are expected to be recovered through reimbursement from Project participants and the successful operation of the Project's transmission lines. The Project agreement among the participating members provides that each member agrees to make payments, from its revenues, to TANC for Project costs incurred and for the payment of debt service. Under the TANC joint powers agreement, the City is obligated to pay 1.89% of its debt service and operating costs. At June 30, 1999, approximately $444 million in long-term debt was outstanding of which $68.5 million is considered current. 34 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 The following are the most recent available audited condensed financial statements of TANC: BALANCE SHEET June 30, 1999 Assets Electric Utility Plant, net Restricted Assets Current Assets Noncurrent assets and deferred charges Total Assets Capitalization and liabilities $ $ Total members' equity Long-term debt Total capitalization Current liabilities Noncurrent liability and deferred credit Total capitalization and liabilities $ 375,317,015 45,100,494 5,814,533 49,396,291 475,628,333 547,928 375,777,359 376,325,287 87,186,662 12,116,384 475,628,333 STATEMENT OF INCOME For the Year Ended June 30, 1999 Revenues: Operating revenues Interest income Total revenues Costs and expenses General and other operating costs Interest and other financing costs Depreciation and amortization Total costs and expenses 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 16) Membership in Insurance Pools California Joint Powers Risk Management Authority Net income $ 43,852,234 3,709,211 $ 47,561,445 $ 9,850,134 27,026,878 10,650,332 47,527,344 $ 34,101 The City is a member, along with 23 other public agencies, 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 35 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 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 retrospectively five years after the end of the current program year. The City periodically pays deposits to the CJPRMA. These deposits are recorded as expenditures in the year paid, as they are a reasonable estimate of the actual cost of the program. During the year ended June 30, 2000, deposits of $189,089 were paid to CJPRMA. The most recent condensed audited financial information of CJPRMA as of June 30, 1999 follows: Balance Sheet June 30, 1999 Total Assets, primarily investments Liabilities Reserve for losses, Liability program Reserve for losses, Workers' Compensation program Claims Payable Accrued liabilities Total liabilities Fund Equity Retained earnings Total Liabilities and Equity $ 58,520,365 $ 36,802,087 57,670 1,586,289 8,920 38,454,966 20,065,399 $ 58,520,365 Statement of Revenues, Expenses and Retained Earnings Year Ended June 30, 1999 Total Revenues Total Expenses Operating Income Investment Income Net Income Retained Earnings, beginning of year Refunds to members Retained earnings, end of year $ 9,853,302 (15,640,470) (5,787,168) 2,397,536 (3,389,632) 28,896,328 (5,441,297) $ 20,065,399 The participants and their percentage shares at June 30, 1999, are as follows: City of Alameda 3.68%, CCCMRMIA 4.96%, Chico 1.62%, Central San Joaquin Valley Risk Management Authority 14.99%, Fairfield 2.91%, Fremont 6.16%, Livermore 2.50%, Lodi 2.20%, Manteca 1.47%, NCCSIF 2.79%, Petaluma 1.70%, Redding 3.93%, Redwood Empire Municipal Insurance Fund 5.71%, Roseville 3.30%, San Leandro 2.99%, San Rafael 2.54%, Santa Barbara Area Joint Powers Insurance Authority 0.72%, Santa Rosa 5.50%, Small Cities Organized Risk Effort 2.0%, Stockton 7.84 %, Sunnyvale 6.23%, Vacaville 2.17%, Vallejo 3.33%, and Yolo County Public Agencies Risk Management Insurance Authority 8.76%. 36 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 Local Agency Workers' Compensation Excess Joint Powers Authority The City, along with 30 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. All members are self-insured up to $250,000 per occurrence. LAWCX members pool resources to pay claims from $250,000 to $500,000 per occurrence and then use group purchasing power to obtain excess coverage through a commercial insurance company up to statutory limits. The most recent condensed audited financial statement information of LAWCX follows: Balance Sheet Statement of Revenues, Expenses and Retained Earnings June 30,1999 Year Ended June 30, 1999 Total Assets, primarily investments $ 3,526,300 Total Revenues $ 1,189,258 Liabilities: Accounts Payable $ 19,981 Total Expenses (2,600,294) Unallocated Loss Adjustment 195,211 Claims Reserve 2,343,634 Claim Incurred But Not Reported 1,560,587 Net Income (1,411,036) Total liabilities 4,119,413 Retained Earnings: Retained Earnings, beginning of year 817,923 Contingency Margin (1,448,375) Capital Contributions 855,262 Total Retained Earnings (593,113) Retained earnings, end of year $ (593,113) Total Liabilities and Equity $ 3,526,300 The City paid $37,818 in deposits to LAWCX during the fiscal year ended June 30, 2000. The participants and their percentage shares at June 30, 1999 are as follows: City of Alameda 4.21%, Albany 0.67%, ACWA/JPIA 12.67%, Central San Joaquin Valley Risk Mgmt Authority 16.46%, Clovis 1.28%, Coachella Valley Joint Power Insurance Authority 8.07%, Desert Hot Springs 0.03%, East Bay Regional Park District 3.06%, Emeryville 1.09%, Fremont 6.50%, Livermore 2.62%, Lodi 2.48%, Merced 1.72%, Los Gatos 0.40%, Morgan Hill 0.71 %, Newark 0.92%, Pacific Grove 0.19%, Palm Springs 2.60%, PARDEC 4.65%, PARSAC 6.38%, Piedmont 0.67%, Rialto 0.47%, Roseville 4.20%, SDWCA 37 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 4.28%, Small Cities Org. Risk Effort (SCORE) 1.31%, South Lake Tahoe 0.25%, Sunline Transit Agency 0.12%, Union City 1.51%, Vacaville 3.27%, Vallejo 4.67% and Vector Control JPA 2.54%. California Transit Insurance Pool The City, along with 27 other public agencies is a member of California Transit Insurance Pool (Ca1TIP), 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 1 applies to member properties with a pre -funded deductible or a self-insured retention of less than $100,000 per occurrence. Under this program, claims administration services are provided by CaITIP's claim administrator. Program 11 applies to all member properties with self-insured retention of $100,000 or greater per occurrence. Under this program, claims administration services are performed at the discretion of the member agency, subject to Ca1TIP bylaws. Ca1TIP is responsible for funding member claims in excess of applicable self-insured retention from the self-insurance pool limit of $500,000. Claims in excess of the pool limit are covered by overlying insurance purchased by CaITIP, covering all member agencies up to $5 million. Claims in excess of $5 million are covered by additional overlying insurance up to a $10 million limit for certain member agencies, at the option and expense of those agencies. 38 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 The schedule below reflects the liability protection coverage at April 30, 1999, which is the most recent available data, for each of CaLTIP's member agencies: Self -Insured Limit Agency Program Retention (in millions) Arcata Mad River Transit System I $ Prefunded $ 10 City of Azusa Transit System I 25,000 10 Butte County Transit System 1 25,000 10 Central Contra Costa Transit Authority I 25,000 10 Culver City Municipal Bus Lines 11 250,000 5 City of Dixon Transit System I Prefunded 10 El Dorado County Transit I Prefunded 10 City of Folsom Transit System 11 250,000 5 I-Iumbolt Transit I Prefunded 5 City of Lincoln Transit System II 250,000 5 City of Lodi Transit System I Prefunded 5 Mendocino Transit Authority 1 25,000 5 Monterey -Salinas Transit II 100,000 5 Morongo Basin Transit Authority 1 Prefunded 5 Napa Valley City Bus 1 Prefunded 5 Nevada County Transit District I Prefunded 5 Placer County Transit 1I 100,000 10 Riverside Transit Agency I 25,000 10 Santa Cruz Metropolitan Transit District II 100,000 10 Santa Rosa County Transit II 100,000 10 Siskiyou County Transit I Prefunded 10 San Luis Obispo Regional Transit Authority I Prefunded 10 South Coast Area Transit I Prefunded 10 City of Vacaville I Prefunded 10 Vallejo Transit Lines 1 25,000 10 Western Contra Costa County Transit Authority I Prefunded 10 City of Whittier Transit System II 100,000 10 Yolo County Transit Authority I Prefunded 10 39 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 The most recent condensed audited financial information of Ca1TIP as of April 30, 1999, is disclosed as follows: Balance Sheet April 30, 1999 Statement of Revenues, Expenses and Retained Earnings Year Ended April 30, 1999 Total Assets, primarily cash and investments $ 9,943,976 Total Revenues $ 1,408,320 Total Operating Expenses (1,952,913) Total Liabilities $ 6,342,678 Net Loss (544,593) Retained earnings 3,601,298 Retained earnings, beginning of year 4,145,891 Total Liabilities and Retained Earnings $ 9,943,976 Retained earnings, end of year $ 3,601,298 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. (17) Deficit in Fund Equity Internal Service Fund - Claims and Benefits - A deficit in fund equity at June 30, 2000, in the amount of $1,296,393 in the Internal Service Fund is due to the self-insurance reserves in the Claims and Benefits Fund established to cover both incurred and incurred -but -not -reported (IBNR) claims. The City plans to implement the deficit reduction plan recommended by an actuary to gradually eliminate the deficit in the Internal Service Fund. 40 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (18) Segments of Enterprise Activities There are four services provided by the City that are financed by user charges - Electric, sewer, water and transit. Selected financial data for these four services for the year ended June 30, 2000, are as follows: Operating revenues Operating expenses: Depreciation and amortization Other Operating loss Nonoperating revenue (expense) Operating transfers, net Net loss Current capital contributions Property, plant and equipment additions (deletions) (including construction in progress), net Net working capital Total assets Certificates of participation, net Total equity Electric $ 38,643,042 (548,484) (40,015,253) (1,920,695) 1,567,966 (2,397,011) $ (2,749,740) $ 427,382 $ 1,818,938 $ 25,080,119 $ 82,578,583 $ 43,407,871 $ 36,673,526 41 Sewer 3,874,750 (815,910) (3,146,931) (88,091) (87,063) (564,970) (740,124) (298,826) 633,338 2,839,800 35,765,971 9,636,398 25,370,550 Water Transit Total 3,547,602 $ 212,274 $ 46,277,668 (685,500) (4,992,501) (2,130,399) 1,030,740 (638,764) (1,738,423) $ (249,514) (3,780,856) (3,818,096) 2,005,814 (178,857) (1,991,139) $ (2,299,408) (51,935,541) (7,957,281) 4,517,457 (3,779,602) (7,219,426) $ 1,852,074 $ 1,980,630 579,902 $ 1,234,358 18,347,812 $ 2,500,000 $ 11,383,586 $ 1,852,074 $ 4,884,252 (1,497,891) $ 27,656,386 5,211,609 $ 141,903,975 $ 55,544,269 3,266,276 $ 76,693,938 CITY OF LODI Notes to General Purpose Financial Statements (continued) June 30, 2000 (19) Contributed Capital Contributions of property, plant and equipment for the proprietary funds increased as follows: Enterprise Fund Electric Fund Sewer Fund Water Fund Transit Total Enterprise Fund (20) Commitments and Contingencies Balance at Beginning of Year $ 185,486 5,674,746 3,734,517 3,161,607 $ 12,756,356 Contributions from Grants & Other Funds 427,382 (298,826) 1,852,074 I,980,630 Depreciation on Contributed Assets (10,685) (152,619) ' (101,532) (249,514) (514,350) Balance at End of Year $ 602,183 5,223,301 3,632,985 4,764,167 $ 14,222,636 Litigation and claims- The City is a defendant in various lawsuits and is a party to various claims including environmental exposure. The City Attorney estimates that the potential claims against the City resulting from such litigation would not materially affect the financial condition of the City. (21) Subsequent Events On October 2, 2000, the City issued 1.5 million Series 2000-B of the Environmental Abatement Program Certificates of Participation. This is the second issue intended to fund the commitment of the City as the lead agency in initiating and prosecuting environmental enforcement actions to compel responsible parties to investigate and clean up all actual or potential dangers to public health and the environment arising from or related to hazardous substance contamination of portions of the City's groundwater and soil located within an area approximately 600 acres and encompassing the City's central business area. 42 REQUIRED SUPPLEMENTARY INFORMATION PENSION PLAN - SCHEDULE OF FUNDING PROGRESS City of Lodi Required Supplementary Information Schedule of Funding Progress - Pension Plan (in thousands of dollars) Unfunded Unfunded (Overfunded) Entry Age (Overfunded) Actuarial Actuarial Actuarial Liability as Actuarial Actuarial Accrued Accrued Funded Covered Percentage of Valuation Asset Value Liability Liability Ratio Payroll Covered Payroll Date (A) (B) [(13) - (A)] [(A) / (B)1 (C) ([(B) -- (AMC)) 6/30/94 $ 65,287 $ 65,878 $ 591 99% $ 14,702 4.02% 6/30/95 70,518 69,253 (1,265) 102% 15,499 (8.16%) 6/30/96 79,694 77,581 (2,113) 103% 15,999 (13.21%) 6/30/97 91,769 79,787 (11,982) 115% 16,871 (71.02%) 6/30/98 108,165 88,222 (19,943) 123% 17,601 (113.31%) 6/30/99 125,286 104,459 (20,827) 120% 18,534 (112.37%) 43 SUPPLEMENTAL FINANCIAL STATEMENTS GENERAL FUND OVERVIEW The General 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. Due to the scale and flexibility of General Fund revenues, a broad range of municipal services are provided through this fund. The following is a summary of the services primarily financed through the General Fund by Department: Office of the City Manager Implementation of City Council policies Intergovernmental relations Community Promotion Risk Management and Insurance Salary and Benefits Administration Budget Administration Transit Operations Disaster Preparedness Solid Waste Management Telecommunications Safety Information Systems/Data Processing Office of the City Attorney Legal Advisor to the City Council Contract Review Litigation Office of the City Clerk Official City Recordkeeping/Elections Council Meeting Agendas and Minutes Chamber of Commerce Human Resources Department Employee Relations Recruitment, Selection and Classification Affirmative Action Benefits Administration Community Center Office Aquatics for Seniors Facilities Administration Senior Activities Cultural Activities Police Department Patrol Crime Prevention Animal Control Investigations Drug Suppression Fire Department Emergency Response Hazard Prevention Weed Abatement Parks and Recreation Department Park Maintenance Youth Programs Adult Programs Pre-school Programs Senior Activities Aquatics Trips and Classes Libra ry Adult and Youth Reading Material Research Services Finance Department Revenues and Collections Financial Reporting Debt and Investment Management Parking Enforcement Utility Billing Purchasing Public Works Department Engineering Services Street Paving and Sweeping Sidewalk Maintenance Traffic Signal & Sign Maintenance Storm Drain Maintenance Tree Maintenance Street Maintenance Building Maintenance Parking Lot Maintenance Community Development Department Development Review General Plan Environmental Impact Reporting Demographic Information Design Review Building and Safety Although several of the activities listed above may be partially financed through other funds, the primary source of funding for these services is the General Fund. For example, central support services provided by the Department of Finance are organized in the General Fund, these services are provided to Enterprise Fund Activities, Special Revenue Fund Activities and Capital Outlay Fund Activities. Reimbursement transfers are made from the other funds to the General Fund based on a formula calculated each year as compensation for these services. 45 CITY OF LOD1 GENERAL FUND COMPARATIVE BALANCE SHEETS • June 30, 2000 and 1999 ASSETS Cash and Investments Receivables: Accounts Property taxes Interest Due from other funds or governmental agencies Inventory Other assets TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable and other liabilities Accrued salaries and wages Accrued compensated absences Deferred revenue TOTAL LIABILITIES FUND BALANCE Reserved for encumbrances Reserved for inventory Reserved for library Unreserved TOTAL FUND BALANCE TOTAL LIABILITIES AND FUND BALANCE 46 2000 $ 3,197,509 1,878,624 58,262 16,816 155,469 102,705 68,383 $ 5,477,768 $ 1,004,507 385,041 300,000 $ 1999 $ 2,935,386 1,889,114 61,914 43,969 60,721 96,353 42,338 $ 5,129,795 $ 1,084,456 1,014,349 300,000 20,114 1,689,548 $ 2,418,919 191,851 $ . 42,501 102,705 96,353 178,933 9,664 3,314,731 2,562,358 3,788,220 2,710,876 5,477,768 $ 5,129,795 CITY OF LODI GENERAL FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Years ended June 30, 2000 and 1999 2000 1999 VARIANCE- VARIANCE - Favorable Favorable BUDGET ACTUAL (Unfavorable) BUDGET ACTUAL (Unfavorable) REVENUES Taxes $ 17,155,319 17,573,705 418,386 $ 16,058,940 16.633,299 574,359 Licenses and permits 1,342,629 1,405,935 63,306 1,136,800 1,266,630 129,830 Intergovernmental revenues 2,805,476 3,748,649 943,173 2,687,065 2,714,356 27,291 Charges for services 1,387,702 1.411,163 23,461 1,032,285 1,307,379 275,094 Fines, forfeits and penalties 948,505 714,051 (234,454) 782,485 878,245 95,760 Investment and rental income 550,835 572,239 21,404 413,714 644,532 230,818 Miscellaneous revenue 77,000 161,996 84,996 70,900 71,301 401 Total revenues 24,267,466 25,587,738 1,320,272 22,182,189 23,515,742 1,333,553 EXPENDITURES Current General government 8,398,034 7,774,589 623,445 7,639,780 7,238,903 400,877 Public protection 11,665,761 11,353,514 312,247 11,559,317 11,096.702 462,615 Public works 4,572,357 4,493,714 78,643 4,601.350 4,544.180 57,170 Library 1,102,085 1,039,971 62,114 1,032,512 1,029,669 2,843 Parks and recreation 2,765,172 2,669,872 95,300 2,241,178 2,230,233 10,945 Total expenditures . 28,503.409 27,331,660 1,171,749 27,074,137 26,139,687 934,450 (DEFICIENCY) EXCESS OF REVENUES (UNDER) OVER EXPENDITURES (4,235,943) (1,743,922) 2,492,021 (4,891,948) (2,623,945) 2,268,003 OTHER FINANCING SOURCES (USES) Operating transfers in 3,995,011 3,995,011 4,245,037 4,245,037 Operating transfers out (1,173.745) (1,173,745) (1,182,005) (1,182,005) Residual equity transfer 10,313 10,313 2,821,266 2,821,266 3,073,345 3,073,345 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (1,414,677). 1,077,344 2,492,021 (1,818,603) 449,400 2,268,003 FUND BALANCE , BEGINNING OF YEAR 2,710,876 2,710,876 2,261,476 2,261,476 FUND BALANCE, END OF YEAR $ 1,296,199 3,788,220 2,492,021 $ 442,873 2,710,876 2,268,003 47 CITY OF LODI GENERAL FUND SCHEDULE OF EXPENDITURES BY DEPARTMENT BUDGETARY LEVEL OF CONTROL - BUDGET AND ACTUAL COMPARISON Year ended June 30, 2000 2000 VARIANCE - Favorable BUDGET ACTUAL (Unfavorable) GENERAL GOVERNMENT City Council $ 113,015 $ 101,255 11,760 City Manager 2,427,732 2,277,130 150,602 City Clerk 263,906 252,837 11,069 City Attorney 282,085 235,845 46,240 Human Resources 474,100 408,621 65,479 Community Development 1,395,016 1,349,586 45,430 Finance Department 2,031,100 1,941,673 89,427 Non Departmental 1,411,080 1,207,642 203,438 Total General Government 8,398,034 7,774,589 623,445 PUBLIC PROTECTION Police Department 7,941,771 7,716,454 225,317 Fire Department 3,723,990 3,637,060 86,930 Total Public Protection 11,665,761 11,353,514 312,247 PUBLIC WORKS 4,572,357 4,493,714 78,643 LIBRARY 1,102,085 1,039,971 62,114 PARKS AND RECREATION 2,765,172 2,669,872 95,300 TOTAL GENERAL FUND EXPENDITURES BY DEPARTMENT $ 28,503,409 $ 27,331,660 1,171,749 48 SUPPLEMENTAL FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS OVERVIEW The City has established the following five special revenue funds in order to account for the proceeds from revenue sources that are restricted to expenditures for specific purposes. Police Special Revenue Fund 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 moneys. Special Grants Fund This fund has been established to account for the receipt of smaller grants from Federal and State sources. 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 stomp 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. Master Storm Drain To account for the funding of construction or modification of the City's storm drain system. 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. 49 OVERVIEW -continued Transportation Fund This fund was established to account for the receipt of moneys from the State of California apportioned to the City for transportation purposes. The State has designated 1/4% of the 6% sales tax levied statewide for local transportation purposes. Funding for this program was provided during the 1971 legislative session with the enactment of the Transportation Development Act, which extended the 6% sales tax to include purchases of gasoline. Revenues allocated to the City of Lodi under this program are divided into two categories: Article 8 funds, which are restricted for the improvement and maintenance of street systems; and Article 4 funds, which are restricted for public transit systems. Community Development Block Grants This fund was established to account for Federal moneys provided to the City principally for low and moderate income residents to develop a suitable living environment and expand economic opportunities. Home Program 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. 50 CITY OF LODI SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET June 30, 2000 (with comparative totals for the year ended June 30, 1999) Community Development Police Special Special Block Home Totals Revenue Grants Streets Transportation Grants Program 2000 1999 ASSETS Cash and Investments $ 416,890 9,311 2,779,548 $ 3,205,749 $ Receivables: Accounts 401,636 1,772,137 2,173.773 2.668,517 Interest 4,554 55,638 60,192 19,596 Due from other funds or governmental agencies 8.158 1,691,337 934,691 103,899 2,738.085 5.109,560 Advance receivables 393,985 690,015 1,084,000 1,084,000 TOTAL ASSETS $ 429.602 9,311 4,928,159 1,772.137 1,328,676 793,914 9.261,799 $ 8,881.673 Iv- as - LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable and other liabilities $ 733 117,572 31,477 149,782 $ 859,642 Accrued interest 19.495 Due to other funds or other governmental agencies 736,436 45,030 903,214 103,899 1,788,579 2,944,762 Deferred revenue 288,563 393,985 690,015 1,372,563 1,176,139 TOTAL LIABILITIES $ 289.296 854,008 45,030 1,328,676 793,914 3,310,924 $ 5.000,038 FUND EQUITY Fund balances: Reserved for encumbrances $ 875 175,735 Unreserved -designated for specific projects and programs 139,431 9,311 3,898,416 TOTAL FUND BALANCE 140,306 9.311 4.074.151 1,727,107 1,727,107 176,610 $ 1,583.557 5,774,265 2,298.078 5,950.875 3,881.635 TOTAL LIABILITIES AND FUND BALANCE $ 429,602 9,311 4,928,159 1.772,137 1,328,676 793.914 9,261,799 $ 8,881,673 SI CITY OF LODI SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year ended June 30, 2000 (with comparative totals for the year ended June 30, 1999) Community Development Police Special Special Block Home Totals Revenue Grants Streets Transportation Grants Program 2000 1999 REVENUES Taxes $ 747,630 $ 747,630 $ 604.016 Intergovernmental revenues 65,020 2,811,394 1,772,629 518,874 7,942 5,175,859 5,568,200 Charges for services 1,396,494 1,396,494 1,392,628 Investment and rental income 18,106 173,905 192,011 131,626 Miscellaneous revenue 100,876 3,210 104,086 Total revenues 83,126 5,230,299 1,775,839 518,874 7,942 7,616,080 7,696,470 EXPENDITURES Current Public protection 76,762 76,762 127,901 Public works 17,989 518,874 7,942 544,805 606,701 Capital outlay 7,734 4,062,324 30,743 4,100,801 3,908,413 Total expenditures 84,496 4,062,324 48,732 518,874 7,942 4,722,368 4,643,015 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,370) 1,167,975 1,727,107 2,893,712 3,053,455 OTHER FINANCING SOURCES (USES) Operating transfers in 9,184 1,179,837 1,189,021 7,050,180 Operating transters out (41,184) (1,972,309) (2,013,493) (9,593,101) Total other financing uses (32,000) (792,472) (824,472) (2,542,921) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (33,370) 375,503 1,727,107 2,069,240 510.534 FUND BALANCE, BEGINNING OF YEAR 173,676 9,311 3,698,648 3,881,635 3,371.101 FUND BALANCE, END OF YEAR $ 140,306 9,311 4,074,151 1,727,107 $ 5,950,875 $ 3,881,635 52 CITY OF LODI SPECIAL REVENUE FUNDS COMPARATIVE STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year ended June 30, 2000 POLICE SPECIAL REVENUE SPECIAL GRANTS VARIANCE- VARIANCE - Favorable Favorable BUDGET ACTUAL (Unfavorable} BUDGET ACTUAL (Unfavorable) REVENUES Taxes S 5 Intergovernmental revenues 116,139 65,020 (51,119) Charges for services Investment and rental Income 14,000 18,106 4,106 Miscellaneous Revenue Total Revenue 130,139 83,128 (47,013) EXPENDITURES Current Public protection 103,969 76,762 27,207 Public works Capital outlay 7,734 7,734 Total Expenditures 111.703 84,496 27.207 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES 18,436 (1,370) (19,806) OTHER FINANCING SOURCES (USES) Operating transfers M 9,184 9,184 Operating transfers out (41,184) (41,184) Total other llnandng sources (uses) (32,000) (32,000) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 50,436 (33,370) (19,806) FUND BALANCE, BEGINNING OF YEAR 173676 173,676 9.311 9,311 FUND BALANCE, END OF YEAR $ 224,112 140,306 (19,806) $ 9,311 9,311 v CITY OF LODI SPECIAL REVENUE FUNDS COMPARATIVE STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year ended June 30, 2000 STREETS TRANSPORTATION VARIANCE- VARIANCE - Favorable Favorable BUDGET ACTUAL (Unfavorable) BUDGET ACTUAL (Unfavorable) REVENUES Taxes $ 687,000 747,830 80,830 $ Intergovernmental revenues 2,392,303 2,811,394 419,091 2.738,829 1,772.629 (986,000) Charges for services 853,000 1,396,494 543.494 Investment and rental income 184,000 173.905 9,905 Miscellaneous Revenue 100,878 100,876 3.210 3,210 Total Revenue 4,076,303 5,230,299 1,153,996 2.738,629 1,775,839 (962.790) EXPENDITURES Cunene Public protection Public works 2,000 17,989 15,989 Capital ou0ay 6,020,881 4.082,324 1.958,557 30,743 30,743 Total Expenditures 8,020.881 4.062,324 1,958,557 32,743 48,732 15,989 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES (1,944.578) 1.167.975 3,112,553 2,705,888 1,727.107 (978,779) OTHER FINANCING SOURCES (USES) Operating transfers in 1.179.837 1,179,837 Operating transfers out (1,972.309) (1,972,309) Total other financing sources (uses) (792,472) (792.472) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (2.737,050) 375.503 3.112.553 2,705,888 1.727.107 (978,779) FUND BALANCE, BEGINNING OF YEAR 3,698,648 3,698,648 FUND BALANCE, END OF YEAR $ 961,598 4,074,151 3,112.553 $ 2,705,888_ 1,727,107 (978,779) REVENUES Taxes S S S 667,000 747,630 80.630 Intergovernmental revenues 1,787,426 518.874 (1.248.552) 594,126 7,942 (586.184) 6.198.071 5,175,859 (1.022,212) Charges for services 853,000 1,396,494 543,494 Investment and rental incarne 172,000 192,011 20.011 Miscellaneous Revenue 104,088 104,086 Total Revenue 1,787,426 518,874 (1248,552) 594.126 7.942 (586,184) 7,890,071 7,816,080 (273,991) CITY OF LODI SPECIAL REVENUE FUNDS COMPARATIVE STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year ended June 30, 2000 COMMUNITY DEVELOPMENT DEVELOPMENT BLOCK GRANTS HOME PROGRAM TOTALS VARIANCE- VARIANCE- VARIANCE - Favorable Favorable Favorable BUDGET ACTUAL (Unfavorable) BUDGET ACTUAL (Unfavorable) BUDGET ACTUAL (Unfavorable) EXPENDITURES Current Public protection Public works Capital outlay Total Expenditures EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out Total other financing sources (uses) 103.969 76,762 27,207 1.787.426 518,874 1248,552 594,126 7,942 586,184 2.361,552 544,805 1818,747 8,051,724 4.100,801 1,950,923 1,767,428 518,874 1,248,552 594,126 7,942 586,184 8,517,245 4.722.368 3,794,877 (627.174) 2.893.712 3,520,886 1,189,021 1,189,021 (2,013,493) (2,013,493) (824.472) (824.472) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (1,451,646) 2,069240 3,520.886 FUND BALANCE, BEGINNING OF YEAR 3,881,635 3.881,635 FUND BALANCE, END OF YEAR $ $ $ 2,429.989 5,950,875 3.520.886 SS SUPPLEMENTAL FINANCIAL' STATEMENTS DEBT SERVICE FUND OVERVIEW The City has established a debt service fund to account for the payment and accumulation of resources related to general Tong -term debt principal and interest for the following debt issues: 1995 Certificates of Participation These bonds were issued in September 1995 to finance the Central City Revitalization and City Hall remodel. 1996 Certificates of Participation The bonds were issued in August 1996 to finance the Conference/Performing Arts and Center. CITY OF LODI DEBT SERVICE FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Years ended June 30, 2000 and 1999 REVENUES Investment and rental income Total Revenues $ 2000 1999 $ 30 30 EXPENDITURES Interest and fiscal charges 777,352 797,309 Principal payments 505,000 485,000 Total Expenditures 1,282,352 1,282,309 DEFICIENCY OF REVENUES UNDER EXPENDITURES (1,282,352) (1,282,279) OTHER FINANCING SOURCES Operating transfers in Total other financing sources (DEFICIENCY) EXCESS OF REVENUES AND OTHER SOURCES (UNDER) OVER EXPENDITURES FUND BALANCE, BEGINNING OF YEAR 1,282,352 1,282,352 FUND BALANCE, END OF YEAR $ $ 57 1,282,279 1,282,279 SUPPLEMENTAL FINANCIAL STATEMENTS CAPITAL PROJECT FUNDS OVERVIEW The following funds were used by the City in order to account for the financial resources used in the construction and acquisition of major capital facilities or equipment (with the exception of those financed primarily through enterprise funds): Equipment Fund This fund was established to account for the financing and replacement of equipment for all funds of the City with the exception of the Enterprise Funds. Financing is primarily provided through operating transfers from other funds, interest earnings and sales of surplus property. Library Capital This fund is used to account for the acquisition, construction and installation of capital facilities for the Library. Subdivision Capital This fund is used to account for construction and installation projects dealing with subdivision work for others. Hutchins Street Square Capital When the old Lodi High School burnt 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 Fund This fund was established to account for the entire City's construction projects and capital purchases in excess of $10,000 with the exception of those funded through Enterprise Funds. Financing is provided primarily by operating transfers from other funds and from State and Federal grants. Lodi Lake Capital This fund was established to account for moneys charged for activities held at Lodi Lake. The Council designated the moneys to be used for Lodi Lake capital projects. 58 CITY OF LODI CAPITAL PROJECT FUNDS COMBINING BALANCE SHEET June 30, 2000 (with comparative totals for the year ended June 30, 1999) Hutchins Capital Lodi Library Subdivision Street Square Outlay Lake Totals Equipment Capital Capital Capital Reserve Capital 2000 1999 ASSETS Cash and investments $ 390,205 144,922 300,339 3,577 4,916,693 29,249 $ 5,784,985 $ 4,538,616 Restricted assets 1,098 1,098 761 Receivables: Accounts 73,000 73,000 73,479 Property taxes 6,539 6,539 26,535 Interest 1,596 54,365 320 56,281 39.345 Due from other funds or governmental agencies 37,283 37,283 172,927 Other assets 1,085 1,085 TOTAL ASSETS $ 390,205 146,518 300,339 76,577 5,017,063 29,569 $ 5,960,271 $ 4,851,663 LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable and other liabilities ' $ 37,537 10,303 1,293 $ 49,133 $ 339,009 Due to other funds or other governmental agencies 73,000 1,949,226 2,022,226 1,700,104 TOTAL LIABILITIES 37,537 73,000 1,959,529 1,293 2,071,359 2,039,113 FUND BALANCE Fund balances: Reserved for encumbrances 203,450 154 157,951 15,920 377,475 582,836 Unreserved -designated for specific projects and programs 149,218 146,364 300,339 3,577 2,899,583 12.356 3,511,437 2,229,714 TOTAL FUND BALANCE 352,668 146,518 300,339 3,577 3,057,534 28,276 3,888,912 2,812,550 TOTAL LIABILITIES AND FUND BALANCE $ 390,205 146,518 300,339 76,577 5,017,063 - 29,569 $ 5,960,271 $ 4,851,663 59 CITY OF LODI CAPITAL PROJECT FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year ended June 30, 2000 (with comparative totals for the year ended June 30, 1999) Hutchins Capital Lodi Library Subdivision Street Outlay Lake Totals Equipment Capital Capital Square Capital Reserve Capital 2000 1999 REVENUES Taxes $ 1,479,550 $ 1,479,550 $ 1,356,270 Intergovernmental revenues 129,578 129,578 87,973 Charges for services 1,803,555 1,803,555 1.173,940 Investment and rental income 14 213.933 3,933 217,880 205,734 Miscellaneous revenue 4.333 493,336 497,669 171,283 Total revenue $ 4,333 14 4,119,952 3,933 $ 4,128,232 2.995.200 EXPENDITURES Current $ General government 38,149 $ 38,149 Capital outlay 525,849 15,541 1,715,280 62,936 2,319,606 2,732,058 Total expenditures $ 525,849 15,541 1,753,429 62,936 $ 2.357,755 2,732,058 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES (521,516) (15,527) 2,366,523 (59,003) 1,770,477 263.142 OTHER FINANCING SOURCES (USES) Operating transfers in 512,539 15,000 2,564,195 156,958 3.248.692 3,908.429 Operating transfers out (99,410) (3,843,397) (3,942,807) (3,634,754) Residual equity transfer (197.468) Total other financing sources (uses) 413.129 15,000 (1.279.202) 156,958 (694,115) 76,207 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES (108,387) (527) 1,087,321 97,955 1,076,362 339,349 FUND BALANCE , BEGINNING OF YEAR 461,055 147,045 300.339 3,577 1,970,213 (69.679) 2,812,550 2,473,201 FUND BALANCE, END OF YEAR $ 352,668 146,518 300.339 3,577 3,057,534 28,276 $ 3,888,912 $ 2,812,550 60 SUPPLEMENTAL FINANCIAL STATEMENTS ENTERPRISE FUNDS OVERVIEW Enterprise funds are distinguished by their similarity to private sector activities, as the intent is to finance or recover the cost of providing services primarily through user charges. As such, the measurement focus is on net income in addition to financial position and changes in financial condition. An accrual basis of accounting with depreciation recorded as an expense is utilized. Enterprise funds may also be established in order to account for operations under which the City or an outside grantor agency has decided that a periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The City of Lodi uses the following five enterprise funds: 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 itnprovements, maintenance and debt service. 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. Transit Fund This fund is used to account for the operations of the Dial -A -Ride and the Grapeline bus system. CITY of LODI ENTERPRISE FUNDS COMBINING BALANCE SHEET June 30, 2000 (with comparative totals for the year ended June 30, 1999) Totals Electric Sewer Water Transit 2000 1999 ASSETS Cash and Investments 3 15.895,762 3,318,661 2.248,666 $ 21,463,089 $ 19,759,569 Restricted assets 35,992,088 35,992,088 Receivables: Accounts 3,977.248 183,086 228,153 11,089 4,399,576 3,123,142 Interest 192,314 37,704 26,103 256,121 229,608 Due from other funds or govemmentat agencies 3,496,663 42,773 23,706 436.203 3,999,345 5,040,343 Advance receivables 2.372,487 2,372,487 1,483.861 Inventory 1.642,237 12,980 246,851 1,902,068 1,920.527 Other assets 594 3,619 1,800 150 6,163 67,175 Fixed assets (net) 19.009.190 31,956,239 15,572,533 4,764,167 71,302,129 68,547,261 Deferred financing costs 210,909 210,909 219,180 TOTAL ASSETS 3 82,578,583 35,765,971 18,347,812 5,211,609 141.903,975 100,390,666 LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable and other liabirsies 5 1,084,298 101.085 623,017 264.414 $ 2,052,814 $ 1,262,998 Accrued salaries and wages 73,110 35,567 4,068 1,576 114,321 295,257 Accrued interest 695,718 333,385 24.921 21.256 1,075,280 371,140 Due to other funds or other governmental agencies 1,657,437 1,657,437 1,410,489 Accrued compensated absences 664,060 272,738 20.697 650 958,145 1,007,106 Deferred revenue 16,248 868,218 884,466 1,457,087 Certificates of participation payable, net of discount 43,407,871 9.636,398 2,500.000 55,544,269 9,761,923 Water note payable 2,923.305 2,923,305 2,891.932 TOTAL LIABILITIES $ 45,905,057 10.395.421 6,984,226 1,945.333 $ 65,210,037 $ 18.457,932 FUND EQUITY Contributed capital $ 602.183 5.223.301 3,632,985 4,764,167 $ 14,222,636 $ 12,756,356 Retained earnings (deficit) 36,071.343 20.147.249 7,750,601 (1,497,891) 62.471,302 69.176,378 TOTAL FUND EQUITY 36,673,526 25.370,550 11,383,586 3,266276 78,693,938 81,932,734 TOTAL LIABILITIES AND FUND EQUITY $ 82,578,583 _ 35.765,971 18.347.812 5.211.609 $ 141.903,975 $ 100,390,666 OPERATING REVENUES Charges for services CITY OF LODI ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND EQUITY Year ended June 30, 2000 {with comparative totals for the year ended June 30, 1999) Totals Electric Sewer Water Transit 2000 1999 $ 38.643,042 3,674,750 3,547,602 212,274 $ 46,277,668 $ 44,793,286 OPERATING EXPENSES Personnel services 3,229,711 1,357,970 729,886 71,322 5,368,869 5,228,880 Supplies, materials and services 8.617,213 1.423,792 3,566,359 3,676,428 17,283,792 14,924,635 Utilities 28,168,329 365,169 696,256 33,106 29,262,860 29,763,555 Depreciation and amortization 548,484 815,910 685,500 249,514 2,299,408 2,307,386 TOTAL OPERATING EXPENSES $ 40,563,737 3,962,841 5,678,001 4,030,370 $ 54,234,949 $ 52,224,456 OPERATING LOSS $ (1,920,695) (88,091) (2,130,399) (3.618,096) $ (7,957.261) $ (7,431,170) NONOPERATING REVENUES (EXPENSE) Interest, net 1,246,891 (541,457) (198,014) (124,347) 383,073 193,604 Rent - 155,543 31,041 1.000 187.584 231,448 Non-recurring settlement - - - 1.076,255 Fees received from developers 170,386 26'040 - 431,428 487,235 Other revenues 321.075 128,463 936,673 2,129,161 3,515,372 3,781,521 TOTAL NONOPERATING REVENUES (EXPENSE) $ 1,567,966 (87,063) 1,030,740 2,005,814 5 4,517,457 $ 5,770,063 LOSS BEFORE OPERATING TRANSFERS (352.729) (175,154) (1,099,659) (1,812,282) (3,439,824) (1,661,107) Operating Transfers in 1,441.065 191.779 16,975 268,307 1,908,126 5,651,784 Operating Transfers out (3,838,076) (726,749) (655,739) (467,164) (5.687,728) (9,261,841) Net Operating Transfers in (out) (2,397,011) (564,970) (638,764) (178.857) (3.779.602) (3.610.370) Net loss (2,749.740) (740,124) (1,738,423) (1,991.139) (7,219,426) (5.271,477) Add: Depreciation on contributed assets 10,685 152,619 101,532 249,514 514,350 1,075,721 Net decrease to retained earnings (2,739,055) (567,505) (1,636,891) (1,741,625) (6,705,076) (4,195,756) RETAINED EARNINGS - BEGINNING OF YEAR 38.810,398 20,734,754 9.387,492 243,734 69,176,378 73,372,134 RETAINED EARNINGS (DEFICIT) - ENO OF YEAR 36.071,343 20,147,249 7.750,601 (1,497,691) 62,471,302 69,176,378 CONTRIBUTED CAPITAL: Beginning of year Depreciation on contributed assets Contributed assets End of year 185,486 5,674,746 (10,685) (152,619) 427,382 (298,826) 602,183 5,223,301 3.734,517 3.161,607 12,756,356 9,281.359 (101,532) (249,514) (514,350) (1,075,721) 1,852,074 1,980,630 4,550,718 3,632,985 4,764,167 14,222,636 12,756,356 TOTAL FUND EQUITY $ 36.673,526 25370,550 11,383,586 3,266,276 $ 76,693,938 $ 81,932.734 64 CITY OF LODI ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS Year ended June 30. 2000 (with comparative totals for the year ended June 30, 1999) Totals Electric Sower Water Transit 2000 1999 Cash flows from operating activities: Operating loss $ ' (1.920,695) (88,091) (2.130.399) (3,818,096) $ (7,957281) (7,431,170) Adjustments to reconcile operating income (loss) 10 net cash provided by operating activities: Depreciation and amortization 548.484 815,910 685,500 249,514 2,299,408 2,307,386 Settlements received 1,076,255 Other revenues 321,075 128,463 936,673 2,129,161 3,515,372 3,781,522 Change in assets and liabilities: Increase (decrease) in accounts receivables (1,458,446) 157,839 28,760 (4,587) (1,276,434) (266,405) Increase in advance receivables (888,626) (888,626) (906,300) Decrease in restricted deposit 7,800,000 (Increase) decrease in interest receivables (21,820) 3,858 (8,551) (26,513) 49,138 (Increase) decrease in due from other funds (538,000) 1,578,998 1,040,998 (3,553,562) Decrease (Increase) in inventory 613 (1,210) 19,056 18,459 (168.405) (Increase) decrease in other assets (378) 62,065 (525) (150) 61,012 (56,246) Increase (decrease) in accounts payable and other liabilities 606,223 8,623 266,897 (91,927) 789,816 (262.320) (Decrease) Increase in accrued salaries and wages (129,454) (49,985) (68) (1.429) (180,936) 78.301 Increase (decrease) in accrued interest 695,718 (4,126) (1.064) 13.615 704,143 (55,940) Increase in due to other funds 246,949 246,949 1,410,489 (Decrease) increase in compensated absences (55,460) 6,182 160 156 (48,962) (87,276) Decrease in deferred revenue (572,621) (572,621) (242,913) Net cash (used in) provided by operating activities (2,840,766) 1,039,528 (776.182) 302.204 (2,275,216) 3,472,534 Cash flows from noncapital financing activities: Operating transfers in 1,441,065 161,779 16,975 288,307 1.908,126 5,651,784 Operating transfers out (3.838,076) (726,749) (655,739) (467,164) (5,687,728) (9,261,841) Residual equity transfer (313) Fees received from developers 170.388 261,040 431,428 487.234 Net cash used in noncapital financing activities (2.397,011) (394,582) (377,724) (178,857) (3,348,174) (3,123,136) Cash flows from capita! financing activities: Proceeds from Certificates of Participation 8,231,895 2,500,000 10,731,895 Issuance costs -Certificates of Participation (834.837) (834,837) Acquisition and construction of capital assets (1.818.938) (633,338) (579,902) (1.852,074) (4,884,252) (6,833,114) Principal payments on debt (140,000) Interest payments on debt (1,329.594) (666,770) (101,827) (265.119),052) (781 (2,098,1991) (781,052) Capital contributed 1.852,074 1,852,074 2,905.125 Net cash provided by (used in) capital financing activities 4,248.526 (1,440,108) 1,693,152 4,501,570 (4,955,000) Cash flows from Investing activities: Rent of City property 155,543 31.041 1,000 187,584 231,448 Interest on investments 2,576,485 125.314 60,304 (124,347) 2,637,756 974,656 Net cash provided by (used in) investing activities 2,576,485 280.857 91.345 (123.347) 2,825,340 1,206,104 Net increase (decrease) in cash and cash equivalents 1,587.234 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (514,305) 630,591 1,703,520 (3,399,498) 14,308,528 3,832,966 1,618.075 19.759,569 23,159,067 $ 15,895,762 3,318.661 2,248.666 $ 21,463,089 19.759,569 Noncash Investing, Caoital and Financing Activities Enterprise Funds - The City received donated fixed assets valued at $128,556 for the year ended June 30, 2000. 65 SUPPLEMENTAL FINANCIAL 'STATEMENTS INTERNAL SERVICE FUND OVERVIEW Internal Service Funds are maintained to account for the internal transfer of services between operating units of the City. The purpose of an Internal Service Fund is to achieve a level of operating efficiency that may not be available if the same activities were performed by multiple organizations. Claims and Benefits Funds The City of Lodi maintains an internal service fund to account for the following insurance and certain employee benefits: General Liability Employee assistance program Workers' Compensation Employee recognition program Dental Unemployment insurance Chiropractic Flexible spending program Life/accidental insurance Long Tenn Disability Medical Vision CITY OF LODI INTERNAL SERVICE FUND COMBINING BALANCE SHEET June 30, 2000 and 1999 ASSETS Totals 2000 1999 Cash and investments $ 2,153,460 $ 2,413,598 Receivables: Accounts 99,425 63,377 Interest 23,165 25,621 Other assets 4,186 900 TOTAL ASSETS $ 2,280,236 $ 2,503,496 LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable and other liabilities $ $ 32,501 Self-insurance reserve 3,576,629 3,787,044 TOTAL LIABILITIES $ 3,576,629 $ 3,819,545 FUND EQUITY (DEFICIT) Retained deficit (1,296,393) (1,316,049) TOTAL. FUND DEFICIT (1,296,393) (1,316,049) TOTAL LIABILITIES AND FUND EQUITY (DEFICIT) $ 2,280,236 $ 2,503,496 67 CITY OF LODI INTERNAL SERVICE FUND COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND DEFICIT Years ended June 30, 2000 and 1999 Totals 2000 1999 OPERATING REVENUES Charges for services $ 2,439,023 $ 2,029,081 OPERATING EXPENSES Personnel services 175,495 172,873 Supplies, materials and services 2,664,891 2,815,837 Claims payments 955,716 450,158 TOTAL OPERATING EXPENSES 3,796,102 3,438,868 OPERATING LOSS (1,357,079) (1,409,787) NONOPERATING REVENUES Investment income 135,228 159,629 Other, net 80,507 315,926 TOTAL NONOPERATING REVENUES 215,735 475,555 LOSS BEFORE OPERATING TRANSFERS (1,141,344) (934,232) Operating transfers in 1,161,000 1,569,742 Net income 19,656 635,510 RETAINED DEFICIT - BEGINNING OF YEAR (1,316,049) (1,951,559) RETAINED DEFICIT- END OF YEAR (1,296,393) (1,316,049) 68 CITY OF LODI INTERNAL SERVICE FUND COMBINING STATEMENT OF CASH FLOWS Years ended June 30, 2000 and 1999 Cash flows from operating activities: Operating loss Other revenues Changes in assets and liabilities: Increase in accounts receivables Decrease (Increase) in interest receivables Decrease in accounts payables and other liabilities Increase in other assets Decrease in self-insurance reserve Net cash used in operating activities Cash flows from noncapital financing activities: Operating transfers in Net cash provided by noncapital financing activities Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 69 Totals 2000 $ (1,357,079) 80,507 (36,048) 2,456 (32,501) (3,286) (210,415) (1,556,366) 1,161,000 1,161,000 135,228 135,228 1999 $ (1,409,787) 315,926 (63,377) (199) (17,463) (900) (1,175,800) 1,569,742 1,569,742 159,629 159,629 553,571 1,860,027 2,413,598 (260,138) 2,413,598 $ 2,153,460 $ SUPPLEMENTAL FINANCIAL 'STATEMENTS TRUST AND AGENCY FUNDS OVERVIEW The City has established the following expendable trusts and agency funds, which are used to account for funds, held by the City in a trustee capacity or as an agent for private individuals, organizations or other governmental agencies: Expendable Trust Funds Private Sector Trust Fund This fund was established to account for assets held and invested by the Library Board as trustee. The Library can spend the funds in accordance with trust agreements. Hutchins Street Square Bequest This fund was established to account for assets held by the City as trustee. The City can spend the principal and earnings of the trust in accordance with the trust agreement on behalf of Hutchins Street Square. Miscellaneous Expendable Trust This fund was established to account for nominal sums of moneys held by the City as trustee. It is believed that these sums will be spent within a short span of time. Agency Funds Special Assessments 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. 70 CITY OF LODI TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET June 30, 2000 (with comparative totals for the year ended June 30, 1999) Expendable Trust Funds Agency Fund Private Hutchins Street Miscellaneous Special Totals Sector Square Bequest Expendable Trust Assessments 2000 1999 ASSETS Cash and Investments $ 679,730 348 167,056 379,462 $ 1,226,596 $ 1,207,911 Receivables: Accounts 1,598 1,598 7,360 Interest 4 4,137 4,141 4,139 Other assets 3,321 3,321 10,578 TOTAL ASSETS $ 679,730 352 171,975 383,599 $ 1,235,656 $ 1,229,988 LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable and other liabilities $ 171,975 383,599 $ 555,574 $ 511,971 TOTAL LIABILITIES $ 171,975 383,599 $ 555,574 $ 511,971 FUND BALANCE Unreserved 679,730 352 680,082 718,017 TOTAL FUND BALANCE 679,730 352 680,082 718,017 TOTAL LIABILITIES AND FUND BALANCE $ 679,730 352 171,975 383,599 $ 1,235,656 $ 1,229,988 71 CITY OF LODI EXPENDABLE TRUST FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year ended June 30, 2000 (with comparative totals for the year ended June 30, 1999) Expendable Trust Funds Private Hutchins Street Miscellaneous Totals Sector Square Bequest Expendable Trust 2000 1999 REVENUES Investment and rental income $ 12,298 17 $ 12,315 $ 122,675 Total revenues $ 12,298 17 $ 12,315 $ 122,675 EXPENDITURES Current General government $ Library 50,000 50,000 3,000 Total expenditures $ 50,000 $ 50,000 $ 3,000 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES (37,702) 17 (37,685) 119,675 OTHER FINANCING SOURCES Operating transfers in 33,571 33,571 18,250 Operating transfers out (54,000) Other (33,821) (33,821) Total other financing sources (250) (250) (35,750) EXCESS OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES (37,702) 17 (250) (37,935) 83,925 FUND BALANCE , BEGINNING OF YEAR 717,432 335 250 718,017 634,092 FUND BALANCE, END OF YEAR $ 679,730 352 $ 680,082 $ 718,017 72 CITY OF LODI AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year ended June 30, 2000 (with comparative totals for the year ended June 30, 1999) Special Assessments Balance Balance 7/1/99 Additions Deductions 6/30/00 6/30/99 ASSETS Cash and investments $ 381,448 181,725 183,711 379,462 $ 381,448 Interest receivable 4,136 4,137 4,136 4,137 4,136 TOTAL ASSETS $ 385,584 185,862 187,847 383,599 $ 385,584 LIABILITIES Accounts payable and other liabilities $ 385,584 1,985 383,599 $ 385,584 TOTAL LIABILITIES $ 385,584 1,985 383,599 $. 385,584 73 SUPPLEMENTAL SCHEDULES GENERAL FIXED ASSETS AND GENERAL LONG-TERM OBLIGATIONS ACCOUNT GROUPS OVERVIEW General Fixed Assets Account Group All of the City's fixed assets of a tangible nature, except those relating to the proprietary fund types, are accounted for in this Account Group. As these assets are not financial resources available for expenditure or appropriation, they are not accounted for with Governmental Funds, but as an account group; and exist solely as accounting records of the City's fixed assets. The City's general fixed assets have been accounted for at cost, and do not include public domain or infrastructure fixed assets such as roads, bridges, storm drains or sidewalks, as these assets are immovable and only of value to the City. General Long -Term Obligations Account Group The City's long term obligations, except those relating to the proprietary fund types, are accounted for in this Account Group. These liabilities are backed by the full faith and credit of the City, which means that the general taxing authority of the City secures the debt. Included in long-term obligations are: • Compensated absences * Capitalized leases obligations * Certificates of Participation CITY OF LODI COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS June 30, 2000 and 1999 General fixed assets: 2000 1999 Land $ 19,111,815 $ 18,660,423 Buildings and improvements 24,015,010 24,015,010 Machinery and equipment 4,598,524 4,023,378 Vehicles 4,320,427 4,135,263 Construction in progress 25,657,629 25,074,956 Capital lease assets 842,522 955,351 Total $ 78,545,927 $ 76,864,381 Investment in general fixed assets: Prior year balances (as of June 30,1991) $ 42,965,286 $ 42,965,286 General fund 20,060,079 18,961,206 Special revenue funds 408,342 169,613 Capital projects funds 15,112,220 14,768,276 Total $ 78,545,927 $ 76,864,381 75 Function and Activity CITY OF LODI SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY June 30, 2000 Buildings and Machinery and Capital Lease Construction Land Improvements Equipment Vehicles Assets in Progress Total General Government: City clerk $ 48,533 $ 48,533 City manager 299,542 35,784 335,326 Finance 572,083 181,567 236,461 12,874 1,002,985 Total General Government $ 920,158 217,351 236,461 12,874 $ 1,386,844 Public protection $ 628,503 739,336 1,951,539 2,225,083 606,061 988,995 $ 7,139,517 Public works 429,188 766,429 797,695 1,526,031 2,761,169 6,280,512 Library 205,286 328,524 137,506 671,316 Parks and recreation 12,323,309 20,797,890 526,957 351,962 1,174,643 35,174,761 Non -departmental 5,525,529 1,382,831 264,669 20,719,948 27,892,977 — Total general fixed assets allocated to functions $ 19,111,815 24,015,010 3,678,366 4,103,076 606,061 25,644,755 $ 77,159,083 Total general fixed assets $ 19,111,815 24,015,010 4,598,524 4,320,427 842,522 25,657,629 $ 78,545,927 76 Function and Activity CITY OF LODI Schedule of Changes in General Fixed Assets By Function and Activity Year ended June 30, 2000 General Fixed General Fixed Assets Assets June 30, 1999 Additions Deletions June 30, 2000 General Government: City Clerk $ 48,533 $ 48,533 City Manager 191,536 143,790 335,326 Finance 990,582 12,403 1,002,985 Total General Government 1,230,651 156,193 1,386,844 Public Protection 6,259,874 879,643 7,139,517 Public Works 6,152,960 127,552 6,280,512 Library 656,880 14,436 671,316 Parks and Recreation 34,631,656 558,105 (15,000) 35,174,761 Non -departmental 27,932,360 155,963 (195,346) 27,892,977 Total General Fixed Assets Allocated to Functions $ 75,633,730 1,735,699 (210,346) $ 77,159,083 Total General Fixed Assets $ 76,864,381 1,891,892 (210,346) $ 78,545,927 CITY OF LODI COMPARATIVE SCHEDULES OF GENERAL LONG-TERM OBLIGATIONS June 30, 2000 and 1999 Amount to be provided for retirement of general Tong -term obligations Total General Long-term Obligations 2000 1999 $ 18,569,285 $ 19,094,895 $ 18,569,285 $ 19,094,895 Compensated absences $ 4,683,774 $ 4,581,400 Capitalized lease obligations 375,511 498,495 Certificates of participation 13,510,000 14,015,000 Total $ 18,569,285 $ 19,094,895 78 OVERVIEW General Fixed Assets Account Group All of the City's fixed assets of a tangible nature, except those relating to the proprietary fund types, are accounted for in this Account Group. As these assets are not financial resources available for expenditure or appropriation, they are not accounted for with Governmental Funds, but as an account group; and exist solely as accounting records of the City's fixed assets. The City's general fixed assets have been accounted for at cost, and do not include public domain or infrastructure fixed assets such as roads, bridges, storm drains or sidewalks, as these assets are immovable and only of value to the City. General Long -Term Obligations Account Group The City's long term obligations, except those relating to the proprietary fund types, are accounted for in this Account Group. These Liabilities are backed by the full faith and credit of the City, which means that the general taxing authority of the City secures the debt. Included in long-term obligations are: * Compensated absences * Capitalized leases obligations * Certificates of Participation CITY OF LODI COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS June 30, 2000 and 1999 General fixed assets: 2000 1999 Land $ 19,111,815 $ 18,660,423 Buildings and improvements 24,015,010 24,015,010 Machinery and equipment 4,598,524 4,023,378 Vehicles 4,320,427 4,135,263 Construction in progress 25,657,629 25,074,956 Capital lease assets 842,522 955,351 Total $ 78,545,927 $ 76,864,381 Investment in general fixed assets: Prior year balances (as of June 30,1991) $ 42,965,286 $ 42,965,286 General fund 20,060,079 18,961,206 Special revenue funds 408,342 169,613 Capital projects funds 15,112,220 14,768,276 Total $ 78,545,927 $ 76,864,381 75 Function and Activity General Government: City clerk City manager Finance Total General Government Public protection Public works Library Parks and recreation Non -departmental Total general fixed assets allocated to functions Total general fixed assets Land CITY OF LODI SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY June 30, 2000 Buildings and Machinery and Improvements Equipment Vehicles $ 48,533 299,542 35,784 572,083 181,567 $ 920,158 217,351 $ 628,503 739,336 1,951,539 2,225,083 429,188 766,429 797,695 1,526,031 205,286 328,524 137,506 12,323,309 20,797,890 526,957 351,962 5,525,529 1,382,831 264,669 $ 19,111,815 24,015,010 3,678,366 4,103,076 $ 19,111,815 24,015,010 4,598,524 4,320,427 76 Capital Lease Construction Assets in Progress 236,461 12,874 236,461 606,061 988,995 2,761,169 Total $ 48,533 335,326 1,002, 985 12,874 $ 1,386,844 606,061 842,522 1,174,643 20,719, 948 $ 7,139,517 6,280, 512 671,316 35,174,761 27,892,977 25,644,755 $ 77,159,083 25,657,629 $ 78,545,927 Function and Activity CITY OF LODI Schedule of Changes in General Fixed Assets By Function and Activity Year ended June 30, 2000 General Fixed General Fixed Assets Assets June 30, 1999 Additions Deletions June 30, 2000 General Government: City Clerk $ 48,533 $ 48,533 City Manager 191,536 143,790 335,326 Finance 990,582 12,403 1,002, 985 Total General Government 1,230,651 156,193 1,386,844 Public Protection 6,259,874 879,643 7,139,517 Public Works 6,152,960 127,552 6,280,512 Library 656,880 14,436 671,316 Parks and Recreation 34,631,656 558,105 (15,000) 35,174,761 Non -departmental 27,932,360 155,963 (195,346) 27,892,977 Total General Fixed Assets Allocated to Functions $ 75,633,730 1,735,699 (210,346) $ 77,159,083 Total General Fixed Assets $ 76,864,381 1,891,892 (210,346) $ 78,545,927 CITY OF LODI COMPARATIVE SCHEDULES OF GENERAL LONG-TERM OBLIGATIONS June 30, 2000 and 1999 Amount to be provided for retirement of general Tong -term obligations Total General Long-term Obligations 2000 1999 $ 18,569,285 $ 19,094,895 $ 18,569,285 $ 19,094,895 Compensated absences $ 4,683,774 $ 4,581,400 Capitalized lease obligations 375,511 498,495 Certificates of participation 13,510,000 14,015,000 Total $ 18,569,285 $ 19,094,895 78 STATISTICAL TABLES UNAUDITED 25,000 - 20,000 15,000 I. I I T ur Lou! GENERAL GOVERNMENTAL REVENUES BY SOURCE LAST TEN FISCAL YEARS (Amounts In Thousands) Thousands 0 1990-91 1991-92 1992-93 1993-94 1994-95 1995.96 1996-97 1997.98 1996.99 III Inter - Governmental ❑ Charges Services ■ Fines, Forfeits/ Penalties 0 Use of Money & Property ! Misc. Revenue © Taxes B Licenses/ Permits Fiscal Year Taxes 1990-91 10,623 1991-92 11,556 1992-93 11,462 1993-94 12,579 1994-95 16,209 1995-96 17,070 1996-97 17,029 1997-98 17,790 1998-99 18,594 1999-00 19,801 Mk 1999-00 Use of Licenses/ Inter - Charges Fines, Forfeits/ Money & Misc. Permits Governmental Services Penalties Property Revenue Total 545 4,134 4,062 341 1,406 1,341 22,452 420 5,213 5,003 252 1,380 1,139 24,963 317 5,049 5,975 338 1,136 649 24,926 507 4,756 2,100 " 407 1,157 199 21,705 634 5,928 2,517 406 808 201 26,703 842 6,642 2,428 421 1,063 140 28,606 1,012 6,316 1,908 453 1,216 80 28,014 1,183 6,291 2,871 662 1,060 524 30,381 1,267 8,493 3,874 878 982 243 34,331 1,406 9,054 4,611 714 982 764 37,332 General Governmental Revenues include General, Special Revenue, Debt Service and Capital Projects Funds. Excludes Expendable Trusts. SOURCE: City Finance Department * Due to change in accounting for refuse revenue. 79 **Due to in -lieu taxes from Enterprise Funds. 20,000 - .. 18,000 -- 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 0 CITY OF LODI GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION LAST TEN FISCAL YEARS (Amounts in Thousands) J. 1990-91 1991-92 fiGeneral Govemment Library 1992-93 1993 94 1994 95 199596 1996.97 ®Public Protection ❑Public Works 0 Parks 8 Recreation "'Debt Service 1997 98 1998 99 D Sanitation D Capital Outlay 1999 00 Fiscal General Public Public Parks & Debt Capital Year Government Protection Works Sanitation Library Recreation Service Outlay Total 1990-91 4,209 9,141 4,301 3,449 904 2,485 406 1,243 26,138 1991-92 5,186 9,903 4,204 3,424 949 2,632 395 1,519 28,212 1992-93 5,033 9,903 5,128 4,063 852 2,487 396 941 28,803 1993-94 4,908 9,949 4,296 0 • 881 2,307 405 2,203 24,949 1994-95 5,211 10,401 4,382 0 • 956 2,299 345 2,652 26,246 1995-96 5,217 10,172 6,012 0 • 954 2,198 500 5,378 30,431 1996-97 5,882 11,059 5,749 0 • 1,012 2,312 939 10,810 37,763 1997-98 7,068 10,896 4,810 0 • 966 2,174 1,288 18,383 45,585 1998-99 7,239 11,225 5,151 0 • 1,030 2,230 1,282 6,640 34,797 1999-00 7,813 11,430 5,039 0 1,040 2,670 1,282 6,420 35,694 General Governmental Expenditures includes General, Special Revenue, Debt Service and Capital Projects Funds. Excludes Expendable Trusts. SOURCE: City Finance Department • Due to change in accounting for refuse expenditures. 80 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 so CITY OF LODI GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (Amounts In Thousands) 1990-91 1991-92 0 Property 0 Motor Veh . in Lieu 1992 93 1993-94 © Sales & Use ■ Public Protection 1994-95 ❑Transient Occupancy a Franchise 0 Business License 1995-96 1996-97 • In Lieu Franchise Fiscal Sales Transient Documentary Motor Veh . Year Property & Use Occupancy Franchise Transfer in Lieu 1990-91 4,348 4,962 151 238 98 1,787 1991-92 4,620 4,909 200 235 79 1,799 1992-93 4,618 4,968 236 447 58 1,868 1993-94 4,950 5,221 247 508 68 1,972 1994-95 4,077 5,320 248 506 68 1,885 1995-96 4,206 5,763 278 503 75 2,023 1996-97 4,225 5,950 249 524 66 2,144 1997-98 4,374 6,205 278 586 77 2,478 1998-99 4,517 6,523 305 618 119 2,221 1999-00 4,932 7,095 318 675 116 3,008 1997-98 a Documentary Transfer 1998-99 1999-00 Public Business In Lieu Cigarette Protection License Franchise Total (1) 90 93 - 11,767 43 95 11,980 7 95 12,297 - 98 92 - 13,156 149 169 5,300 17,722 154 470 5,413 18,885 - 154 541 5,348 19,201 180 593 5,546 20,317 180 612 5,627 20,722 - 196 658 5,721 22,719 (1) General governmental tax revenues are included in taxes, licenses and permits, intergovernmental revenues and miscellaneous revenue of the City's General Fund. - SOURCE: City Finance Department 81 CITY OF LODI SECURED TAX LEVIES AND COLLECTIONS • LAST TEN FISCAL YEARS (Amounts in Thousands) 6,000 5,000 4,000 "- --....,••••.+0.. -- r �.-r.--".. "...--e 3,000 .c 2,000 1,000 0 - 1 1 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 --•- Tax Levy -- Tax Collections Percent Total Current Year's Percent of Delinquent Total of Total Fiscal Tax Tax Collections Tax Tax Collections Year Levy Collections to Tax Levy Collections Collections to Tax Levy 1991 4,286 3,847 89.8% 351 4,198 97.9% 1992 4,175 4,105 98.396 169 4,274 102.4% 1993 4,375 3,809 87.1% 90 3,899 89.1% 1994 3,639 3,461 95.1% 624 4,085 112.3% 1995 3,670 3,516 95.8% 9 3,525 96.0% 1996 3,781 3,615 95.6% 3,615 95.6% 1997 3,827 3,682 96.2% - 3.682 96.2% 1998 4,444 4,433 99.8% 4,433 99.8% 1999 4,653 4,578 98.4% 4,578 98.4% 2000 5,056 4,917 97.3% 4,917 97.3% SOURCE: County Auditor -Controller R2 CITY OF LODI ASSESSED FULL CASH VALUE OF ALL TAXABLE PROPERTY LAST TEN FISCAL YEARS (Amounts in Thousands) Fiscal Secured Mineral Utility Unsecured Tax Less Net Tax Year Roll Roll Roll Roll Roll Exemptions Roll 1990-91 1,948,698 12 2,712 99,114 2,050,536 145,148 1,905,388 1991-92 2,097,616 12 2.748 102,918 2,203,294 152,569 2,050,725 1992-93 2,200,557 12 2,782 100,982 2,304,333 160,068 2,144,265 1993-94 2,305,937 12 2,736 107.151 2,415.836 125,486 2,290,350 1994-95 2,353,069 3,504 115,180 2,471.753 164,592 2,307,161 1995-96 2,427,757 3,560 125,011 12,556,328 170,899 2,385,429 1996-97 2,463,536 3,557 125,907 2,593,000 172,945 2,420,055 1997-98 2,515,478 3,699 129,396 2,648,573 176,500 2,472,073 1998-99 2,574,622 3,826 146,345 2,724,793 179,835 2,544,958 1999-00 2,707,343 3,525 163.299 2,874,167 183,294 2,690.873 Fiscal Personal Less Net Assessed Year Land Improvements Property Total Exemptions Value 1990-91 507,046 1,358,841 184,649 2,050,536 145,148 1,905,388 1991-92 561,505 1,461.124 180,665 2,203.294 152,569 2,050,725 1992-93 597,785 1,524,596 181,952 2,304,333 160,068 2,144,265 1993-94 639,421 1,575,675 200,740 2,415,836 125,486 2,290,350 1994-95 663.227 1,608,564 199,962 2,471,753 164,592 2,307,161 1995-96 691,116 1,654,842 210,370 2,556,328 170,899 2.385,429 1996-97 709,296 1,673,877 209,827 2,593,000 172,945 2,420,055 1997-98 728,900 1,705,635 214,038 2,648,573 176,500 2,472,073 1998-99 756.166 1,748.387 220,240 2,724,793 179,835 2,544,958 1999-00 787,249 1,847,800 239,118 2,874,167 183,294 2,690,873 Sl 2,000,000 - 1,800,000 1,600,000 1,400,000 CITY OF LODI ASSESSED FULL CASH VALUE OF ALL TAXABLE PROPERTY LAST TEN FISCAL YEARS (Amounts In Thousands) 1990-91 1991-92 0 Land 1992-93 g Improvements 1993-94 1994-95 • Property 1995-96 0 Exemptions 1996-97 1997-98 1998-99 1999-00 CITY OF LODE PROPERTY TAX RATES -• DIRECT & OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Per $100.00 of Assessed Value ............ ® Levy 1St City ❑ School 0 All Other County -Wide Basic Fiscal County -Wide Year Levy Cjty School All Other Lotal 1990-91 1.0000 0.0170 0.0248 0.0034 10452 1991-92 1.0000 0.0153 0.0248 0.0034 1.0435 1992-93 1.0000 0.0150 0 0248 0,0034 1,0432 1993-94 1.0000 0.0146 0.0248 0.0034 1 0428 1994-95 1.0000 0.0126 0.0140 0,0034 1,0300 1995-96 1.0000 0.0123 0.0028 0.0034 1 0185 1996-97 1.0000 0.0000 0.0022 0,0034 1.0056 1997-98 1.0000 0.0000 0.0019 0.0034 1.0053 1998-99 1.0000 0.0000 0.0001 0.0034 1.0035 1999-00 1.0000 0.0000 0.0002 0.0034 1.0036 SOURCE: San Joaquin County Auditor/Controller's Office 85 Fiscal Year 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 CITY OF LODI SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS LAST TEN FISCAL YEARS (Amounts in Thousands) Current Assessments Due 182 178 49 52 49 51 125 Current Assessments Collected 178 140 46 52 48 50 125 SOURCE: City Finance Department 86 Total Collection As Percent of Current Assessments Due 97.8% 78.7% 93.9% 100.0% 98.0% 98.0% 100.0% 0.0% 0.0% 0.0% Total Outstanding Current and Delinquent Assessments 4 38 3 CITY OF LODI RATIO OF NET GENERAL BONDED DEBT TO TAXABLE ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (Amounts In Thousands) Debt Payable Gross Gross From Net Percent of Net Net Fiscal Assessed Bonded Enterprise Bonded Bonded Debt to Bonded Debt Year Population Value Debt Revenue Debt Assessed Value Per Capita 1990-91 53 2,050,536 10,247 8,746 1,501 0.0732% 28.57 1991-92 53 2,203,294 12,375 11,170 1,205 0.0547% 22.74 1992-93 53 2,304,333 11,560 10,355 1,205 0.0523% 22.61 1993-94 54 2,415,837 10,840 10,270 570 0.0236% 10.58 1994-95 55 2,471,754 11,379 10,174 1,205 0.0488% 22.03 1995-96 54 2,556,328 15,078 10,078 5,000 0.1956% 91.41 1996-97 55 2,593,001 24,948 9,978 14,970 0.5773% 273.67 1997-98 56 2,648,573 24,372 9,872 14,500 0.5475% 265.08 1998-99 57 2,724,793 23,776 9,762 14,014 0.5143% 256.20 1999-00 58 2,874,167 23,146 9,636 13,510 0.4700% 246.98 SOURCE: City Finance Department 87 CITY OF LODI COMPUTATION OF DIRECT AND OVERLAPPING GENERAL BONDED DEBT June 30, 2000 DIRECT DEBT: CERTIFICATE OF PARTICIPATION OVERLAPPING DEBT: NONE Total Total Percent City's Share COP Applicable of Debt $ 13,510,000 100.00% $ 13,510,000 0 0 $ 13,510,000 DEBT RATIOS June 30, 2000 $ 13,510,000 Ratio of Direct Overlapping Debt to Assessed Full Cash Value = 13,510,000/2,874,167,000 0.47% Direct and Overlapping Debt Per Capita =13,510,000/57,935 $233 Taxable Assessed Full Cash Values Per Capita = 2,874.167,000/57,935 $49,610 SOURCE: City Finance Department 88 CITY OF LODI COMPUTATION OF LEGAL DEBT MARGIN June 30, 2000 Assessed Full Cash Value as of June 30, 2000 (1) $ . 2,874,166,878 Debt Limit - 15 Percent of Assessed Full Cash Value (2) $ 431,125,032 Amount of Debt Applicable to Debt Limit 0 LEGAL DEBT MARGIN $ 431,125,032 (1) Assessed Value before exemptions applicable to 1999-00 Tax Roll (2) Section 43605 California Government Code SOURCE: San Joaquin County Auditor/Controller's Office City Finance Department 89 CITY OF LODI RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES LAST TEN FISCAL YEARS (Amounts in Thousands) Total Percent of Total General Debt Service Fiscal Debt Governmental to Governmental Year Principal Interest Service Expenditures Expenditures 1990-91 145 33 178 26,138 0.68% 1991-92 147 27 174 28,212 0.62% 1992-93 156 21 177 28,803 0.61% 1993-94 165 15 180 24,949 0.72% 1994-95 1148 122 26,246 0.46% I 1995-96 118 4 122 30,431 0.40% 1996-97 0 0 * 37,763 * 1997-98 470 818 1,288 45,585 2.83% 1998-99 485 797 1,282 34,797 3.68% 1999-00 505 777 1,282 35,694 3.59% Zero balances occured in 1996-97 due to general obligation bonds paid off in 1995-96. SOURCE: City Finance Department 90 CITY OF LODI REVENUE BOND COVERAGE LAST TEN FISCAL YEARS Net Revenue Direct Available Current Fiscal Year's Fiscal Gross Operating For Debt Debt Service Requirements Year Revenue Expense Service Principal Interest Total Coverage 1990-91 3,743,712 1,746,750 1,996,962 110,000 700,060 810,060 2.47 1991-92 3,941,414 2,394,811 1.546,603 483,493 483,493 3.20 1992-93 2,923,038 2,009,791 913,247 330,000 710,390 1,040,390 0.88 1993-94 3,454,258 2,030,628 1,423,630 100,000 705,690 805,690 1.77 1994-95 3,596,313 2,489,307 1,107,006 110,000 700,355 810,355 1.37 1995-96 3,339,315 3,301,761 37.554 110,000 696,357 806,357 0.05 1996-97 3,444,597 2,863,017 581,580 115,000 688,818 803,818 0.72 1997-98 3,946,058 2,913,969 1,032,089 120,000 682,218 802,218 1.29 1998-99 3,935,006 2,957,162 977,844 125,000 675,030 800,030 1.22 1999-00 3,874,750 3,146,931 727,819 140.000 666,770 806.770 0.90 SOURCE: City of Lodi Finance Department 91 600,000 500,000 400,000 300,000 200,000 100,000 0 CITY OF LODI DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS --+--- 1992.93 1993.94 ® City Population 1994-95 1995-96 1996-97 CI San Joaquin County 1997-98 1998-99 1999-00 Population San Joaquin Population Fiscal Square City Percent County Percent Year Miles Population Change Population of County 1990-91 10.70 52,700 7.1% 470,934 11.2% 1991-92 11.30 52,900 0.4% 480,628 11.0% 1992-93 11.82 52,900 0.0% 503,400 10.5% 1993-94 12.14 53,000 0.2% 521,500 10.2% 1994-95 12.32 53,575 1.1% 530,700 10.1% 1995-96 12.32 54,473 1.7% 529,300 10 3% 1996-97 12.32 54,800 0.6% 535,420 10.2% 1997-98 12.32 55,700 1.6% 545,200 10.2% 1998-99 12.32 56,900 2.2% 554,400 10.3% 1999-00 12.50 57,900 1.2% 566,600 10.2% SOURCE: State of California, Department of Finance, Demographic Research Unit. City Finance Department Budget 92 Rank in Slze of California Cities 113 113 120 124 121 81 123 124 124 125 1500 1000 500 CITY OF LODI CONSTRUCTION ACTIVITY LAST TEN FISCAL YEARS Building Permits 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Number of Estimated Fiscal Building Permits Percent Valuation Percent Year Issued Change (in thousands) Change 1991 1279 - 3.98% 40,634 -20.23% 1992 1300 1.64% 27,009 -33.53% 1993 903 -30.54% 18,123 -32.90% 1994 995 10.19% 31,517 73.91% 1995 994 - .10% 44,881 42,40% 1996 1464 47,24% 29,019 -35.34% 1997 1486 1.50% 57,452 97.98% 1998 1632 9.83% 59,790 4.07% 1999 1749 7.17% 74,012 23.79% 2000 1856 6.12% 77,613 4.87% SOURCE: City Community Development Department 93 0 800,000 700,000 600,000 500,000 400,000 300,000 200,000 -1 100,000 0 0 BANKS Information on this page is the most remit data available. CITY OF LODI BANK DEPOSITS LAST TEN FISCAL YEARS (Amounts in Millions) 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 0 SAVINGS & LOANS 0 CREDIT UNIONS Fiscal SAVINGS & CREDIT 'LQ41' BANKS LOANS UNIONS 1989 $ 492,636 $ 282,339 $ 14,111 1990 540,545 267,501 12,813 1991 691,677 183,936 12,465 1992 649,252 198,756 13,993 1993 666,342 191,014 15,405 1994 627,132 186,159 15,689 1995 643,109 159,276 16,036 1996 682,223 121,183 15,721 1997 698,080 118,200 16,894 1998 725,210 113,431 17,729 Source: California State Department of Banking - Licensing & Statistics Section 94 CITY OF LODI PRINCIPAL EMPLOYERS JUNE 30, 2000 Employer Activity Employees Lodi Unified School Dist. Education 2,247 General Mills Cereals and Food Mixes 575 Lodi Memorial Hospital Health Care 650 Pacific Coast Producers Can Manufacturer and Cannery 530 City of Lodi Government 387 Wal-Mart General Merchant 226 Target General Merchant 200 Valley Industries Trailer Hitches 191 Farmers and Merchants Bank Banking 183 Lodi Fab Industries, Inc. Industrial Storage Racks 200 SOURCE: City of Lodi 95 CITY OF LODI PRINCIPAL TAXPAYERS JUNE 30, 2000 Property Owner Land Use Assessed Valuation Percent of Total (1) General Mills, Inc. Food Processing $ 175,048,560 6.80% Pacific Coast Producers Manufacturing 44,686,153 1.74% Dayton Hudson Corp. Department Store 15,623,172 0.61% Califomia Waste Removal System Industrial 14,353,902 0.56% GFLIP Limited Partners Apartments 12,941,356 0.50% Dart Container Corporation Warehousing 12,885,034 0.50% Wells Fargo Bank Commercial 11,774,891 0.46% First Lodi Plaza Associates Shopping Center 11,620,333 0.45% Wallace Computer Service Warehousing 10,737,902 0.42% Edmund N. Richmond Industrial 10,455,000 0.41% $ 320,126,303 12.43% (1) Local Secured Assessed Valuation: 2,574,622,000 Source: San Joaquin County Assessor's Office 96 CITY OF LODI SURETY BONDS OF PRINCIPAL OFFICIALS JUNE 30, 2000 City Manager $500,000 Deputy City Manager 500,000 City Attorney 500,000 City Clerk ' 500,000 Public Works Director 500,000 Police Chief 500,000 Fire Chief 500,000 Finance Director 500,000 Community Development Director 500,000 Electric Utilities Director 500,000 Community Center Director 500,000 Parks and Recreation Director 500,000 Human Resources Director 500,000 City employees are covered by a commercial fidelity bond amounting to a maximum of $500,000 per loss. SOURCE: City of Lodi 97 FISCAL YEAR 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 CITY OF LODI GANN APPROPRIATION LIMITATION Last Ten Fiscal Years LIMIT CPI or POPULATION GROWTH BASE INCOME GROWTH FACTOR 29,357,398 31,286,179 33,441,797 34,027,028 35,697,755 36,515,234 38,739,012 41,229,332 43,456,825 45,785,303 1.0421 1.0414 0.9936 1.0272 1.0071 1.0470 • 1.0467 1.0467 1.0536 1.0453 SOURCE: City Finance Department 1.0226 1,0657 1.0264 1.0689 1.0241 1.0175 1.0213 1.0491 1.0157 1.0229 1.0131 1.0609 1.0168 1.0643 1.0070 1.0540 1.0120 1.0420 1.0194 1.0656 98 APPROPRIATION BUDGET SUBJECT LIMITATION 31,286,179 33,441,797 34,027,028 35,697,755 36,515,234 38,739,012 41,229,332 43,456,825 45,785,303 48,787,849 TO LIMIT 17,847,059 22,048,696 17,255,606 16,646,590 17,292,960 18,583,360 19,243,568 20,096,975 20.491,809 20,907,397 VARIANCE 13,439,120 11,393,101 16,771,422 19,051,165 19,222,274 20,155,652 21,985,764 23,359,850 25,293,494 27,880,452 CITY OF LODI PERSONNEL AUTHORIZED LAST TEN YEARS JUNE 2000 ®Administration 15 Community Development ❑Electric Utility ❑ Finance Department 11 Fire Department 0 Library ■ Parks & Recreation 0 Police Department ■ Public Works Department DEPARTMENT 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 Administration 17 17 17 22 22 22 20 20 20 20 Community Development 11 11 11 11 11 14 12 14 15 15 Electric Utility 41 41 41 40 40 42 38 44 44 44 Finance Department 40 40 39 36 36 36 . 34 36 37 37 Fire Department 49 49 49 48 48 48 49 48 49 49 Library 15 15 15 15 15 15 15 14 14 14 Parks & Recreation 34 35 36 29 29 28 27 26 26 26 Police Department 104 105 105 104 104 111 108 112 113 113 Public Works Department 95 95 97 89 89 91 87 94 95 95 Total 406 408 410 394 394 407 390 408 413 413 SOURCE: City of Lodi Finance Department 99 CITY OF LODI SCHEDULE OF TAXABLE SALES AND PERMITS BY CATEGORY LAST TEN YEARS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 SALES (IN THOUSANDS OF DOLLARS): Apparel Stores $ 9,909 $ 9,549 $ 8,429 $ 6,467 $ 6,105 $ 5,970 $ 5,651 $ 5,633 4,898 4,898 General Merchandise Stores 41,672 40,089 49,944 60,764 73,765 79,420 84,977 105,423 101,018 101,018 Drug Stores 18,066 17,719 16,373 13,184 13,673 13,295 13,411 Food Stores 35,525 40,197 42,130 33,033 28,692 33,237 34,029 34,247 34,032 34.032 Packaged Liquor Stores 4,558 3,956 6,470 6,041 5,932 5,664 6,150 Ealing & Drinking Places 40,361 39,302 38,548 39,161 39,714 43,770 44,598 45,349 47,053 47,053 Home Furnishings & Appliances 10,901 10,407 13,593 16,038 14,327 12,396 12.808 12,136 16,330 16,330 Building Materials & Farm Tool 31,526 28,604 30,278 37,539 34,250 31,801 31,858 29,865 33,163 33.163 Auto Dealers & Supplies 91,987 81,918 82.725 85.917 93,198 103,241 102.788 101,933 115.419 115,419 Service Stations 24,552 27,983 29,601 31.221 30,519 34,348 35,095 35,746 29,337 29,337 Other Retail Stores 21,830 21,488 23,089 25,666 26,547 29,261 30,502 39,759 44,528 44.528 Tolal Retail Stores 330,887 321,212 341,180 355,031 366,722 392,403 401,867 410,091 425,778 425,778 All Other Outlets 97,866 91,310 92,149 96,021 92,594 94,440 116,000 130,660 TOTAL $ 428,753 $ 412,522 $ 433,329 $ 451,952 $ 459,316 $ 486,843 $ 517,867 $ 540,751 $ 425,778 $ 425,778 PERMITS: Apparel Stores 26 29 32 25 23 22 31 28 28 General Merchandise Stores 9 17 14 15 13 13 20 22 22 Drug Stores 5 10 9 9 9 8 Food Stores 28 42 44 47 45 45 49 47 47 Packaged Liquor Stores 7 8 8 7 7 7 Eating & Drinking Places 65 135 132 136 144 146 146 146 146 Home Furnishings & Appliances 27 43 44 46 46 41 42 47 47 Building Materials & Farm Tool 14 38 38 35 29 30 27 25 25 Auto Dealers & Supplies 19 63 56 63 62 66 71 78 78 Service Stations 11 19 18 19 20 19 19 17 17 Other Relail Stores 98 186 182 196 201 197 208 205 205 Total Retail Stores 0 309 590 577 598 599 594 613 615 615 All Other Outlets 523 987 929 926 912 918 918 900 TOTAL 0 • 0 1577 1506 1524 1511 1512 1531 1515 615 • Not available SOURCE: State Board of Equalization, State of California 100 CITY OF LODI SCHEDULE OF TAXABLE SALES LAST TEN YEARS O Apparel Stores ® General Merchandise Stores 0 Drug Stores D Food Stores • Packaged Liquor Stores 0 Eating & Drinking Places • Home Furnishings & Appliances 0 Building Materials & Farm Tool ■ Auto Dealers & Supplies ® Service Stations 0 Other Retail Stores 101 CITY OF LODI SCHEDULE OF BUSINESS TAX RECEIPTS ISSUED YEAR ENDED JUNE 30, 2000 TYPE OF BUSINESS Located in Lodi: NO. OF BUSINESSES PERCENT Agriculture, Forestry and Fishing 112 3.75% Mining 0 0.00% Construction 273 9.14% Manufacturing 96 3.21% Transportation and Public Utilities 44 1.47% Wholesale trade 80 2.68% Retail trade 638 21.36% Finance, Insurance and Real Estate 278 9.31% Services 1,466 49.09% Total 2,987 100.00% Located outside Lodi: Agriculture, Forestry and Fishing 37 4.41% Mining 0 0.00% Construction 476 56.73% Manufacturing 14 1.67% Transportation and Public Utilities 8 0.95% Wholesale trade 51 6.08% Retail trade 53 6.32% Finance, Insurance and Real Estate 31 3.68% Services 169 20.14% Total 839 100.00% Grand Total 3,826 102 SOURCE: City Finance Records Population Assessed Value Building Permits Issued Date of Incorporation Form of Govemment Employees Area Number of Stations Number of Firefighters Number of Reserve Firefighters Number of Calls Answered Number of Stations Number of Police Officers Number of Reserve Officers Number of Support Personnel Number of Calls Answered Miles of Streets Miles of Alley Ways Number of Street Lights Number of Traffic Signals POPULATION FIRE PROTECTION POLICE PROTECTION PUBLIC WORKS WATER/WASTEWATER Miles of Water Mains Miles of Wastewater Lines Number of Wastewater Treatment Plants Average Daily Treatment Maximum Daily Capacity CITY OF LODI MISCELLANEOUS STATISTICS JUNE 30, 2000 57.935 $2.8b 1,856 December 6, 1906 Council -Manager 413 12.5 SQ Miles 3 40 0 4,047 1 77 7 35 unable to determine Number of Customers Energy Sales (MWH) Peak Demand(MW) ELECTRIC UTILITY PARKS & RECREATION Parks Developed Acres Parks Developed Parks Undeveloped Acres Parks Undeveloped Community Center Swimming Pools Tennis Courts Boat Ramp Playgrounds Ball Parks Various Soccer Fields Football Field HandbalUBasketballNolleyball Courts Horseshoe Pits EDUCATION 176 Elementary Schools (public) 16 Middle Schools (public) 5,701 High Schools (public) 52 Elementary Schools Enrollment (public) Middle Schools Enrollment (public) High Schools Enrollment (public) 204 164 1 6.3 MG 8.5 MG HOSPITALS Number of Hospitals 1 Number of Patient Beds 181 103 K-8 Schools (private) High Schools (private) K-8 Enrollment (private) High School Enrollment (private) 23,644 383,333 123 25 293 7 107 1 3 11 1 16 25 36 1 6 12 19 6 5 13,482 4,140 7,994 5 1 1472 98 - SINGLE AUDIT REPORTS CITY OF LOD1, CALIFORNIA Schedule of Expenditures of Federal Awards Fiscal Year Ended June 30, 2000 Federal CFDA Pass -Through Federal Grantor/Program'l'itle Number Number Expenditures U.S. Department of Housing and Urban Development: (Pass-through San Joaquin County — Department of Planning and Building Inspection. Urban county arrangement, and therefore no pass-through number.) Community Development Block Grants: 1999-2000 Program Year 14.228 N/A $ 100,505 1998-1999 Program Year 14.228 N/A 284,070 1997-1998 Program Year 14.228 N/A 131.359 1996-1997 Program Year 14.228 N/A 572 1995-1996 Program Year 14.228 N/A 552 1993-1994 Program Year 114.239 N/A 1.815 flume Funds N/A 7,942 526.815 U.S. Department of Transportation: (Pass-through California Department of Transportation) Federal Transit Assistance (FTA): 1999-2000 Prograrn Year 20.507 N/A 581.357 1998-1999 Program Year 20.507 N/A 1.365.965 1997-1998 Program Year 20.507 N/A 50,118 1996-1997 Program Year 20.507 N/A 90.316 Intermodal Surface Transportation Efficiency Act (ISTEA) 20.205 N/A 653.684 2.741.440 U.S. Department of Justice: Office ol'the Justice Programs: 1996 COPS MORE Grant 16.726 N/A 406 1998 COPS MORE Grant 16.710 N/A 126.351 COI'S Universal Hiring Grant 16.710 N/A 60,649 Local Law Enforcement Block Grant: 96 -LB -VX -1055 16.592 N/A 7.791 97 -LB -V X-3209 16.592 N/A 4.224 (Pass-through State Office of Criminal Justice Planning) Crac-Net DC 970803911 16.579 DC 9708039( 74.046 273.467 Total federal awards $ 3,541.722 See accompanying notes to schedule of expenditures of federal awards. 104 CITY OF LODI, CALIFORNIA Notes to Schedule of Expenditures of Federal Awards For the year ended June 30, 2000 (1) General The accompanying Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2000 presents the activity of all federal awards programs of the City of Lodi, California (the City). The City's reporting entity is defined in note I to the City's general purpose financial statements. The SEFA includes all federal awards received directly from federal agencies and federal awards passed through other government agencies. Amounts reported on the SEFA agree to or can be reconciled with the amounts reported or to be reported in the related federal financial reports. (2) Basis of Accounting The accompanying SEFA is presented using the modified accrual basis of accounting in the governmental funds and the accrual basis of accounting in the proprietary fund which is described in note I to the City's general purpose financial statements. 105 Three Embarcadero Center San Francisco, CA 94111 Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The honorable Members of City Council City of Lodi, California: We have audited the general purpose financial statements of the City of Lodi, California (the City) as of and for the year ended June 30, 2000, and have issued our report thereon dated October 18, 2000. 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. Compliance As part of obtaining reasonable assurance about whether the City's general purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, 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 that are required to be reported under Government Auditing Standards. Internal Control over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that night be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. However, we noted other matters involving internal control over financial reporting which we have been reported to management of the City in a separate letter. This report is intended solely for the information of the City Council, City management and the City's federal awarding agencies and the City's pass- through entities and is not intended to be and should not be used by anyone other than these specified parties. October 18, 2000 K`Pe/(c.. LLP 106 Three Embarcadero Center San Francisco, CA 94111 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance itt Accordance with OMB Circular A-133 The Honorable Members of City Council City of Lodi, California: Compliance We have audited the compliance of the City of Lodi, California (the City) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Sigrplement that are applicable to each of its major federal programs for the year ended June 30, 2000. The City's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of auditors' results, findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing,Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of Stares. 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. Our audit does not provide a legal determination on the City's compliance with those requirements. In our opinion, the City of Lodi complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2000. 107 UAW Internal Control over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information of the City Council, City management and the City's federal awarding agencies and the City's pass- through entities and is not intended to be and should not be used by anyone other than these specified parties. October 18, 2000 tv(Cr LLP 108 Schedule of Auditors' Results, Findings and Questioned Costs — Year Ended June 30, 2000 CITY OF LODI, CALIFORNIA Schedule of Auditors' Results, Findings and Questioned Costs Year ended June 30, 2000 (1) Summary of Auditors' Results (a) The type of report issued on the general purpose financial statements: Unqualified opinion (b) Reportable conditions in internal control were disclosed by the audit of the general purpose financial statements: None reported Material weaknesses: None reported (c) Noncompliance which is material to the general purpose financial statements: None reported (d) Reportable conditions in internal control over major programs: None reported Material weaknesses: None reported (e) The type of report issued on compliance for major programs: Unqualified opinion ' (f) Any audit findings which are required to be reported under section 510(a) of OMB Circular A-133: None reported (g) Major programs: CFDA # 14.228 United States Department of 1 -lousing and Urban Development — Community Development Block Grants 20.507 United States Department of Transportation — Federal Transit Assistance (h) Dollar threshold used to distinguish between Type A and Type B programs: $300,000 (i) Auditee qualified as a low-risk auditee under section 530 of OMB Circular A-133: Yes (2) Findings Relating to the Financial Statements Reported in Accordance with Government Auditing Standards: None (3) Findings and Questioned Costs Relating to Federal Awards: None 109 • '‘,-- ----.-,,,.,,...,,,r.,.,.: ,.-,,, ,'i'.1,.';, -,,,t.'-',,,,.. -,i1,..f-fi'..'s,::,