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Aft CITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: REVIEW OF THE CITY'S ANNUAL FINANCIAL REPORT (FY 2003-0.4)
BY MACIAS. GINI & COMPANY
MEETING DATE: March 2, 2005
PREPARED BY Finance Director
RECOMMENDED ACTION: That the City Council receivesfor file the following reports and
financial statements submitted by Macias. Gini &Company LLP and the Finance Departmentfor Fiscal -
Year 2003-04:
• The Combined Annual Financial & Single Audit Report
• Management Report
• Report on Applying Agreed-upon Procedures
BACKGROUND INFORMATION: The annual audit was conducted to assure the City Council and
other interested parties that the City's financial records and reports are prepared in accordance with
generally accepted accounting principles (GAAP) that internal controls are adequate to safeguard the
City against loss from unauthorized use or disposition of assets and that the City has complied with all
agreements and covenants to obtain grant funds and debt financing. Macias, Gini & Company LLP
("MG") issued an "unqualified opinion." Scott Brunner, Director of MG 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 or the City's website at www.lodi.aoy
and at the Lodi Public Library.
Certificate of Achievement
The City received a Certificate of Achievement for Excellence in Reportingfrom the Government Finance
Officers Association of United States and Canada (GFOA) for the 10' year and the California Society of
Municipal Finance Officers (CSMFO) for the ninth year in a row. A copy of the GFOA certificate is
included in the 2003-04 Financial Reports.
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
tJ mes R. Krueger, Finance Director
APPROVED: ] aZ
Blair King, City Manager
CITY OF LODI
Agreed -Upon Procedures Report For
Gann Appropriations Limit
For the Fiscal Year Ended June 30,2004
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3. We reviewed the accuracy of the computations set forth in the accompanying
Appropriations Limit Worksheet.
Finding: No exceptions were noted as a result of our procedures.
4. We agreed the current year information presented in the accompanying
Appropriations Limit Worksheet to the appropriate aforementioned City reports.
Finding: No exceptions were noted as a result of our procedures.
5. We agreed the prior year appropriations limit presented in the accompanying
Appropriations Limit Worksheet to the prior year appropriations limit adopted by the
City Council.
Finding: No exceptions were noted as a result of our procedures.
We were not engaged to, and did not, perform an audit, the objective of which would be the
expression of an opinion on the accompanying Appropriations Limit Worksheet.
Accordingly, we do not express such an opinion. Had we performed additional procedures,
other matters might have come to our attention that would have been reported to you. No
procedures have been performed with respect to the determination of the appropriation limit
for the base year, as defined by Article XIII -B of the California Constitution.
This report is intended solely for the information and use of the specified users listed above
and is not intended to be and should not be used by anyone other than those specified parties.
Certified Public Accountants
Sacramento, California
May 25,2004
CITY OF LODI
APPROPRIATIONS LIMIT WORKSHEET
FOR THE FISCAL YEAR ENDED JUNE 30,2004
Amount
Appropriations limit, fiscal year 2002-03 $ 57,439,894
Adjustment factors:
Population increase, 2003-04 1.0169
Inflation increase, 2003-04 1.0231
Total adjustment factor 4.039%
Annual adjustment 2,320,020
Appropriations limit, fiscal year 2003-04, as adopted $ 59,759,914
K
CITY OF LODI, CALIFORNIA
Report to Management
For the Fiscal Year Ended June 30,2004
MACIAS GINI & COMPANYLLP
CERTIFIED PUBLIC ACCOUNTANTS & MANAGEMENT CONSULTANTS
CITY OF LODI, CALIFORNIA
Report to Management
For the Fiscal Year Ended June 30,2004
Table cf Contents
Page(s)
TransmittalLeiter..........................................................................................................................................
RequiredCommunications........................................................................................................................ 2-4
Current -Year Management Comments and Recommendations................................................................ 5-6
MACIAS GINI t& COMPANYu.P
3400 5 Street. Ste, 300
Sacramento, California 95816
9 f 6.928.4600 w.iom
916.928.2755 FAx
City Council
City of Lodi, California
We have audited the financial statements of the City of Lodi, California (City) for the year ended June
30,2004, and have issued our report thereon dated December 10,2004. Professional standards require
that we provide you with information related to our audit. That information is included in the Required
Communications section of this report.
Also, in planning and performing our audit of the financial statements of the City for the year ended June
30,2004, we considered the City's internal controls in order to determine our auditing procedures for the
purpose of expressing an opinion on the financial statements, and not to provide assurance on internal
control over financial reporting.
During our audit for the fiscal year ended June 30, 2004, we became aware of certain matters that
represent an opportunity for strengthening the City's internal controls and operational efficiency. The
memorandum that accompanies this letter summarizes our comments and suggestions regarding those
matters. This letter does not affect our report dated December 10,2004, on the basic financial statements
of the City.
This letter is intended solely for the information and use of City Council and management and is not
intended to be and should not be used by anyone other than these specified parties.
We would like to thank the City's management and staff for the courtesy and cooperation extended to vs
during the course of our engagement. We have discussed our comments and suggestions with
management and would be pleased to discuss them further.
��4c �'qs, Can'ni r �urulaa�y L L f
V
Certified Public Accountants
Sacramento, California
December 10,2004
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CITY OF LODI, CALIFORNIA
Report to Management
Required Communications
For the Fiscal Year Ended June 30,2004
I. The Auditor's Responsibility Under U.S. Generally Accepted Auditing Standards and
OMB Circular A-133
As stated in our engagement letter dated July 16, 2003, our responsibility, as described by
professional standards, is to plan and perform our audit to obtain reasonable, but not absolute,
assurance about whether the basic financial statements are free of material misstatement and are
fairly presented in accordance with U.S. generally accepted accounting standards. Because an
audit is designed to provide reasonable, but not absolute assurance and because we did not
perform a detailed examination of all transactions, there is a risk that material misstatements
may exist and not detected by us.
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
opinions on the basic financial statements and not to provide assurance on the internal control
over financial reporting. We also considered 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.
As part of obtaining reasonable assurance about whether the City's basic financial statements
are fie of material misstatement, we performed tests of the City's compliance with certain
provisions of laws, regulations, contracts and grants, noncompliance with which could have a
direct and material effect on the determination of basic financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit.
Also, in accordance with OMB Circular A-133, we examined, on a test basis, evidence about
the City's Compliance with the types of compliance requirements described in the U. S. Office Of
Management and Budget Circular A-133 Compliance Supplement applicable to each of its
major federal programs for the purpose of expressing an opinion on the City's compliance with
those requirements. While our audit provides a reasonable basis for our opinion, it does not
provide a legal determination on the City's compliance with those requirements.
11, Significant Accounting Policies
Management has the responsibility for the selection and use of appropriate accounting policies.
In accordance with the terms of our engagement letter, we will advise management about the
appropriateness of accounting policies and their application. The significant accounting
policies used by the City are described in Note 1 to the financial statements. No new
accounting policies were adopted and the application of existing policies was not changed
during the year. 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.
2
CITY OFLODI, CALIFORNIA
Report to Management
Required Communications (Continued)
For the Fiscal Year Ended June 30,2004
III. Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management
and are based on management's knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive
because of their significance to the financial statements and because of the possibility that
future events affecting them may differ significantly from those expected. The most sensitive
estimates affecting the financial statements were (I) depreciation, (2) allowance for doubtful
accounts, (3) compensated absences, and (4) self-insurance liability. We evaluated the key
factors and assumptions used to develop those estimates in determining that they are reasonable
in relation to the financial statements taken as a whole.
IV. Audit Adjustments
For the purposes of this report, professional standards define an audit adjustment as a proposed
correction of the financial statements that, in our judgment, may not have been detected except
through our auditing procedures. An audit adjustment may or may not indicate matters that
could have a significant effect on the City's financial reporting process (that is, cause future
financial statements to be materially misstated). In our judgment, none of the adjustments we
posed, whether recorded or unrecorded by the City, either individually or in aggregate,
indicate matters that could have a significant effect on the City's financial reporting process.
V. Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting
or auditing matter that could be significant to the basic financial statements or the auditor's
report. We are pleased to report that no such disagreements arose during the course of our
audit.
VI. Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If
consultation involves applications of an accounting principle to the gavernrnental unit's
financial statements or a determination of the tTe of auditor's opinion that may be expressed
on those statements, our professional standards require the consulting accountant to check with
us to determine that the consultant has all the relevant facts. To our knowledge, there were no
such consultations with other accountants.
VII. Issues Discussed Prior to Retention of Independent Auditors
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.
3
CITY OF LODI, CALIFORNIA
Report to Management
Required Communications (Continued)
For the Fiscal Year Ended June 30,2004
VIII. Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing our audit.
CITY OF LODI, CALIFORNIA
Report to Management
Current -Year Management Comments and Recommendations
For the Fiscal Year Ended June 30,2004
CAPITAL ASSETS
Condition
During our audit of the City's financial statements for the year ended June 30, 2004, we noted that the
acquisition and construction of capital assets is maintained on a spreadsheet, outside of the City's
accounting system, which can lead to inaccurate recording and depreciation of capital assets.
Recommendation
We recommend that the City place into operation the JDE fixed asset module that records the City's
capital assets and automatically calculates depreciation. The system would support the City's
deprecation method and automatically post accumulated depreciation expense to the General Ledger
module for a specified accounting period.
The system provides methods to track assets, their beginning cost, current value, and method of
depreciation. Some of the advantages include:
I . Flexible Asset Numbering System — an unlimited number of assets can be maintained. The
assets can be grouped by many types of categories for reporting purposes.
2. User Defined Asset Control - Accumulated depreciation, depreciation expense and asset
master accounts can be user specified for each asset.
3. Reports - variety of reports can be produced including a listing of all assets by type,
category and description, method of depreciation, and all other information maintained in
the master file. The module could be programmed to also print reports listing assets with
original cost and current book value plus calculated depreciation for a specified period.
To reduce operating overhead, the City should consider hiring temporary staff for data entry into the
capital assets module.
Manaeement Response
When Finance migrated to the JDE General Accounting system in 1997, the implementation of all the
modules was prioritized. The Fixed Asset module at the time was at the lowest priority. The task of
converting the asset files in JDE requires set up and data entry that the current personnel can not
accommodate without overtime or part time help. In light of the current budget cut demands from
management, the implementation of the Fixed Asset module is recommended to be deferred at this
time.
FTA INDIRECT COSTS
Condition
We noted, during our review of the fiscal year 2003/2004 Federal Transit Administration (FTA)
apportionment, that management had originally decided to use the apportionment to cover indirect
costs. Per our review of FTA guidelines, grantees who intend to seek FTA reimbursement for indirect
costs must prepare a cost allocation plan that has been approved by the FTA or another cognizant
Federal agency. Further inquiry determined that the cost allocation plan has not been approved in the
prescribed manner.
CITY OF LODI, CALIFORNIA
Report to Management
Current -Year Management Comments and Recommendations (Continued)
For the Fiscal Year Ended June 30,2004
Recommendation
We recommend that the City perform a review of all grants and make the determination if indirect
costs can be applied against grant funds.
Manaeemenr Response
The Finance Department and Transit will work together in the development of a comprehensive cost
allocation plan that will be submitted to FTA for approval. The City will also look into the other
grants to determine if indirect costs can be reimbursed once a cost allocation plan is established.
FTA DRAWDOWNS
Condition
it has come to our attention that FTA apportionments are revealed to the City through ft Federal
Register. The City of Lodi can draw down FTA apportioned funds throughout the year in accordance
with amounts established per the FTA. Currently, Tiffani Fink, Transportation Manager is responsible
for the draw down of funds as needed. However, this process has not occurred due to ongoing
negotiations between the City of Lodi and the City of Galt to split FTA funds.
Recommendation
We recommend once negotiations between the two cities is finalized, procedures be put in place where
the Transportation Manager makes withdraw requests to the Finance Department for FTA funds.
Manaeemenr Re onse
Procedures for FTA drawdowns are now set in place as follows:
When an FTA Electronic Clearinghouse Operation (ECHO) drawdown is to be requested, the City
Transportation Manager will complete the drawdown request form, attaching all necessary information
as backup. This packet will then be sent to the City's Senior Accountant for review. The Senior
Accountant shall attach all necessary run data and verify the correct expenditures and reimbursement
ratios.
The Senior Accountant will then process and request the drawdown from the ECHO system. Once the
funds are received, a copy of the confirmation will be sent to the Transportation Manager for the
Transit files. All originals shall be maintained in the Finance Department.
6
CITY OF LODI, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended June 30,2004
LARRY HANSEN, MAYOR
JOHN BECKMAN, MAYOR PRO TEMP
SUSAN HITCHCOCK, COUNCILMEMBER
EMILY HOWARD, COUNCILMEMBER
KEITH LAND, COUNCILMEMBER
H. DIXON FLYNN, CITY MANAGER
Prepared by the Finance Department
James R. Krueger, Finance Director[Treasurer
Ruby Paiste, Accounting Manager
Coriene Wadlow, Sr. Accountant
Odette Bondoc, Accountant 11
INTRODUCTORY SECTION
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30,2004
TABLE OF CONTENTS
INTRODUCTORY SECTION
Table of Contents
i
Letter of Transmittal
v
Certificate of Achievement for Excellence in Financial Reporting
xiv
Organization Chart of the City of Lodi
xv
Directory of Officials and Advisory Bodies
xvi
FINANCIAL SECTION
Independent Auditors' Report
1
MANAGEMENT DISCUSSIONAND ANALYSIS
3
BASIC FINANCIAL STATEMENTS
Government -wide Financial Statements:
Statement of Net Assets
13
Statement of Activities
14
Fund Financial Statements:
15
Balance Sheet — Governmental Funds
18
Reconciliation of the Balance Sheet of Governmental Fundsto the Statement of Net Assets
19
Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds
20
Reconciliation of the Statement of Revenues, Expendituresand Changes in Fund Balances
of Governmental Funds to the Statement of Activities
21
Statement of Net Assets — Proprietary Funds
22
Statement of Revenues, Expenses and Changes in Net Assets — Proprietary Funds
23
Statementof Cash Flows — Proprietary Funds
24
Statement of Fiduciary Net Assets — Fiduciary Funds
25
Statement of Changes in Fiduciary Net Assets - Fiduciary Funds
26
Notes to Basic Financial Statements
27
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress— Pension Plan
67
Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — General Fund
68
Notes to the Required Supplementary information
69
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30,2004
TABLE OF CONTENTS -continued
COMBININGAND INDIVIDUAL FUND STATEMENTSAND SCHEDULES
Combining Balance Sheet — Nonmajor Governmental Funds
71
Combining Statement of Revenues, Expenditures and Changes in Fund Balances— Nonmajor Governmental Funds
72
Nonmajor Governmental Funds- Special Revenue Funds
73
Combining Balance Sheet--Nonmajor Governmental Funds — Special Revenue Funds
75
Combining Statement of Revenues, Expenditures and Changes in Fund Balances— Nonmajor Governmental Funds — Special Revenue Funds
76
Schedule of Revenues, Expendituresand Changes in Fund Balance— Budgetand Actual — Nonmajor Governmental Funds— Special Revenue Funds
77
Nonmajor Governmental Funds- Capital Project Funds
81
Combining Balance Sheet—Nonmajor Governmental Funds— Capital Project Funds
82
Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds — Capital Project Funds
83
Combining Statement of Fiduciary Net Assets - Private -Purpose Trust Funds
84
Combining Statement of Changes in Fiduciary Net Assets - Fiduciary Funds
85
Statement of Changes in Assets and Liabilities- Agency Funds
86
STATISTICAL TABLES (UNAUDITED)
Government -wide information:
Government -wide Expenses by Function. Last Ten Fiscal Years
07
Government -wide Revenues- Last Ten fiscal Years
88
Fund information:
General Governmental Revenues by Source- Last Ten FiscalYears
89
General Governmental Expenditures by Function - Last Ten Fiscal Years
90
General GovernmentalTax Revenues by Source- Last Ten FiscalYears
91
Secured Tax Levies and Collections- Last Ten Fiscal Years
92
Assessed Full Cash Value of all Taxable Property- Last Ten FiscalYears
93
PropertyTax Rates- Direct& Overlapping Governments- Last Ten FiscalYears
94
Special Assessment Billings and Collections- Last Ten FiscalYears
95
Ratio of Net General Bonded Debt to Taxable Assessed Value and Net Bonded Debt Per Capita- Last Ten FiscalYears
96
Computation of Direct and Overlapping General Bonded Debt- June 30,2004
97
Debt Ratios- June 30,2004
97
Computation of Legal Debt Margin- June 30, 2004
98
Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total Governmental Expenditures- Last Ten Fiscal Years
99
Revenue Bond Coverage - Last Ten Fiscal Years
100
DemographicStatistics- Last Ten FiscalYears
101
ConstructionActivity- Last Ten FiscalYears
102
J
CITY OF LODI
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30,2004
TABLE OF CONTENTS -continued
Bank Deposits- Last Ten FiscalYears
103
Principal Employers- June 30, 2004
104
Principal Taxpayers- June 30,2001
105
Surety Bonds of Principal Officials — June 30,2004
106
Gann Appropriation Limitation -Last Ten Fiscal Years
107
Personnel Authorized- Last Ten FiscalYears
908
Schedule of Taxable Sales and Permits by Category — Last Ten Fiscal Years
109
Schedule of Business Tax Receipts Issued—Year ended June 30,2004
111
Miscellaneous Statistics- June 30, 2004
112
SINGLEAUDIT
Schedule of Expendituresof Federal Awards 113
Notes to the Schedule of Expenditures of Federal Awards 195
IndependentAuditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Basic
Financial Statements Performed in Accordance with Government Auditing Standards 116
Independent Auditor's Report on Compliancewith Requirements Applicable to Each Major Program, Internal Control over
Compliance and Schedule of Expendituresof FederalAwards in Accordance with CircularA-133 118
Schedule of Findings and Questioned Costs 121
(This page intentionally left blank.)
CITY COUNCIL
LARRY HANSEN, Mayor
JOHN BECKMAN, Mayor Pro
Tempore
COUNCILMEMBERS:
SUSAN HITCHCOCK
EMILY HOWARD
KEITH LAND
November 12,2004
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:
JANET S. KEETER
Interim City Manager
SUSAN BLACKSTON
City deck
STEVE SCHWABAUER
City Attorney
The Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2004, is hereby submitted. This report is provided to
present the financial position, results of operations and cash flows of the City's proprietary funds as of June 30, 2004, in conformity with generally
accepted accounting principles. The report conforms to the highest standards of financial reporting as established by the Governmental Accounting
Standards Board (GASB), for reporting by State and local governments. The responsibility for the accuracy, fairness and completeness of the
report rests with the City.
This report consists of management's representations concerning the finances of the City of Lodi. Consequently, management assumes full
responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these
representations, management of the City of Lodi has established a comprehensive internal control framework that is designed to protect the City's
assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformitywith
GAAP. We believe that the information is accurate in all material respects and that it is presented in a manner designed to fairly present the
financial position of the City, In addition, we believe that all disclosures necessary to enable the reader to gain full understanding of the City's
financial activities have been included.
The CAFR is presented in four sections: introductory, a financial section, a statistical section and single audit.section. The introductory section
includes the transmittal letter, the City's organization chart and a list of principal officials. The financial section includes the independent auditors'
report, management discussion and analysis, the basic financial statements, notes to the financial statements, required supplementary schedules,
and the combining and individual statements. The single audit section includes the schedule of expenditures of federal awards, notes to the
schedule, and reports on compliance and internal control based on the audit of the basic 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.
This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately
following the independent auditors' report.
V
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 GASB Statement 14.
The City provides a wide range of municipal services including public safety (police, fire and graffiti abatement), public utilities services (electric,
water and wastewater), transportation services (streets, flood control and transit) leisure, cultural and social services (parks and recreation, library
and community center), and general government services (management, 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 15
Sanitation (solid waste) and Cable Television 2
Ambulance 1
Gas and Telephone 2
ECONOMIC CONDITION AND OUTLOOK
The City is located in the San Joaquin Valley between Stockton 10 miles to the south, and Sacramento 35 miles to the north, and adjacent to U.S.
Highway 99. The City population is 60,769 and is contained in an area of 12.79 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.
Over the past several years, there has been an increase in industrial and residential development that has been unprecedented since the early
1980s. This new development combined with the growing strength of the wine/grape industry is a positive indicator for Lodi. The City's focus on
economic development has successfully encouraged numerous big industries to move to Lodi that collectively created hundreds of newjobs.
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I• �WW ow 4ROf Now. ■
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 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, OBJECTIVESAND PROJECTS
To assist the citizens of Lodi in understanding where the City intends to allocate available resources, the City Council, the City Manager and
Department Heads have established a hierarchy of major goals, objectives and major projects that support and re -enforce the City's mission
statement.
Four major City goals were established as policy direction and focal points for the efforts of City staff. These goals include:
Ensure a High Quality of Life and a Safe Environmentfor Citizens
Ensure Efficientand Productive City Organization
Ensure Public Trust, and
Ensure the Development of the Lodi Economy for a Fiscally Sound City Organization
City Council, the City Manager and Department Heads established nineteen major City objectives:
Maintain City's Sense of Community Provide Employee Training and Education
Provide for a Balanced Community Evaluate Telecom municationsOpportunities
Enhance Access through Implementationof Information Systems Strategic Plan Provide Resources to Maintain City's Infrastructure
Promote Urban Forestry Promote Public Relations and Marketing Efforts
Attract, Retain and Invest in A Quality City Work Force Ensure Open and Accessible Public Meetings
Encourage PublicArts, Cultural and Recreational Opportunities Pursue Efforts to be Entrepreneurial
Provide Appropriate and Sufficient City Facilities Improve Customer Service
Develop Short and Long Range Operational Plans Continue to Use Partnerships to Advance City's Objectives
Develop Effective Records Management Program Provide a Balanced Budget & Adhere to Adopted Policies
Promote Commerciallindustrial Base
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.
As discussed above, economic revitalization continued to be an active focal point of the City in 2003-04. The following major City projects were
planned in the 2003-05 two-year budget document: 1) the construction of a new Public Safety building; 2) remodel of the old Public Safety building
and Civic Center Complex; 3) replacement of Animal Shelter Facility; 4) construction of the DeSenedetti Park/G-Basin; 5) development and
construction of an indoor sports and activity center; and 6) construction of an aquatics complex.
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During fiscal year 2003-04 some of these projects moved through various phases of the capital improvement project process, and some General
Fund projects were put on hold until a revenue stream is identified
The slow down in the capital development comes at a time when the cost of City services is increasing leaving less discretionary money. However,
the projects identified by the City Councils in the past years remain a high priority.
New Police Building
The new Police Station was completed in January 2004. The cost of the project was approximately $14.0 million. This building was designed to
meet the needs of the Police Department for the next 20 years. The project was paid for with a grant from the State and Certificates of Participation.
The Police Building is a 54,000 square foot, two-story building designed to house police operations, including staff offices and work space, property
and evidence handling areas, and storage and mechanical rooms. The facility also includes a 5,600 square foot Type 1 jail, 1,000 square foot
dispatch center, and 10,000 square feet of expansion shell space for future growth. The site will also include 100 secure parking spaces for police
vehicles, a sally port for prisoner transportation and a shelter for police motorcycles. Trash enclosures and an emergency generator will also be
installed on the site.
The major Capital Projects that were placed on hold due to budget constraints facing the city in 2003-05 are:
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 workspace, parking and related site improvements, 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
Animal Shelter Facility
The Lodi Animal shelter was built in the 1960's to service a community of approximately 26,000. As most shelters built at that time, its purpose was
to be a "dog pound", i.e. a place to impound stray and vicious dogs before euthanizing them. The current shelter cannot meet the newly mandated
State law or fulfill the expectations of a community eager to provide more humane animal care.
The estimated cost of the project is $4 million, which is $1.5 greater than the original estimate made in June 2001. This will be an 18,000 square
foot facility on a 3 -acre site. It will include kennels, isolation kennels, community classroom, a clinic, storage areas, exercise areas and areas set
aside for expansion of kennels. The project completed the design phase prior to being placed on hold pending identification of a revenue source.
DeBenedetti Park/G-Basin
This project consists of design and development of a youth sports complex (with lighted fields) and park within the "G -basin", which provides storm
water storage in the park. This project is one of the highest unranked projects identified by the Parks and Recreation Commission and the City
Council. The estimated cost of the project is $11.2 million, which is approximately $5 million greater than the estimate in June 2001. The project
has gone through the schematic design and construction design phases. The General Fund portion of the project has been put on hold; however,
the portions funded by other sources of revenue are expected to proceed.
Indoor Sports and Activity Center
This project consists of development and construction of a 40,000 square foot building to provide space for a gymnasium, exercise rooms, kitchen,
meeting rooms and offices for community use. The estimated cost is $10.9 million and is currently in the schematic design phase. The construction
design phase has been completed.
Aquatics Complex
This project consists of design and construction of a recreation pool with water features, a 50 -meter competitive pool, snack bar, changing rooms,
showers, parking and picnic areas. The estimated cost of the project is $7 million, which is a $4 million, increase from the estimate made in June
2001. The project passed through the design phase prior to being placed on hold
FINANCIAL INFORMATION, MANAGEMENTAND CONTROL
A detailed understanding of the financial position and operating results of the City is provided in the following sections of this report. The following is
a brief description of the City's financial condition, management practices and control techniques.
Basis of Accounting
Basis of accounting refers to the policy as to when revenues, expenditures or expenses are recognized in the financial accounts and reported in the
financial statements. The City's accounting records for general government operations are maintained on a modified accrual basis. Revenues are
recorded when available and measurable. Expenditures are recorded when the services or goods are received and the liability incurred. For
proprietary fund types, the City uses the accrual basis of accounting. As such, the measurement focus is on net income in addition to financial
position and changes in financial position. Revenues are recognized when earned and expenses are recognized as the liability is incurred. We
believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial
transactions.
Accounting System and Budgetary Control
In developing the City's accounting system, consideration is given to the adequacy of the internal controls. The objective of the City's internal
accounting controls is to provide reasonable, but not absolute, assurance that the assets are safeguarded against loss from unauthorized use or
disposition; and to ensure that transactions are properly recorded to permit the preparation of financial statements in accordance with generally
accepted accounting principles. The concept of reasonable assurance recognizes that the cost of control should not exceed the benefits likely to
be derived and that estimates andjudgments 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. Although the City utilizes a two-year Financial Plan format 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 anytime during the year. The City Manager has the authorityto 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 2003-04, the City Council and City Manager made
several supplemental budget appropriations, the majority of which relate to capital projects.
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Fund Balance
It is the City's goal to target and maintain an unreserved, undesignated fund balance in the General Fund and working capital balances in the
Electric, Water and Wastewater enterprise funds of at least 15% of operating expenditures. This goal allows for variations from year-to-year to
account for economic and fiscal changes. The General Fund maintained a fund balance of $1,452,988 or 3.62% of operating expenditures at the
end of fiscal year 2003-04. The fund balance is of concern to the City Council and was addressed during the fiscal year by implementing budget
cuts and raising various fees.
Carryover Policy
A 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 terms
are to be consistent with the City's cash flow needs. Investment reports are issued both monthly and 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 again this fiscal year from the Municipal Treasurer's Association of the United States and Canada (MTA) 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 B of the Constitution of the State of California (Proposition 4) provides for the limitation of expenditures by state and local governments.
Under the provisions of this article, City appropriations funded through tax sources may not exceed Fiscal Year 1979 appropriation levels except as
adjusted for increases in population and the growth in the California per capita income or non-residential assessed valuation due to new
construction within the city.
Excluded from the limitation are appropriations funded through charges for services, fines and forfeitures, grants, transfers of service responsibilities
between government agencies and indebtedness incurred prior to Fiscal Year 1979. Pursuant to subsequent legislation adopted after Article XIII B,
the City is required to annually establish and adopt its appropriations limit by resolution. For 2003-04, the City's appropriations subject to limit were
$28,710,584 and the appropriation limit was $59,759,913 a favorable variance of $31,049,329.
Debt Administration
At June 30, 2004, the City had outstanding Certificates of Participation of $167,427,477. These liabilities are discussed in Note 7 of the Basic
Financial Statements and summarized below.
The City issued a $5.0 million certificates of Participation (1995) COP to fund its share of the improvements downtown and Cherokee Lane. These
bonds were refunded by the issuance of the 2002 Certificates of Participation. The City also issued a $1.97 million limited obligation improvement
bonds for the Central City Revitalization Assessment District on July 22, 1996. The improvement bonds of the assessment district are not general
obligations of the City.
The City also issued $10.12 million for the renovation of the PerformingArts Center on August 1, 1996; the 2002 Certificates of Participation also
refunded these bonds. In addition, the Electric Utility issued $43.96 million Certificates of Participation to finance the costs of certain improvements
to the distribution and transmission facilities of the City's electric system. These bonds were also refunded by the issuance of the 2002 Electric
Systems Revenue Certificates of Participation. The City is also authorized to issue up to $16 million for the Envi ron mental Abatement Program for
the clean up effort of the groundwater contamination of PCEITCE around the downtown area.
On November 2002, the City issued the 2002 Revenue Certificates of Participation Series C for $21,225,000 and 2002 Series D for $22,740,000, to
buy out the energy purchase agreement entered into by the City in January 2002 with Calpine.
During the fiscal year, the City of Lodi and the City of Fort Bragg issued Water and Wastewater revenue bonds (200313) through the California
Statewide Communities Development Authority ("the Authority") under its pooled financing program. Total bonds issued were $9,855,000 of which
$5,000,OOOwas for the upgrade of the City of Lodi's wastewater facilities.
The City also issued a $27,360,000 Wastewater Certificates of Participation (2004A) to finance the costs of improvements to the wastewater
collection, treatment and disposal system.
The City's debt management policy includes a commitment to monitor all forms of debt annually during the preparation of the City's Financial Plan
and Budgetto ensure compliance. Also, the Citywill generally conduct financing on a competitive basis, will seek an investment grade rating on any
direct debt and will obtain credit enhancements such as letters of credit or insurance when necessaryfor marketing purposes, availability and cost
effectiveness. _
Interim Financial Reporting
Monthly financial reports are prepared to present the City's financial condition and results of operations. These executive reports are organized
using the "pyramid" approach. As such, the highest level of summary data is presented first, followed by progressively greater levels of detail. The
reports provide current period and year to date revenues, expenditures and encumbrances for all activities and funds, including year to date
estimates and variances.
Single Audit
The City is subject to financial and compliance reporting required by the Single Audit Act Amendments of 1996 and OMB Circular A-133, which is a
requirement of all local and state governments receiving federal financial awards. As part of the Single Audit, tests are made to determine the
adequacy of internal controls, including that portion related to federal financial awards, as well as to determine that the City has complied with
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certain applicable laws and regulations governing federal funds. The Single Audit report is published as part of the annual financial statements for
easy reference.
Competitive Bidding Policy
All required purchases for materials, equipment and services during 2003-04 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
underthe City's Claims and Benefits Fund. At June 30, 2004, the Claims and Benefits Fund had a deficit of $3,577,932. The City is implementing a
phased deficit reduction plan recommended by an actuary to gradually eliminate the deficit in the Internal Service Fund.
INDEPENDENT AUDIT
The City Council requires an annual audit of the records and accounts of the City by an independent certified public accountant. To ensure internal
control periodically the City conducts a request for proposal (RFP) process for auditing services. The accounting firm of Macias, Gini & Company
LLP was selected to perform this audit. The independent auditors' report precedes the basic financial statements and concludes that the City's
basic financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United
States of America.
CERTIFICATES OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in
Financial Reporting to the City for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2003. The City did not
submit for the California Society of Municipal Finance Officers (CSMFO) award program last year.
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 ten consecutive
years. We believe our current report continues to conform to the Certificate of Achievement program requirements and we are submitting it to
GFOA again this year.
ACKNOWLEDGMENTS
As always 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. I would also like to personally thank Ruby Paiste, Accounting Manager, and Cory Wadlow, Senior
Accountant, Odette Bondoc, Accountant II and Tyson Mordhorst, Senior Programmer Analyst. Their work in preparing this year's CAFR was greatly
appreciated
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I would also like to thank you for your continued interest and support in planning and conducting the financial operations of the City in a responsible
and progressive manner.
Respectfully submitted, ,
(,,dames R. Krueger
Finance Director
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Lodi,
California
For its Comprehensive Annual
Financial Report
for die Fiscal Year Ended
June 30, 2003
A Certificate of Achievement for Excellence in Financial
Reporting is prescntcd by the Government Finn nre 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.
cum
ftVWM President
Executive Director
a.
.r.
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Libra
Lib
Center Recreation I ruuuc VVw1rb
I
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Community Finance Human
Development I I Resources
xv
Police
Is and
ssions
DIRECTORY OF OFFICIALS AND ADVISORY BODIES
CITY COUNCIL
Larry Hansen
Mayor
John Beckman
Mayor Pro Temp
Susan Hitchcock
Council Member
Emily Howard
Council Member
Keith Land
Council Member
ADVISORY BODIES
Planning Commission Eastside Improvement Committee
Library Board Lodi Arts Commission
Recreation Commission Youth Commission
Site Plan and Architectural Review Committee Lodi Senior Citizens' Commission
PRINCIPAL ADMINISTRATIVE OFFICERS
H. Dixon Fiynn
D. Stephen Schwabauer
Susan Blackston
Nancy Martinez
James Krueger
Mike Pretz
Tea Silvestre
Joanne Narloch
Richard Prima
Alan Vallow
Konradt Bartlam
Jerry Adams
Tony Goehring
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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
(This page intentionally left blank.)
FINANCIAL SECTION
The Financial Section is comprised of the IndependentAuditors' Report, Management Discussion and Analysis,
Basic Financial Statements, including the notes, required Supplementary Information, and Supplementary
Information which includes Combining and Individual Fund Statements and Schedules.
MACIAS GINI & COMPANYLLP
3000 S Street, Ste. 300
Sacramento,California 95816
916.928.4600 PFIONV
916.928.2755 FAX
The Honorable Members of City Council
City of Lodi, California
INDEPENDENT AUDITOR`S REPORT
We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining
fund information of the City of Lodi, California (City), as of and for the year ended June 30, 2004, which collectively comprise the City's basic financial
statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions
on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Stundurds, 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
opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities,
the business -type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2004, and the respective changes in
financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Goverinnent Auditing Standards, we have also issued our report dated December 10, 2004 on our consideration of the City's internal control
over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with
GovernmentAuditing Standards and should be considered in assessing the results of our audit.
CERTIFIED PU15LIC ACCOUNTANTS & MANAOEMENT C0N5Ut_TANT5
The management's discussion and analysis on pages 3 through 12, the schedule of funding progress - pension plan on page 67, and schedule of revenues,
expenditures and changes in fund balance — budget and actual — General Fund on page 68 are not a reqoired part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United Mates of America. We have applied certain limited procedures,
whicli consisted principally of inquiries of management regarding the methods of measturementand presentation of the required supplementary information.
flowever, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The
introductory section, combining and individual nonmajor fund statements, and the statistical section are presented for purposes of additional analysis and are not
a required part of the basic financial statements. The combining and individual nomnajor fund statements have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, are fairly stated, in all material respects in relation to the basic financial statements taken as a
whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic 1'uiancial statements
and, accordingly, we express no opinion on them.
Certified Public Accountants (J
Sacramento, California
December 10,2004
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the Comprehensive Annual Financial Report is presented as discussion and analysis of the financial performance of the City of
Lodi (the City) for the fiscal year ended June 30, 2004.
FINANCIAL HIGHLIGHTS
• The assets of the City of Lodi exceeded its liabilities at the close of the 2004 fiscal year by $161,798,491 (net assets). Of this amount,
$16,948,388 is a deficit (unrestricted net assets), needed to meet the City's ongoing obligations to citizens and creditors.
• The City's total net assets increased by $8,919,010,
• As of June 30, 2004, the City's governmental funds reported combined ending fund balances of $11,484,747, a decrease of
$6,464,020 in comparison with the prior year. Of this amount, $6,410,972 is available for spending at the City's discretion (unreserved
fund balance).
• At the close of the fiscal year, fund balance for the general fund was $1,452,988 or 3.62 % of total general fund expenditures of
$40,171,604.
• The City's total long-term debt increased by $35,437,984 (23.4%) during the current fiscal year. The key factors in this increase were
the issuance of $32,360,000 in certificates of participation in the Wastewater Fund and $1,125,000 in the Water Fund.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial
statements comprise of three components: (1) Government -wide financial statements, (2) Fund financial statements, and (3) Notes to the
Financial Statements. This reportalso includes other supplementary information in addition to the basic financial statements.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to
a private -sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as
net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether or not the financial position of the City
is improving or deteriorating.
The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes
in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
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Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as
revenues pertaining to uncollected taxes and expenses pertaining to earned but unused vacation and sick leave.
Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs
through users fees and charges (business -type activities). The governmental activities of the City include general government, public
protection, public works, library, and parks and recreation. The business -type activities of the City include electric operations, wastewater
system, water operations and public transit system.
Fund Financial Statements
The fund financial statements are designed to report information about groupings of related accounts, which are used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into the
following three categories: Governmental funds, Proprietary funds, and Fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the
government -wide financial statements. Most of the City's basic services are reported in governmental funds. These statements, however,
focus on (1) how cash and other financial assets can readily be converted to available resources and (2) the balances left at year-end are
available for spending. Such information may be useful in determining what financial resources are available in the near future to finance the
City's programs.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the
information presented for governmental funds with similar information presented for governmental activities in the government -wide financial
statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the
governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains several individual governmental funds organized according to their type (special revenue, capital projects and debt
service). Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues,
expenditures, and changes in fund balances for the general fund, which is considered to be a major fund. Data from the remaining
governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non -major governmental funds
is provided in the form of combining statements elsewhere in this report.
The City adopts a two-year budget for its general fund and special revenue funds. Budgetary comparison statements have been provided for
the general fund and the special revenue funds to demonstrate compliance with this budget.
Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges customers -either outside
customers, or internal units or departments of the City. Proprietary funds provide the same type of information as shown in the government -
wide financial statements, only in more detail. The City maintains the following two types of proprietary funds:
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Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial
statements. The City uses enterprise funds to account for the operations of the Electric, Wastewater, Water, all of which are
considered to be majorfunds and the Transit system,which is consideredto be a non major proprietary fund.
• Internal Service fund is used to report activities that account for various employee benefits and self-insurance activities of the City.
Because these activities predominantly benefit governmental rather than business -type functions, they have been included within the
governmental activities in the govern ment-wide financial statements.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. The activities of the
Downtown and Cherokee Lane and the Industrial Way -Beckman special assessment districts are accounted for and reported under the
fiduciary funds. The activities of the private sector trust and the Holz bequest are also accounted for under the fiduciary funds. Since the
resources of this fund are not available to support the City's own programs, it is not reflected in the govemment-wide financial statements.
The accounting used for fiduciary funds is much like that used for proprietaryfunds.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the
government -wide and fund financial statements.
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information
concerning the City's progress in funding its obligation to provide pension benefits to its employees, and a schedule comparing budget to
actual in the General Fund.
Combininq Statements
The combining statements in connection with nan-major governmental funds and fiduciary funds are presented immediately following the
required supplementary information on pensions.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Lodi,
assets exceeded liabilities by $161,798,491 at the close of the current fiscal year.
The largest portion of the City's net assets reflects its investment in capital assets (e.g., land, buildings and improvements, machinery and
equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services
to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net
of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
S
City of Lodi's Net Assets
Governmental
Business-tvoe
146,180,690
114,269,825
Activities
Activities
3,750,597
Total
17,706,658
2004 2403
20,04
2003
2004
2003
Assets:
44,752,890
Current and other assets $ 18,935,593 24,253,428
109,272,639
80,895,348 $
128,208,232
105,148,776
Capital assets 128,334,732 117,334,991
113,895,765
99,101,161
242,230,497
216,436,152
Total assets 147,270,325 141,588,419
223,168,404
179,996,509
370,438,729
321,584,928
Liabilities:
Long-term liabilities
outstanding
Other liabilities
Total liabilities
Net assets:
Invested in capital assets,
net of related debt
Restricted
41,002,293
37,475,374
146,180,690
114,269,825
187,182,983
151,744,999
3,750,597
3,955,379
17,706,658
13,005,069
21,457,255
16,960,448
44,752,890
41,430,753
163,887,348
127,274,694
208,640,238
168,705,447
100,749,086 94,680,680 64,214,183
11,205,788 12,810,536 2,577,822
62,751,969
239,354
164,963,269
13,783,610
157,432,849
13,049,890
Unrestricted (9,437,439) (7,333,550) (7,510,949) (10,269,508) (16,948,388) (17,603,058)
Total net assets $ 102,517,435 100,157,666 59,281,056 52,721,815 $ 161,798,491 152,879,481
An additional portion of the City's net assets, $13,783,610 (8.52°/x) represents resources that are subject to external restrictions on how they
may be used. The remaining balance of unrestricted net assets represents a deficit of $16,948,388. At the end of the current fiscal year, the
City is able to report positive balances in trap of the three categories of net assets for the government as a whole. Unrestricted net assets are
negative for both the governmental activities and the business -type activities. The deficit in unrestricted net assets in the governmental
activities at the end of the year was $9,437,439 caused primarily by the accrual of compensated absences of $7,908,647 and the inclusion of
the internal service fund in the governmental activities that had negative net assets of $3,577,932.
Refer to pages 8-9 for analysis of the business -type activities and internal service fund negative unrestricted net assets
City of Lodi's Changes in Net Assets
Expenses
General government
Governmental
12,237,616
Business -type
13,166,925
12,237,618
Public protection
Activities
16,631,944
Activities
Total
16,631,944
Public works
20D4
2003
2004
2003
ZQ04
2QM
Revenues
1,409,413
1,453,769
1,409,413
1,453,769
Program revenues:
4,095,367
3,989,438
4,095,367
3,989,438
Charges for Services $
4,828,330
3,873,478
65,709,989
61,457,486 $
70,538,319
65,330,964
Operating grants and contributions
2,321,453
3,315,488
2,547,266
1,772,069
4,868,719
5,087,557
Capital grants and contributions
13,893,743
6,814,312
8,268,229
6,565,948
22,161,972
13,380,260
General revenues:
7,486,844
12,879,363
7,488,844
12,879,363
Property taxes
7,187,535
6,398,164
3,064,298
5,388,541
7,187,535
6,398,164
Othertaxes
9,571,855
8,846,168
72,792,974
75,796,924
9,571,855
8,846,168
Grants and contributions not restricted to
specific programs
8,532,897
8,639,582
8,609,321
2,049,675
8,532,897
5,639,582
Other
4,077,732
3,835,412
4,876,811
8,051,096
8.954.543
11,886,508
Total revenues
50,413,545
41,722,604
81,402,295
77,846,599
131,615,840
118,569,203
Expenses
General government
13,166,925
12,237,616
13,166,925
12,237,618
Public protection
19,162,270
16,631,944
19,162,270
16,631,944
Public works
11,867,698
10,946,025
11,867,698
10,946,025
Library
1,409,413
1,453,769
1,409,413
1,453,769
Parks and recreation
4,095,367
3,989,438
4,095,367
3,989,438
Intereston long-termdebt
1,267,017
1,214,565
1,267,017
1,214,565
Electric
55,942,822
5i,387,848
55,942,822
51,387,$46
Wastewater
6,297,010
6,141,172
6,297,010
6,141,172
Water
7,486,844
12,879,363
7,488,844
12,879,363
Transit
3,064,298
5,388,541
3,064,298
5,388,541
Total expenses
50,968,690
46,473,357
72,792,974
75,796,924
123,761,664
122,270,281
Changes in net assets before special items
and transfers
(555,145)
(4,750,753)
8,609,321
2,049,675
8,054,176
(2,701,078)
Litigation settlements
864,834
2,727,811
864,834
2,727,811
7
Transfers
Changes in net assets
Net assets at beginning of year
Net assets at end of year
2,914,914 2,980,631 (2,914,914) (2,980,631)
2,359,769 (1,770,122) 6,559,241 1,796,855 8,919,010 26,733
100,157,666 101,927,788 52,721,815 50,924,960 152,879,481 152,852,748
$ 102,517,435 100.157,666 59,281,056 52,721,815 $ 161,798,491 152,679,481
ANALYSIS OF CHANGES IN NET ASSETS
Governmental activities.
Governmental activities increased the City's net assets by $2,359,769. This reflects primarily the increase in capital grants and contributions
from infrastructure donated to the City from the new residential subdivisions and new commercial areas.
Business -type activities.
Business -type activities increased the City's net assets by $6,559,241. This reflects primarily the increase in utility rates combined with the
decrease in expenditures related to the environmental abatement program (PCE/TCE).
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Governmental Funds.
The focus of the City of Lodi's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable
resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a
useful measure of a government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $11,484,747,a decrease of
$6,464,020in comparison to the prioryear.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of the general fund
was $156,650, while total fund balance was $1,452,988 a decrease of $113,720 from prior year. Asa measure of the general fund's liquidity,
it maybe useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Fund balance represents 3.62%
of total general fund expenditures.
Proprietary Funds
The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail
Unrestricted net assets for the Electric Fund and the Wastewater Fund at the end of the year amounted to $7,757,442 and $4,607,817
respectively. The deficit in unrestricted net assets in the Water Fund amounted to $19,572,353 as a result of primarily legal expenses and
interest accrued related to the Environmental Abatement Program bonds issued to finance the groundwater contamination (PCE-TCE)
litigation
The deficit in unrestricted net assets in the Transit Fund was due to the decrease in federal transit revenues as a result of the new allocation
for urbanized areas which now makes Lodi's apportionment shared by the City of Galt. Another factor was the cost of services charged to
Transit that are not covered by TDA and or FTA until the City submits an approved cost allocation plan.
The internal Service Fund is reporting a deficit in unrestricted net assets as a result of the City not fully funding its self-insurance activities.
The City plans to implement the deficit reduction plan recommended by an actuary to gradually eliminate the deficit in the Internal Service
Fund.
Other factors concerning the finances of these funds are discussed in the City of Lodi's business -type activities.
General Fund Budgetary Highlights
Differences between the original operating budget and the final amended operating budget in the General Fund were a net increase in
appropriation of $197,560 and can be briefly summarized as follows:
• $78,792 in miscellaneous decreases in general government activities
■ $142,683 in increases allocated to public protection
■ $969 net decrease in publicworks
$7,415 net increase in library
$127,223 net increase in parks and recreation
The various increases and decreases in appropriation were the net effect of budget cuts implemented during the fiscal year amounting to
$957,730 offset by the increase of $ 370,130 from carry-over of encumbered purchase orders and contracts, $564,090 from various special
allocations, $175,800 from grants primarily for after school programs and $45,270 offset by revenues.
The $883,037 in the capital outlay was for the lease purchase of two Pierce Quantum fire apparatus and equipment approved in mid -year
Significant differences between the final budget and the actual revenues and expenditures can be briefly summarized as follows:
Licenses and permits - a favorable variance of $465,329 was the result of increased building permit fees, plumbing, mechanical and
electrical fees as well.
■
Intergovernmental revenues — a variance of $1,043,108was primarily the decrease in vehicle license fees (VLF) ($169,798) and the
VLF backfill gap, which was three months of the VLF backfill for August through October 2003, withheld by the State to cover its
budget deficit ($596,152) and is expected to be repaid in 2006; sales tax came in lower than expected ($222,103); and, certain grants
and after school programs funded by grants were not funded in the current year ($55,055).
■ Charges for services exceeded estimated revenues by $763,694 as a result of new and increased police fees, tire fees, engineering
fees, community center, and parks and recreation fees implemented during the year.
Fines, forfeits and penalties- the implementation of increased fees for returned checks and late fees resulted in a _positive variance of
$214,414.
• Underthe expenditures, favorable variance between the final budget and actual expenditures was $1,019,892. Factors contributing.to
this difference are the following: Full time salaries budgeted at E (top) step, employee participation in the voluntary time off program,
vacancies, the suspension of conferences, travel and training; and the overall effort to hold the line on spending and reduce costs.
y
Capital Assets and Debt Administration
Capital assets.
The City of Lodi's investment in capital assets for its governmental and business -type activities as of June 30, 2004, amounts to $242,230,497
(net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery and equipment,
vehicles, infrastructure and construction in progress. The total increase in the City of Lodi's investment in capital assets for the current fiscal
year was 11.92%(a 9.37% increase in governmental activities and a 14.93% increase in business -type activities) as shown in the table below.
Changes in Capital Assets, Net of Depreciation
Governmental Activities Business -type Activities Total
2004 2003 2004 2003 2004 2003
Land
$ 23,798,811 $
23,799,732 $
5,247,806 $
5,306,754 $
29,046,617 $
29,106,486
Buildings and Improvements
41,026,803
27,870,536
24,902,110
25,550,704
65,928,913
53,421,240
Machinery and Equipment
1,797,112
2,012,782
62,823,423
55,254,723
66,044,623
57,267,505
Vehicles
2,487,373
2,120,683
2,403,851
2,862,302
3,467,135
4,982,985
Infrastructure
55,464,893
49,068,135
55,674,098
49,068,135
Work of Art
62,024
62,024
62,024
62,024
Construction in Progress
3,697,716
12,401,099
18,518,575
10,126,678
22,007,087
22,527,777
Total
$ 128,334,732 $
117,334,991 $
113,895,765 $
99,101,161 $
242,230,497 $
216,436,152
A significant increase in buildings and improvements compared to prior year was due to the completion of the new police building.
Construction cost was approximately $13.3 million. Increase in machinery and equipment was due primarily to additions in electric, water and
wastewater connections, taps, lines and mains for new developments. Increase in infrastructure was primarily due to increase in streets from
new residential developments.
Additional information on the City of Lodi's capital assets can be found in note 6 on pages 40-42 of this report.
Long-term debt.
At the end of the current fiscal year, the City of Lodi had total bonded debt outstanding of $167,427,477. Of this amount, $25,530,000 is the
outstanding balance of the bonds issued to fund the new public safety building, the performing arts center and the downtown and Cherokee
Lane improvements. The total of $141,897,477 from the business -type activities consists of $41,934,121 for the Wastewater Fund,
$15,625,000 for the Environmental Abatement program of the Water Fund, and $84,338,356 for the Electric Fund.
10
City of Lodi's Outstanding Debt
Governmental
activities,
Certificatesof Participation $ 25,530,000
Business -type
activities Total
141,897,477 167,427,477
The City of Lodi's total bonded debt increased by $31,420,353(23.1 %) during the current fiscal year. The key factors in this increase were the
issuance of $32,360,000 in certificates of participation in the Wastewater Fund and $1,125,000 in the Water Fund.
The City maintains an "AAA" rating from Standard & Poor's and Fitch, Inc. The revenue bonds of the Electric Systems have been rated by
these two rating agencies and given an "AAA."
Additional information on the City of Lodi's long-term debt can be found in note 8 on pages 43-54 of this report.
Economic factors and next year's budget.
The City faces significant budget challenges in the next two fiscal years. As a result of downward economic trends and personnel
expenditures, which are increasing at a pace that outstrips the resources available to fund these expenditures, the City faces an operating
deficit in the General Fund for fiscal year 2004-05. In order to eliminate this projected deficit, planned expenditures have been reduced by
approximately $1.9 million and property tax revenues of approximately $1.9 million (originally planned to be used for repayment of debt
service) have been shifted to the General Fund.
In spite of continuing efforts to work through this challenge, the City General Fund will be in a deficit condition in fiscal year 2005-06 as well.
The shifting of property tax revenues was a one time measure to offset the impact of rising expenditures. Consequently, further steps are
needed in order to resolve this structural deficit. It is estimated that the deficit will range between approximately $1.3 and $3.1 million in fiscal
year 2005-06. Expenditures will be reduced in order to resolve this anticipated deficit. Reductions will need to be made in the range of 5% to
15% across all departments in the General Fund. A survey of citizens was completed in the winter of 2004, which identified public safety as
being the highest priority services for the City of Lodi. Based on results from that survey, expenditures will be reduced by less in departments
that provide services of the highest priority and to a greater extent in departments that do not provide those services identified as the highest
priority services.
As the local and state economies continue to show signs cf economic recovery, the City of Lodi may choose to return to operations levels of
2003-04 and earlier years, However, the likely scenario is that the City will work towards building its General Fund balance to a level that will
allow for weathering economic downturns without having severe effects on service levels.
11
REQUEST FOR INFORMATION
This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City's
finances and to demonstrate the City' accountability for the money it receives. If you have any questions about this report or need additional
information, contact the Accounting Division of the Finance Department of the City of Lodi at 300 W. Pine Street, Lodi, California, 95240.
12
A j . 1 l J J i ....J - __ ..) - .._J - :..) LL -I __J .,..) I ! I
BASIC FINANCIAL STATEMENTS
The Government -wide Financial Statements provide abroad overview of the City's financial position and operating results. Information is
grouped by governmental activities or business -type activities.
The Fund Financial Statements report information about the City's Governmental Funds, Proprietary Funds, and the Fiduciary Fund.
The notes have an integral role in disclosing information essential to the fair presentation of the Basic Financial Statements.
GOVERNMENT -WIDE FINANCIAL STATEMENTS
CITYOFLODI
STATEMENT OF NETASSETS
J u n e 30,2004
The notesto the financial statementsare an integralpast of this statement. 13
Governmental
Business -type
Activities
Activities
Total
ASSETS
Cash and investments
11,356,581
12,358,243 $
23,714,824
Restricted assets
1,729,169
40,515,546
42,244,715
Accounts receivable,net
4,775,980
11,165,565
15,941,545
Property tax receivable
1,298,480
1,298,480
Interest receivable
37,100
42,203
79,303
Internal balances
(3,796,763)
3,796,763
Due from other governmental agencies
1,950,350
1,858,867
3,809,217
Loan receivables
1,084,000
1,084,000
Advance receivables
1,070,959
1,070,959
Inventory
113,538
2,017,857
2,131,395
Other assets
387.158
16,759
403,917
Deferred charges
36,429,877
36,429,877
Capital assets, net:
Nondepreciable
27,558.551
23,766,381
51,324,932
Depreciable, net
100,776,181
90,129,384
190,905,565
TOTAL ASSETS
147,270,325
223,168,404
370,438,729
LIABILITIES
Accounts payable and accrued liabilities
2,457,715
9,785,076
12,242,791
Accrued salaries and wages
972,911
972.911
Accrued interest
319,971
6,516,743
6,836,714
Unearned revenue
1,404,839
1,404,839
Long-term liabilities:
Due within one year
4,715,007
6,904,453
11,619,460
Due in more than one year
36,287,286
139.276.237
175,563,523
TOTAL LIABILITIES
44,752,890
163,887,348
208,640,238
NETASSETS
invested in capital assets, net of related debt
100,749,086
64,214,183
164,963,269
Restricted for:
Capital projects
9,406,992
9,406,992
Debt service
1,409,198
2,372,302
3,781,500
Other purposes
389,598
205.520
595.118
Unrestricted (deficit)
(9,437,439)
(7,510,949)
(16,948,388
TOTAL NET ASSETS
$ 102,517,435
59,281,056
161,798,491
The notesto the financial statementsare an integralpast of this statement. 13
Functions/Programs
PRIMARY GOVERNMENT
Governmental activities:
General government
Public protection
Pubiit: works
Library
Parks 8 Recreation
intereston long-term debt
Total governmental activities
Business -type activities:
Electric
Wastewater
water
Transit
Total business-typeactivities
Total primary g ovem ment
CITY OF LODI
STATEMENT OF ACTIVITIES
Year ended June 30,2004
55,942,822
52,896,902
Program Revenues
450,615
Net (Expense) Revenue and
Changes in NetAssets
(2,593,305)
6,297,010
Operating
Capital
4,239,687
4,527,799
4,527,799
Chargesfor
Grantsand
Grants and
Governmental
Business -type
Expenses
Services
Contributions
Contributions
Acti+ties
Activities Total
$ 13,166,925
3,144,267
177.270
365,617
(9,459,571)
$ (9,459,571)
19,162,270
624,277
731,101
279.437
(17,627,455)
(17,627,455)
11,867,698
430,127
1,247,165
12,685,581
2,495,175
2,495,175
1,409,413
50,228
115,937
(1,243,248)
(1,243,248)
4,095,367
679,431
49.980
542,908
(2,823,048)
(2,823,048)
1,267,017
(1,267,017)
(1,267,017)
50,968,690
4,628,330
2,321,453
13,893,743
(29,925,164)
(29,925,164)
55,942,822
52,896,902
7,187,535
450,615
(2,593,305)
(2,593,305)
6,297,010
6,560,013
24,909
4,239,687
4,527,799
4,527,799
7,488,844
6,007,137
3,362,792
3,105,393
1,623,686
1,623,686
3,064,298
243,937
2,522,357
472,334
174,330
174,330
72,792,974
65,709,969
2,547,266
8,268,229
3,732,510
3,732,510
$ 123,761,664
70,536,319
4,868,719
22,161,972 (29,925,164)
3,732,510$
(28,192,654)
The notes to the financial statements are an integral part of this statement
General revenues:
Taxes:
Prope ty taxes
Franchisetaxes
Business licensetax
Transient occupancy tax
motor vehicle -in lieu
investmentearnings
Grants and contributions not restricted to specific programs
Other
special item -litigation settlement
Transfers
Total general revenues,speciai itemsand transfers
Change in net assets
Net assets, beginning of year
Net assets, end of year
14
7,187,535
7,187,535
8,381.401
8,381,401
873,657
673,657
316,797
316,797
3,362,792
3,362,792
125,411
2,242,227
2,387,638
8,532,897
8,532,897
569,528
2,634,584
3,224,113
664,634
664.834
2,9141914
(2,914,914)
32,284,933
2,826,731
35.111,664
2,359,769
6,559,241
8,919,010
100,157,656
62,721,615
152,879,481
102,517,435
59,281,056 $
161,796,491
I ,J
FUND FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
Governmental Fund Types
Governmental funds consist of the General Fund, special revenue funds, debt service fund and capital projects
funds
Major Governmental Fund:
General Fund
This fund is maintained to account for all financial resources that are not restricted as to their use. This includes
property and sales taxes, business tax, receipts, franchise taxes and various subventions such as Motor Vehicle
In -Lieu fees received from the State of California. With the exception of grant programs, General Fund resources
can be utilized for any legitimate governmental purpose.
Proprietary Fund Types
Proprietary funds consist of the enterprise funds and the internal service funds.
Major Enterprise Funds include:
Electric Fund
The City established this fund in order to account for the provision of electric services to the residents of the
City. All activities necessary to provide such services are accounted for in this fund, including but not limited to,
source of supply, overhead, systems maintenance, customer service, engineering, administration, capital
improvements maintenance and debt service.
15
Wastewater Fund
This fund was established by the City in order to account for the provision of waste water collection and
treatment services to the residents of the City. All activities necessaryto provide such services are accounted
for in this fund, including, but not limited to, administration, operations, maintenance, improvements and debt
service.
Water Fund
This fund was established by the City in order to account for the provision of water to the residents of the City as
well as some customers in the County. All activities to provide such services are accounted for in this fund,
including, but not limited to administration, operations, distribution, maintenance, capital improvements and debt
service.
Nonmajor Enterprise Fund:
Transit Fund
This fund is used to account for the operations of the Dial -A -Ride and the Grapeline bus system.
Internal Service Fund
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
Workers' Compensation
Dental
Chiropractic
Life/accidental insurance
Medical
Employee assistance program
Employee recognition program
Unemployment insurance
Flexible spending program
Long Term Disability
Vision
iC
Fiduciary Fund Type
Private -purpose Trust Fund
This fund is used to account for trust agreements underwhich the principal and income benefit individuals, private organizations or other
governments.
Agency Fund
This fund was established to account for special assessments collected on the property tax roll by the City on behalf of the property owners
within the Industrial Way Beckman Districts and the Downtown and Cherokee Lane Districts.
17
CITY OF LODI
BALANCESHEET
GOVERNMENTAL FUNDS
June 30,2004
The notes to the financial statements are an integral part of this statement. 18
Other
Total
General
Governmental
Governmental
Fund
Funds
Funds
ASSETS
Cash and investments
$
9,792,599 $
9,792,599
Restricted assets
1,729,169
1,729,169
Receivables:
Accounts
4,348,522
285,563
4,634,085
Property taxes
908.936
389,544
1,298,480
Interest
33.238
33,238
Due from other funds
1,488,350
1,486, 350
Due from other governmental agencies
68,206
1,882,144
1,950,350
Loan receivables
1,084,000
1,084,000
Inventory
113.538
113,538
Advances to other funds
240,040
716,770
956,810
Other assets
96,802
96,802
Total assets
$
5,776,044
17,399,377 $
23,175,421
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and Other liabilities
$
1,744,831
642,857 $
2,387,688
Accrued salaries and wages
972.911
972,911
Due to other funds
1,009,162
477.188
1,488,350
Advances horn other funds
4,753,573
4,753,573
Deferred revenue
596,152
1,494,000
2,090,152
Total liabilities
4,323,058
7,367,618
11,890,674
Fund balances
Reserved
1,296,338
31777,437
5,073,775
Unreserved reported in:
General Fund
156,650
156,650
Special revenue funds
534,108
534,108
Capital projects funds
5,720,214
5,720,214
Total fund balances
1,452,988
10,031,759
11,4B4,747
Total liabilities and fund balances
$
5,776,044
17,399,377 $
23,175,421
The notes to the financial statements are an integral part of this statement. 18
CITY OF LODi
RECONCILIATION OF THE BALANCE SHEETOF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NETASSETS
June 30,2004
Amounts reported for governmental activities in the statement of net assets are
different because:
Fund balances - total governmental funds
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds
Nondepreciable capital assets
Depreciable capital assets, net
Long-term liabilities are not due and payable in the current period
and therefore are not reported in the governmental funds as follows:
Compensated absences
Bonds payable and other long-term debt
Interest on long-term debt is not accrued in the funds, but rather is
recognized as an expenditure when due.
Other long-term assets are not available to pay for current period expenditures and,
therefore, are deferred in the funds
Internal service funds are used by management to charge the costs of
general liability insurance, workers' compensation insurance, health benefits
insurance and other insurance to individual funds. The assets of the internal
service fund are included in governmental activities in the statement of net assets.
Net assets of governmental activities
The notes to the financial statements are an integral part of this statement. 19
$ 11,484,747
27,558,551
100,776,181
(7,908,647)
(27, 585, 646)
(319,971)
2,090,152
(3,577,932)
$ 102,517,435
CITY OF LODI
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
Year ended June 30,2004
Revenues:
Taxes
Licenses and permits
Intergovernmental revenues
Charges for services
Fines, forfeits and penalties
Investmentand rental income
Miscellaneous revenue
Total revenues
Expenditures:
Current:
General government
Public protection
Public works
Library
Parks and recreation
Capital outlay
Debt service:
Principal payments
Interest and fiscal charges
Total expenditures
Deficiency of expenditures under revenues
Other financing sources (uses):
Transfers in
Transfers out
Capital lease proceeds
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning of yeas
Fund balances, end of year
11e notes to the fmancial statements are an inEegral part. of this statement.
10,815,208
Other
Total
General
Governmental
Governmental
Fund
Funds
Funds
$ 14,065,774
2,842,574 $
16,908,348
2,021,234
(6,350,300)
2,021,234
11,964,723
4,692,324
16,657,047
2,410,024
2,068,288
4,478,312
1,084,500
1,215,152
1,084,500
258.874
278,375
537,249
166.710
306,392
473,102
31,971,839
10,187,953
42,159,792
10,815,208
2,571,167
10,815,208
17,263,236
227,304
17,490,540
6,224,844
1,078,380
7,303,224
1,356,213
(4,288,094)
1,356,213
3,411,552
(6,350,300)
3,411,552
883,037
9,157,718
10,040,755
187,190
571,605
758.795
30,324
1,215,152
1,245,476
40,171,604
12,250,159
52,421,763
(8,199,765)
(2,062,206)
(10,261,971)
7,203,008
2,571,167
9,774,175
(6,859,261)
(6,859,261)
883,037
883,037
8,086,045
(4,288,094)
3,797,951
(113,720)
(6,350,300)
(6,464,020)
1,566,708
16,382,059
17,948,767
$ 1,452,988
10,031,759 $
11,484,747
20
1
CITY OF LODI
RECONCILIATION OF THE STATEMENTOF REVENUES,
EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Year ended June 30,2004
Amounts reporled for governmental activities are different because
Net change in fund balances- total governmental funds
Governmental funds report capital outlays as expenditures. However. in the
statement of activitiesthe cost of those assets is allocated overtheir estimated
useful Yves and reporled as depreciation expense.
Capital outlays. capital contributions and depreciation expense are as follows:
Capitalized capital outlays
Capital contributions
Depreciation expense
Proceedsfrom dispositionof capital assets
Long-term debt proceeds, net of discounts. provide current financial resources to governmental funds,
but issuing debt increases long-term liabilities in the statement of net assets. Repayments
of the principal are expenditures inthe governmental funds. but the repayments
reduce long-term liabilities i n the Statement of net assets.
Proceedsfrom capital lease
Repayments ofprincipal are as follows:
Capital leases
Certificates ofparticipatlon principal
Loan principal
internal service funds are used by managementto charge the costs of certain activities, such as health benefits
and self-insurance, to individual funds. The net revenue (expenses) of Internal service funds is reportedwith
governmental activities.
Deferred revenues recognized in the funds that were previously recognized in the statement of activities
Other expenses in the statement of activities that do not use currentfinancial resources are not reported as
expenditures in the governmental funds.
Change in compensated absences
Change in accrued interest
Change in net assets of governmental activities
The notes to the financial statements are an integral part of this statement. 21
$ (6,464,020)
10,040,755
7,734,845
(6,738,615)
(37,244)
(883,037)
187,190
485,000
86.805
(1,401,063)
556.152
(1,185,258)
(21,541)
5 2,359,769
ASSETS
Current assets:
Cash and Investments
Restrictede ss ets
Receivables:
Accounts
Interest
Duefrom other funds
Duefrom other governmental agencies
Advance receivables
Inventory
Otherassets
Total current asset$
Noncurrent assets:
Advances to otherfunds
Deferred charges and other assets
Capital assets,net:
Nondepredable
Depreciable, not
Total capftal assets
Total noncurrent assets
TOTALASSETS
LIABILITIES
Current liabilities:
Accounts payableand other liabilities
Accrued interest
Due to other funds
Unearned revenue
Self -I nsurancellability
Accrued compensated absences
Certlficstes ofpart'clpation payable
water note payable
Noncurrent liabilities:
Accrued interest
Self-insurancefi abil ity
Accrued compensated absences
Cerllfcates of participation payable
water note payable
TOTAL LIABILITIES
NETASSETS
invested in capital assets, net ofrelated debt
Restricted:
Debt service
Other purposes
Unrestricted (deficit)
TOTAL NET ASSETS (DEFICIT)
The notes to the financial statements are an integral part of this stutemenl-
7,715,368 26,152,203 18,418,631 11,927,981 64,214,183
15,614 2,356,488 2,372,302
205,520 205.520
7,757,442 4,607,617 (19,572,353) (303,655) (7,510,949) (3,577,932)
$ 2)
22
1 4 1 1 1 ) . ..) -.) ..J . ) . A --) ...1 ) ._) ..) ) I
CITY OF LODI
STATEMENTOF NET ASSETS
PROPRIETARY FUNDS
June 30,2004
Governmental
Activities -
Business -type Activities -Enterprise
Funds
Internal
Nonmajor Fund
Service
Electric
Wastewater
Water
Transit
Total
Fund
$ 6,347,087
4,568,925
1,442,231
$
12,356,243 $
1,563,982
16,199,580
24,015,274
300.692
40.515,546
4,956,392
3,736,141
538.502
1,930,530
11,165,565
141.895
30.768
6.874
4,561
42,203
3.862
3,579,002
3,579,002
33.142
16,188
1,809,537
1,858,667
1,07f),959
1,070,959
1 842.989
12,510
162,376
2.017.857
1.445
8.757
5.727
830
16,759
290,356
34,030,202
32,383,623
2,470,279
3,740,897
72,625,001
2,000,095
2,400,ODO
1,396,763
3,796,763
35,691.166
738,711
36,429,877
8,699,871
12,720,483
568.636
1,757,169
23,766,381
26,043,333
33707055
20208204
10,170,792
90,129,384
34,743,204
46427538
2?'9' M 2
11,927,981
113,895,765
72,834,370
47 166 249
22193,605
11,927,981
154,122,405
106,864,572
79 549 872
24 664084
15,868,878
226,747,408
2,000,095
5.115.809
3,444,514
918,125
308.628
9,765,076
70,027
522.705
311.656
20.278
10.398
865,035
3,579,002
3,579,002
83.009
1,188,218
143,612
1,404,839
1,643,214
343.798
168,768
13,620
5,112
531.316
5,673,947
550,904
6,224,651
148.286
148.286
5,651,708
5,651,708
3,864,786
648,760
481.278
42,448
1,373,486
78,664,409
41,383,217
15,625,000
135,672,626
2,230,125
2,230,125
91,170,428
46,433,364
25,817,606
4,044,752
167,466,350
5,578,027
7,715,368 26,152,203 18,418,631 11,927,981 64,214,183
15,614 2,356,488 2,372,302
205,520 205.520
7,757,442 4,607,617 (19,572,353) (303,655) (7,510,949) (3,577,932)
$ 2)
22
1 4 1 1 1 ) . ..) -.) ..J . ) . A --) ...1 ) ._) ..) ) I
OPERATING REVENUES
Charges lor services
OPERATING EXPENSES
Personnel services
Supplies, materials end services
Utilities
Claims
Depreciationand amortization
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES)
Investment income
Interest expense
Rent
Operating grants
Otherrevenues
TOTAL NONOPERATING REVENUES (EXPENSES)
INCOME (LOSS) BEFORE SPECIAL ITEM. CAPITAL CONTRIBUTIONSAND TRANSFERS
special ltem-11ligation settlement
Capita[ contributions
Transfers In
Transfers out
Net Special Item.Capital Contribti Ions and Tnansfers
Change in net assets
NETASSETS(DEFICIT)- BEGINNINGOF YEAR
NETASSETS (DEFICIT)- END OF YEAR
CITY OF LODI
STATEMENT OF REVENUES. EXPENSESAND
CHANGES ]NNETASSETS
PROPRIETARY FUNDS
Year ended June 30,2004
Governmental
Activities-
E3usiness-type Activities - Enterprise Funds Internal
Nonmajor Fund Service
Elerlrio Wastewater water Transit Total Fund
$ 52,890,902 6,500,013 6,007,137 243.837 $ 65,709,989 § 7,610,130
4,962,929
1,904,055
1,023,000
08,486
7,978,472
346.202
11,230,869
1,956,715
4,844,716
2,407,550
20,439,650
4,996,566
30,664,580
524,899
166.707
58.834
32,014.900
24,909
2.522,357
2,647r260
3,660,633
5,823,765
1,190,809
770,871
509,626
8,300,871
100.631
52,602,143
5,582,478
7,405,174
3,064,280
08,734,083
9,205,403
404,325
939.266
(1,012153)
9,054
210.759
977.535
(1,398,03
2( 820,361)
(3,024,104)
11.595.273)
2,174,839
75.101
28,305
(36,068)
2,242,227
1.519
(3,260,679)
(714,532)
(83.070)
(4,058,881)
1,004
37.301
8.891
10,058
58.240
24,909
2.522,357
2,647r260
1,272,406
530.802
431.358
333.670
2,510,336
100.631
167.500
(30,269)
385,884
2,830,015
3,365,190
184.210
404,325
939.266
(1,012153)
9,054
341,092
(1,401,053)
884,834
064,034
450,615
4,239,887
3,105,393
472.334
8,268,229
+.,608,915
1,605,915
(2843.703)
(670.4501
(685 477)
(221 199)
(4,520,629)
(2493.088)
3509.431
3,284,750_
1857010
8,218,149
(2,088,763)
4,508,703
2,272,597
1,866,704
8,559,241
(1,401,063)
17,782,907
28,607,805
(3,426,319)
8,751,422
52,721,815
(2,170,859)
8 15,694,144
31118,508
(1,153.722)
11,624,125 $59
w
i
(3,511
632t�281,0BB_
The notes to the financial statements are an integral pati of this report.
23
Cash flows from operating activitles:
Receipts from customers and users
Receipts from intedund services provided
Cash paid to suppliers for goods 6 services
Payments to employees
Payments for interfund services provided
Net cash provided by (used in) operating activities
Cash flows from noncapital financing activities:
Spectral Item -litigation settlement
Transfers in
Transfers out
Net cash provided by (used in) noncapital financing activities
Cash flows ham capital and related fmancing activ8ies:
Proceeds from Certificates of Participation
Acquisldan and construction of capital assets
Proceeds from sales of capital assets
Fees received from developers
Capital grants received
Principal payments on debt
Interest payments on debt
Nei cash provided by (used in) capital and related financing actividea
Cash flows from investing activities:
Rent of City prop"
Proceeds from sales and maturities of investments
Interest on investments
Net cash provided by (used In) investing activities
Net increase in cash and rash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating scdvitles:
Depredation and amortintion
Operating grants
Other revenues
Change in assets and liabilities:
Decrease (increase) In a=Unte receivable
Increase in advance, receivables
Increase in restricted deposit
Decrease (Increase) In due from other kakis
Increase in due from other governmental agencies
Increase In advances to other funds
Decrease (increase) In inventory
Decrease (increase) in other assets
Increase (decrease) in accounts payable and other Ilablilities
(Decrease) Increase in accrued salaries and wages
Increase (decrease) In atxruedinterest
Increase In due to other funds
Increase (decrease) in compensated absences
Increase In deferred revenue
Net cash provided by (used in) operating activities
CITY OF LODI
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
Year ended June 30, 2004
064,834 M4,634
1,805,915 1,606,915
(2,943,703) (670,450) (685,477)22( 1,199) (4,520,629)
(2,943,7Q?) (670.4501 179,357 1,384,716(2,050,08D ]
37,301
1,125, 000
1,125,000
(2,528,498)
Governmental
(300,657)
Suslness-type Activities Enterprise Funds
500,000
Activities-
10,434577
505,005
7,073,369
Nonmajor Fund
72.491
Internal Service
E€eclnc
Wastewater
Water
Transit
Total
Fund
$ 49.390,281
5,890,005
9,516,254
387,357 $
65.1 83,807 S
7.716,679
386,228
(5,462,447)
(1,299,610)
(14,161,251)
38.228
(38,297,679)
(13874,109)
(5,58.197)
(1,619,326)
(47,357,311)
(8,572,755)
(4,809,881)
(1,957.115)
(977.283)
(85,671)
(7,828,730)
(346,202)
11,358)
(498,548T
(739,273]
(41,745)
(1,280,924}
(980,649)
8,887,759
1,560,233
2,233,521
-359,375)
9,102,188
798,722
064,834 M4,634
1,805,915 1,606,915
(2,943,703) (670,450) (685,477)22( 1,199) (4,520,629)
(2,943,7Q?) (670.4501 179,357 1,384,716(2,050,08D ]
1,900
37,301
1,125, 000
1,125,000
(2,528,498)
(4,635.408)
(300,657)
(7,462,563)
500,000
5.005
10,434577
505,005
7,073,369
14.954
72.491
87.475
7,140,922
22,495
22.485
44,990
(2,150,000)
(175,000)
(143.030)
(2,486,030)
(3,202,696)_
(714,523)
(2,075,909)
(5,883,1281
(7,379,194)
(5,462,447)
(1,299,610)
(14,161,251)
1,900
37,301
9,Bs1
10,056
58.248
(1,595,273)
2,155,238
8,276,339
770,671
509,825
10,434577
7,073,369
76,179
26,771
(35,3971
7,140,922
4,145
9,230,807
8,391,819
38.882
(25,341)
17,833,747
4,146
5,575,499
3,788,155
1,149,930
(1,674,730)
10524,584
802,886
771,588
789,770
292.301
1,833,859
761,114
S 5,347,087
4,568,925
1,442,231
$
12,3511,243 I
1,553,982
$ 218.759
977,535
(1,398,037)
(2,820,361} $
(3,024,104) $
(1,595,273)
5,823,765
1,198,509
770,671
509,825
8,300,871
24,909
2,522,357
2,547,288
831,354
556,504
431.358
365,408
2,188,624
186.631
572.149
(3,109,467)
2,155,464
(1,674,730)
(2,228,580)
(31,065)
(539,173)
(539,173)
(472)
(426)
(1
(1,529,002)
1,822,081
2,310,124
2,e03,203
(22,106)
(16,188)
(980,649)
(1,018,943)
(2,400,000)
(1,396, 763)
(3,796,763)
(486,375)
(379)
52,838
(445,915)
1.231
;1,x441
;4,452)
(83a)
(5,695)
(49,017)
4,035,639
90.782
(746,806)
(136,665)
3,243,130
70,027
910.040 910.040
163 248 (53.060) 45,737 2.817 148742
75.761 143,512 220,373
S 6,687,768 1,560,233 2,233,521(1,358,375} 8,102,168 E 788.722
Noncash Invilli Capital and Financing Activitjas
Donated capitai assets $
Certificates of participation proceeds invested
Acquisition and construction of capital assets via accounts payable and other
liabilities
Cost of issuance paid from debt proceeds
450,615 4,202,405 9,070,407
32,876,445
3,113,881
583,419
The notes to die financial sratemeara are an integral pettof this statement. 24
8 7,663,430 I
32,818,445
3,113, 881
563,419
CITY OF LODI
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
June 30,2004
ASSETS
Cash and Investments
Receivables:
Special assessments
Interest
TOTALASSETS
LIABILITIES
Agency obligations
TOTAL LIABILITIES
NETASSETS
The notes to the t'mancial statements are an integral part of this statement. 25
Private -Purpose
Trust Funds Agency Fund
$ 643,889$ 378,650
39,963
1,149
643,889 419,762
419,762
419,762
643,889$
CITY OF LODI
STATEMENT OF CHANGES IN FIDUCIARY NETASSETS
FIDUCIARY FUNDS
Year ended June 30,2004
ADDITIONS
investment and rental income
Total additions
NETASSETS. BEGINNING OF YEAR
N ET ASSETS, E N D OF YEAR
The notes to the financial statements are an integral part of this statement. 26
Private -Purpose
Trust Funds
$ 99,265
99,265
544,624
$ 643,889
NOTES TO THE FINANCIAL STATEMENTS
CJTY OF LODI
Notes to Basic Financial Statements
June 30,2004
SUMMARY OF SIGN IFICANTACCOUNTING POLICIES
(a) THE FINANCIAL REPORTING ENTITY
The City of Lodi (City) was incorporated on December 6, 1906, as a municipal corporation under the General Laws of the State of California.
The City operates under a Council -Manager form of government and provides the following services: general government, public works, public
protection (police and fire), public utilities, library, parks and recreation.
The accounting policies of the City conform to generally accepted accounting principles (GAAP) as applicable to governments in the United
States of America. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting
and financial reporting principles.
An elected five -member council governs the City of Lodi. AS required by GAAP, these financial statements present the City and its component
units, entities for which the City is considered to be financially accountable. The component units, although legally separate entities, are, in
substance, part of the City's operations and therefore, their activities are blended with data of the City.
Blended Component Units
The blended component units of the City are as follows:
The Lodi Public Improvement Corporation (LPIC) was formed on April 26, 1988, for the purpose of rendering financial assistance to the City in
the issuance of the 1988 Certificates of Participation (refunded by the issuance of the 1991 Certificates of Participation) to finance the expansion
of the City's White Slough Pollution Control Facility, the 1995 and 1996 Certificates of Participation to finance the Central City Revitalization
Projects and the Performing Artsf Conference Center, (refunded by the issuance of the 2002 Certificates of Participation) and the issuance of the
1999 Certificates of Participationto finance the Electric Systems improvements (refunded by the 2002 Certificates of Participation Series A).
On May 12, 2004, LPIC also issued the 2004 Wastewater System Revenue Certificates of Participation Series A to provide funds to finance the
costs of certain improvementsto the wastewater collection, treatment and disposal system of the City.
The City Council constitutes the Board of Directors of LPIC. The funds of LPIC have been included in the Enterprise (Electric and Wastewater)
Funds and in the other governmental funds in the accompanying basic financial statements.
The Lodi Financing Corporation (LFC) was formed on October 12, 1999, for the purpose of assisting the City with the financing of the costs of its
environmental abatement program and enhancing the water supply of the City for the use, benefit and enjoyment of the citizens served by the
City.
21
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30.2004
On June 29, 2000, the Lodi Financing Corporation was authorized to issue Variable rate Certificates of Participation quarterly on each January 1,
April 1, July 1 and October 1, beginning October 2000; provided however, that the aggregate principal amount shall not exceed Sixteen Million
Dollars ($16,000,000). Total bonds issued as of June 30, 2004, were $15,625,000. These issues were intended to fund the continued
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. The City Council is the Board of Directors of LFC. The funds of LFC are included in the Water Fund in the accompanying basic
financial statements.
(b) Government -wide and fund financial statements
The government -wide financial statements (i,e., the statement of net assets and the statement of activities) report information on all of the non -
fiduciary activities of the primary government and its component units. For the most part the effect of interfund activity has been removed from
these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately
from business -type activities that rely, to a significant extent, on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct
expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or
applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded
from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as
separate columns in the fund financial statements.
(c) Measurement focus, basis of accounting, and financial statement presentation
The government -wide financial statements are reported using the economic resources measurement focus and accrual basis of accounting, as
are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grant and similar items are recognized as revenue as soon as all eligibility requirements have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of
accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they
are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers property tax revenues
28
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
to be available if they are collected within 60 days of the end of the current fiscal year. All other revenues are considered to be available if they
are generally collected within 120 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as
under accrual accounting. However, debt service expenditures, as well as expenditures related to vacation, sick leave, claims and judgments,
are recorded only when payment is due.
Property taxes, other local taxes, licenses. intergovernmental revenues, and interest associated with the current fiscal period are all considered
susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenues are considered to be
measurable and available when the City receives cash.
The City reports the following major governmental fund:
The General Fund is the City's primary operating fund. It accounts for all financial resources of the City except those required to be
accounted for in another fund.
The City reports the following major proprietary (enterprise) funds:
The Electric Fund accounts for the provision of electric services to the residents of the City. All activities necessary to provide such
services are accounted for in this fund, including but not limited to, source of supply, overhead, systems maintenance, customer service,
engineering, administration, capital improvements, and maintenance and debt service.
The Wastewater Fund accounts for the provision of wastewater collection and treatment services to the residents of the City.
All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations,
maintenance, improvementsand debt service.
The Water Fund accounts for the provision of water to the residents of the City as well as some customers in the County. All activities
to provide such services are accounted for in this fund, including, but not limited to administration, operations, distribution, maintenance,
capital improvements and debt service.
Additionally, the City reports the folfowing fund types:
The Internal Service Fund accounts for the City's claims and benefits.
The fiduciary funds account for assets held in trust forother agencies
private -purpose trust fund is used to account for mast agreements under which the principal and income benefit individuals,
private organizations or other governments.
29
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Agency fund accounts for assets held by the City as a trustee or as an agent for individuals, private organizations, related
organizations and/or other governmental units.
Private—sector standards of accounting and financial reporting issued prior to December 1, 1989, are followed in both the government -wide and
the proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the GASB. The City also
has the option of the following subsequent private -sector guidance for their business -type activities and enterprise funds, subject to this same
limitation. The City has elected not to follow subsequent private -sector guidance.
The effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this rule are charges to other
City departments from the Electric, Wastewater, Water and Transit Funds. These charges have not been eliminated because elimination would
distort the direct costs and program revenues reported in the statement of activities.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result
from providing services in connection with the fund's principal ongoing operations. The principal operating revenues of the City's enterprise fund
and internal service fund are charges for customer services including: electric, wastewater, water and public transportation fees. Operating
expenses for enterprise funds and internal service fund include the cost of services, administrative expenses, and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then unrestricted
resources as they are needed.
(d) Cash and Investments
The City maintains a cash and investment pool that is available for all funds of the City for the purpose of increasing interest earnings through
investment activities. Investments are generally stated at fair value with the exception of guaranteed investment contracts, which are stated at
cost. Income earned or losses arising from the investment of pooled cash are allocated to various funds based on month-end cash balances in
accordance with California Government Code Section 53647. Changes in fair value of investments are recognized as a component of interest
and investment income.
Proceeds from debt and other cash and investments held by fiscal agents by agreement are classified as restricted assets
(e) Restricted Assets
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. In the Capital Outlay Reserve Fund, the restricted assets represent the proceeds of the 2002
Improvement bonds reserved for debt service. In the Wastewater fund, the restricted assets represent the proceeds of the 2003E and the
30
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
2004A Certificates of Participation issued for improvements to the City's wastewater collection, treatment and disposal system. In the Water
Fund, the restricted assets represent funds held b y the attorneys in connection with the PCEITCE litigation.
(f) Property Taxes
San Joaquin County is responsible for assessing, collecting and distributing property taxes in accordance with enabling legislation. Revenue
received is based on an allocation factor calculated by the County under the provisions of Proposition 13 plus a percentage of the increase in
market value in specific areas. The City's property tax is liened based on the assessed value listed as of the prior January 1 st for all real and
personal property located in the City. Property sold after the assessment date (January 1st) is reassessed and the amount of property tax
assessed is prorated. The assessed value at January 1, 2002, upon which the 2003 levy was based, was $3,825,793,000.
Secured property taxes are levied on October 1 and are due in two installments on November 1 and February 1. The tax becomes delinquent
after December 10 and April 10, respectively. Unsecured property tax is levied on July 1, due on July 31 and becomes delinquent after August
31.
Property taxes levied for the year ended June 30, 2004, are recorded as receivables, net of estimated uncollectible amounts. Property taxes
paid to the City by the Countywithin 60 days of the fiscal year end are considered "available" and are, therefore, recognized as revenue.
In 1993, the City made an agreementwith the San Joaquin County to participate in the Teeter Plan. The Teeter plan is an alternative method of
apportioning property tax money. The cities receive 95% of the property taxes in advance from the County and the 5% remaining after
reconciling the cities' balances at June 30. As part of the agreement, the County keeps the penalties and interest on the delinquenttaxes.
(g) Due From/Due To Other Funds and Internal Balances
During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered, In the fund
financial statements, these receivables and payables are classified as "due from other funds" or "due to other funds."
In the government -wide financial statements, these receivables and payables are eliminated within the governmental activities and business -type
activities columns. Receivables and payables between the governmental activities and the business -type activities are classified as internal
balances.
31
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30.2004
(h) Transfers
In the fund financial statements, interfund transfers are recorded as transfers in (out) except for transactions that are described below:
Charges for services are recorded as revenues of the performing fund and expenditures of the requesting fund. Unbilled costs are
recognized as an asset of the performing fund at the end of fiscal year.
Reimbursements for expenditures, initially made by one fund that is properly applicable to another fund, are recorded as expenditures in
the reimbursing fund and as other revenue in the fund that is reimbursed. Reimbursementsare eliminated for purposes of government -
wide reporting.
(i) Long-term obligations
In the government -wide financial statements and in the proprietaryfund type financial statements, long-term debt and other long-term obligations
are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund statement of net assets. Bond
premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of
the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related
debt. Gains or losses occurring from advance refunding, are deferred and amortized into expense for both governmental and business -type
activities.
U) Loan receivables
Loan receivables reported in the HOME Program & Community Development Block Grant Special Revenue Fund represent 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 can
use it for allowable projects or to make new loans.
(k) Advance receivables
Advance receivables reported in the Enterprise Fund (Electric) represent the City's portion of the NCPA's General Operating reserve that is
refundable upon demand by the City (See Note 13.)
(1) Inventory
General fund inventories are recorded at cost and are recognized as expenditures when consumed rather than when purchased. For the
Proprietary fund types, inventories are recorded at cost using the weighted average cost method, which approximates market, and expense is
recognized when inventories are consumed in operations.
32
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
(m) Deferred Charges
Deferred charges reported in the Electric Fund include costs incurred in connection with the issuance of the 2002 Certificates of Participation
Series A and B amortized over 30 years. It also includes the buyout cost of the Calpine energy purchase contract amortized over 9.5 years. The
deferred charges reported in the Wastewater Fund include costs incurred on the issuance of the 1991 Certificates of Participation amortized over
32.5 years and the costs incurred on the issuanceof the 2003B and 2004A Certificates of Participation amortized over 20 years.
(n) Capital Assets
Capital assets, which include land, buildings and improvements, machinery and equipment, vehicles, infrastructure (e.g., streets, streetlights,
traffic signals, sidewalks, and bridges), and electric lines, wastewater lines and storm drains are reported in the applicable governmental or
business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with individual
cost of $3,000 or more and have an estimated useful life in excess of two years. Such assets are recorded at historical cost. Donated capital
assets are recorded at estimated fair market value at the date of donation. Capital outlay is recorded as expenditures in the General and other
governmental funds and as assets in the government -wide financial statements to the extent the City's capitalization threshold is met.
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset useful lives are not capitalized.
As required by the Governmental Accounting Standards Board Statement No. 34, beginning July 1, 2002, the City has capitalized infrastructure,
primarily its network of streets, as part of the capital assets shown in the governmental activities column on the government -wide statement of
net assets. This capitalization included infrastructure that could be identified and has been acquired since July 1, 1980.
Depreciation of capital assets is provided on the straight-line basis over the following estimated useful lives:
Years
Buildings and improvements 3-40
Machineryand equipment 2-40
Vehicles 5-15
Infrastructure 10-50
(o) Compensated Absences[Vacation and Sick Leave
Accumulated vacation and vested sick leave benefits are accrued when incurred in the government -wide financial statements and the proprietary
financial statements. A liability for these amounts is reported in the governmental funds only if they have matured.
33
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
(p) Self -Insurance
The City is self-insured for general liability, workers' compensation, dental benefits, unemployment and long-term disability. Various City funds
are charged premiums for the City's self-insurance liability, which is accounted for 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.
(q) Fund Equity
In the fund financial statements, governmental funds report reservations of fund balances for amounts that are not available for appropriation or
are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that
are subject to change.
(r) Statement of Cash Flows
A statement of cash flows is presented for proprietary fund types. For purposes of reporting cash flows, the City considers all highly liquid
investments with maturities of three months or less when purchased and investments maintained in the pool to be cash equivalents.
(s) Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Actual results could differ from those estimates.
34
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
(2) 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, 2004:
Pooled cash and investments:
Cash on hand
Demand deposits
Certificates of deposit
Investments
Total pooled cash and investments
Private Sector Fund:
Mutual funds
Total cash and investments
Restricted cash with fiscal agent
Total cash and investments and restricted cash with
fiscal agent
Presented in the govern ment-wide statement of net assets
Presented in the statement of fiduciary net assets:
Private-purposetrust funds
Agency Fund
Total cash and investments
Restricted assets
Total
1,753
5,395,826
1,549,008
17,420,824
24,367,411
369,952
24,737,363
42,244,715
W VV,vu,G,VI V
$ 23,714,824
643,889
378.650
24,737,363
42,244,715
$ 66,982,078
(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.
35
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
(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 as permitted by the Government Code, and the State of California Local Agency
Investment Fund (LAIF). The City is not authorized to enter into reverse repurchase agreements. The City selects its investments based on
safety, liquidity and yield.
The value of the pool shares in the State of California Local Agency Investment Fund (LAIF), which maybe withdrawn is determined on an
amortized cost basis, which is different than the fair value of the City's portion in the pool. The total amount invested by all public agencies in
LAIF on June 30, 2004, is $57,600,699,158. LAIF is managed by the State Treasurer. Included in LAIF's investment portfolio are asset-backed
securities totaling $923,459,000. The Local Investment Advisory Board (LAIB) has oversight responsibility for LAIF. The LAIB consists of five
members as designated by State Statute
(c) Restricted Cash with Fiscal Agent
This represents the balance of the 2002 Public Improvement Certificates of Participation held by US Bank and proceeds of the 1999 Electric
Utility Certificates of Participation held by Bank of New York and funds held by the attorneys related to the PCE/TCE litigation. It also includes
bond proceeds held by Union Bank of California from the issuance of the 20038 Water and Wastewater revenue bonds through the pooled
financing program of the California Statewide Communities Development Authority and the proceeds of the 2004A Wastewater Certificates of
Participation.
(d) Custodial Credit Risk
In accordance with GASB 3, deposits and investments are classified as to custodial credit 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
U ncol lateral ized. (Includes any bank balance that is collateralized with securities held by the pledging financial
36
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
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 $6,944,834 and the bank balance was $7,609,475. Of the bank balance, $676,341 was
covered by federal depository insurance or by collateral held by the City's agent in the City's name. The remaining balance of $6,933,134 was
collateralized with securities held by the pledging financial institution or by its trust department or agent in the City's name.
Investments:
Category 1
Insured or registered, or securities held b y 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 counterpartyor by its trust department or agent but not in the City's name
Investments and restricted cash with fiscal agent of the City as of June 30, 2004 are summarized below:
Not Subject Carrying
to Categorization Amount
Pooled investments:
State of California
Local Agency I nvestment F u n d (LAI F)
Total pooled investments
Investments held in trust:
Mutual funds
Restricted cash with fiscal agent, primarily
Guaranteed Investment Certificates (GICs)
Total investments
17,420,624
17,420,624
369,952
42,244,715
$ 60,035,491
37
17,420,624
17,420,624
369,952
42,244,715
$ 60,035,491
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
(3) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
Revenues of the General Fund, Electric, Wastewater and Water funds are reported net of uncollectible amounts. Total uncollectible amounts
related to revenues of the current period are as follows:
Uncollectibles related to late charges and services $
16,800
Uncollectibles related to electric sales and services
188,100
Uncollectibles related to wastewater services
30,700
Uncollectibles related to water sales and services
34,700
Total uncollectibles of the currentfiscal year $
270,300
(4) INTERFUND RECEIVABLESIPAYABLES
Interfund receivables and payables at June 30, 2004 are as follows:
Due from
Due to
Amount
Other governmental General $ 1,009,162
Other governmental Other governmental 477,100
Electric Nonmajor fund -Transit 3,579,002
$ 5,065,352
"Due to" and "due from" balances are recorded primarily when funds overdraw their share of pooled cash or when there are short-term loans
between funds. The $1,009,162 and the $477,188 represent cash deficits in the governmental funds. The $3,579,002 represents the cash
deficit in the Transit Fund.
Advances from
Other governmental
Other governmental
Other governmental
Other governmental
Advances to
General
Other governmental
Electric
Water
38
Amount
$ 240,040
716,770
2,400,000
1,396,763
$ 4,753,573
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
The $240,040 from the General Fund to the Other Governmental is an advance used for the start up costs of a redevelopment agency, The
$716,770 advance from Other Governmental was used for the Lower Sacramento Road expansion project. The $2,400,000 from the Electric
Fund to the Other Governmental Fund represents advance for capital improvements. The $1,396,763 advanced from the Water Fund was used
for the construction of Fire Station #4.
(5) TRANSFERS
Transfers for the year ended June 30, 2004, are summarized as follows:
During the year, various interfund transfers were made to finance expenditures, subsidize operating losses and service debt
The total transfers out of $2,707,332 from Other Governmental to the General Fund include transfers of $1,116,000 to reimburse for capital
transfers per Phase 11 budget adjustments, the transfer of $985,000 gas tax revenues to fund the Public Works Street Maintenance Division; and
$50,000 to reimburse the General Fund for the costs associated with the administration of the IMF program; $105,446 for the lease payment of
the new fire truck, $426,276 for Engineering cost of services and $24,610 for operations.
The $2,546,014 transfers out from Other Governmental to the Other Governmental represent transfers of $1,775,837 to the Debt Service Fund
for the principal, interest and fiscal charges required to pay the 2002 Certificates of Participation; transfer of $175,000 to Lodi Lake Fund and
$330,000 to the Vehicle and Equipment Fund; and impactfee transfers of $265,177 for the DeBenedetti Park design.
The $1,605,915 transfer to the Transit Fund includes reimbursements of $718,677 from impact fees for the Lower Sacramento Road project,
Guild/Thurman project and the Lodi Lake Westside trail project. It also includes a transfer of $887,238 from the General Capital Outlay Reserve
to cover the deficit in the Transit Fund.
39
Transfers in
Other
Transfers out:
General
Governmental Transit
Total
Other governmental $
2,707,332
2,546,014 1,605,915 $
6,859,261
Electric
2,918,550
25,153
2,943,703
Wastewater
670,450
670,450
Water
685,477
685,477
Transit
221,199
221,199
Total $
7,203,008
2,571,167 1,605,915 $
11,380,090
During the year, various interfund transfers were made to finance expenditures, subsidize operating losses and service debt
The total transfers out of $2,707,332 from Other Governmental to the General Fund include transfers of $1,116,000 to reimburse for capital
transfers per Phase 11 budget adjustments, the transfer of $985,000 gas tax revenues to fund the Public Works Street Maintenance Division; and
$50,000 to reimburse the General Fund for the costs associated with the administration of the IMF program; $105,446 for the lease payment of
the new fire truck, $426,276 for Engineering cost of services and $24,610 for operations.
The $2,546,014 transfers out from Other Governmental to the Other Governmental represent transfers of $1,775,837 to the Debt Service Fund
for the principal, interest and fiscal charges required to pay the 2002 Certificates of Participation; transfer of $175,000 to Lodi Lake Fund and
$330,000 to the Vehicle and Equipment Fund; and impactfee transfers of $265,177 for the DeBenedetti Park design.
The $1,605,915 transfer to the Transit Fund includes reimbursements of $718,677 from impact fees for the Lower Sacramento Road project,
Guild/Thurman project and the Lodi Lake Westside trail project. It also includes a transfer of $887,238 from the General Capital Outlay Reserve
to cover the deficit in the Transit Fund.
39
(6)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
The $2,918,550 transfer out from the Electric Fund, $670,450 from Wastewater, $685,477 from Water and the $221,199 from Transit represent
primarily the cost of services reimbursementto the General Fund.
CAPITAL ASSETS
Capital assets activity of the primary governmentfor the year -ended June 30, 2004, was as follows:
Balance Balance
Governmental activities June 30,2003 Increases Decreases June 30,2004
Capital assets, not being depreciated:
Land $ 23,799,732 36,323 (37,244) $ 23,798,811
Work of art 62,024 62,024
Construction in progress 12,401,099 6,245,322 (14,948,705) 3,697,716
Total capital assets, not being depreciated 36,262,855 6,281,645 (14,985,949) 27,558,551
Capital assets, being depreciated:
Buildings and improvements
Machinery and equipment
Vehicles
Infrastructure
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings and improvements
Machineryand equipment
Vehicles
Infrastructure
Total accumulated depreciation
Total capital assets, being depreciated, net
Governmental activities capital assets, net
41,002,027
14,580,072
7.112,401
393,241
7,708,788
992,081
74,791,443
10,477,266
55,582,099
7,505,642
(193,500) 8,507,369
85,268,709
130,614,659 26,442,660 (193,500) 156,863,819
13,131,491 1,423,805 14,555,296
5,099,619 608.911 5,708,530
5,588,105 625.391 (193,500) 6,019,996
25,723,308 4,080,508 29,803,816
49,542,523 6,738,615 (193,500) 56,087,638
81,072,136 19,704,045 100,776,181
$ 117,334,991 25,985,690 (14,985,949)$ 128,334,732
40
I
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Bus! ness-tvoeactivities Balance Balance
41
June 30,2003
Increases
Decreases
June 30,2004
Capital assets, not being depreciated:
Land
$ 5,306,754
(58,948) $
5,247,806
Construction in progress
10,126,678
8,824,788
(432,891)
18,518,575
Total capital assets, not being depreciated
15,433,432
8,824,788
(491,839)
23,766,381
Capital assets, being depreciated:
Buildings and improvements
32,473,453
174,291
32,647,744
Machineryand equipment
80,989,023
9,615,255
90,604,278
Vehicles
6,605,524
26,693
(31,130)
6,601,087
Total capital assets, being depreciated
120,068,000
9,816,239
(31,130)
129,853,109
Less accumulated depreciation for:
Buildings and improvements
6,922,749
822,885
7,745,634
Machineryand equipment
25,734,300
2,046,555
27,780,855
Vehicles
3,743,222
460,537
(6,523)
4,197,236
Total accumulated depreciation
36,400,271
3,329,977
(6,523)
39,723,725
Total capital assets, being depreciated, net
83,667,729
6,486,262
(24,607)
90,129,384
Business -type activities capital assets, net
$ 99,101,161
15,311,050
(516,446) $
113,895,765
41
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Depreciation expense was charged to function/programs of the primary government as follows:
Governmental activities:
General government $ 720,422
Public protection 1,141,783
Public works 4,220,109
Library 35,420
Parks and recreation 620,881
Total depreciation expense - governmental activities $ 6,738,615
Business -type activities:
Electric $ 883,675
Wastewater 1,166,005
Water 770,671
Transit 509,626
Total depreciation expense - business -type activities $ 3,329,977
(7) Operating Leases
The City is obligated under various operating leases for the use of buildings and office space. Total costs for such leases were $158,616 for the
year ended June 30,2004.
Future minimum lease payments required by lease agreements that have initial or remaining noncancellable lease terms of one year or more as
of June 30, 2004, are as follows:
Fiscal Years Ending
2005 $ 142,400
2006 142,400
2007 71,400
Total minimum lease payments required
under operating leases $ 356,200
42
! I I I ! ! I ! I I I I ! I 4 I I ]
CITY OF LODI
Notesto Basic Financial Statements (continued)
June 30,2004
(8) Long -Term Obligations
The following is a summary of debt transactions of the City for the year ended June 30, 2004:
531,316 (382,574)
$ 1,904,802 $
531,316
2,521,441
(143,030)
2,378,411
Amounts
9,565,000
(175,400)
9,390,000
185.000
Due Wlthin
14,475
interest Rates
June 30.2003
Additions
Reductions
June 30.2004
One Year
Governmental activities:
14,500,000
1,125,000
15,625,000
Compensated absences
50,460,000
$ 6,723,389
2,252,800
(1,067,542)
$ 7,906,647 $
2,252,800
2002 Certificatesof Participation
3.0-5.0%
26,015,000
286,689
(485.000)
25,530,000
500,000
Note payable
5.0%
245,000
245,000
Loan payable
4.0%
542,900
(86,605)
456,295
813,120
Capital leases
5.3-5.39%
658,504
883,037
(187,190)
1,354,351
230.873
Self-insurance liability
3,290,581
3,860,633
(1,643,214)
5,508,000
1,643,214
Governmental activity long-term liabilities
$ 37,475,374
6,996,470
(3,469,551)
$ 41,002,293$
41715,007
Business -type activities:
Compensated absences
California Safe Drinking Water Note Payable 3.41%
Certificates of Participation:
1991 Certificatesof Participation 4.5-6.6%
Less deferred amounts:
For issuance discounts
Net
2000 EnvironmentalAbatement Certificates of Participation—vaflsble
2002 Certificates of ParticipationA 8, B Variable
Less deferred amounts
From refunding
Net
$ 1,756,060
531,316 (382,574)
$ 1,904,802 $
531,316
2,521,441
(143,030)
2,378,411
148,286
9,565,000
(175,400)
9,390,000
185.000
(340,177)
14,475
(325,702)
(14,475)
9,224,823
(160525)
9,064,298
170,525
14,500,000
1,125,000
15,625,000
50,460,000
50,460,000
3,700,000
286,689
(7,463%W
(284,1389)
42 71.8391
286,689
43,006;080
3 413 311
43
2002 Certificatesof ParticipationC& D
Add deferred amounts
For issuance premium
Total
2003 Certificates of Participation
Add deferred amounts:
For issuance premium
Total
2004 Certificates of ParticipationA
Add deferred amounts:
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
154-5 25% 42,990,000
(2150,000) 40,840,000 2,195,000
557,910 (65,634) 492,276 65,636
43,547,910 (2,215,634) 41,332,276 2,260,636
2.0-5.0% 5,000,000 5,000,000 185,000
2.0-5.5%
82,041 (3,078) 78,963 4,102
5,082,041 (3,078) 5,078,963 189,102
27,360,000
27,360,000 170,000
For issuance premium 434,404 (3,544) 430,860 21,277
Total 27,794,404 (3,544) 27,790,860 191,277
Total Certificatesof Participation 109,992,124 34,001,445 (2,096,092) 141,897,477 6,224,851
Business-typeactivitylong-term liabilities $ 114,269,625 34,532,761 (2,621,696) $ 146,180,690 $ 6,904,453
Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the above
totals for governmental activities. At year-end $ 5,508,000 of internal service funds self-insurance liability was included in the above amounts.
Also, for the governmental activities, compensated absences are generally liquidated by the general fund.
Long-term debt payable at June 30, 2004, comprised of the following individual issues:
California Safe Drinking Water Note Payable
The City entered into a contract on October 16, 1991, with the State of California Department of Water Resources to assist the City in financing
the construction of water wells enabling the City to meet safe drinking water standards established by the State. The original amount of the note
was $3,129,828 and is secured by the project and 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.
44
Note Payable
The City issued $245,000 promissory note to James E. Dean and Carol Dean, as trustees of the James E. Dean Family Trust, for the purchase
of 307 W. Elm Street property, which is the site of the new Public Safety Building. Interest is payable quarterly and principal is due on April 1,
2007
Annual debt service requirements to maturity of note payable are as follows:
Fiscal
Year
Ending Governmental Activities
ane 30, Principal
CITY OF LODI
2005 $
Natesto Basic Financial Statements
(continued)
12,250
June 30,2004
9,188
Annual debt service requirements to maturity of water
note payable are as follows:
Fiscal
Year
Ending
Business -type Activities
June 30,
Principal
Interest
2005
$ 148,286 $
79,690
2006
153,220
74,758
2007
158,488
69,488
2008
163,810
64,166
2009
169,695
58,281
2010-2014
939,470
200,417
2015-2017
645,442
39,112
Total
$ 2,378,411 $
585,912
Note Payable
The City issued $245,000 promissory note to James E. Dean and Carol Dean, as trustees of the James E. Dean Family Trust, for the purchase
of 307 W. Elm Street property, which is the site of the new Public Safety Building. Interest is payable quarterly and principal is due on April 1,
2007
Annual debt service requirements to maturity of note payable are as follows:
Fiscal
Year
Ending Governmental Activities
ane 30, Principal
Interest
2005 $
$ 12,250
2006
12,250
2007 245,000
9,188
Total $ 245,000
$ 33,688
45
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Loan Payable
The City entered into an agreement and issued a promissory note to San Joaquin County Council of Governments, ajoint powers agency acting
as the San Joaquin County Transportation Authority, in the amount of $840,000 on February 5, 1999 for the purpose of funding the Kettleman
Lane/SR 99 Interchange project. The balance remaining as of June 30, 2004, is $456,295. Interest and principal is due and payable annually
and matures on July 1, 2009.
Annual debt service requirements to maturity of loan payable are as follows:
Fiscal
Year
Ending
June 30,
2005
2006
2007
2008
2009
Total
Certificates of Participation
Governmental Activities
Principal
$ 88,120
89,662
91,232
92,828
94,453
$ 456,295
Interest
$ 7,985
6,443
4,874
3,277
1,653
$ 24,232
$11,170,000 Certificates of Participation (1991 Wastewater Treatment Plant Expansion Refunding Project) were sold in December 1991 for the
repayment of 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 California Statewide Communities Development Authority Water and Wastewater Revenue Bonds were issued on October 7, 2003.
The City of Lodi along with the City of Fort Bragg issued $9.855 million 2003 Series B revenue bonds through the California Statewide
Communities Development Authority (the "Authority") pooled financing program. The City of Lodi's portion is $5.0 million for the upgrade of its
wastewater facilities. Principal is payable annually on October 1 in amounts from $185,000 to $365,000 with final payment due October 1, 2023.
The Authority's Water and Wastewater Pooled Financing Program is available to California water and wastewater agencies to facilitate the
financing or refinancing of capital improvements. The program is available to California cities and special districts that operate water or
wastewater enterprises. The Authority is authorized pursuant to Chapter 5 of Division 7 of Title 1 of the California Government Code to issue
bonds to finance and refinance water and wastewater public capital improvements of local agencies located throughout California.
46
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
$27,360,000 Certificates of Participation (2004A COP) were issued on May 12, 2004 to provide funds to finance the costs of certain
improvements to the wastewater collection, treatment and disposal system of the City. Principal is payable annually on October 1 in amounts
from $170,000 to $2,070,000 with final payment due October 1, 2024.
$26,745,000 Certificates of Participation (2002 COP) were issued in January 2002 to provide funds to finance the costs of constructing,
furnishing and equipping a new police building and jail for the City; to finance portions of certain other projects and to refund the outstanding
1995 and 1996 Certificates of participation. The 1995 Certificates of Participation (1995 COP) were sold in October 1995 to finance the City
Downtown Revitalization and the Cherokee Lane Beautification projects. The 1996 Certificates of Participation (1996 COP) were sold in August
1996 to finance the construction of the Hutchins Street Square Conference and Performing Arts Center. Principal is payable annually on October
1 in amounts from $730,000 to $1,600,000with final payment due October 1, 2031.
$46,760,000 2002 Variable Rate Demand Series A and $8,400,000 2002 Taxable Series B Electric System Revenue Certificates of Participation
were sold in January 2002. The proceeds of the 2002A Certificates of Participation were used to advance refund the 1999 Electric System
Certificates of Participation Series A and the 1999 Series B Capital Appreciation certificates, The 1999 Series A and 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. As of June 30, 2004, the outstanding balance of the advanced refunded certificates is
$43,957,682. The proceeds of the 2002B Certificates were deposited in the Rate Stabilization Fund and applied to certain power purchase costs
of the City. Principal for Series A is payable annually beginning 2011 to 2032 in amounts ranging from $1,175,000 to $ 3,460,000. Series B is
payable annually beginning 2002 to 2006 in amounts ranging from $1,100,000 to $3,600,000.
The interest rate on the 2002A Certificates is determined based on the "Weekly Rate Index" for weekly interest rate periods. "Weekly Rate
Index " is defined as The Bond Market Association Municipal Index as of the most recent date for which such index is published.
$15,625,000 Variable rate Certificates of Participation were issued for the Environmental Abatement Program of which $1,125,000 were issued
during the 2004 fiscal year. Interest on the Certificates accrue at a variable rate determined by a per annum interest rate equal to the three-
month LIBOR RATE (London InterBank Offered Rate) plus 20 percentage points, but in no event shall the variable rate exceed 30 percent per
annum. There is no set repayment schedule for both principal and interest for this issue; therefore this issue has not been included in the debt
service schedule on page 53.
$21,225,000 Revenue Certificates of Participation 2002 Series C and $22,740,000 Revenue Certificates of Participation Series D were issued to
buy out the energy purchase agreementwith Calpine.
In February 2001, the City entered into an energy purchase agreement (the Original Agreement) with Calpine Energy Services L.P. (Caipine) to
purchase 25 MW of energy at $65/mwh for a ten-year period beginning January 1, 2002. Since the execution of the Original Agreement, actions
of the State in connection with the energy market conditions, including the initiation of conservation programs, and other factors, have resulted in
lower electric load requirements and reduced energy costs throughout the State. As a result, the City's need for the energy purchased under the
47
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30.2004
Original Agreement to serve its load has been reduced. The Original Agreement was amended on September 4, 2002, and was divided into
three parts. The City sold its interests in the energy purchased under the Original Agreement to Calpine and nets the payments due from the
City with respect to its purchase of such energy against the payments due from Calpine with respect to its purchase of the City's rights to such
energy, On November 21, 2002, the City issued $21,225,000 Revenue Certificates of Participation 2002 Series C and $22,740,000 Revenue
Certificates of Participation 2002 Taxable Series D to buy out the amended contract in the amount of $42,406,175.
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.
Interest Rate Swaps
1999 $42 Million Forward Basis Swap
Objective:
As a means to lower its borrowing costs, the City executed a forward floating -to -floating ("Basis") swap in connection with its existing
$42,000,000 Electric System Revenue Certificates of Participation, 1999 Series A and B. The intention of the swap was to provide protection
against rising short-term interest rates since the City's net payment increases as rates rise.
Terms:
Under the swap, the City pays Citigroup (previously Salomon) a variable payment computed as The Bond Market Association Municipal Swap
Index' (BMA) and received a variable payment computed as 74.25% of the London Interbank Offered Rate (LIBOR). The swap has a notional
amount of $42 million and the associated fixed rate bonds had a $42 million principal amount at the time the swap was executed. The swap
began on July 15, 2003 and matures on September29, 2014. As of June 30, 2004, rates were as follows:
Rates
Interest rate swap:
Variable paymentto counterparty BMA 1.050%
Fixed paymentfrom counterparty 74.25% of LIBOR (1.016%)
Net interest rate swap payments (0.034%)
Fair Value:
As of June 30, 2004, the swap had a fair value of ($213,400). The fair value was estimated using the zero-coupon method. This method
calculates the future payments required by the swap, assuming that the current forward rates by the yield curve correctly anticipate future spot
rates, These payments are then discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon rate bonds due
on the date of each future net settlement on the swap.
48
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Credit Risk:
As of June 30, 2004, the City was not exposed to credit risk because the swap had a negative fair value. However, should interest rates change
and the fair value of the swap becomes positive, the City would be exposed to credit risk in the amount of the swap's fair value, The
counterparty was rated Aa I by Moody's investors Service, AA by Standard & Poor's, and AA+ by Fitch Ratings. To mitigate the potential for
credit risk, the counterparty is required to post collateral should the fair value exceed certain thresholds. In the event of a downgrade of the
counterparty below AAA by Standard & Poor's, the threshold amount is $10 million.
Basis Risk:
As noted above, the swap exposes the City to basis risk should the relationship between LIBOR and BMA converge. If a change occurs that
results in the rates' moving to convergence, the expected cost savings of the swap may not be realized.
Termination Risk:
The swap contract uses the International Swap Dealers Association Master Agreement, which includes standard termination events, such as
failure to pay and bankruptcy. The Schedule to the Master Agreement includes an "additional termination event." That is, the swap may be
terminated by the City if the counterparty's credit rating falls below BBB- as determined by Fitch or BBB- as determined by Standard & Poor's.
Also, if at the time of an early termination of the swap, if the swap has a negative fair value, the City would be liable to the counterparty for a
payment equal to the swap's fair value.
2002 $46.8 Million Step -Up Coupon Swap
Objective:
In connection with its issuance of $46,760,OOOof Electric System Revenue Certificates of Participation 2002 Variable Rate Demand Series A, the
City entered into a swap transaction with Salomon Smith Barney on January 2002. The intention of the swap was to change the City's variable
interest rate on the bonds to a synthetic fixed rate that steps up over time. The swap was structured with step-up coupons in order to provide the
City with lower debt service in the earlier years of the transaction.
Terms:
Under the swap, the City pays Citigroup (previously Salomon) a fixed rate with an initial coupon of 2.503%. Beginning July 1, 2005 the swap
coupon steps up to 3.749% and then to 4.945% on July 1, 2010 until maturity. In exchange, the City receives an initial variable rate equal to
59.65% of the I -month London Interbank Offered Rate (LIBOR). Beginning January 1, 2004 the percent of LIBOR received by the City stepped
up to 60.56% and then steps up to 62.92% of LIBOR on January 1, 2006 until maturity. The 4.945% coupon in the final period reflects the
above -market fixed rate required to offset the first two periods' below-market fixed rates of 2.503% and 3.749% respectively. The effective at -
market fixed rate for the entire_ swan term equals 3 85% or approximatelv, 61.71 % of LIBOR. The notional amount of the swap matches the
notional amount of the bonds outstanding in each year. The bonds' variable-rate coupons are assumed to be basea on The Bond orarkef
Association Municipal Swap IndexTm (BMA). The bonds and related swap mature on July 1, 2032. As of June 30, 2004, rates were as follows:
49
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Terms Rates
Interest rate swap:
Fixed payment to counterparty Fixed 2.503%
Variable payment from counterparty 60.56% of LIBOR (0.829%)
Net interest rate swap payments 1.674%
Variable rate bond payments BMA 1.040%
Synthetic interest rate on bonds 2.714%
Fair Value:
As of June 30, 2004, the swap had a fair value of ($4,708,300). The negative fair value of the swap is a result of the decline in interest rates
since the inception date of the swap. The fair value was estimated using the zero-coupon method. This method calculates the future payments
required by the swap, assuming that the current forward rates by the yield curve correctly anticipate future spot rates. These payments are then
discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon rate bonds due on the date of each future net
settlement on the swap.
Credit Risk:
As of June 30, 2004, the City was not exposed to credit risk because the swap had a negative fair market value. However, should interest rates
change and the fair value of the swap becomes positive, the City would be exposed to credit risk in the amount of the swap's fair value. The
counterparty was rated Aa I by Moody's Investors Service, AA by Standard & Poor's, and AA+ by Fitch Ratings. To mitigate the potential for
credit risk, the counterparty is required to post collateral should the fair value exceed certain thresholds. In the event of a downgrade of the
counterparty below AAA by Standard & Poor's, the threshold amount is $10 million.
Basis Risk:
As noted above, the swap exposes the City to basis risk should the relationship between LIBOR and BMA converge, changing the synthetic rate
on the bonds. If a change occurs that results in the rates' moving to convergence, the expected cost savings of the swap may not be realized.
Termination Risk:
The swap contract uses the International Swap Dealers Association Master Agreement, which includes standard termination events, such as
failure to pay and bankruptcy. The Schedule to the Master Agreement includes an "additional termination event." That is, the swap may be
terminated by the City if the counterparty's credit rating falls below Baa3 as determined by Moody's Investor Service or BBB- as determined by
Standard & Poor's. If the swap is terminated, the bonds would no longer carry a synthetic fixed interest rate. Also, if at the time of an early
termination of the swap, if the swap has a negative fair value, the City would be liable to the counterparty for a payment equal to the swap's fair
value.
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
2003 $42 Million Fixed -to -Floating Swap Termination
2003 $42 Million Fixed -to -Floating Swap
Objective:
On April 16, 2003 the City executed two transactions with Citibank, which comprised 1) the termination of an existing $42 million fixed -to -floating
swap maturing 2014 and 2) the execution of a new $42 million fixed -to -floating swap maturing 2009. The City initially entered into a swap in
September 1999 in order to covert its fixed-rate Bonds. into synthetic variable-rate debt. The fixed -receiver rate on the swap was 5.11 %. Since
interest rates had declined substantially since the City entered into the swap, the City received a net payment from Citibank to terminate the
swap in the amount of $4,743,000. The City executed a new $42 million fixed -to -floating swap to manage interest rate volatility in its liability
portfolio.
Terms:
Under the swap, the City receives a fixed rate of 4.00% and pays The Bond Market Association Municipal Swap Index TM (BMA)+100 bps. The
swap has a notional amount of $42 million and matures on January 15, 2009. As of June 30, 2004, rateswere as follows:
Terms Rates
Interest rate swap:
Variable payment to counterparty BMA + 100 bps 2.050%
Fixed paymentfrom counterparty Fixed (4.000%)
Net interest rate swap payments (1.950%)
Fair Value:
As of June 30, 2004, the swap had a fair value of ($113,500). The fair value was estimated using the zero-coupon method. This method
calculates the future payments required by the swap, assuming that the current forward rates by the yield curve correctly anticipate future spot
rates. These payments are then discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon rate bonds due
on the date of each future net settlement on the swap.
Credit Risk:
As of June 30, 2004, the City was not exposed to credit risk because the swap had a negative fair marketvalue. However, should interest rates
change and the fair value of the swap becomes positive, the City would be exposed to credit risk in the amount of the swap's fair value, The
counterparty was rated Aal by Moody's Investors Service, AA by Standard & Poor's, and AA+ by Fitch Ratings. To mitigate the potential for
credit risk, the counterparty is required to post collateral should the fair value exceed certain thresholds. In the event of a downgrade of the
cou nterparty below AAA by Standard & Poor's, the threshold amount is $10 million.
Basis Risk:
The swap does not expose the City to basis risk since the swap is not based on the LIBOR index. If a change occurs that results in BMA
increasing,the expected savings of the swap may not be realized.
51
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Termination Risk:
The swap contract uses the International Swap Dealers Association Master Agreement, which includes standard termination events, such as
failure to pay and bankruptcy. The Schedule to the Master Agreement includes an "additional termination event." That is, the swap may be
terminated by the City if the counterparty's credit rating falls below BBB- as determined by Fitch or BBB- as determined by Standard & Poor's. If
the swap is terminated, the bonds would no longer carry a synthetic fixed interest rate. Also, if at the time of an early termination of the swap, if
the swap has a negative fair value, the City would be liable to the counterparty for a payment equal to the swap's fair value.
Swap payments and associated debt.
Using rates as of June 30, 2004, debt service requirements of the variable-rate debt and net swap payments, assuming current interest rates
remain the same, for their term were as follows As rates vary, variable rate bond interest payments and net swap payments will vary.
2002 Electric Certificates of Particioation Series A
Fiscal Year
Variable -Rate Bonds
Interest Rate
Ending June 30
Principal
Interest
Swaps, Net
Total
2005
$
486,304
684,099
$ 1,170,403
2006
486,304
684,099
1,170,403
2007
486,304
1,266,728
1,753,032
2008
486,304
1,266,728
1,753,032
2009
486,304
1,266,728
1,753,032
2010-2014
3,720,000
2,374,840
7,798,567
13,893,407
2015-2019
7,620,000
2,047,916
7,689,531
17,357,447
2020-2024
9,865,000
1,596,062
5,992,907
17,453,969
2025-2029
12,725,000
1.011,634
3,798,491
17,535,125
2030-2032
12,830,000
275,444
1,034,240
14,139,684
$ 46,760,000
9,737,416
31,482,118
$ 87,979,534
52
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
Annual debt service requirements to maturity for certificates of participation are as follows:
Fiscal
Year Ending
Governmental Activities
Business -type
Activities
June 30,
Principal
Interest
Principal
Interest
2005
$ 500.000
1,171,672
$ 6,435,000
$ 5,061,897
2006
520,000
1,156,372
3,625,000
4,931,071
2007
535,000
1,140,547
3,620,000
5,405,065
2008
555,000
1,123,642
6,595,000
5,291,577
2009
565,000
1,104,874
4,320,000
5,052,923
2010-2014
3,175,000
5,172,243
26,125,000
22,889,447
2015-2019
3,905,000
4,390,064
27,675,000
16,763,921
2020-2024
4,925,000
3,340,594
22,710,000
10,633,585
2025-2029
6,280,000
1,958,000
16,300,000
5,008,697
2030-2032
4,570,000
350,250
15,645,000
1,309,684
Total
$ 25,530,000 $
20,908,258
$ 133,050,000
$ 82,347,867
Capital Leases
The City has entered into lease agreements for financing the acquisition of two fire trucks. These lease agreements qualify as capital leases for
accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of Inception date.
The assets acquired through capital leases are as follows:
Governmental
Activities
Asset:
Vehicles $2,307,123
Less accumulated depreciation (701,239)
Total $ 1,605,884
53
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30,2004
The present values of future minimum capital lease payments as of June 30, 2004, are as follows:
Fiscal Years
Ending
2005
$ 279,346
2006
279,348
2007
279,346
2008
279,348
2009
148,003
2010-2011
296,006
Total minimum lease payments
Less amounts representing interest
Present value of minimum capital lease payments
Special Assessment District Debt
1,561,401
(207,050)
1,354,351
The City issued limited obligation improvement bonds on July 22, 1996, for the "Lodi Central City Revitalization Assessment District." These
bonds have no governmental commitment and debt service is recorded in an Agency Fund. These bonds were issued under the Improvement
Act of 1915 and will mature in the year 2011. The City's liability in the event of delinquent assessment shall not exceed the balance of the
established Reserve Fund. The amount outstanding as of June 30, 2004, is $1,130,000.
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; Wallace Computer Services $3,000,000; and Luster -Cal
Nameplate Corporation $3,000,000. These bonds are special obligation bonds only, payable solely out of the bond revenues or other sources of
the above companies and are not a pledge of the general credit of the City. The City is not obligated for the redemption or administration of
these industrial development bonds.
Woodbridge Irrigation District Bonds
On October 8, 2003, the City lent its name to the Woodbridge Irrigation District (the "District") in the procurement of $11.745 million 2003
Revenue Certificates of Participation, to provide funds to finance the costs of construction of a new diversion dam on the Mokelumne River and
related facilities of the water district. A significant portion of the District's sources of payment for the 2003 Certificates are expected to be derived
from amounts to be received by the District from the City of Lodi pursuant to an Agreement for purchase of water from the Woodbridge Irrigation
54
(9)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
District by the City of Lodi, dated May 13, 2003 (the "Lodi Water Sales Agreement'). Under the agreement, the City will purchase 6,000 acre feet
of water per annum from the District for 40 years.
Nature and Purpose of Reported Fund Equity
The following is a summary of reserved, unreserved -designated and unreserved -undesignated fund balances at June 30, 2004:
Reserved for:
Library
Encumbrances
Advances to other funds
Inventory
Total Reserved
Unreserved -designated for:
Specific projects and programs
Total Designated
Unreserved - undesignated
Total Fund Balances
Other
General Governmental Total
$ 629,506
$
629,506
313,254
3,060,667
3,373,921
240,040
716,770
956,810
113,538
113,538
1,296,338
3,777,437
5,073,775
6,254,322
6,254,322
6,254,322
6,254,322
156,650
156,650
$ 1,452,988
10,031,759 $
11,484,747
Reserved Fund Balance
Reserved represents that portion that is legally segregated for specific purposes and is not available for discretionary appropriation.
Unreserved -Designated Fund Balance
Designated represents that portion for which the City has made tentative plans.
Unreserved -Undesignated Fund Balance
Undesignated represents that portion which is available for budgeting in future periods.
«y
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
(10) Defined Benefit Pension Plan
(a) Plan Description
The City of Lodi contributes to the California Public Employees' Retirement System (PERS); an agent multiple -employer public employee defined
benefit pension plan. PERS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members
and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS' annual financial report may
be obtained from their Executive Office- 400 P Street, Sacramento, CA 95814.
(b) Funding policy
Participants are required to contribute 7% (9% for safety employees) of their annual covered salary. The City makes the contributions required
of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate; the current rate is
0.0% for miscellaneous employees, 17.399% for fire employees and 17.386% for police employees, of annual covered payroll. The contribution
requirements of plan members and the City are established and may be amended by PERS.
(c) Annual Pension Cost
For fiscal 2004, the City's annual pension cost of $1,383,892 for PERS was equal to the City's required and actual contributions. The required
contribution was determined as part of the June 30, 2001, actuarial valuation using the entry age normal actuarial cost method. The actuarial
assumptions included (a) 8.25% investment rate of return (net of administrative expenses) (b) projected annual salary increases that vary by
age, length of service, and type of employment (c) 3.75% payroll growth, and (d) 3.50% inflation. The actuarial value of PERS assets was
determined using techniques that smooth the effects of short-term volatility in the market value of investments over a three-year period
(smoothed market value). PERS unfunded actuarial liability is being amortized as a level percentage of projected payroll on a closed basis.
Amortization of the remaining period varies: (a) safety police plan over 20 years (b) safety fire plan over 20 years, and (c) miscellaneous plan
over 19 years as of the valuation date.
56
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
d) Trend Information
Three -Year Trend information ($ Amounts in Thousands):
Annual
Percentage
Net
Fiscal Year
Pension
of APC
Pension
Ended
Cost (APC)
Contributed
Obligation
6/30/02
100%
$0
569
6/30/03
543
100%
$0
6/30/04
1,384
100%
$0
(11) Post -Retirement Health Care Benefits
The City provides no post -employment benefits for its employees. However, employees hired prior to July 1, 1994, who retire after ten years of
service, may elect to convert accumulated sick leave time 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- "Bank"
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.
b) Option II — "Conversion"
The number of accumulated hours is multiplied by 50% and converted into days. The City pays one month's premium for employee and
dependents for each day. For each year of employment in excess of ten years, 2.5% is added to the 50%. The employee must pay any increase
in premiums.
c) Option III — "Cash -Out"
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.
d) Option IV —"Service Credit"
A retiring employee will be able to convert unused sick leave to service credit for CALIPERS retirement purposes.
57
(12)
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
Claims and Benefits
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to
employees; and natural disasters. The City is self-insured as discussed in the following paragraphs for which liabilities are recorded in the
Internal Service Fund.
The City is self-insured for general liability up to the first $500,000 per occurrence with claims from $500,000 to $25,000,000 per occurrence and
in the aggregate insured through the California Joint Powers Risk Management Authority. (See note 14)
The City is self-insured for workers' compensation up to the first $250,000 per claim. Any claims of $250,000 up to California statutory limits are
covered under a purchased policy through the membership with the Local Agency Workers' Compensation Excess Joint Powers Authority. (See
note 14).
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 $5,508,000 at June 30, 2004, for all self-insured claims in the Internal Service Fund that includes an amount for
incurred but not reported claims. The liability amount is based on the requirements of Governmental Accounting Standards Board Statement No.
10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable
that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. In the opinion of
the City, the amounts accrued are adequate to cover claims incurred but not reported in addition to known claims.
Changes in the self-insurance liability for fiscal years ended June 30, 2004 and 2003 are as follows:
Current -Year
Claims and Changes Claim
Beginninq in Estimates Payments
FY 02-03 $ 2,733,000 2,141,383 (1,583,802)
FY 03-04 $ 3,290,581 3,860,633 (1,643,214)
58
Ending
$ 3,290,581
$ 5,508,000
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
(13) 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) that was formed in 1968 as a
joint powers agency. Its membership consists of eleven cities with publicly owned electric utility distribution systems, one irrigation district, one
public utility district, one port authority and four other associate member entities. NCPA is generally empowered to purchase, generate, transmit,
distribute and sell electrical energy. Members participate in the projects of NCPA on an elective basis. A commission comprising of one
representative from each member organization governs NCPA. The commission is responsible for the general management of the affairs,
property and business of NCPA. Under the direction of the general manager, the staff of NCPA is responsible for providing various
administrative, operating and planning services for NCPA and its associated power corporations.
Project Financing and Construction
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.
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 rate with those of the non -
defaulting Project Participant thereunder; provided, however, that the sum of such increase for any non -defaulting Project Participant shall not
exceed, without written consent of such non -defaulting Project Participant, an accumulated maximum of 25% of the non -defaulting Project
Participant's original Project Entitlement Percentage Share.
General Operating Reserve with NCPA
Members of NCPA established a general operating reserve in 1992 for the purposes of providing a vehicle to fund reasonably foreseeable
contingent liabilities. It was setup 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.
59
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
As of June 30, 2004, the City's balance in the NCPA General Operating Reserve, which has been credited with annual interest earnings and
settlements, is approximately $1,071,000.
Proiect Participation
The NCPA members and their percentage share at June 30, 2003.
which is the most recent available data,
are as follows:
Hydro
Combustion
Multiple
Geothermal
Electric
Turbine
Capital
Transmission
Project
Project
Project #1
Facilities
Project
Alameda
16.8825
10.00
13.092
19.00
30.3590
Biggs
0.2270
0.4082
Gridley
0.3360
0.7103
Healdsburg
3.6740
1.66
3.500
6.6068
Lodi
10.2800
10.37
34.780
39.50
18.4861
Lompoc
3.6810
2.30
3.500
5.00
6.6194
Palo Alto
22.92
11.0736
Plumas-Sierra Rural Electric Cooperative
0.7010
1.69
1.090
1.4647
Roseville
7.8830
12.00
13.584
36.50
14.1756
Santa Clara
44.3905
37.02
25.000
Turlock Irrigation District
6.3305
Ukiah
5.6145
2.04
5.454
10.0963
Bulk power purchased by the City through NCPA amounted to $30,138,915 during the year ended June 30, 2004 and is reflected in utilities
expense in the electric enterprise fund.
NCPA Geothermal Proiect
A purchase power agreement with NCPA obligates the City for a 10.28% share of the operating costs and debt service of two of NCPA's 110 -
megawatt steam powered plants, Project Number 2 and Project Number 3. Outstanding long-term debt related to this project was approximately
$261 million at June 30, 2003.
In addition to federal geothermal leasehold, steam wells, gathering system and related facilities, the project consists of two electric generating
stations (Plant 1 and Plant 2). Each plant has two 55MW turbine generator units utilizing low temperature geothermal steam; associated
electrical, mechanical and control facilities; a heat dissipation system; a steam gathering system; a transmission tapline; and, other related
60
1 1 1 J
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
facilities. Geothermal steam for the project is derived from the geothermal property, which includes wellpads, access roads, steam wells and
reinjection wells.
Calaveras Hydroelectric Project
NCPA contracted to finance, manage, construct and operate Hydroelectric Project Number One for the licensed owner, Calaveras County Water
District. In exchange, NCPA has the right to the electric output of the project for 50 years from February 1982. NCPA has also the option to
purchase power from the project in excess of the District's requirements for the subsequent 50 years, subject to regulatory approval.
Under a power purchase agreement the City is obligated to pay 10.37% of the debt service and operating costs. At June 30, 2003,
approximately $506 million in long-term debt used to finance this project was outstanding.
NCPA Combustion Turbine Proiect
The project consists of five combustion turbine units, each nominally rated at 25 megawatts. Two such units are located in Roseville, two in
Alameda and one in Lodi. The project provides capacity during peak load periods and emergency capacity reserves. Excess capacity and
energy from the project are also sold to other entities from time to time. Under the NCPA power agreement, the City is obligated to pay 34.78%
of the debt service and operating costs. At June 30, 2003 approximately $28 million in long-term debt was outstanding.
Transmission Proiect
The project was undertaken to meet certain obligations of NCPA under the NCPA/PG & E Interconnection Agreement. The project includes an
ownership interest in PG & E's 230kv Castle Rock to Lakeville Substation Transmission Line in Sonoma County, additional firm transmission
rights in that Transmission Line, and a central scheduling and dispatch facility in service at the NCPA headquarters in Roseville, California.
Under a power purchase agreement, the City is obligated to pay 18.4861% of the debt service and operating costs. At June 30, 2003,
approximately $6 million in long-term debt was outstanding.
Capital Facilities Proiect
The Project consists of one 49.9 megawatt natural gas-fired steam injected combustion turbine generator unit located in Lodi, California.
Wastewater is reclaimed from the City of Lodi's White Slough water pollution control facility, processed to eliminate contaminants, and used in
the turbine to produce steam for power enhancement and emissions control.
Under a power purchase agreement, the City is obligated to pay 39.5% of the debt service and operating costs. At June 30, 2003.
approximately $68 million in long-term debt was outstanding.
61
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
The following are the most recent available audited condensed financial statements of NCPA:
Combined Balance Sheet
June 30, 2003
Assets
Current assets $ 69,596,000
Restricted assets 203,121,000
Electric plant, net 500,396,000
Other assets and deferred charges 271,743,000
Total assets
$ 1,044,856,000
Combined Statement of Revenue and Expenses
Year ended June 30, 2003
Sales to participants for resale
$ 192,563,000
Operating expenses
(139,940,000)
Other revenues (expenses)
(62,292,000)
Future recoverable costs
22,342 000
Net revenues before refunds
12,673,000
Refunds to participants
(12,490,000)
Net revenues
183,000
Accumulated net revenues,
beginning of year
18,315,000
Accumulated net revenues,
end of year
$ 18,498,000
Liabilities and Capitalization
Current portion of long-term debt $ 52,935,000
Other current liabilities 44,396,000
Other liabilities and deferred credits 117,260,000
Long-term debt 811,767,000
Accumulated net revenues 18,498,000
Total liabilities and capitalization $ 1,044,856,000
Combined Statement of Cash Flow
Year ended June 30, 2003
Net cash provided by operating activities
$ 98,019,000
Net cash provided by investing activities
125,167,000
Net cash used in capital and related
financing activities
(175,162,000)
Net cash provided by noncapital
and related financing activities
3,136,000
Increase in cash and cash equivalents
51,160,000
Cash and cash equivalents, beginning
of year 68,037,000
Cash and cash equivalents end of year $ 119,197,000
At June 30, 2003, NCPA's total outstanding long-term debt was $864,702,000 at an average interest rate of 5%. The current portion of long-term
debt at June 30, 2003, was $52,935,000.
Complete financial information for NCPA may be obtained at the following administration office:
Northern California Power Agency
180 Cirby Way
Roseville, CA 95678
62
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
Transmission Agency of Northern California
The Transmission Agency of Northern California (TANC) was organized under the California Government Code pursuant to a joint powers
agreement entered into by fifteen Northern California utilities including the City of Lodi. The purpose of TANG 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 TANG's activities can be financed or recovered through assessment of its
members or user charges through transmission contracts with its members. Each TANG member has agreed to pay a pro rata share of the
costs to operate TANG and has the right to participate in future project agreements. The joint power agreement remains in effect until debt
obligations and interest thereon have been paid, unless otherwise extended by the members.
Increase in Non -defaulting 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 Transmission Project
The project is a 339 -mile long, 500 -kilovolt alternating current transmission project between Southern Oregon and Central California. The project
is operated in coordination with the Pacific AC Intertie as a part of the California -Oregon Intertie (COI) within the Western System Coordinating
Council (WSCC) region. The WSCC approved rating of the COI is 4,800 MW and the Pacific Direct Current Intertie (PDCI) is 3,100 MW for a
combined total of 7,900 MW of transfer capability. Depending on the time of year, operational transfer capability of the combined COI and PDCI
is between 6,900 MW and 7,900MW.
TANG, California Department of Water Resources (CDWR), Western, and five other parties have agreed to an Interim Participation Agreement
(IPA) under which project participant is granted a percentage entitlement in project transfer capability and is required to pay a percentage of the
costs. Pursuant to the IPA and a subsequent agreement with Western, TANG is entitled to use approximately 1,242 MW, and is obligated to pay
an average of approximately 73 percent of the operating costs associated with the project.
In 2005, CDWR has an option to purchase, at the project participants' original cost, approximately 6 percent of entitlement in the project's
transfer capability. If this option is exercised, TANC's percentage of entitlement in project transfer capability may be reduced pro -rata.
Under the TANG joint powers agreement, the City is obligated to pay 1.89% of its debt service and operating costs. At June 30, 2003,
approximately $402 million in long-term debt was outstanding of which $21 million is considered current.
PIX
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
Complete financial information for TANC may be obtained at the following administration office:
Transmission Agency of Northern California
3100 Zinfandel Drive, Suite 600
Sacramento, CA 95670
(14) Membership in Insurance Pools
California Joint Powers Risk Management Authority
The City is a member, along with twenty-three 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 public officials' errors and omissions losses because adequate insurance is not available in the
commercial insurance market. CJPRMA has a twenty-one member Board of Directors, including a director from the City of Lodi. The Board
members elect officers of CJPRMA every two years.
The ultimate cost of the program to the City depends on the catastrophic losses of all members, as well as the City's own loss experience and
will be determined 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, 2004, deposits of $248,474 were paid to CJPRMA.
The participants and their percentage shares at June 30, 2004, are as follows: City of Alameda 3.57%, CCCMRMIA 9.20%, Chico 1.65°/x,
Central San Joaquin Valley Risk Management Authority 10.51 %, Fairfield 2.80%, Fremont 5.97%, Livermore 2.43%, Lodi 2.18%, Manteca .53%,
NCCSIF 7.71%, Petaluma 1.78%, Pomona (.63%), PERMA (.71%), Redding 3.79%, Redwood Empire Municipal Insurance Fund 6.46%,
Roseville 3.81%, San Leandro 1.91%, San Rafael 2.48%, Santa Rosa 5.95%, Small Cities Organized Risk Effort 1.51%, Stockton 6.07%,
Sunnyvale 5.83%, Vacaville 2.08%, Vallejo 2.51%, and Yolo County Public Agencies Risk Management Insurance Authority 10.61%.
Local Agency Workers' Compensation Excess Joint Powers Authority
The City, along with twenty-five 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 City paid $237,346 in deposits
to LAWCX during the fiscal year ended June 30, 2004.
The participants at June 30, 2003, are as follows: Alameda, ABAG, BCJPIA, Benicia, CCCSIF, CCCTA, Central San Joaquin Valley Risk Mgmt
Authority (CSJVRMA), City of Clovis, East Bay Regional Park District, Fremont, City of Gilroy, Livermore, Lodi, Los Gatos, Merced, Morgan Hill,
Newark, PARSAC, Placentia, Roseville, Small Cities Org. Risk Effort (SCORE), SDWCA, South Lake Tahoe, Suisun City, Vacaville, Vallejo and
Vector Control JPA.
64
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
California Transit Insurance Pool
The City, along with thirty other public agencies is a member of California Transit Insurance Pool (CaITIP), a joint powers insurance authority
which was formed for the purpose of sharing the risk of property damage, bodily injury, personal injury and public officials errors and omissions
losses for public transit systems.
Liability protection coverage is provided under two programs:
Program I applies to members who choose to utilize CaITIP's adjuster and /or those with a $0 deductible.
Program II applies to members with self-insured retentions who choose to provide their own adjusting services.
CaITIP purchases excess insurance over its $500,000 retention up to $20 million per occurrence. Each member is provided with $5 million in
excess of the pooled retention and has the option to choose one or both of two additional layers for the full $20 million.
CaITIP also provides physical damage coverage to its members. This coverage program is optional for all members and offers damage or loss
protection for transit, staff and maintenance vehicles to transit operators. CaITIP self -insures to $100,000, under which members have the
option of five levels of deductible ranging from $500 to $10,000 per vehicle. Claims are administered by the CaITIP's adjuster.
4.
re have een no reductions
fThe City rom the prior yearr anOd therepwere no insurance settlements he 'ements iscaln excess of nsu anceear ended June 3, 2 coverage gee n any of in insurance coverage
he last thee years.
Self-
insured Limit Physical
Program Retention (in millions) Damage
City of Lodi Transit System
I Prefunded 5 X
(15) Deficit in Fund Equity
Internal Service Fund -Claims and Benefits - A deficit in fund equity at June 30, 2004, in the amount of $3,577,932 in the Internal Service Fund
both incurred and incurred -but -not -reported (IBNR) claims. The City plans to implement the deficit
is due to the self-insurance liability to cover
to gradually eliminate the deficit in the Internal Service Fund.
reduction plan recommended by an actuary
65
CITY OF LODI
Notes to Basic Financial Statements (continued)
June 30, 2004
Water Fund - A deficit in fund equity at June 30, 2004, in the amount of $1,153,722 in the Water Fund is primarily due to the accrued interest on
the Environmental Abatement Certificates of Participation. The City increased its water rates in 2004 not only to eliminate this deficit but also to
replace and upgrade water lines in the older sections of the City.
(16) Commitments and Contingencies
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.
Last year the City was advised that its former outside counsel, Envison Law Group, believed the City owed approximately $6 million in attorney
fees. However, the statute of limitations on any such claim has now expired and there is no potential liability on the part of the City.
Environmental Forensic Investigations (EFI) was hired by the City's former outside counsel, Envision Law Group. City rejected EFI's claim on
April 22, 2004. City received service of EFI's lawsuit on October 7, 2004, claiming $894,773.25 in monetary damages. City's outside counsel,
Folger, Levin & Kahn has answered the Complaint and filed a Cross -Complaint for fraud, False Claims Act and restitution. Although the City is
confident it will prevail in the action, it is too early to access the outcome with certainty.
The City received and rejected claims for a traffic accident that occurred at a crosswalk involving two students in front of Tokay High School.
The City anticipates that lawsuits will be filed for a wrongful death and severe injuries based on allegation of a dangerous condition of public
property and although it is too early to assess liability, maximum exposure is estimated by the City Attorney at $1-3 million. There is also
reasonable possibility the City may prevail in the litigation based on the comparative fault of the minor and the fault of the driver.
Arbitrage Earnings Rebate Liability - Arbitrage earnings are defined as income earned on the unexpended tax-exempt certificate proceeds in
excess of that which would have been earned had the moneys been invested in securities with a yield of the effective rate of the certificates.
Currently, arbitrage earnings must be rebated to the United States Treasury every five years from the date of August 18, 1999, for the Electric
System Certificates of Participation. The City has recorded an arbitrage liability of $205,520 as of June 30, 2004 that is included in the Electric
Fund's accounts payable and other liabilities.
M.
REQUIRED SUPPLEMENTARY INFORMATION
Actuarial
Valuation
Date
6/30/01
6130/02
6/30/03
city of Lodi
Required Supplementary Information
Schedule of Funding Progress - Pension Plan
June 30, 2004
(in thousands of dollars)
Unfunded
Entry Age
(Overfunded)
Actuarial
Actuarial
Accrued
Asset Value
Liability
(A)
(B)
[(B) - (A)]
[(A) / (B)]
140,463
125,752
130,903
134,344
132,001
149,935
Unfunded
Unfunded
(Overfunded)
(Overfunded)
Actuarial
Actuarial
Accrued
Funded
Liability
Ratio
[(B) - (A)]
[(A) / (B)]
(C)
([(B) — (A)]/(C))
(14,711)
112%
3,441
97%
17,934
88%
67
Unfunded
(Overfunded)
Actuarial
Liability as
Covered
Percentage of
Payroll
Covered Payroll
(C)
([(B) — (A)]/(C))
21,446
(68.60%)
23,361
14.73%
24,978
71.80%
CITY OF LODI
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERALFUND
Year ended June 30, 2004
REVENUES
Taxes
Licenses and permits
Intergovernmental revenues
Charges for services
Fines, forfeits and penalties
Investment and rental income
Miscellaneous revenue
Total revenues
EXPENDITURES
Current
General government
Public protection
Public works
Library
Parks and recreation
Capital outlay
Debt service
Principal payments
Interest and fiscal charges
Total expenditures
DEFICIENCY OF REVENUES UNDER EXPENDITURES
OTHER FINANCING SOURCES
Transfers in
Capital lease proceeds
Other sources and uses
Total other financing sources
NET CHANGE IN FUND BALANCE
FUND BALANCE, beginning of year
Original Final Variance with
Budget Budget Actual Final Budget
$ 13,690,735
1,555, 905
13,007,831
1,794,930
870,090
776,260
13,690,735
14,065,774 $
1,555,905
2,021,234
13,007,831
11, 964,723
1,646,330
2,410,024
870,090
1,084, 500
331,880
258,874
143,280 143,280 166,710
31, 839, 031 31,246,051 31,971, 839
11, 314, 588
11,235,796
10,815,200
17,135,212
17,277,895
17,263,236
6,446,056
6,445,087
6,224,844
1,383,085
1,390,500
1,356,213
3,614,444
3,741,667
3,411,552
883,037
883,037
375,039
465,329
(1,043,108)
763,894
214,410
(73,006)
23,430
725,788
420,588
14,659
220,243
34,287
330,115
187,190
187,190
187,190
30,324
30,324
30,324
40,110,899
41,191,496 -
40,171,604 1,019,892
(8,271,868) (9,945,445) (8,199,765) 1,745,680
6,326,577 7,203,008 7,203,008
883,037 883,037
2,530,001 1,375,588 (1,375,588)
8,856,578 9,461,633 8,086,045 (1,375,588)
584,710 (483,812) (113,720) 370,092
3,109,967 1,566,708 1,566,708
FUND BALANCE, end of year $ 3,694,677 1,082,896 1,452,988 $ 370,092
68
Tha ote to the required supplementary information is an integral part of this schedule.
1 J J ) 1 l 1 I ) f 1 1 I I 1
CITY OF LODI
Notes to the Required Supplementary Information
June 30, 2004
Budgetary Data
The City adopts an annual budget for the general and special revenue funds. These budgets are prepared in accordance with generally
accepted accounting principles. As part of the City's internal controls, the City maintains budgetary controls. The objective of these
budgetary controls is to ensure compliance with the legal provisions embodied in the annual appropriated budget approved by the City
Council. The accompanying financial statements present budget and actual data only of funds for which an annual budget was adopted.
The budgets of capital projects are primarily "long-term" budgets that emphasize the major programs and capital project plans extending
over a number of years. Due to the long-term nature of these projects, "annual" budget and actual comparisons are not considered
meaningful. Formal budgetary integration is not employed for debt service funds since effective budgetary control is alternatively achieved
through the bond indenture provisions. Accordingly, no budgetary information is included in the accompanying 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 financial statements:
Original Budget
On or prior to the first regular Council meeting in June of each year, the City Manager submits to the City Council a proposed
Two-year Financial Plan and Budget for two fiscal years commencing July 1. The budget includes proposed expenditures and the
means of financing them.
Budgeted revenues are adopted by the City Council at the time the budget is approved. Budgeted revenues are modified when
the tax base changes, when fees are modified or when new revenue sources are identified.
Public hearings are conducted during meetings of the City Council to obtain citizens' comments. Prior to July 1, the budget is
legally enacted through passage of a resolution.
Final Budget
The final budgetary data presented in the basic financial statements reflects the following changes to the original budget:
• Budgeted expenditures represent original appropriations adjusted by budget transfers and appropriation amendments.
The legal level of budgetary control (that is, the level at which expenditures can not legally exceed the appropriated
•'
CITY OF LODI
Notes to the Required Supplementary Information (continued)
June 30, 2004
• 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
70
COMBINING AND INDIVIDUAL FUND STATEMENTS
AND SCHEDULES
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2004
Assets
Cash and investments
Restricted assets
Receivables:
Accounts
Property taxes
Interest
Due from other funds
Due from other governmental agencies
Loan receivables
Advances to other funds
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable and other liabilities
Due to other funds
Advances from other funds
Deferred revenue
Total liabilities
Fund Balances :
Reserved for encumbrances
Reserved for advances to other funds
Unreserved -designated
Total fund balances
Total liabilities and fund balances
71
Special Capital
Revenue Projects Total
2,639,879 7,152,720 $ 9,792,599
1,729,169 1,729,169
272,974
12,589
285,563
477,188
389,544
389,544
9,832
23,406
33,238
477,188
1,009,162
1,486,350
1,441,034
441,110
1,882,144
1,084,000
11,474,470 $
1,084,000
716,770
716,770
5,924,907
11,474,470 $
17,399,377
537,378
105,479 $
642,857
477,188
716,770
477,188
716,770
4,036,803
4,753,573
1,084,000
410,000
1,494,000
2,815,336
4,552,282
7,367,618
2,575,463
485,204
3,060,667
716,770
716,770
534,108
5,720,214
6,254,322
3.109,5TT
6,922,188
10,031,759
$ 5,924,907
11,474,470 $
17,399,377
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
Year ended June 30, 2004
Revenues:
Taxes
Intergovernmental revenues
Charges for services
Investment and rental income
Miscellaneous revenue
Total revenues
Expenditures:
Current:
Public protection
Public works
Capital outlay
Debt service:
Principal payments
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning of year
Fund balances, end of year
1 j 1 I
Special
Debt
Capital
Revenue
Service
Projects
Total
$ 758,242
2,084,332 $
2,842,574
4,563,180
129,144
4,692,324
870,982
1,197,306
2,068,288
54,785
223,590
278,375
92,462
213,930
306,392
6,339,651
3,848,302
10,187,953
227,304
227,304
1,077,190
1,190
1,078,380
3,126,094
6,031,624
9,157,718
571,605
571,605
1,204,232
10,920
1,215,152
4,430,588
1,775,837
6,043,734
12,250,159
1,909,063
(1,775,837)
(2,195,432)
(2,062,206)
25,153
1,775,837
770,177
2,571,167
(2,231,392)
(4,627,869)
(6,859,261)
(2,206,239)
1,775,837
(3,857,692)
(4,288,094)
(297,176)
(6,053,124)
(6,350,300)
3,406,747
12,975,312
16,382,059
$ 3,109,571
6,922,188 $
10,031,759
72
NONMAJOR GOVERNMENTAL FUNDS
Nonmajor Governmental Funds include:
Special Revenue Funds account for the proceeds of specific revenue sources that are restricted by law or administrative action to
expenditures for specified purposes, other than those for major capital projects;
Debt Service Fund account for the accumulation of resources for the repayment of principal and interest on general long-term debt;
Capital Project Funds account for the financial resources to be used for the acquisition or construction of major capital facilities, other than
those financed by proprietary funds.
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
SPECIAL REVENUE FUNDS
Public Safety
This fund was established to account for the revenues and expenditures related to the City's share of property forfeited by persons convicted of
possession and selling illegal drugs and the State of California auto theft prosecution moneys.
Streets Fund
This fund was established to account for the following:
Gas Tax
To account for revenues and expenditures apportioned to the City under the Streets and Highway Code. Portions
of the tax rate levied by the State of California on all gasoline purchases are allocated to cities throughout the State on a population
basis. These funds are restricted for expenditure by the State of California for street related purposes only.
Development Impact Mitigation Fees
To account for impact fees charged to provide for the building of various storm drains and street improvements needed to serve new
development. The fees are calculated on a per acre basis and are collected at subdivision final map approval or with building permit
stage effective November 4, 1991.
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.
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.
73
HOME Program/Community Development Block Grants
and moderate -income residents to develop a suitable living environment and expand economic opportunities; and account for moneys provided for
adequate and affordable housing for low and very low-income residents.
74
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
June 30, 2004
ASSETS
Cash and Investments
Receivables:
Accounts
Interest
Due from other funds
Due from other governmental agencies
Loan receivables
TOTALASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and other liabilities
Due to other funds
Advances from other funds
Unearned revenue
TOTAL LIABILITIES
FUND BALANCES
Fund balances:
Reserved for encumbrances
Unreserved -designated for specific projects and programs
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
Public
Safety Streets Transportation
$ 318,506 2,321,209 164
HOME Program &
Community
Development
Block Grants
Total
$ 2,639,879
7,765
225,575
39,634 272,974
918
8,914
9,832
477,188
477,188
30,255
907,841
502,938 1,441,034
1,084,000 1,084,000
$ 357,444
3,940,727
39,798 1,586,938 $ 5,924,907
$ 7,644 503,984
716,770
71644 1,220,754
25,750 $ 537,378
477,188 477,188
716,770
1,084,000 1,084,000
1,586,938 2,815,336
16,616 2,558,847 2,575,463
333,184 161,126 39,798 534,108
349,800 2,719,973 39,798 3,109,571
$ 357,444 3,940,727 39,798 1,586,938 $ 5,924,907
75
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year ended June 30, 2004
REVENUES
Taxes
intergovernmental revenues
Charges for services
Investment and rental income
Miscellaneous revenue
Total revenues
EXPENDITURES
Current
Public protection
Public works
Capital outlay
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES. beginning of year
FUND BALANCES, end of year
HOME Program &
(38,767) 1,914,416 33,414
1,909,063
25,153 25,153
(2,231,392) (2,231,392)
(2,206,239) (2,206,239)
(38,767)
(291,823)
33,414
Community
388,567
Public
6,384
3,406,747
Development
2,719,973
Safety
Streets
Transportation
Block Grants
Total
$
758,242
$
758,242
186,083
3,260,540
39,367
1,077,190
4,563,180
870,982
870,982
2,454
51,833
498
54,785
92,462
92,462
188,537
5,034,059
39,865
1,077,190
6,339,651
227,304
227,304
1,077,190
1,077,190
3,119,643
6,451
3,126,094
227,304
3,119,643
6,451
1,077,190
4,430,588
(38,767) 1,914,416 33,414
1,909,063
25,153 25,153
(2,231,392) (2,231,392)
(2,206,239) (2,206,239)
(38,767)
(291,823)
33,414
(297,176)
388,567
3,011,796
6,384
3,406,747
$ 349,800
2,719,973
39,798
$ 3,109,571
76
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year -ended June 30, 2004
REVENUES
Intergovernmental revenues
Investment and rental income
Total Revenue
EXPENDITURES
Current
Public protection
Total Expenditures
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
77
PUBLIC SAFETY
FINAL
BUDGET
ACTUAL VARIANCE
$ 186,063
186,083
227,304
2,454 2,454
186,083
188,537 2,454
425,145
227,304
197,841
425,145
227,304
197,841
(239,062)
(38,767)
200,295
388,567
388,567
$ 149,505
349,800
200,295
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year -ended June 30, 2004
REVENUES
Taxes
Intergovernmental revenues
Charges for services
Investment and rental income
Miscellaneous revenue
Total Revenue
EXPENDITURES
Capital outlay
Total Expenditures
EXCESS OF REVENUE OVER
EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
78
STREETS
FINAL
3,119,643
4,026,289
BUDGET
ACTUAL
VARIANCE
$ 838,370
758,242
(80,128)
5,217,000
3,260,540
(1,956,460)
1,144,000
870,982
(273,018)
51,833
51,833
20,000
92,462
72,462
7,219,370
5,034,059
(2,185,311)
7,145,932
3,119,643
4,026,289
7,145,932
3,119,643
4,026,289
73,438
1,914,416
1,840,978
25,153
25,153
(2,231,392)
(2,231,392)'
(2,206,239)
(2,206,239)
(2,132,801)
(291,823)
1,840,978
3,011,796
3,011,796
$ 878,995
2,719,973
1,840,978
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year -ended June 30, 2004
REVENUES
Intergovernmental revenues
Investment and rental income
Total Revenue
EXPENDITURES
Capital outlay
Total Expenditures
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
79
TRANSPORTA
FINAL
BUDGET ACTUAL VARIANCE
$ 39,367 39,367
498 498
39,367 39,865 498
45,751 6,451 39,300
45,751 6,451 39,300
(6,384) 33,414 39,798
6,384 6,384
$ 39,798 39,798
CITY OF LODI
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
Year -ended June 30, 2004
HOME PROGRAM and COMMUNITY DEVELOPMENT
BLOCK GRANTS
REVENUES
Intergovernmental revenues
Total Revenue
EXPENDITURES
Current
Public works
Total Expenditures
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
1 l 1 J 1 1 1 1
FINAL
BUDGET ACTUAL VARIANCE
$ 3,321,038 1,077,190 (2,243,848)
3,321,038 1,077,190 (2,243,848)
3
3,321,038 1,077,190 2,243,848
3,321,038 1,077,190 2,243,848
NONMAJOR GOVERNMENTAL FUNDS
CAPITAL PROJECT FUNDS
CAPITAL PROJECT FUNDS
Vehicle and Equipment Fund
This fund was established to account for the financing and replacement of vehicles and equipment for all funds of the City with the exception of the
Enterprise Funds. Financing is primarily provided through operating transfers from other funds, interest earnings and sales of surplus
property.
Library Fund
This fund is used to account for the acquisition, construction and installation of capital facilities for the Library.
Subdivision Fund
This fund is used to account for construction and installation projects dealing with subdivision work for others.
Hutchins Street Square Fund
When the old Lodi High School burned down, the City purchased the property and renamed it Hutchins Street Square. The Old Lodi High Site
Foundation was established and this organization organizes events to raise money for the capital restoration of Hutchins Street Square.
Capital Outlay Reserve 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 Fund
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.
81
ASSETS
Cash and investments
Restricted assets
Receivables:
Accounts
Property taxes
Interest
Due from other funds
Due from other governmental agencies
Advances to other funds
TOTALASSETS
LIABILITIES
Accounts payable and other liabilities
Advances from other funds
Unearned revenue
TOTAL LIABILITIES
FUND BALANCES
Fund balances:
Reserved for encumbrances
Reserved for advances to other funds
Unreserved -designated for specific projects and programs
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
CITY OF LODI
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS- CAPITAL PROJECT FUNDS
June 30, 2004
82
Capital
t
i
1 i
Vehicle and
Hutchins
Outlay
Lodi
Equipment
Library
Subdivision
Street Square
Reserve
Lake
Total
$ 349,450
23,578
300,339
3,577
6,338,292
137,484
$
7,152,720
1,729,169
1,729,169
12,589
12,589
389,544
389,544
74
22,957
375
23,406
1,009,162
1,009,162
31,110
410,000
441,110
716,770
716,770
$ 380,560
23,652
300,339
3,577
10,628,483
137,859
$
11,474,470
S 8,492
2,875
66,538
27,574
$
105,479
4,036,803
4,036,803
410,000
410,000
8 492
2,875
4,513,341
27,574
4,552,282
1,284
470,678
13,242
485,204
716,770
716,770
370,784
20,777
300,339
3,577
4,927,694
97,043
5,720,214
372,068
20,777
300,339
3,577
6,115,142
110,285
i 6922,188
$ 380,560
23,652
300,339
3,577
10,628,483
137,859
$
11,474,470
82
1 I 1 1 I 1 i
t
i
1 i
REVENUES
Taxes
InteMovemmental revenues
Charges for services
Investment and rental income
Miscellaneous revenue
Total revenues
EXPENDITURES
Current
Public works
Capital outlay
Debt service:
Interest and fiscal charges
Total expenditures
DEFICIENCY OF REVENUE UNDER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES. BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
CITY OF LODI
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS -CAPITAL PROJECT FUNDS
Yearended June 30,2004
Hutchins
Vehicle and Street
Equipment Library Subdivision Square
S
36.313
7,890 1,067
44.203 1,067
172,156 142.322
172,156 142,322
(127,953) (141,255)
Capital
265,177
Outlay
Lodi
Reserve
Lake
Total
2.084,332
E
2,084,332
92,831
175,000
129,144
1,197,306
(141.255)
1,197,308
222,420
1.170
223,590
190,158
14,815
213,930
3,787,047
15,985
3,848,302
3,577 6,115,142
110,285 $
6,922,188
1,190
1,1%
5,470,858
246,288
6,031624
10,920
10,920
5,482,968
246,288
6,043,734
(1,895,921)
(230,303)
(2,195.432)
330,000
265,177
175,000
770.177
(4,627,869)
(4,627,869)
330,000
(4,362,692)
175,000
(3,857,692)
202,047
(141.255)
(6858,613)
(55,303)
(8.D53,124)
170.021
162,032 300.339
3,577 12173,755
185,588
12,975,312
$ 372,068
20,777 300,339
3,577 6,115,142
110,285 $
6,922,188
83
(This page intentionally left blank.)
FIDUCIARY FUNDS
Private -purpose Trust Fund
This fund is used to account for trust agreements under which the principal and income benefit individuals, private
organizations or other governments.
Agency Fund
This fund was established to account for special assessments collected on the property tax roll by the City on behalf of the
property owners within the Industrial Way Beckman Districts and the Downtown and Cherokee Lane Districts.
CITY OF LODI
COMBINING STATEMENT OF FUDUCIARY NET ASSETS
PRIVATE -PURPOSE TRUST FUNDS
June 30, 2004
Private -Purpose Trust Funds
Private Hutchins Street
Sector Square Bequest
ASSETS
Cash and Investments $ 643,486 403
TOTAL ASSETS 643,486 403
$ 643,486
84
UIR]
Total
643,889
643,889
643,889
CITY OF LODI
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
Year ended June 30, 2004
85
J j 1
Private -Purpose Trust Funds
Private Hutchins Street
Sector Square Bequest
Total
ADDITIONS
Investment and rental income $
99,262 3 $
99,265
Total additions
99,262 3
99,265
NET ASSETS, BEGINNING OF YEAR
544,224 400
544,624
NET ASSETS, END OF YEAR $
643,486 403 $
643,889
85
J j 1
ASSETS
Cash and investments
Special assessment receivable
Interest receivable
TOTAL ASSETS
LIABILITIES
Agency obligations
TOTAL LIABILITIES
CITY OF LODI
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCYFUNDS
Year ended June 30, 2004
$ 408,452 11,310
$ 408,452 11,310
86
$ 419,762
$ 419,762
Special Assessments
Balance
Balance
7/1/03
Additions
Deductions
6/30/04
$ 366,733
324,620
312,703 $
378,650
40,463
39,963
40,463
39,963
1,256
1,149
1,256
1,149
$ 408,452
365,732
354,422 $
419,762
$ 408,452 11,310
$ 408,452 11,310
86
$ 419,762
$ 419,762
(This page intentionally left blank.)
STATISTICAL TABLES
UNAUDITED
CITY OF LODI
GOVERNMENT -WIDE EXPENSES BY FUNCTION
LAST TEN FISCAL YEARS
(Amounts in Thousands)
Fiscal
Year
General
Government
Public
Protection
Public
Works
Library
Parks 6
Recreation
Interest On
Long-term
Debt
Electric
Wastewater
Water Transit
Total
2002-03
2003-04
$ 12,238 5
13,167
16,632 $
19,163
10,946
11,868
$ 1,454 5
1,409
3,989 5
4.095
1,215 $
1,267
51,388
55,943
$ 6,141 $
6,297
12,879 $ 5,389 $
7,489 3,064
120,565
123,752
Note Information is availa6k beginning in fiscal year 2003,xhcn the City implesumed GASB 34 'Basic Financial Su¢men6-and
Management Discussions and Amlysis - for State and Local Gomrramems.'
SOURCE: City Finance Department
87
CITY OF LODI
GOVERNMENT -WIDE REVENUES
LAST TEN FISCAL YEARS
(Amounts in Thousands)
Note: Information is available beginning in fiscal year 2003, when the City implemented GASB 34
"Basic Financial Statements and MananagemenCs Discussion and Analysis for State and Local Governments."
SOURCE: City Finance Department
Chargaa
Operating
Capital
Special Item
Fiscal
for
Grants and
Grants and
Motor
Investment
Litigation
Year
Services
Contributions
Contributions
Taxes
Vehicle In -Lieu
Earnings
Omer Settlement
Total
2002-03 $
65,331 $
13,727 $
13,380 $
15,244 $
3,430 $
6,726 $
1,761 $ 2,728 $
122,327
2003-D4
70,538
13,402
22,162
16,759
3,363
2,368
3,224 865
132,681
Note: Information is available beginning in fiscal year 2003, when the City implemented GASB 34
"Basic Financial Statements and MananagemenCs Discussion and Analysis for State and Local Governments."
SOURCE: City Finance Department
88
30,000
25,000
20,000
15,000
10,000
5,000
N
Ig
CITY OF LODI
GENERAL GOVERNMENTAL REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(Amounts in Thousands)
1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04
0 Taxes ■ Licenses/ Permits ■ Inter - Governmental ❑ Charges for Services
■ Fines, Forfeits/ Penalties ❑ Use of Money & Property ® Misc. Revenue
Fines, Forfeits/
Money&
Misc.
Charges
Fiscal
Revenue
Licenses/
Inter-
for
Year
Taxes
Permits
Governmental
Services
1994-95 $
16,209 $
634 $
5,928 $
2,517
1995-96
17,070
842
6,642
2,428
1996-97
17,029
1,012
6,316
1,908
1997-98
17,790
1,183
6,291
2,671
1998-99
18,594
1,267
8,493
3,874
1999-00
19,801
1,406
9,054
4,611
2000-01
21,909
1,592
11,641
4,249
2001-02
23,043
1,464
22,000
3,888
2002-03
24,100
1,669
7,385
6,272
2003-04
16,909 -
2,021
16,657
4,478
Fines, Forfeits/
Money&
Misc.
Penalties
Property
Revenue
Total
$ 406
$ 808 $
201 $
26,703
421
1,063
140
28,606
453
1,216
80
28,014
662
1,060
524
30,381
878
982
243
34,331
714
982
764
37,332
765
1,509
383
42,048
806
1,234
1,349
53,784
803
832
453
41,514
1,085
537
473
42,160
General Governmental Revenues include General, Special Revenue, Debt Service and Capital Projects Funds. Excludes Expendable Trusts,
SOURCE: City Finance Department
'reclassed sales tax into intergovernmental revenue
89
20,000
18,000
16,000
14,000
v 12,000
10,000
'o
8,000
6,000
4,000
2,000
0
CITY OF LODI
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION
LAST TEN FISCAL YEARS
(Amounts In Thousands)
1994-95 199596 1996-97 1997-98 1998-99 199900 2000-01 2001-02 2W2-03 21103-04
■ General Government
IN Public Protection
Cl PUNIC Works
■ Library
■ Parks & Recreation
■ Debt Service
■ Capital Outlay
Capital
Fiscal
General
Public
Public
Parks&
Debt
Capital
Year
Government
Protection
Works
Library
Recreation
Service
Outlay
Total
1994-95 $
5,211 3
10,401 $
4,382
$ 956 $
2,299 S
345
$ 2,652 $
26,246
1995-96
5,217
10,172
6,012
954
2,198
500
5,378
30,431
1996-97
5,882
11,059
5,749
1,012
2,312
939
10,810
37,763
1997-98
7,068
10,896
4,810
966
2,174
1,288
18,383
45,585
1998-99
7,239
11,225
5,151
1,030
2,230
1,262
6,640
34,797
1999-00
7,813
11,430
5,039
1,040
2,670
1,282
6,420
35,694
2000-01
8,862
13,190
6,312
1,184
2,989
1,285
12,045
45,877
2001-02
8,987
13,562
5,741
1,158
2,680
1,233
17,948
51,489
2002-03
10,874
15,597
6,926
1,316
3,385
1,950
12,942
52,990
2003-04
10,815
17,491
7,303
1,356
3,412
2,004
10,041
52,422
General Governmental Expenditures includes General, Special Revenue, Debt Service and Capital Projects Funds
Excludes Expendable Trusts.
SOURCE: City Finance Department
w
$10,000
$oAOo
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
CITY OF LODI
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(Amounts in Thousands)
1994-95 1995-98 1998-97 1997-98 1998.99 1998-00 2000-01 2001-02 2002-03 2003-04
■Property ■ Sales &Use O Transient Occupancy 0Franchise ■ Documentary Transfer
■Motor Veh . in Lieu ■ Public Protection 0 Business License ■ In Lieu Franchise
Fiscal
Motor Veh .
Sales
Transient
In Lieu
Year
Property
& Use
Occupancy
Franchise
1994-95 $
4,077 $
5,320 $
248 $
506
1995-96
4,206
5,763
278
503
1996-97
4,225
5,950
249
524
1997-98
4,374
6,205
278
586
1998-99
4,517
6,523
305
618
1999-00
4,932
7,095
318
675
2000-01
5,322
8,028
390
820
2001-02
5,641
8,300
439
931
2002-03
6,191
8,709
400
730
2003-04
6,948
8,533
317
800
Documentary
Motor Veh .
Public
Business
In Lieu
Transfer
in Lieu
Protection
License
Franchise
Total (1)
$ 68 $
1,885 $
148
$ 169 $
5,300
$ 17,722
75
2,023
154
470
5,413
18,885
66
2,144
154
541
5,348
19,201
77
2,478
180
593
5,546
20,317
119
2,221
180
612
5,627
20,722
116
3,008
196
658
5,721
22,719
158
3,051
242
736
6,015
24,762
172
3,276
231
787
6,569
26,346
207
3,430
247
822
6,895
27,631
240
2,787
264
874
7,580
28,323
(1) General governmental tax revenues are included in taxes, licenses and permits, intergovernmental revenues and miscellaneous revenue of the Citys General Fund.
SOURCE; City Finance Department
91
6,000
6,000
Q� 4,000
F 2,000
0
1995
CITY OF LODI
SECURED TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(Amounts in Thousands(
1958 1997 1998 19% 2000 2001 20D2 2003 2004
-Tax Lavy -Tau Collections
SOURCE: County Auditor -Controller
i t )
Percent of
Total
Current Year's
Fiscal
Tax
Tax
Year
Levy
Collections
1995
$ 3,670
$ 3,516
1996
3,781
3,615
1997
3,827
3,682
1998
4,444
4,433
1999
4,653
4,578
2000
5,056
4,917
2001
5,182
5,118
2002
5,757
5,640
2003
5,832
5,408
2004
6,570
5,764
SOURCE: County Auditor -Controller
i t )
Percent of
Delinquent
Total
Collections
Tax
Tax
to Tax Levy
Collections
Collections
95.8%
$ 9
$ 3,525
95.6%
-
3,615
96.2%
-
3,682
99.8%
-
4,433
98.4%
-
4,578
97.3%
-
4,917
98.8%
-
5,118
98.0%
-
5,640
92.7%
-
5,408
87.7%
5,764
92
_.�
Percent
of Total
Collections
to Tax Levy
96.0%
95.6%
96.2%
99.8%
98.4%
97.3%
98.8%
98.0%
92.7%
87.7%
CITY OF LODI
ASSESSED FULL CASH VALUE OF ALL TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(Amounts in Thousands)
Fiscal
Secured
Utility
Unsecured
Tax
Less
Net Tax
Year
Roll
Roll
Roll
Roll
Exemptions
Roll
1994-95
$ 2,353,069
S 3,504
S 115.180 $
2,471,753
$ 164,592
$ 2,307,161
1995-96
2,427,757
3,560
125,011
2,556,328
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
146.346
2,724.793
179,835
2,544,958
1999-00
2707,343
3.525
163,299
2,874,167
163,294
2690,873
2000-01
2,880,201
3,484
177.040
3.060,725
185,473
2,875,252
2001-02
3,096,937
3.379
198,678
3,298,994
190,252
3,108,742
2002-03
3.381,945
3,352
207.095
3,592,392
200,957
3,391,435
2003-04
3,619,116
3,893
202,785
3,825,794
212,102
3,613,692
Personal
Less
Net Assessed
Fiscal
Year
Land
Improvements
Property
Total
Exemptions
Value
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
1,705,535
214.038
2,648,573
176,500
2,472,073
1998-99
756,166
1748,387
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
2000-01
832,788
1,982 668
245,269
3,060,725
185,473
2,875,252
2001-02
889,262
2,164,121
245,611
3,298,994
190,252
3,108,742
2002-03
960,166
2,366,887
265,339
3,592,392
200,957
3,391,435
2003.04
1,027462
2.549660
248,472
3,825,794
212,102
3,613,692
Source: San Joaquin County Assessor's Office
CITY OF LODI
PROPERTY TAX RATES -- DIRECT S OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Per $100.00 of Assessed Value
2003-04
■County -Wide Lavy ■County -Wide City
El County -Wide School ■County -Wide All Other
SOURCE: San Joaquin County Auditor/Controllefs Office
94
Basic
Fiscal
County -Wide
Year
Lew
gjbf
Scbpo!
All Other
Total
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
2000-01
1.0000
0.0000
0.0002
0.0000
1.0002
2001-02
1.0000
0.0000
0.0002
0.0000
1.0002
2002-03
1.0000
0.0000
0.0487
0.0000
1.0487
2003-04
1.0000
0.0000
0.0475
0.0000
1.0475
SOURCE: San Joaquin County Auditor/Controllefs Office
94
CITY OF LODI
SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
(Amounts in Thousands)
SOURCE: City Finance Department
95
Total
Collection
Total
As Percent of
Outstanding
Current
Current
Current
Currentand
Fiscal
Assessments
Assessments
Assessments
Delinquent
Year
Due
Collected
Due
Assessments
1994-95
49
48
98.0%
1
1995-96
51
50
98.0%
1
1996-97
125
125
100.0%
-
1997-98
-
-
0.0%
-
1998-99
-
-
0.0%
-
1999-00
-
-
0.0%
-
2000-01
-
-
0.0%
-
2001-02
-
-
0.0%
-
2002-03
-
-
0.0%
-
2003-04
-
-
0.0%
-
SOURCE: City Finance Department
95
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)
SOURCE: City Finance Department
96
_ 1 --i .-j - J ... J __._} . _ ,J ----)
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
1994-95
55
2,471,754
11,379
10,174
1,205
0.0488%
21.91
1995-96
54
2,556,328
15,078
10,078
5,000
0.1956%
92.59
1996-97
55
2,593,001
24,948
9,978
14,970
0.5773%
272.18
1997-98
56
2,648,573
24,372
9,872
14,500
0.5475%
258.93
1998-99
57
2,724,793
23,776
9,762
14,014
0.5143%
245.86
1999-00
58
2,874,167
23,146
9,636
13,510
0.4700%
232.93
2000-01
59
3,060,725
72,911
59,930
12,981
0.4241%
220.02
2001-02
59
3,298,994
101,675
74,930
26,745
0.8107%
453.31
2002-03
60
3,592,392
143,748
117,733
26,015
0.7242%
433.58
2003-04
60
3,825,793
174,205
148,675
25,530
0.6673%
425.50
SOURCE: City Finance Department
96
_ 1 --i .-j - J ... J __._} . _ ,J ----)
CITY OF LODI
COMPUTATION OF DIRECT AND OVERLAPPING GENERAL BONDED DEBT
June 30, 2004
DIRECT DEBT:
CERTIFICATE OF PARTICIPATION
OVERLAPPING DEBT:
NONE
Total
Total Percent City's Share
COP Applicable of Debt
5 25,530,000 100.00% $ 25,530,000
0
$ 25,530,000
DEBT RATIOS
June 30, 2004
0
$ 25,530,000
Ratio of Direct Overlapping Debt to Assessed Full Cash Value = 25,530,000 / 3,825,793,000 0.67%
Direct and Overlapping Debt Per Capita =25,530,000160,769 $ 420
Taxable Assessed Full Cash Values Per Capita = 3.825,793,000 160,769 $ 62,956
SOURCE: City Finance Department
97
CITY OF LODI
COMPUTATION OF LEGAL DEBT MARGIN
June 30, 2004
Assessed Full Cash Value as of June 30, 2003 (1)
Debt Limit - 15 Percent of Assessed Full Cash Value (2)
Amount of Debt Applicable to Debt Limit
LEGAL DEBT MARGIN
(1) Assessed Value before exemptions applicable to 2003-04 Tax Roll
(2) Section 43605 California Government Code
SOURCE: San Joaquin County Auditor./Controller's Office
City Finance Department
98
J __j ____j __ J - _) 1 - __J ..__J - _.) . ____J _) __ J ___ )
$ 3,825,793,000
$ 573,868,950
0
$ 573,868,950
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)
2003-04
'Zero balances occured in 1996-97 due to general obligation bonds paid off in 1995-96.
SOURCE: City Finance Department
99
Percent of
Debt Service
to Governmental
Expenditures
0.46%
0.40%
2.83%
3.68%
3.59%
2.80%
2.40%
3.68%
3.19%
Total
Total
General
Fiscal
Debt
Governmental
Year
Principal
Interest
Service
Expenditures
1994-95
$ 114
$ 8
$ 122
$ 26,246
1995-96
118
4
122
30,431
1996-97
37,763
1997-98
470
818
1,288
45,585
1998-99
485
797
1,282
34,797
1999-00
505
777
1,282
35,694
2000-01
530
755
1,285
45,877
2001-02
555
679
1,234
51,489
2002-03
730
1,220
1,950
52,991
485
1 186
1 671
52,422
2003-04
'Zero balances occured in 1996-97 due to general obligation bonds paid off in 1995-96.
SOURCE: City Finance Department
99
Percent of
Debt Service
to Governmental
Expenditures
0.46%
0.40%
2.83%
3.68%
3.59%
2.80%
2.40%
3.68%
3.19%
CITY OF LODI
REVENUE BOND COVERAGE
LAST TEN FISCAL YEARS
Net
Direct
Fiscal
Gross
Operating
Year
Revenue
Expense
1994-95
3,596,313
2,489.307
1995-96
3,339,315
3,301761
1996-97
3,444,597
2,863.017
1997-98
3,946,058
2,913,969
1998-99
3,935,006
2,957,162
1999-00
3,874,750
3,146,931
2000-01
4,697,052
4,336,384
2001-02
4,138,729
4,807,716
2002-03
6,760,379
4,360,114
2003-04
59,458,915
51,244,047
SOURCE:
City of Lodi Finance Department
120,000
CITY OF LODI
REVENUE BOND COVERAGE
LAST TEN FISCAL YEARS
Net
Revenue
Available
Current Fiscal
Years
For Debt
Debt Service Requirements
Service
Principal
Interest
Total
Coverage
1,107,006
110,000
700,355
810,355
1.37
37,554
110,000
696,357
806,357
0.05
581,580
115,000
688,818
803,818
0.72
1,032,089
120,000
682,218
802,218
1.29
977,844
125,000
675,030
800,030
1.22
727,819
140,000
666,770
806,770
0.90
360,668
145,000
658,070
803,070
0.45
(668,987)
150,000
648,920
798,920
(0.84)
2,380,265
160,000
639,000
799,000
2.98
8,214,868
2,325,000
3,975,207
6,300,209
1.30
100
___ J _ __J J J ) _._..J __) _ 'i - J __ I __j __J __) J 1 ) ) J )
CITY OF LODI
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
SOURCE: State of California, Department of Finance, Demographic Research Unit.
City Finance Department Budget
101
Population
San Joaquin
Population
Rank in Size
Fiscal
Square
City
Percent
County
Percent
of California
Year
Miles
Population
Change
Population
of County
Cities
1994-95
12.32
53,575
1.1%
530,700
10.1%
121
1995-96
12.32
54,473
1.7%
529,300
10.3%
81
1996-97
12.32
54,800
0.6%
535,420
10.2%
123
1997-98
12.32
55,700
1.6%
545,200
10.2%
124
1998-99
12.32
56,900
2.2%
554,400
10.3%
124
1999-00
12.50
57,900
1.8%
566,600
10.2%
125
2000-01
12.60
58,600
1.2%
583,700
10.0%
126
2001-02
12.62
59,431
1.4%
596,000
10.0%
129
2002-03
12.69
60,500
1.8%
613,500
9.9%
179
2003-04
12.79
60,769
0.4%
630,600
9.6%
130
SOURCE: State of California, Department of Finance, Demographic Research Unit.
City Finance Department Budget
101
CITY OF LODI
CONSTRUCTION ACTIVITY
LAST TEN FISCAL YEARS
Building Permits
Number of
Estimated
Fiscal
Building Permits
Percent
Valuation
Percent
Year
Issued
Change
(in thousands)
Change
1995
994
- .10%
44,881
42.40"%
1996
1464
47.28%
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%
2001
2275
22.58%
104,380
34.49%
2002
2090
-8.13%
69,693
-33.23%
2003
2492
19.23%
92,815
33.18%
2004
2659
6.70°%
109,565
18.05%
SOURCE:
City Community Development Department
102
800,000
700,000
600,000
„ 500,000
c
° 400,000
300,000
200,000
100,000
0
CITY OF LODI
BANK DEPOSITS
LAST TEN FISCAL YEARS`
(Amounts In Millions)
1989 1990 1991 1992 1993 1994 1995 1986 1997 1998
■ BANKS 0 SAVINGS & LOANS 0 CREDIT UNIONS
Fiscal
Year
BANKS
1989
$ 492,636
1990
540,545
1991
691,677
1992
649,252
1993
666,342
1994
627,132
1995
643,109
1996
682,223
1997
698,080
1996
725,210
Source: California State Department of Banking -
Licensing 8 Statistics Section
'Information on this page is the most recent data available.
SAVINGS S
CREDIT
LOANS
UNIONS
$ 282,339 $
14,111
267,501
12,813
183,936
12,465
198,756
13,993
191,014
15,405
186,159
15,689
159,276
16,036
121,183
15,721
118,200
16,894
113,431
17,729
103
CITY OF LODI
PRINCIPAL EMPLOYERS
JUNE 30, 2004
Employer
Activity
Employees
Lodi Unified School Dist.
Education
2,940
Lodi Memorial Hospital
Health Care
1,121
General Mills
Cereals and Food Mixes
500
Pacific Coast Producers
Cannery
800
City of Lodi
Government
428
Wal-Mart
General Merchant
340
CertainTeed
PVC Pipe Manufacturer
106
Target
General Merchant
189
Valley Industries
Trailer Hitches
360
Farmers and Merchants Bank
Banking
310
SOURCE: City of Lodi Community Development Department
IW
, __.) __J _ � J _J ) _ _ _) _ J _ _J ) _-.J I ._ ) . __.) ___J __.J ) ) 1 ) 1
CITY OF LODI
PRINCIPAL TAXPAYERS
JUNE 30,2001'
Property Owner
Land Use
Assessed Valuation
Percent of Total (11
General Mills, Inc.
Food Processing
$ 171,116,463
5.94%
Pacific Coast Producers
Manufacturing
59,325,814
2.06%
Certainteed Corporation
Manufacturing
15,531,735
0.54%
Dart Container Corporation
Warehousing
13,486,205
0.47%
King Video Cable Company
Communications
12,363,403
0.43%
Edmund N. Richmond
Industrial
11,852,374
0.41%
Wal Mart Stores
Department Store
10,893,893
0.38%
Wallace Computer Service
Warehousing
10,854,802
0.38%
Interlake Material Handling, Inc
Industrial
10,837,238
0.38%
Dayton Hudson Corporation
Department Store
10,504,048
0.36%
$ 326,765,975
11.35%
(1) Local Secured Assessed Valuation.
2,880,201,262
Source: San Joaquin County Assessor's Office
Information on this page is the most recent data available.
105
CITY OF LODI
SURETY BONDS OF PRINCIPAL OFFICIALS
JUNE 00, 2004
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
106
__J ..__.J , _.J - -) __ J ____J _._ l _J ._.._.J _..__J _._1 _ 1 __ 1 ___) ► 1 J J
FISCAL
YEAR
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
LIMIT
BASE
$ 35,697,755
36,515,234
38,739,012
41,229,332
43,456,825
45,785,303
48,787,849
51,843,597
56,959,824
57,439 894
SOURCE: City Finance Department
CPI or
INCOME
1.0071
1.0470
1.0467
1.0467
1.0536
1.0453
1.0491
1.0762
0.9873
1.0231
CITY OF LODI
GANN APPROPRIATION LIMITATION
Last Ten Fiscal Years
POPULATION
GROWTH
1.0157
1.0131
1.0168
1.0070
1.0120
1.0194
1.0129
1.0190
1.0214
1.0169
GROWTH
FACTOR
1.0229
1.0609
1.0643
1 0540
1.0420
1.0656
1.0626
1.0987
1.0084
1.0404
107
APPROPRIATION
LIMITATION
$ 36,515,234
38,739,012
41,229,332
43 456,825
45,785,303
48,787,849
51,843,597
56,959,824
57,439,894
59,759,913
BUDGET SUBJECT
TO LIMIT
$ 17,292,960
18,583,360
19,243,568
20,096,975
20,491,809
20,907,397
22,482,923
25,610,753
28,013,113
28,710,584
VARIANCE
$ 19,222,274
20,155,652
21,985,764
23,359,850
25,293,494
27,880,452
29,360,674
31,349,071
29,426,781
31,049,329
CITY OF LODI
PERSONNEL AUTHORIZED LAST TEN YEARS
JUNE 2004
■Administration ■ Community Development ❑Electric Utility
■ Finance Department ■ Fire Department ■ Library
■ Parks & Recreation ■ Police Department ■ Public Works Department
DEPARTMENT
1994-06
1996-96
1996-97
1997.98
1998-99
1999-00
2000-01
2001-02
2002-03
2009-04
Administration
17
21
24
26
30
32
34
34
37
36
Community Development
11
13
14
14
15
15
17
17
18
17
Electric Utility
38
39
43
44
44
46
47
50
52
52
Finance Department
35
35
34
34
32
34
34
35
38
38
Fire Department
47
48
48
48
49
50
52
55
68
61
Library
15
15
14
14
14
14
14
14
15
15
Parks & Recreation
26
27
26
27
26
26
29
29
34
34
Police Department
104
106
112
112
113
113
114
115
117
118
Public Works Department
86
87
92
94
95
99
103
108
110
110
Total
379
391
407
413
418
429
444
457
489
479
SOURCE: City of Lodi Finance Department
108
CITY OF LODI
SCHEDULE OF TAXABLE SALES AND PERMITS BY CATEGORY
LAST TEN YEARS
(Amounts in Thousands)
First three quarters are actual, the fourth quarter is an estimate.
SOURCE: State Board of Equalization, State of California
109
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004'
SALES (IN THOUSANDS OF DOLLARS):
Apparel Stores $
5,970 $
5,651 $
5,633 $
5,020 $
4,778 $
4,458 $
4,702 $
5,417
5,696
8,534
General Merchandise Stores
79,420
84,977
105,423
111,930
120,952
120,263
132,747
131,371
144,160
136,541
Drug Stores
13,295
13,411
Food Stores
33,237
34,029
34,247
34,344
37,328
42,977
42,600
43,271
44,448
45,666
Packaged Liquor Stores
5,664
6,150
Eating & Drinking Places
43,770
44,598
45,349
46,316
49,803
52,860
52,952
59,594
68,092
67,326
Home Furnishings&Appliances
12,396
12,808
12,136
17,319
22,254
17,908
18,055
15,886
19,252
19,780
Building Materials & Farm Tool
31,801
31,858
29,865
32,424
39,369
47,467
45,722
46,048
.41,772
42,524
Auto Dealers & Supplies
103,241
102,788
101,933
106,531
123,667
141,640
137,830
166,102
201,528
199,904
Service Stations
34,348
35,095
35,746
29,203
36,491
46,794
45,675
45,130
43,212
45,754
Other Retail Stores
29,261
30,502
39,759
45,689
47,022
48,759
49,862
49,262
48,920
53,306
Total Retail Stores
392,403
401,867
410,091
428,776
481,664
523,126
530,145
562,081
617,080
619,335
All Other Outlets
94,440
116,000
130,660
133,453
143,207
154,590
153,314
148,736
141,456
136,337
TOTAL $
486,843 $
517,867 $
540,751 $
562,229 $
624,871 $
677,716 $
683,459 $
710,817
758,536
755,672
PERMITS:
Apparel Stores
23
22
28
28
28
28
31
19
23
26
General Merchandise Stores
13
13
22
21
23
24
24
21
20
22
Drug Stores
9
B
Food Stores
45
45
47
51
53
59
56
61
60
61
Packaged Liquor Stores
7
7
Eating & Drinking Places
144
146
146
151
151
148
153
160
165
181
Home Furnishings & Appliances
46
41
47
43
53
55
53
63
64
72
Building Materials & Farm Tool
29
30
25
22
22
23
23
24
26
24
Auto Dealers & Supplies
62
66
78
81
77
83
81
83
80
86
Service Stations
20
19
17
16
15
15
16
16
15
18
Other Retail Stores
201
197
205
229
258
268
268
296
303
347
Total Retail Stores
599
594
615
642
680
703
705
743
756
837
All Other Outlets
912
918
900
869
875
882
869
912
894
837
TOTAL
1511
1512
1515
1511
1555
1585
1574
1655
1650
1,674
First three quarters are actual, the fourth quarter is an estimate.
SOURCE: State Board of Equalization, State of California
109
Apparel Stores ■
Food Stores ■
Home Furnishings & Appliances ❑
Service Stations ❑
General Merchandise Stores ❑
Packaged Liquor Stores ❑
Building Materials & Farm Tool ■
Other Retail Stores
110
Drug Stores
Eating & Drinking Places
Auto Dealers & Supplies
.._`J _A . _.J ___J - _J __ J _ ..J - _ -j .. ___J __J J _ _J I 1 1 1 J 1 1
CITY OF LODI
SCHEDULE OF BUSINESS TAX RECEIPTS ISSUED
YEAR ENDED JUNE 30, 2004
TYPE OF BUSINESS NO OF BUSINESSES PERCENT
Located in Lodi.
Agriculture, Forestry and Fishing
16
0,48%
Mining
0
0.00%
Construction
354
10.53%
Manufacturing
30
0.89%
Transportation and Public Utilities
37
1.10%
Wholesale trade
86
2.56%
Retail trade
544
16.18%
Finance, Insurance and Real Estate
290
8.62%
Services
2,006
59.66%
Total
3,363
100.00%
Located outside Lodi
Agriculture, Forestry and Fishing
4
0.38%
Mining
0
0.00%
Construction
674
63.89%
Manufacturing
2
0.19
Transportation and Public Utilities
12
1.14%
Wholesale trade
36
3.41%
Retail trade
42
3.98%
Finance, Insurance and Real Estate
35
3.31%
Services
250
23.70%
Total
1055
100.00%
Grand Total 4,418
SOURCE: City Finance Records
_J __ J
POPULATION
Population
Assessed Value
Building Permits Issued
Date of Incorporation
Form of Government
Employees
Area
FIRE PROTECTION
Number of Stations
Number of Firefighters
Number of Reserve Firefighters
Number of Calls Answered
POLICE PROTECTION
Number of Stations
Number of Police Officers
Number of Reserve Officers
Number of Support Personnel
Number of Calls Answered
PUBLIC WORKS
Miles of Streets
Miles of Alley Ways
Number of Street Lights
Number of Traffic Signals
WATER/N/ASTEWATER
Miles of Water Mains
Miles of Wastewater Lines
Number of Wastewater Treatment Plants
Average Daily Treatment
Maximum Daily Capacity
HOSPITALS
Number of Hospitals
Number of Patient Beds
CITY OF LODI
MISCELLANEOUS STATISTICS
JUNE 30, 2004
60,769
$3.6b
2,659
December 6, 1906
Council -Manager
428
12.79
4
52
0
4,350
1
78
4
41
42.802
205
16
6.400
58
224
177
1
6.6MG
85MG
1
172
11?
1 ) 1 1 l J 1 J 1
ELECTRIC UTILITY
Number of Customers
26,182
Energy Sales (KWH)
439,628,669
Peak Demand(MW)
130.0
PARKS 8 RECREATION
Parks Developed
23
Acres Parks Developed
272.68
Parks Undeveloped
6
Acres Parks Undeveloped
99.91
Community Center
1
Swimming Pools
3
Tennis Courts
11
Boat Ramp
1
Playgrounds
17
Ball Parks Various
26
Soccer Fields
22
Football Field
3
Handball/BasketballNolleyball Courts
7
Horseshoe Pits
10
EDUCATION
Elementary Schools (public)
29
Middle Schools (public)
8
High Schools (public)
6
Elementary Schools Enrollment (public)
15,179
Middle Schools Enrollment (public)
4,507
High Schools Enrollment (public)
8,657
K-8 Schools (private) 5
High Schools (private) 2
K-8 Enrollment (private) 1,355
High School Enrollment (private) 341
SINGLE AUDIT REPORTS
CITY OF LODI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Federal Grantor
Pass-through Grantor or Direct
Program Title
U.S. Department of Housing and Urban Development
Passed through San Joaquin County Department of Planning and Building Inspection
Community Development Block Grant/Entitlement Grants:
2003-2004 Program Year
2002-2003 Program Year
2001-2002 Program Year
2000-2001 Program Year
1999-2000 Program Year
1998-1999 Program Year
1997-1998 Program Year
Total Community Development Block Grant/Entitlement Grants
Passed through San Joaquin County Community Development Department:
Home Investment Partnership Program
2003-2004 Program Year
Total U.S. Department of Housing and Urban Development
U.S. Department of Justice
Direct:
Local Law Enforcement Block Grant
Local Law Enforcement Block Grant
Total Local Law Enforcement Block Grant
Passed through State Office of Criminal Justice Planning:
Byrne Formula Grant Program
Total U.S. Department of Justice
CFDA
Number
14.228
14.228
14.228
14.228
14.228
14.228
14.228
14.239
Grant/Project
Number Expenditures
N/A
$ 207,757
N/A
494,004
N/A
56,723
N/A
6,971
N/A
37,148
N/A
12,505
N/A
508
815,616
M03 -UC -06-0009 261,572
1,077,188
16.592
2002 -LB -BX -0591
16.592
2003 -LB -BX -00301
16.579
DC97080390
See accompanying notes to the schedule of expenditures of federal awards.
113
75,799
9,355
85.154
87,402
172,556
{Continued)
CITY OF LODI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Federal Grantor
Pass-through Grantor or Direct
Program Title
U.S. Department of Transportation
Direct:
Federal Transit Formula Grant:
2003-2004 Program Year
2002-2003 Program Year
Total Federal Transit Formula Grant
Passed through California Department of Transportation:
Highway Planning and Construction
Highway Planning and Construction
Highway Planning and Construction
Total Highway Planning and Construction
Total U.S. Department of Transportation
Total federal awards
CFDA Grant/Project
Number Number
20.507 N/A
20.507 N/A
20.205 STPLNH-5154(015)
20.205 CML -5154(028)
20.205 CML -5154(021)
See accompanying notes to the schedule of expenditures of federal awards.
114
i 1 1 J 1 J J I 1 1
Expenditures
701,462
653,500
1,354,962
131,533
155,105
448,966
735,604
2,090,566
$ 3,340,310
CITY OF LODI
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
NOTE 1 — GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year ended June 30, 2004, presents the activity of all
federal award programs of the City of Lodi, California (City). The City reporting entity is defined in Note 1 of the City's basic financial
statements. All federal awards received directly from federal agencies, as well as federal awards passed through other government agencies,
are included in the SEFA.
NOTE 2 — BASIS OF ACCOUNTING
The accompanying SEFA is presented using the modified accrual basis of accounting for grants accounted for in governmental fund types and
the full accrual basis of accounting for grants accounted for in proprietary fund types, as described in Note I of the City's basic financial
statements.
NOTE 3 — CATALOG OF FEDERAL DOMESTIC ASSISTANCE
The CFDA numbers included in the accompanying SEFA were determined based on the program name, review of grant contract information
and Office of Management and Budget's Catalog of Federal Domestic Assistance.
NOTE 4 - SUBRECIPIENTS
Of the federal expenditures presented in the schedule, the City provided federal awards to subrecipients as follows:
Federal Program
Community Development Block
Grant/Entitlement Grant
Home Investment Partnership Program
Federal
CFDA Number
115
14.228
14.239
Amount Provided
to Subrecipients
$ 186,998
261,572
4
MACIAS GINI & COMPANYLLP
3000 S Street, Ste. 300
Sacramento, California 95816
916.928.4600 PHONE
916.928.2755 FAX
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
The Honorable Members of City Council
City of Lodi, California
We have audited the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate
remaining fund information of the City of Lodi, California (City), as of and for the fiscal year ended June 30, 2004, which collectively
comprise the City's basic financial statements and have issued our report thereon dated December 10, 2004. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing
procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over
financial reporting. Our consideration of the internal control would not necessarily disclose all matters in the internal control over financial
reporting that might be material weaknesses. A material weakness is a reportable 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 caused by error 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. 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 the internal control over financial reporting that we have reported to the management of the City in
a separate letter dated December 10, 2004.
116
CERTIFIED PUBLIC ACCOUNTANTS S MANAGEMENT CONSULTANTS
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was
not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the City Council, management, federal and state grantor agencies and pass-through
entities and is not intended to be and should not be used by anyone other than these specified parties.
%vQcias, Gn'ni {Gloavty LLP
Certified Public Accountants
Sacramento, California
December 10, 2004
117
W
MACIAS GINI & COMPANYLLP
3000 S Street, Ste. 300
Sacramento, California 95816
916.928.4600 PHONE
916.928.2755 FAX
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR
PROGRAM, INTERNAL CONTROL OVER COMPLIANCE AND SCHEDULE OF EXPENDITURES OF FEDERAL
AWARDS IN 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 (City), with the types of compliance requirements described in the U. S. Office
of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the
fiscal year ended June 30, 2004. The City's major federal programs are identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants
applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on
the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB
Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that
we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred
to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis,
evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the
City's compliance with those requirements.
In our opinion, City 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, 2004.
118
CERTIFIED PUBLIC ACCOUNTANTS & MANAGEMENT CONSULTANTS
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.
We noted one matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable
conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over
compliance that, in our judgment, could adversely affect the City's ability to administer a major federal program in accordance with the
applicable requirements of laws, regulations, contracts, and grants. This reportable condition is described in the accompanying schedule of
findings and questioned costs as item 04-01.
A material weakness is a reportable 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 caused by
error or fraud 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. Our consideration of the internal control over compliance would not
necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all
reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is
not a material weakness.
Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate
remaining fund information of the City, as of and for the fiscal year ended June 30, 2004, and have issued our report thereon dated December
10, 2004. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic
financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis, as required
by OMB Circular A-133, and is not a required part of the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the
basic financial statements taken as a whole.
119
This report is intended solely for the information and use of the City Council, management, federal and state grantor agencies and pass-through
entities and is not intended to be and should not be used by anyone other than these specified parties.
/Vado-S, 66141, ; C &kPat~tq U.P
Certified Public Accountants
Sacramento, California
December 10, 2004
120
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED .TUNE 30, 2004
Section I - Summary of Auditor's Results
Financial Statements;
Type of auditor's report issued: Unqualified
Internal control over financial reporting:
Material weaknesses identified? No
Reportable conditions identified that are
not considered to be material weaknesses? None reported
Noncompliance material to financial
statements noted? No
Federal Awards:
Internal control over major programs:
Material weaknesses identified? No
Reportable conditions identified that are
not considered to be material weaknesses? Yes
Type of auditor's report issued on compliance
for major programs: Unqualified
Any audit findings disclosed that are required
to be reported in accordance with section
510(a) of Circular A-133? Yes
121
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Identification of major programs:
Highway Planning and Construction CFDA #20.205
Federal Transit Formula Grant CFDA #20.507
Dollar threshold used to distinguish
between type A and type B programs: $300,000
Auditee qualified as low-risk auditee? No
Section II - Financial Statement Findings
None
Section III - Federal Award Findings and Questioned Costs
Funding No. 04-01
Federal Transit Formula Grant
CFDA No. 20.507
U.S. Department of Transportation - Federal Transit Administration
Special Tests and Provisions -Garter Service
Criteria
The City is requiredtocomply with title 49 CFR part 604 with regard to its use of equipment for charter services funded with FTA funds.
122
CITY OF LODI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Condition
The City used FTA funded equipment for charter services and did not follow the following procedures specified by the FTA under title 49 CFR
part 604.11.
Procedures:
(a) To determine if there is at least one private charter operator willing and able to provide the charter service that the recipient
desires, the recipient must complete a public participation process:
(1) At least 60 days before it desires to begin to provide charter service if it is not doing so on May 13, 1987; or
(2) Not more than 90 days after May 13, t 987 if the recipient is providing charter service on May 13, 1987 and desires to continue to
provide charter service.
(b) The public participation process must at a minimum include:
(1) Placing a notice in a newspaper, or newspapers, of general circulation within the proposed geographic charter service area;
(2) Sending a copy of the notice to all private charter service operators in the proposed geographic charter service area and to any
private charter service operator that requests notice;
(3) Sending a copy of the notice to the United Bus Owners of America , 1300 L Street, NW., suite 1050, Washington, DC 20005,
and the American Bus Association, 1100 New York Avenue, NW, Suite 1050, Washington, DC 20005-3934.
(c) The notice must:
(1) State the recipient's name;
(2) Describe the charter service that the recipient proposes to provide limited to the days, times of day, geographic area, and
categories of revenue vehicle, but not the capacity or the duration of the charter service.
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FOR THE FISCAL YEAR ENDED JUNE 30, 2004
(3) Include a statement providing any private charter operator desiring to be considered willing and able with at least 30 days from
the date of the notice to submit written evidence to prove that it is willing and able;
(4) State the address to which the evidence must be sent.
(5) Include a statement that the evidence necessary for the recipient to determine if a private charter operator is willing and able
includes only the following:
(i) A statement that the private operator has the desire and the physical capability to actually provide the categories of
revenue vehicle specified; and
(ii) A copy of the documents to show that the private charter operator has the requisite legal authority to provide the
proposed charter service and that it meets all necessary safety certification, licensing and other legal requirements to
provide the proposed charter service.
(6) Include a statement that die recipient shall review only that evidence submitted by the deadline, shall complete its review within
30 days of the deadline, and within 60 days of the deadline shall inform each private operator that submitted evidence what the
results of the review are.
(7) Include a statement that the recipient shall not provide any charter service using equipment or facilities funded under the Acts to
the extent that there is at least one willing and able private charter operator unless the recipient qualifies for one or more of the
exceptions in 49 CFR 604.9(b).
(d) Any recipient that desires to continue to provide charter service using FTA funded equipment or facilities shall follow the procedures in 49
CFR 604.1 l (b) and (c) annually during the month in which it published its first newspaper notice to re -determine the extent to which there
is at least one willing and able private charter operator.
Cause
The City was unaware of the compliance requirements of the FTA.
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FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Effect
The City could be liable to sanctioning by these grantor agencies.
Recommendation
The City should review FTA guidelines as they relate to charter services using FTA funded equipment and incorporate those guidelines into
their policy on providing charter services.
Management's Response
The City transportation department is implementing procedures as required by the FTA to ensure compliance in the use of equipment funded by
the FTA in charter services.
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No
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