Bixby Creek Bridge and the Big Sur Coastline

Eighteen miles south of Carmel stands one of the world's highest single-span concrete arch bridges. Its beauty is matched only by the ocean waves crashing on the rocky coastline below. Reaching over 260 feet high and over 700 feet long, it's a structural masterpiece, and probably the most photographed object along the coastal route. The bridge was completed on October 15, 1932, and ceremoniously dedicated on November 27th.

Today the exquisite structure is commonly called Bixby Bridge, although in the past it had been referred to as: Bixby Creek Bridge, Bixby's Bridge, Mill Creek Bridge, or Rainbow Bridge. "Bixby" stems from Mr. Charles Henry Bixby (a cousin of United States President James K. Polk), an early settler in the area. Originally from Livingston County, New York, he came to the Monterey Peninsula in 1868. His purchase, improvement, and development of large tracts of land gave him the legacy of being the most instrumental in the opening of the Sur area. Lumber, shakes, shingles, railroad ties, trench posts and tan bark, processed through a mill, were shipped north from a stretch of land known as Bixby Landing. Later it was a shipping point of lime for the Monterey Lime Company. The Mill name didn't come, as one might think, from a family named Mill. It originated from Mr. Bixby's sawmill, built along the creek. This name is sometimes used interchangeably with Bixby when describing such places as the creek, bridge, and landing.

The name Rainbow stems from a nearby resort, Rainbow Lodge, operated by an Army Captain, Howard Sharpe and his wife, Frida. The Sharpes bought the ranch in the Bixby Creek Canyon in 1919 with the prospect of profiting from tourist dollars. Using his engineering experience during his off-season time, he built and improved a dirt road from the lodge up the canyon to Bixby Landing and another road down to the beach at the mouth of Bixby Creek. In 1930 the Sharpes sold part of the Bixby Landing right-of-way to the State of California for its construction of Highway 1 and the bridge.

Of the five bridges built along the 30-mile highway on the central coast Bixby remains the most admired.

Although there is an actual Big Sur Village 25 miles south of Carmel, "Big Sur" refers to the entire 90-mile stretch of coastline between Carmel and San Simeon, blessed on one side by the majestic Santa Lucia Range and on the other by the rocky Pacific coastline.

Jagged cliffs pummeled by surf line the Pacific Coast Highway along Big Sur, creating some of California's most memorable ocean vistas between Carmel and the northern tip of San Luis Obispo County. Gray whales migrate past twice a year, and elephant seals bask on the sandy shores. Luxury hotels, restaurants and art galleries cluster in a six-mile strip, giving way to redwood-filled state parks on either side.

Cover photograph courtesy of Ma Mon

COUNTY of MONTEREY

STATE of CALIFORNIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2009

Prepared and Submitted by the Office of the Auditor-Controller Michael J. Miller, CPA, CISA

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Table of Contents

Page INTRODUCTORY SECTION

Letter of Transmittal ...... i-ix Award for Achieving Excellence in Financial Reporting...... x-xi Directory of County Officials ...... xii Organizational Structure ...... xiii

FINANCIAL SECTION

Independent Auditor’s Report...... 1-2

Management’s Discussion and Analysis (Required Supplementary Information) ...... 3-16

Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets ...... 19 Statement of Activities...... 20-21

Fund Financial Statements: Governmental Funds: Balance Sheet...... 25 Reconciliation of the Governmental Funds Balance Sheet to the Governmental-Wide Statement of Net Assets – Governmental Activities ...... 26 Statement of Revenues, Expenditures, and Changes in Fund Balances...... 27 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Governmental-Wide Statement of Activities – Governmental Activities...... 28

Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual: General Fund...... 29 Community Development ...... 30

Proprietary Funds: Statement of Net Assets...... 31 Statement of Revenues, Expenses, and Changes in Net Assets ...... 32 Statement of Cash Flows...... 33-34

Fiduciary Funds: Statement of Fiduciary Net Assets ...... 35 Statement of Changes in Fiduciary Net Assets ...... 36

Notes to the Financial Statements...... 37-84

COUNTY OF MONTEREY COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2009

Table of Contents

Page FINANCIAL SECTION (continued)

Required Supplementary Information (Other than MD & A): Schedules of Funding Progress County of Monterey Employees’ Retirement Plan ...... 87 County of Monterey Retiree Healthcare Plan ...... 88

Supplementary Information: Nonmajor Governmental Funds: Combining Balance Sheet...... 93 Combining Statement of Revenues, Expenditures and Changes in Fund Balances...... 94

Special Revenue Funds: Nonmajor Special Revenue Funds: Definition ...... 95-96 Combining Balance Sheet...... 97-101 Combining Statement of Revenues, Expenditures and Changes in Fund Balances...... 102-106 Budgetary Comparison Schedules: Road Fund...... 107 County Library Fund...... 108 In-Home Support Services...... 109 Fish and Game Propagation...... 110 Office of Employment Training...... 111 Community Services...... 112 Inclusionary Housing...... 113 Disaster Assistance...... 114 Productivity Investment ...... 115 Lakes Resort Parks...... 116 Emergency Medical Services ...... 117 Fort Ord Reuse...... 118 Nacimiento Hydroelectric Operations...... 119 Water Resources Agency...... 120 County Service Areas...... 121 Sanitation Districts...... 122 Redevelopment Agency – Set Aside Fund...... 123

Debt Service Funds: Nonmajor Debt Service Funds: Definition ...... 125-126 Combining Balance Sheet...... 127 Combining Statement of Revenues, Expenditures and Changes in Fund Balances...... 128 Budgetary Comparison Schedules: Debt Service – County ...... 129 Debt Service – RDA...... 130 County Financing Authority...... 131

Capital Projects Funds: Definition ...... 133-134 Major Capital Projects Funds: Budgetary Comparison Schedule – Facility Master Plan ...... 135

COUNTY OF MONTEREY COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2009

Table of Contents

Page FINANCIAL SECTION (continued)

Supplementary Information (continued) Capital Projects Funds: Nonmajor Capital Projects Funds: Combining Balance Sheet...... 136 Combining Statement of Revenues, Expenditures and Changes in Fund Balances...... 137 Budgetary Comparison Schedules: Capital Projects...... 138 Enterprise Research Planning...... 139 Facilities Maintenance Projects...... 140 Redevelopment Capital Projects...... 141

Internal Service Funds: Definition ...... 143-144 Combining Statement of Fund Net Assets ...... 145 Combining Statement of Revenues, Expenses and Changes in Net Assets ...... 146 Combining Statement of Cash Flows...... 147-148

Agency Funds: Combining Statement of Changes in Assets and Liabilities ...... 151-152

Detailed Budget Schedule: General Fund – Schedule of Expenditures – Budget and Actual on Budgetary Basis ...... 155-168

STATISTICAL SECTION (Unaudited)

Statistical Section...... 169 Schedule 1: Net Assets by Component ...... 171 Schedule 2: Changes in Net Assets...... 172-173 Schedule 3: Fund Balances of Governmental Funds ...... 174 Schedule 4: Changes in Fund Balances of Governmental Funds...... 175 Schedule 5: Assessed Value and Actual Value of Taxable Property...... 176 Schedule 6: Principal Property Taxpayers ...... 177 Schedule 7: Property Tax Levies and Collections ...... 178 Schedule 8: Debt Service Tax Rates for County and Major Overlapping Governments per $100 of Assessed Value...... 179-180 Schedule 9: Taxable Sales by Category...... 181 Schedule 10: Transient Occupancy Tax Actual Receipts ...... 182 Schedule 11: Ratios of Outstanding Debt by Type...... 183 Schedule 12: Legal Debt Margin Information ...... 184 Schedule 13: Direct and Overlapping Bonded Debt ...... 185 Schedule 14: Demographics and Economic Statistics ...... 186 Schedule 15: Major Industries by Number of Businesses, Employees and Payroll...... 187-188 Schedule 16: Full-Time Equivalent County Government Employees by Function/Program...... 189 Schedule 17: Operating Indicators by Function/Program...... 190-193 Schedule 18: Capital Asset Statistics by Function...... 194-195

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INTRODUCTORY SECTION

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MONTEREY COUNTY

AUDITOR - CONTROLLER (831) 755-5040 ▪ FAX (831) 755-5098 ▪ P.O. BOX 390 ▪ SALINAS, CALIFORNIA 93902

MICHAEL J. MILLER, CPA, CISA AUDITOR-CONTROLLER

ALFRED R. FRIEDRICH, CGFM ASSISTANT AUDITOR-CONTROLLER

December 18, 2009

To the Citizens of the County of Monterey and the Board of Supervisors:

I am pleased to present this Fiscal Year 2008-09 Comprehensive Annual Financial Report (CAFR) for the County of Monterey (County). This CAFR is intended to present information above and beyond what is required by generally accepted accounting principles or state law.

It is my hope that this report will give the residents of Monterey County, the Board of Supervisors, and other users a broader view and understanding of County financial operations and to further assist the users of our financial statements in assessing the financial condition of the County.

This CAFR is in compliance with Sections 25250 & 25253 of the Government Code of the State of California. These statutes require all general-purpose local governments to issue an annual report on the financial position and activities of that government. The report must be presented in conformance with generally accepted accounting principles (GAAP) and must be audited by an independent firm of certified public accountants (CPA) in conformance with generally accepted government auditing standards (GAGAS). The financial statements contained in this CAFR meet these requirements.

This report contains management representations and is prepared by the Office of the Auditor- Controller. Monterey County management is responsible for the accuracy of the presented data, and the completeness and fairness of the presentation. To provide reasonable assurance of accuracy of the information presented in these financial statements and to protect County assets, management has instituted an internal control framework. This framework consists of policies, procedures and computer-based accounting and management information systems sufficient to ensure reliable information for the preparation of the County’s financial statements in conformity with GAAP.

The financial statements and accompanying Notes to the Financial Statements (Notes) contained in this CAFR have been audited by GALLINA LLP, a partnership of Certified Public Accountants (GALLINA). Their audit was performed in accordance with GAGAS. The auditors have concluded, based on their audit that the financial statements combined with the accompanying Notes, present fairly, in all material respects, the financial condition of Monterey

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County as of June 30, 2009. A copy of their report is included on page 1 in the “Financial Section” of this CAFR.

In planning and performing the audit of the financial statements, GALLINA considered the internal control structure of the County in order to determine appropriate audit procedures. During this review, no significant deficiencies or material weaknesses were noted. All fiscal year 2007-08 findings were implemented and corrected. This information was presented in a letter to the Board of Supervisors and management.

Management is required by GAAP (GASB 34) to provide a management discussion and analysis (MD&A) in conjunction with financial statement reporting. The purpose of the MD&A is to introduce the financial statements and to provide an analytical overview of the financial activities of the County. The MD&A begins on page 3 in the “Financial Section” of this CAFR.

PROFILE OF THE COUNTY OF MONTEREY

Overview of the County

History and Geography: Monterey, described as the “greatest meeting of land and sea” celebrated its quadricentennial in 2002. In 1602, Spanish merchant Sebastian Vizcaino became the first European on the Monterey Peninsula. He christened Monterey after the viceroy of New Spain, Count de Monte Rey. Eventually, the City of Monterey served as California’s first capital, where the State constitution was signed in 1849. Monterey County is one of the 27 original California counties, incorporating in 1850.

With an area of approximately 3,300 square miles, the County of Monterey borders the Pacific Ocean almost at the midpoint of California with 99 miles of coastline. The County is located about 100 miles south of San Francisco and 240 miles north of Los Angeles. It is bordered by Santa Cruz County to the north, San Benito (originally part of Monterey County), Fresno and Kings Counties to the east and San Luis Obispo County to the south.

There are two distinct sub-regions in the County. One is the Monterey Peninsula, world famous for beautiful ocean views, opulent homes, the 17-mile drive, delicious seafood and world-class golf courses. The other, the Salinas Valley, is equally renowned as an area full of fertile farmland, running almost the entire length of the County and is one of the world’s major vegetable producing areas.

The County also benefits from two wilderness areas set aside for recreational enjoyment, consisting of 468,538 total acres. The Los Padres National Forest has 304,035 acres and the Ventana Wilderness totals 164,503 acres.

Structure: The County is a general law county. The County government is comprised of ten elected officials including a five-member Board of Supervisors, the Assessor-Clerk-Recorder, the Auditor-Controller, the District Attorney, the Sheriff and the Treasurer-Tax Collector; all

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elected to four-year terms. A County Administrative Officer (CAO) is appointed by the Board of Supervisors and functions as the Chief Executive Officer.

The accounts of the County are organized on the basis of funds, each of which is considered a separate entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, net assets, revenues and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which the spending activities are controlled.

Services: With 4,848 full-time equivalent employees, the County government provides a full range of public services including public safety, roads and facilities, social services, administrative services, health services, sanitation services and leisure services. Typically, the department heads who run these operations, other than the elected department heads, report to the CAO.

Population: The County maintains a steady population base in excess of 400,000 people. About 98% of the 3,300 square miles in the County are outside of a municipality, with about 25% of the residents living in these unincorporated areas. The City of Salinas serves as the County seat, and is the County’s largest city with a population of over 150,000. The eleven other incorporated cities are: Carmel-by-the-Sea, Del Rey Oaks, Gonzales, Greenfield, King City, Marina, Monterey, Sand City, Seaside, Soledad and Pacific Grove.

Component Units

This report includes all of the funds of the County of Monterey, Natividad Medical Center, and the entities described in Note 1 of the Notes. Although all these entities (except for Natividad Medical Center) are legally separate from the County, the County Board of Supervisors serve as the governing board of each entity and the entities meet the test required by GAAP to be presented as blended component units in the County Annual Financial Statements. In addition, individual financial statements are available for many of the above component units and can be obtained by contacting the Office of the Auditor-Controller of the County of Monterey.

Budgetary Process

The County is required by State law to adopt a balanced budget by July 1 of each fiscal year. Budgets are adopted for the general fund, special revenue funds, debt service funds and capital project funds. The legal level of budgetary control is at the department level. Budget data is prepared on the modified accrual basis consistent with comparable actual amounts. A budget is also adopted for the enterprise fund (Natividad Medical Center).

Encumbrance accounting is utilized during the year for budget control purposes. Encumbrances outstanding at year-end do not constitute expenditures or liabilities, but rather restrictions (reserves) of net assets. The County does, however, honor the contracts represented by year-end encumbrances. Unused unencumbered budget appropriations lapse at the end of the fiscal year.

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Board of Supervisors policy requires re-appropriation of carryover capital improvement projects on an annual basis after review of each project status.

The County Administrative Officer, or his designee, approves amendments or transfers of appropriations between major object classes of expenditure within the same department. The Board approves supplemental appropriations, which are normally financed by unanticipated revenues during the year.

FACTORS AFFECTING FINANCIAL CONDITION

State of California

Budgetary difficulties: California has experienced steep declines in tax revenues from personal income, corporate, and sales, three of its main revenue sources. To mitigate this loss of revenue, the State has imposed temporary tax increases, claimed portions of local property tax revenues, and cut allocations to counties. With the State facing a potential deficit of almost $26.3 billion in 2010-11, counties can expect more cuts in the next fiscal year. Additionally, as local revenue sources decline, the County will also experience losses in American Recovery and Reinvestment Act (ARRA) funding as the 18 month Federal stimulus program comes to an end in 2010. This may affect the County’s abilities to administer State and local services.

Triple Flip: In FY 2003-04, the State of California issued State Deficit Reduction bonds under Proposition 57. The financial market required a dedicated revenue stream. The State of California devised a method to secure this dedicated revenue stream called the “Triple Flip”:

1. Beginning in FY 2004-05, and continuing for nine (9) years, the State takes 25% of local government 1% sales tax. 2. In January (6 months into the year), the State requires counties to take the property tax which was earmarked for schools and repay local governments for the first 6 months of the estimated sales tax takeaway as well as any “true up” from the previous year. The State then has the counties pay the estimated next 6 months in May. The difference between the estimated and actual sales tax in one year will be corrected in the first payment of the following year. 3. Then the State, using State General Fund monies, pays back the schools.

Local Economy

The local economy has traditionally centered on agribusiness, tourism, and government, but the trade, transportation and utilities group continues to become a larger part of the Monterey County economy.

Agribusiness: The County is the fourth largest agricultural producing county in the State. The gross production value of County agribusiness is in excess of $3.8 billion. In terms of land allocation, out of 2,121,126 acres in the County, approximately 236,142 acres are prime

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farmland. This presents a steady and growing part of County activity. This unique and fertile valley continues to be the nation’s salad bowl as well as the artichoke capitol of the world. Monterey County is home to nine (9) American Viticultural Areas (AVAs), areas that have been identified as distinct, one-of-a-kind wine growing districts within the Country. Wine grapes production in 2008 was approximately $255 million, and was shipped to over thirty (30) counties.

Tourism: Monterey County ranks 11th out of all 58 counties in tourism spending and has 2.2% of the State’s almost $100 billion industry. Over 8.5 million visitors come to Monterey County each year.

The County assesses hotels located in the unincorporated areas a Transient Occupancy Tax (TOT) on room revenues at all short-term stay hotels and accommodation rentals. The economic downturn has negatively impacted this source of revenue for the County. Year over year this source of revenue decreased by 11.6%. Monterey County still remains an attractive visitors’ destination and should cause tourism to rebound quickly as the economic downturn abates.

Employment: The County normally experiences periods of relatively high unemployment as the agribusiness moves from one season to the next. However, the unemployment rate has been higher than normal at approximately 10.6% as of June, 2009. While this is lower than the State average of 11.6%, it continues to be a condition that is the result of the economic downturn.

Sales & Use Tax Trends: The County’s sales tax receipts decreased by 3.6% in calendar year 2009 compared to calendar year 2008. Softened demand due to the punishing economic downturn has affected all areas of the County’s economy, especially fuel consumption which is a major component of this revenue stream.

Residential Real Estate: During the housing boom, the County experienced an unprecedented growth in the value of homes. Homes in some areas saw appreciation in excess of 150%. The boom in this sector of the County’s economy was rapidly reversed due to the economic meltdown on the national and local economy. In June of 2008 the median price of a single- family home was $359,900. During this same time period in 2009, the price of these homes has decreased by 43% in value. These statistics underline the ultimate effect on property taxes when the revaluation and/or sale of homes are completed.

Long-Term Financial Planning

Three-Year Financial Forecast: In order to provide County policy-makers and the public an updated assessment of the County’s financial conditions, the County Office of Administration develops an annual Three-Year Financial Forecast. This report takes into account the latest economic developments, and identifies pressure points on the revenues and expenditures of all County departments. This tool is proactively used by executive management to update the three- year financial model and to recommend corrective changes and adjustments to the Board of Supervisors.

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Capital Improvements Plan: In April 2009, the Monterey County Board of Supervisors unanimously approved and accepted the annual Capital Improvements Program (CIP) Five Year Plan, covering fiscal years 2009-10 through 2013-14.

The CIP identified collectively a total of 189 capital projects with an estimated value of $1.2 billion over the next five-year period. Of this total amount, $407.4 million, or 33%, in funding sources have been identified. The remaining $822.3 million are recognized as unfunded. The FY 2009-10 CIP capital projects requests by functional area are:

• General Government - $231.8 • Public Protection - $276.6 • Public Ways & Facilities - $592.2 • Health - $60.7 • Public Assistance - $0.2 • Recreation & Education -$68.2

Debt Administration: In fiscal year 2008-09, the County implemented the Sympro Debt Management System to monitor and manage the debt for the County, schools and special districts. This tool will readily assist management to develop scenarios, and monitor market activities, and also capitalize on financial opportunities.

County Debt Obligations: The County entered into two debt issuances in fiscal year 2008-09.

• A Tax and Revenue Anticipation Note (TRAN) was issued through the California State Communities Development Agency (CSCDA) on July 1, 2008 for $30.6 million. This TRAN was promptly paid with principal and interest on the maturity date.

• On July 30, 2008, a second set of Certificates of Participation was sold for $32.9 million. This funding will be used for the Salinas Valley Water Project. The first phase of the project will increase the capacity at the Lake Nacimiento Dam to allow for increased water storage and greater irrigation from the Salinas River. The second phase of the project will allow for diversion from the Salinas River to remedy sea water intrusion into the ground water system.

Credit Ratings: The County was subjected to a follow-up review by both Fitch and Moody’s Investor Services at the end of FY 2008-09. Fitch reaffirmed the County’s rating at A+ with a negative outlook. Moody’s reaffirmed the County’s Issuer rating at A1, the Judgment Obligation Bonds at A2, and the COP rating at A3, all with positive outlook. Moody’s also issued a rating of MIG1 on the County’s short term debt. These ratings reflect the County’s commitment to improve its financial condition and that of the Natividad Medical Center. The County continues developing strategies to aggressively improve the efficiencies and effectiveness of operations, and capitalize on these re-engineering efforts to improve its finances.

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Proposed Financings: The County issued a TRAN on July 1, 2009 in the amount of $50 million as a stand alone tranche of the CSCDA. While numerous counties with higher underlying credit ratings received no bids, the Monterey County’s offering was purchased by four bidders with a coupon rate of 2.0% and a yield of 0.47% resulting in a premium to the County.

The County is actively pursuing a refunding of the 1998 Natividad Medical Center Improvement Bonds, Series E. The viability of this refunding is completely dependent upon market forces. Management is currently monitoring the markets and will complete this refunding if there are significant savings from a turn in the interest rates.

Relevant Financial Policies

Reserve Policy: The Monterey County Board of Supervisors unanimously adopted in ordinance form a formal reserve policy for strategic reserves and contingencies. Beginning in fiscal year 2005-06, General Fund reserves were to be funded over eight years to equal ten percent of General Fund budgeted revenues. The reserve was established for use in legal judgment settlements against the County, economic downturns, natural disasters and for one-time State budget reductions that could not be addressed through the annual appropriations. Because of current budget issues, the Board elected to suspend contributions to the strategic reserve fund for fiscal year 2008-09. On June 23, 2009, the Board again elected to continue suspension of the annual contribution to the Strategic Reserve in FY 2009-10 for the same reasons.

Public Financing Policy: On April 29, 2008, the Board rescinded the previously adopted Public Financing Policies and the Mello Roos Financing Policy and adopted a revised formal written Monterey County Public Financing Policy dated April 21, 2008. The revised policy established a Debt Advisory Committee comprised of the County Administrative Officer, the County Auditor- Controller, and the County Treasurer-Tax Collector. In addition, the policy provides general guidelines for the decision making process with regard to the issuance of debt instruments. The use of debt must provide general or specific benefits to its citizens in relation to the cost of repayment levied upon those citizens.

Major Initiatives

The Next Generation Radio System: This project will bring the County and municipal law enforcement, fire, emergency services, and local government field forces into compliance with the Federal Communications Commission (FCC) regulations. The County plans on completing this project by the end of 2013 and terminating the use of all obsolete band width as mandated by the FCC rules.

Pending Litigation

The County Counsel manages all legal matters for the County. Current cases are evaluated for financial impact on the resources of the County. At the end of the fiscal year 2008-09, there are no cases, singularly or combined, that would pose a material impact to the operations of the County.

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Natividad Medical Center

The Natividad Medical Center (NMC) is a 172 bed inpatient hospital facility that serves the residents of Monterey County. This is a full service hospital and operates as the only enterprise fund in the Monterey County government. There are more than 268 physicians representing 44 specialties that are attracted to NMC’s academic environment. NMC serves more than 48,000 outpatient customers annually, and provides continuous training for RNs, LVNs, and phlebotomy students from local colleges. Since 1974 the hospital has participated in the University of California at San Francisco School of Medicine family residency program.

In 2007, the Board of Trustees and the Board of Supervisors approved a two-year Intergovernmental Grant & Transfer Agreement (IGTA) which restructured the NMC Board of Trustees and included representatives from Salinas Valley Memorial Healthcare System (SVMH) and Community Hospital of the Monterey Peninsula (CHOMP). In addition to the governance change, the agreement included $8.0 million in funding and the installation of a manager to assist in a financial turnaround of NMC. In April of 2008, the Board of Supervisors approved an amendment to the IGTA, which extended the term to July 2009, and specified an additional $2.0 million contribution from SVMH.

On December 9, 2009, the County was awarded the California Association of Counties’ 2009 Challenge award recognizing the successful public-private partnership between NMC, SVMH and CHOMP. The partnership was credited for navigating the county-owned hospital from a deficit three years ago to a profit in fiscal year 2008-09.

ADDITIONAL AVAILABLE INFORMATION

Copies of this CAFR, the Single Audit Report, the County Proposed and Final Budgets, the Tax Rate Books, and other documents are available on the internet, www.co.monterey.ca.us/auditor.

AWARDS AND ACKNOWLEDGEMENTS

Certificate 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 County of Monterey for its comprehensive annual financial report for the fiscal year ended June 30, 2008. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.

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The GFOA is a nonprofit professional association serving approximately 17,600 government finance professionals with offices in Chicago, IL and Washington, DC.

A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

Acknowledgments

I extend my thanks to my staff in the Auditor-Controller’s Office who have performed above and beyond the call of duty, making many significant improvements to this CAFR and the reporting function in general. I also wish to thank the staff in the Budget Office, and all the departments and agencies that contributed financial information to this report and to GALLINA, LLP for their dedication and hard work. Finally, recognition and gratitude is extended to the Board of Supervisors for their support in planning and conducting the financial operations of the County of Monterey in a responsible and progressive manner.

Respectfully Submitted,

Michael J. Miller, CPA, CISA Auditor-Controller

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COUNTY OF MONTEREY

DIRECTORY OF COUNTY OFFICIALS

Elected Officials: Legislative Branch: Board of Supervisors District #1...... Fernando Armenta District #2...... Louis R. Calcagno District #3...... Simon Salinas District #4...... Jane Parker District #5...... Dave Potter Executive Branch: Assessor – County Clerk-Recorder...... Stephen L. Vagnini Auditor-Controller ...... Michael J. Miller, CPA, CISA District Attorney ...... Dean D. Flippo Sheriff-Coroner...... Mike Kanalakis Treasurer-Tax Collector...... Louis G. Solton Appointed Department Heads: County Administrative Officer ...... Lew Bauman Agricultural Commissioner...... Eric Lauritzen Building Services Director...... Tim McCormick Child Support Services Director ...... Stephen H. Kennedy Clerk of the Board...... Gail Borkowski Cooperative Extension Director...... Sonya L.Varea-Hammond County Counsel...... Charles J. McKee County Librarian...... Jayanti Addleman Emergency Communications Director...... Lynn Diebold Equal Opportunity Officer ...... David Medrano Health Services Director...... Len Foster Information Technology Director...... Virgil Schwab Military and Veterans’ Affairs Officer ...... Richard Garza Natividad Medical Center Chief Executive Officer...... Harry Weis Parks Director ...... John Pinio Planning Director...... Mike Novo Public Defender ...... James Egar Public Works Director ...... Yazdan Emrani Registrar of Voters...... Linda Tulett Resource Management Agency Director...... Wayne Tanda Social Services Director...... Elliott Robinson Water Resources Agency General Manager...... Curtis Weeks Appointed by Superior Court: Chief Probation Officer ….……………………………………..………...Manuel Real

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FINANCIAL SECTION

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INDEPENDENT AUDITOR’S REPORT

Board of Supervisors County of Monterey, California

We have audited the accompanying financial statements of the governmental activities, the business- type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Monterey, California (County), as of and for the year ended June 30, 2009, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of the County of Monterey, California. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Monterey County Children and Family Commission, which represent 100 percent of the assets, liabilities, and revenues of the discretely presented component unit. Those financial statements were audited by other auditors, whose report thereon has been furnished to us, and our opinions insofar as they related to the amounts included for discretely presented component units, is based solely on the report of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Monterey, California, as of June 30, 2009, and the respective changes in financial position and cash flows, where applicable, and the respective budgetary comparisons for the General Fund and major special revenue funds for the year then ended in conformity with accounting principles generally accepted in the United States of America.

1 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com

Board of Supervisors County of Monterey, California

In accordance with Government Auditing Standards, we have also issued under separate cover our report dated December 18, 2009, on our consideration of the County of Monterey’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The Management’s Discussion and Analysis (MD & A) and the required supplementary information, as listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules and detailed budget schedules have been subjected to the auditing procedures applied by us 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 and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.

Roseville, CA December 18, 2009

2 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

This section of the County of Monterey’s (County) annual report presents the discussion and analysis of the County’s financial performance during the fiscal year that ended on June 30, 2009. Please read it in conjunction with the transmittal letter at the front of this report and the County’s financial statements, which follow this section. All amounts, unless otherwise indicated, are expressed in millions of dollars.

FINANCIAL HIGHLIGHTS

• The assets of the County exceeded its liabilities at the close of the fiscal year by $735.6 (net assets). Of this amount, $81.0 represents unrestricted net assets, which will be available to meet the County’s ongoing obligations to citizens and creditors. Restricted net assets of $105.2 may be used for the County’s ongoing obligations related to programs with external restrictions. The remaining $549.4 represents the County’s investment in capital assets, less any related outstanding debt used to acquire those assets (invested in capital assets, net of related debt). (See Table 1 – Net Assets.)

• The County’s total net assets increased by $4.5 during the current fiscal year. The increase in net assets represents the degree to which revenue exceeded expenses. (See Table 1 – Net Assets and Table 2 – Change in Net Assets).

• As of June 30, 2009, the County’s governmental funds reported total ending fund balances of $242.7. The decrease of $24.8 is due to the erroneous inclusion in fiscal year 2008 of long-term property tax receivables of $9.4, and the use of fund balances in current year to cover operations as revenues, especially state revenues, lagged, declined or were otherwise unavailable to meet current obligations. Approximately 82.9%, or $201.1, of this total amount is available for spending (unreserved fund balance). $73.0 of the unreserved balance is for capital projects, $40.3 is for special revenue fund purposes and $7.0 is for debt service. Of the remaining $80.7 unreserved fund balance, $.9 is earmarked by management for self-insurance purposes, and $53.6 is designated by the Board of Supervisors for future plans or projects. Please refer to Note 10 for more specific details. (See further discussion in Financial Analysis of the County’s Funds beginning on page 11.)

• At the end of the current fiscal year, the General Fund showed $80.7 in unreserved fund balance, which is a decrease of $5.2 or a negative 6.1% from the prior year. (See further discussion in Financial Analysis of the County’s Funds beginning on page 11.)

• Net long-term debt for the current fiscal year increased by $31.1. This 12.0% increase is due to debt service payments of $1.7, and the selling of new Certificates of Participation (COPs) for $32.8 to fund the Salinas Valley Water project. (See Table 4 – Long-Term Debt on page 15.)

3 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

OVERVIEW OF THE FINANCIAL STATEMENTS

Management’s discussion and analysis is intended to serve as an introduction to the County’s financial statements. The County’s financial statements include three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to financial statements.

Government-wide financial statements The Government-wide financial statements are designed to provide readers with a broad overview of the County’s finances, in a manner similar to a private-sector business and are presented on a full accrual basis.

The statement of net assets presents information on all of the County’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating.

The statement of activities presents information showing how the County’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g. uncollected taxes and earned, but unused, vacation leave).

The government–wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County are: administration and support, public safety and protection, public ways and facilities, health and sanitation, public assistance, education, and recreation and cultural services. The County has one business-type activity: Natividad Medical Center.

Component units consist of legally separate entities for which the County is financially accountable. Those entities that have substantially the same governing board as the County or provide services entirely to the County are blended as if they were a part of the County. The County has seven blended component units (See Note 1 in the Notes to Financial Statements for more details). Financial information on discretely presented component units is reported separately from the financial information presented for the County. The County has one discretely presented component unit.

The government-wide financial statements can be found on pages 19 – 21 of this report.

Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, 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 County can be divided into three categories: governmental, proprietary, and fiduciary.

4 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the County’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 the government-wide financial statements in order to facilitate this comparison between governmental funds and governmental activities.

The County maintains over 130 individual governmental funds. For financial reporting purposes, these funds have been combined into four groupings. The County segregates within the governmental funds the major funds: General Fund, Community Development Fund, Facility Master Plan Implementation Fund and a grouping for all nonmajor funds. 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 three funds, which are considered to be major funds according to the rules stated in Government Accounting Standards Board Statement No. 34 (GASB 34). Data for the remaining governmental funds are combined into the presentation of Other Governmental Funds. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements located in the Supplementary Information section of this report.

The County adopts an annual appropriated budget for all of its operating funds. A budgetary comparison statement has been provided for the General Fund, on page 155, to demonstrate performance against this budget. For individual fund budget comparisons for the Nonmajor Special Revenue, Capital Project and Debt Service funds please see the supplementary information schedules.

The governmental funds’ financial statements can be found on pages 25 and 27 of this report.

Proprietary funds Proprietary Funds include both Internal Service and Enterprise Funds within the County’s Comprehensive Annual Financial Report.

The County has two Internal Service Funds. These Internal Service Funds are used to account for the general liability and workers’ compensation insurance activities.

The County maintains one Enterprise Fund. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses an enterprise fund to account for its county hospital, Natividad Medical Center

5 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

(NMC). The Proprietary fund’s presentation provides the same type of information as the government-wide statements, but in more detail, and is presented on a full accrual basis.

The proprietary fund’s financial statements can be found on pages 31 – 34 of this report.

Fiduciary funds Fiduciary funds are used to account for resources held for the benefit of parties outside the County. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The external portion of the Treasurer’s Investment Pool and agency funds are reported as fiduciary funds.

The fiduciary funds’ financial statements can be found on pages 35 and 36 of this report.

Notes to 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. The notes to financial statements can be found on pages 39 – 84 of this report.

Other Information In addition to the financial statements and accompanying notes, this report also presents certain required supplementary information concerning the County’s progress in funding its obligations to provide pension and retiree health care benefits to its employees. Required supplementary information can be found on pages 87 and 88 of this report.

The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 93 – 168 of this report.

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 County, assets exceeded liabilities by $735.6 at the close of the current fiscal year (Table 1 – Net Assets).

The largest portion of the County’s net assets, $549.4 or 74.8% reflects its investment in capital assets, (land, buildings, roads, bridges, machinery and equipment) less any related outstanding debt used to acquire those assets. This area increased by $11.0 due to the completion of capital projects, and the pay down of debts that were used to purchase the assets. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County’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.

Another portion of the County’s net assets, $105.2, represents resources that are subject to constraints by either external creditors or government entities or by law through constitutional provisions or enabling legislation. The major restrictions on the County’s net assets are imposed

6 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

by state and federal restrictions for allocations to areas such as: flood control, sanitation, debt service, roads, low income housing, emergency medical services, capital projects, and developments of unincorporated areas. Restricted net assets increased by $1.2, or 1.2%, including funding for state programs that are associated with the Mental Health Service Act and the advance of a new boating grant for Lake Nacimiento.

TABLE 1 - County of Monterey's Net Assets (in millions)

Governmental Business-type Total Activities Activites Total Dollar Percent 2009 2008 2009 2008 2009 2008 Change Change Current and other assets $396.0 $425.0 $53.4 $45.2 $449.4 $470.2 ($20.8) -4.4% Capital assets 660.4 600.4 113.6 115.5 774.0 715.9 58.1 8.1% Total assets 1,056.4 1,025.4 167.0 160.7 1,223.4 1,186.1 37.3 3.1%

Current and other liabilities 125.5 96.3 22.0 12.6 147.5 108.9 38.6 35.4% Long-term liabilities 275.4 270.6 64.9 75.5 340.3 346.1 (5.8) -1.7% Total liabilities 400.9 366.9 86.9 88.1 487.8 455.0 32.8 7.2%

Net assets: Invested in capital assets, net of related debt 502.1 493.0 47.3 46.1 549.4 539.1 10.3 1.9% Restricted 105.2 104.0 - - 105.2 104.0 1.2 1.2% Unrestricted 48.2 61.5 32.8 26.5 81.0 88.0 (7.0) 8.0% Total net assets $655.5 $658.5 $80.1 $72.6 $735.6 $731.1 $4.5 0.6%

The County’s unrestricted net assets balance of $81.0 represents resources that are available to meet the County’s ongoing obligations to citizens and creditors. The prior year data has been adjusted to reflect restatements of capital assets. For additional details, please see Note 21 – Restatement of Net Assets and Fund Balances on page 84. Net assets increased by $4.5. The net decline of $3.0 from governmental activities was offset by positive gains of $7.5 from NMC operations.

7 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

TABLE 2 - County of Monterey's Changes in Net Assets (in millions)

Governmental Business-type Total Activities Activities Total Dollar Percent 2009 2008 2009 2008 2009 2008 Change Change Revenues Program Revenues: Charges for services $118.0 $113.3 $185.6 $183.0 $303.6 $296.3 $7.3 2.5% Operating grants and contributions 303.2 286.8 12.9 10.3 316.1 297.1 19.0 6.4% Capital grants and contributions - - 3.2 - 3.2 - 3.2 N/A General revenues: Property taxes 149.2 156.1 - - 149.2 156.1 (6.9) -4.4% Sales tax & Sales Tax in lieu 6.5 6.8 - - 6.5 6.8 (0.3) -4.4% Transient occupancy and other taxes 15.0 16.4 - - 15.0 16.4 (1.4) -8.5% Franchise taxes 7.9 6.6 - - 7.9 6.6 1.3 19.7% Other taxes 2.0 1.9 - - 2.0 1.9 0.1 5.3% Vehicle license fees 12.2 13.8 - 12.2 13.8 (1.6) -11.6% Unrestricted investment earnings 2.1 11.6 - - 2.1 11.6 (9.5) -81.9% Tobacco settlement revenues 4.9 4.4 - - 4.9 4.4 0.5 11.4% Other 0.2 3.8 - - 0.2 3.8 (3.6) -94.7% Donations - - 0.7 1.4 0.7 1.4 (0.7) -50.0% Total revenues 621.2 621.5 202.4 194.7 823.6 816.2 7.4 0.9%

Expenses General government 77.8 78.3 - - 77.8 78.3 (0.5) -0.6% Public safety and protection 177.7 187.7 - - 177.7 187.7 (10.0) -5.3% Public ways and facilities 46.4 39.1 - - 46.4 39.1 7.3 18.7% Health and sanitation 135.2 130.6 - - 135.2 130.6 4.6 3.5% Public assistance 158.1 150.4 - - 158.1 150.4 7.7 5.1% Education 7.6 7.3 - - 7.6 7.3 0.3 4.1% Recreation and culture services 11.2 10.1 - - 11.2 10.1 1.1 10.9% Interest on long-term debt 10.2 8.8 - - 10.2 8.8 1.4 15.9% Natividad Medical Center - - 194.9 186.1 194.9 186.1 8.8 4.7% Total expenses 624.2 612.3 194.9 186.1 819.1 798.4 20.7 2.6%

Change in net assets before transfers (3.0) 9.2 7.5 8.6 4.5 17.8 (13.3) -74.7% Transfers - (4.2) - 4.2 - - 0.0 N/A Increase (decrease) in net assets (3.0) 5.0 7.5 12.8 4.5 17.8 (13.3) -74.7%

Net assets, beginning 658.5 649.1 72.6 59.8 731.1 708.9 22.2 3.1% Prior Period Adjustment - 4.4 - - - 4.4 (4.4) -100.0% Net assets, ending $655.5 $658.5 $80.1 $72.6 $735.6 $731.1 $4.5 0.6%

Governmental Activities Governmental activities decreased the County’s net assets by $3.0. This reduction is primarily due to the use of fund balance to finance government operations as revenues were decreasing, and government services were increasing from the recession. (See Table 2–Change in Net Assets).

Revenues Governmental activities’ revenue (not including transfers) decreased $ .3 from $621.5 to $621.2, or a negative .05%. This marginal net decrease was due to the increase in charges for services and operating grants that were offset by reductions in property taxes, Transient Occupancy Taxes (TOT), Vehicle Licensing Fees (VLF), and investment earnings. Additional information for the decrease is due to the following:

8 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

• Charges for Services increased by $4.7 as County agencies continue to recover the maximum amount of costs for services provided to the public, such as Medi-Cal reimbursements. A part of this increase of $1.4 was attributed to Medicare revenues from increased patient visits.

• Operating grants and contributions increased by $16.4. A large portion of this amount, $10.8, is revenue that was earned in FY 2007-08 but received after the accrual period deadline, thus recognized in FY 2008-09. Additional revenues were earned from federal sources to support entitlement programs due to the deterioration of the local economy, layoffs, and increasing needs for public assistance aids.

• Increased revenues were earned from the completion of numerous grant funded capital projects, i.e., roads, bridges, infrastructure, etc.

• Property taxes decreased by $6.9. The annual growth of secured property taxes is restricted by Article 13 of the State Constitution enacted in 1978 by passage of the People’s Initiative to Limit Property Taxation (Proposition 13). Therefore the FY 2008- 09 tax bills were based on assessed values as of December 31, 2007. The severe impact of the declining real estate market has placed a downward pressure on revenues from delinquencies, foreclosures, and reevaluation of various real parcels.

• Vehicle license fees decreased from $13.8 in prior year to $12.2. The $1.6 decrease was due to the downturn in unit sales volume, pricing incentives and the closing of numerous dealers.

• Interest and investment earnings decreased by $9.5 due to the write-off of two major investments in the County’s pooled investments and the reevaluation of the pool’s portfolio. A softening of interest rates from the frozen financial markets negatively impacted the realized losses from the Lehman Brothers and Washington Mutual Bank bankruptcies.

Expenses Total governmental expenses increased by $11.9 or 1.9% to $624.2. The largest contributors to these increased costs were health and sanitation, public assistance, and public ways and facilities. Reduction in expenses was secured from general government, and the public safety functions. The explanations for these changes are as follows:

• General government expenses decreased by $ .5 due to the implementation of a hiring freeze where only mission-critical positions were filled. At the same time budgets were proactively managed and monitored to eliminate non-essential purchases.

• Public safety and protection expenses decreased by $10.0 or 5.3% due to reprioritization, reduction, and streamlining of services. Programs were readjusted, procurement reprioritized, and personnel services and operating costs readjusted. Additional partnering of resources was also implemented with other public safety agencies to meet the services needs of the County’s stakeholders.

9 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

• Public ways and facilities expenses increased by $7.3 or 18.7%. This increase was due to cost overruns from changing construction requirements, project change orders, and remediation of asbestos problems with the north wing courthouse construction project.

• Health and sanitation expenses rose by $4.6 or 3.5% over prior year due to the cleaning of hazardous materials from the Dayton Fire. The County has also implemented numerous environmental programs to monitor and study the area’s water supply. Medi- Cal and Medicare costs also increased by 4.9% due to increased demand for services from the recession.

• Public assistance expenses moved up by $7.7. The increase in this category of expenses was due to the declining economy and continuous job losses. This pressure has placed rapid growth in entitlement programs such as CalWORKS, food stamps, Medi-Cal, In- Home Supportive Services, general assistance, food aid, cash assistance, and medical assistance.

• Recreation and cultural services costs increased $1.1 or 10.9% due to the County assuming management of the Lake San Antonio and Lake Nacimiento operations. Additional costs were incurred to complete various deferred maintenance and critical capital projects.

For FY 2008-09 the County has proactively managed the downturn of revenues by implementing a hiring freeze and a strategic control of all expenses. Only positions that were mission critical or were associated with “new” sources of revenue were filled during the year. Of the 117 additional positions budgeted in FY 2008-09 only 26 were filled with new grants or self funded revenue. In addition, the FY 2009-10 Adopted Budget deleted 210 positions as County management deals proactively with current and anticipated economic challenges.

As shown in the following chart, program revenues are less than the expenses in all functional areas except for public ways and facilities. The difference of program expenses over program revenue is $203.0.

Expenses & Program Revenues- Governmental Activities

Expenses Program Revenues

$200.0

$150.0

$100.0

$50.0

$0.0 General Public safety Public ways and Health and Public assistance Education Recreation and Interest on long- government facilities sanitation culture services t erm de bt

10 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

Program revenues are not intended to support governmental programs. This presentation is meant to show the net cost of each program prior to allocation of general revenues. The net cost of $203.0 of these programs is almost totally funded by general revenues of $200.0 with the deficit funded by prior year unrestricted net assets.

Total revenue by sources for governmental activities is shown on the following chart.

Revenues by Source- Governmental Activities

Operating grants & contributions 49 % Charges for services 19 %

VLF 2%

Investment earnings 0%

Transient occupancy tax 2% Property Tax 27 % Sales and use tax 1%

Business-type Activities. Natividad Medical Center is owned and operated by the County and governed by a separate Board of Trustees. As a County entity, NMC is mandated to treat patients, regardless of ability to pay.

NMC experienced an operating loss of $6.6 in FY 2008-09. Net non-operating revenues of $14.2 reversed the operating loss to a positive change in net assets of $7.5. The components of the non- operating revenues consist of $16.1 intergovernmental grants, ($.3) interest income, ($3.9) interest expense, $1.7 rental income, and $.7 donations. The County did not provide a subsidy for the fiscal year.

During the fiscal year the County replaced the consulting group with a “new” management team. The new team implemented strategies to continuously increase revenues and streamline operating costs. However the downturn of the economy has placed increased demand for in- patient and emergency services. Costs for personnel services also increased as NMC was forced to upwardly adjust compensation in order to retain personnel, as well as to attract top notch candidates to fill critical vacancies.

FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS

As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds The focus of the County’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County’s financing requirements. In particular, unreserved fund balance may

11 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

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 fiscal year, the County’s governmental funds reported total fund balances of $242.7, a decrease of $24.8 from the adjusted prior year total fund balances. Approximately 82.9%, or $201.1, of this amount constitutes unreserved fund balance, which is available to meet the County’s current and future needs. Another component is restricted for use by the County’s capital project and special revenue funds to be spent on such items as buildings, roads, bridges, waterways and other programs based on the restrictions mandated by the funding sources. Designations by management of unreserved fund balance represent funds earmarked for self- insurance, vehicle replacement, and other planned activities (see Note 10).

The remainder of fund balance is reserved to indicate that the funds are not available for new spending because it has been reserved for the following purposes:

• $26.8 to liquidate contracts and purchase orders of the current period (Encumbrances) • $13.2 to pay debt service • $1.6 for unavailable assets and other reserves

General Fund The General Fund is the main operating fund of the County. All County activities not included in a separate fund are included in the General Fund. At June 30, 2009, unreserved fund balance totaled $80.7, a decrease of $5.2 from the adjusted unreserved fund balance of $85.9 (see Note 21). Overall, revenue fell slightly as property taxes begin to respond to the devalued housing assessments which were calculated in late fiscal year 2006-07. But the growth is expected to decrease even more as:

• State funding continues to shrink, • Tourism receipts follow the economic decline, • Salaries and employee benefits rise per contractual mandates, • Public safety costs increase, and • Health, social services, and population costs escalate.

Expenditures increased 3.9% or $20.1 over prior year, primarily due to growth in employee salaries and benefits as required by union contracts. Pension and retirement costs have mushroomed following the County’s enhancement of employees’ retirement plans and extreme losses to PERS investments.

Community Development Community Development is used for a variety of economic development activities. The fund balance is $1.4, of which $.1 is reserved to liquidate contracts and purchase orders. Fund balance decreased by $.8 as first time state payments from new grants lagged beyond the accrual availability period established by the County. Grant payments received after the County’s accrual period of 90 days are recorded as deferred revenue in the fund statements.

12 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

Facility Master Plan Implementation The Facility Master Plan Implementation Fund ends the fiscal year with a total fund balance of $46.2, of which $10.3 is reserved to liquidate contracts and purchase orders. The unreserved fund balance of $35.8 is a 54.7% decrease over the prior fiscal year. The completed projects that contributed to the decline of the fund balance were: 1) The Health Department Headquarters, 2) Probation – Youth Center Probation Module Education Center, 3) ERP Project, and 4) Government center projects. Ongoing projects include the court house north wing complex facilities, and the east and west wings of the courthouse complex.

Other Governmental Funds The sum of the fund balances of the remaining governmental funds increased $15.2 to a balance of $106.8. Roads is not a major fund in fiscal year 2008-09, thus its fiscal year 2008-09 fund balance was combined with the fiscal year 2008-09 other governmental funds total for this fiscal analysis. The major increases were in: Special Revenue Funds which had an influx of bond proceeds in Other Water Resources Agencies Fund resulting in an $8.0 increase over prior year; and a $5.4 increase in Debt Service Funds for servicing the Water Resources COP issues.

Proprietary funds. The County’s proprietary fund (Natividad Medical Center) increased its net assets by $7.5 during the fiscal year. To date the consolidated net assets ended at $80.1. As stated on page 11, NMC has improved operations considerably over the prior year. The unrestricted cash balance for NMC is $28.6 at the end of the fiscal year. This is an 18.7% growth when compared to the $24.1 from the previous ending fiscal year.

GENERAL FUND BUDGETARY HIGHLIGHTS

Original Budget to Final Budget Increase Original Final (Decrease) Estimated revenues $ 551.2 $566.2 $15.0 Appropriations $ 571.4 $585.3 $13.9

Estimated revenues increase of $15.0:

The final estimated revenue budget increased compared to the original budget by 2.7% due to unanticipated payments of delinquent property taxes as banks assumed the financial responsibility for the back taxes. Additional revenues were re-budgeted from the receipt of deferred income from the State.

Appropriations increase of $13.9:

Budgets were increased to reflect the ARRA-American Recovery and Reinvestment stimulus funds, and other associated grants. These increases were mitigated by savings as departments eliminated or deferred non-essential activities and filled only crucial vacancies. The net result was an increase from the original budget of 2.4%.

13 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

Final Budget to Actual Variance Positive Final Actual (Negative) Revenues $ 566.2 $543.5 ($ 22.7) Expenditures $ 585.3 $551.3 $ 34.0

Revenues actual was lower than final budget by $22.7:

Proposition 172, Public safety sales tax revenues, came in less than budgeted by the various public safety agencies. Permit fees and services associated with housing and construction declined with the downturn of the housing market. Unanticipated payment of delinquent property taxes and increased sales taxes from higher gasoline prices mitigated the decrease.

Expenditures actual was less than final budget by $34.0:

Savings in expenditures are mainly a result of curtailing salary and employee benefits by filling only crucial positions plus reduced travel and training, and curtailed equipment and supplies purchases.

CAPITAL ASSETS

Table 3 – Capital Assets

TABLE 3- County of Monterey's Capital Assets

Governmental Business-type Total Activities Activites Total Dollar Percent 2009 2008 2009 2008 2009 2008 Change Change Land$ 174.8 $ 174.8 $ - $ - $ 174.8 $ 174.8 $ - 0.0% Structures and improvements 141.7 142.9 153.3 153.2 295.0 296.1 (1.1) -0.4% Equipment 79.3 78.5 42.2 37.5 121.5 116.0 5.5 4.7% Infrastructure 491.4 481.2 - - 491.4 481.2 10.2 2.1% Construction in Progress (CIP) 156.0 76.4 1.3 0.9 157.3 77.3 80.0 103.5% Total Capital Assets 1,043.2 953.8 196.8 191.6 1,240.0 1,145.4 94.6 8.3% Accumulated Depreciation (382.8) (357.8) (83.2) (76.1) (466.0) (433.9) (32.1) 7.4% Total $ 660.4 $ 596.0 $ 113.6 $ 115.5 $ 774.0 $ 711.5 $ 62.5 8.8%

Capital projects are generally completed over multiple fiscal years. Costs accumulate within the construction in progress (CIP) account until the completion of projects. At completion, current year costs and all prior years’ costs of a project are totaled then transferred to structures and improvements, equipment or infrastructure. The County’s major capital asset events in the current fiscal year included CIP additions, as the County attempts to complete the courthouse complex north wing in fiscal year 2010, and infrastructure additions as prior years’ costs of completed projects moved to completed asset accounts.

14 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

The accompanying government-wide financial statements include the costs of those infrastructure assets that were either completed during the fiscal year or considered CIP at year- end. Additional information on the County’s capital assets can be found in Note 5 beginning on page 58 of this report.

DEBT ADMINISTRATION

State statutes limit the amount of general obligation debt a government entity may issue to 1.25% of the total assessed valuation of property within the County. The current debt limitation of the County is $663.5, which is significantly in excess of the County’s actual outstanding total debt of $291.1. The following schedule does not include the liabilities for self-insurance, compensated absences, and estimated landfill closure, which are components of the long-term liabilities balance of $374.1.

Moody’s has assigned an A3 rating to the County with a positive outlook, due to significantly improved financial flexibility and strong financial performance in recent years as well as the proactive approach taken by County management in response to the economic recession.

At June 30, 2009, the County had total long-term debt outstanding of $291.2. This was an increase of $31.1 or 12% from the prior year balance of $260.1. The net increase is due to the issue of $32.8 Series A Certificates of Participation (COPs) to fund the Salinas Valley Water Project, and the payment of current debt services of $1.7.

TABLE 4 - County of Monterey's Long Term Debt (in millions)

Governmental Business-type Total Activities Activites Total Dollar Percent 2009 2008 2009 2008 2009 2008 Change Change Certificates of participation$ 136.3 $ 139.1 $ 71.3 $ 67.5 $ 207.6 $ 206.6 $ 1.0 0.5% Revenue bonds 4.0 1.1 - - 4.0 1.1 2.9 263.6% Loans payable-Bureau of Reclamation 33.9 31.4 - - 33.9 31.4 2.5 8.0% Judgment Obligation Bonds 14.7 4.8 - - 14.7 4.8 9.9 206.3% Notes payable 30.8 15.5 - - 30.8 15.5 15.3 98.7% Other bonds and notes 0.2 0.7 - - 0.2 0.7 (0.5) -71.4% Total $ 219.9 $ 192.6 $ 71.3 $ 67.5 $ 291.2 $ 260.1 $ 31.1 12.0%

Additional information on the County’s long-term debt can be found in Note 8 on page 62 of this report.

ECONOMIC ANALYSIS AND NEXT YEAR’S BUDGET AND RATES

The following are economic factors for fiscal year 2009-10:

• Property tax values are estimated to decrease in fiscal year 2010 due to major reassessments of property, as required by the 1978 amendment to Article 13 – Taxation of the State Constitution that requires reassessment of value when market values decline below assessed value. The result will not only produce less tax revenue, but will result in refunds on property sold at a lower price than the assessed value for which taxes have been paid. 15 COUNTY OF MONTEREY MANAGEMENT’S DISCUSSION AND ANALYSIS

• The County of Monterey continues to experience the effects of the economic downturn in California and the nation. Falling house prices, two-digit unemployment rates, tight credit conditions, soaring food and utilities prices are among the challenges facing the County. • The Board adopted a fiscal year 2009-10 balanced budget for the General Fund totaling $558.5, an increase of $6.9 or 1.3% over the fiscal year 2008-09 adopted budget. The modest increase reflects County management’s commitment to provide essential services and programs while minimizing the effect to the County’s workforce in light of continuing economic challenges and severe impact from the State’s budget deficit.

REQUESTS FOR INFORMATION

This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the County’s finances and to demonstrate the County’s accountability for the money it receives. If you have questions about this report or need additional information, contact the County of Monterey, Office of Auditor-Controller, 168 West Alisal Street, Salinas, CA 93901.

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BASIC FINANCIAL STATEMENTS – GOVERNMENT-WIDE FINANCIAL STATEMENTS

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18 COUNTY OF MONTEREY

Statement of Net Assets June 30, 2009 Component Primary Government Unit Governmental Business-Type Children and Activities Activities Total Families Commission ASSETS Cash and investments: Held in County treasury$ 258,915,492 $ 28,552,261 $ 287,467,753 $ 22,111,125 Held with trustee 44,569,220 540,094 45,109,314 -- Imprest cash 23,600 2,128 25,728 470,321 Restricted cash 193,501 -- 193,501 -- Receivables 69,860,085 19,069,747 88,929,832 1,242,692 Inventories 407,403 1,723,099 2,130,502 -- Land held for resale and development 915,680 -- 915,680 -- Prepaid items 362,990 1,766,535 2,129,525 4,704 Internal balances (727,567) 727,567 -- -- Long-term receivables 18,387,308 -- 18,387,308 -- Bond issuance costs, net of amortization 3,048,328 966,889 4,015,217 -- Capital assets: Nondepreciable 330,806,984 1,276,278 332,083,262 -- Depreciable, net 329,613,434 112,344,081 441,957,515 31,264 Total assets $ 1,056,376,458 $ 166,968,679 $ 1,223,345,137 $ 23,860,106

LIABILITIES Vouchers and accounts payable$ 16,306,691 $ 2,846,249 $ 19,152,940 $ 2,433,871 Accrued salaries and benefits 8,730,958 2,561,996 11,292,954 12,376 Accrued interest payable 3,384,700 1,398,478 4,783,178 -- Accrued liabilities 4,322,932 4,914,011 9,236,943 -- Deposits from others 7,252,999 1,333,391 8,586,390 -- Unearned revenues 54,087,473 40,361 54,127,834 -- Long-term liabilities: Due within one year 31,405,769 8,898,847 40,304,616 30,200 Due beyond one year 269,970,689 63,869,836 333,840,525 61,755 Liability for post-employment benefits 5,399,925 1,018,617 6,418,542 -- Total liabilities 400,862,136 86,881,786 487,743,922 2,538,202

NET ASSETS Invested in capital assets, net of related debt 502,050,998 47,265,335 549,316,333 20,058 Restricted for: Community resources and facilities 36,132,579 -- 36,132,579 -- Health and public assistance 1,759,119 -- 1,759,119 -- Disaster assistance 258,355 -- 258,355 -- Capital projects 58,482,136 -- 58,482,136 -- Debt service 45,607 -- 45,607 -- General government and support services 8,571,776 -- 8,571,776 -- Other ------21,301,846 Unrestricted 48,213,752 32,821,558 81,035,310 -- Total net assets 655,514,322 80,086,893 735,601,215 21,321,904

Total liabilities and net assets $ 1,056,376,458 $ 166,968,679 $ 1,223,345,137 $ 23,860,106

The accompanying notes are an integral part of these financial statements. 19 COUNTY OF MONTEREY

Statement of Activities For the Year Ended June 30, 2009

Program Revenues Fees, Fines, and Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Functions/Programs Primary government Governmental activities: General government$ 77,838,801 $ 36,492,304 $ 26,287,292 $ -- Public safety and protection 177,747,409 16,789,377 24,890,411 -- Public ways and facilities 46,384,167 26,335,815 25,090,696 -- Health and sanitation 135,200,026 30,834,849 74,638,581 -- Public assistance 158,092,105 64,533 151,293,261 -- Education 7,559,116 492,620 145,616 -- Recreation and cultural services 11,156,010 6,973,700 834,316 -- Interest on long-term debt 10,172,766 ------Total governmental activities 624,150,400 117,983,198 303,180,173 --

Business-type activities: Natividad Medical Center 194,849,694 185,599,813 12,920,876 3,158,400 Total business-type activities 194,849,694 185,599,813 12,920,876 3,158,400

Total primary government$ 819,000,094 $ 303,583,011 $ 316,101,049 $ 3,158,400

Component unit Children and Families Commission$ 8,307,760 $ -- $ 7,009,546 $ --

General revenues: Taxes: Property taxes Sales and use taxes Transient occupancy taxes Franchise taxes Other taxes Intergovernmental not restricted to specific programs Unrestricted interest and investment earnings Tobacco settlement revenues Other revenues Donations Total general revenues and transfers

Change in net assets Net assets - July 1, 2008 as restated

Net assets - June 30, 2009

20 Net (Expenses) Revenues and Changes in Net Assets Component Primary Government Unit Business- Children and Governmental Type Families Activities Activities Total Commission

$ (15,059,205) $ -- $ (15,059,205) $ -- (136,067,621) -- (136,067,621) -- 5,042,344 -- 5,042,344 -- (29,726,596) -- (29,726,596) -- (6,734,311) -- (6,734,311) -- (6,920,880) -- (6,920,880) -- (3,347,994) -- (3,347,994) -- (10,172,766) -- (10,172,766) -- (202,987,029) -- (202,987,029) --

-- 6,829,395 6,829,395 -- -- 6,829,395 6,829,395 --

(202,987,029) 6,829,395 (196,157,634) --

(1,298,214)

149,239,044 -- 149,239,044 -- 6,564,625 -- 6,564,625 -- 15,006,940 -- 15,006,940 -- 7,866,356 -- 7,866,356 -- 1,973,318 -- 1,973,318 --

12,243,221 -- 12,243,221 -- 2,072,490 -- 2,072,490 350,373 4,880,389 -- 4,880,389 -- 186,417 -- 186,417 635 -- 664,871 664,871 -- 200,032,800 664,871 200,697,671 351,008

(2,954,229) 7,494,266 4,540,037 (947,206) 658,468,551 72,592,627 731,061,178 22,269,110

$ 655,514,322 $ 80,086,893 $ 735,601,215 $ 21,321,904

The accompanying notes are an integral part of these financial statements. 21

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BASIC FINANCIAL STATEMENTS – FUND FINANCIAL STATEMENTS

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24 COUNTY OF MONTEREY

Balance Sheet Governmental Funds June 30, 2009

Facility Other General Community Master Plan Governmental Fund Development Implementation Funds Total ASSETS Cash and investments: Held in County Treasury $ 96,043,189 $ 782,982 $ 23,341,260 $ 98,314,322 $ 218,481,753 Held with trustee -- 387,835 28,200,293 15,586,302 44,174,430 Imprest cash 23,600 ------23,600 Restricted cash 193,501 ------193,501 Receivables 62,410,940 111,291 -- 7,305,373 69,827,604 Due from other funds 25,091 -- -- 86,370 111,461 Advances to other funds -- 150,000 -- -- 150,000 Inventories 287,367 -- -- 120,036 407,403 Land held for resale ------915,680 915,680 Prepaid items and other assets 240,416 ------240,416 Long-term receivables -- 12,624,343 -- 5,762,965 18,387,308 Total assets $ 159,224,104 $ 14,056,451 $ 51,541,553 $ 128,091,048 $ 352,913,156

LIABILITIES Vouchers and accounts payable$ 7,726,393 $ 307 $ 5,375,929 $ 2,926,185 $ 16,028,814 Due to other funds ------111,461 111,461 Accrued salaries and benefits 8,136,934 -- -- 594,024 8,730,958 Accrued liabilities 4,317,969 -- -- 4,963 4,322,932 Claims liability 693,910 ------693,910 Deposits from others 3,742,468 22,112 -- 2,944,142 6,708,722 Deferred revenues 46,275,465 12,624,343 -- 14,557,565 73,457,373 Advances from other funds ------150,000 150,000 Total liabilities 70,893,139 12,646,762 5,375,929 21,288,340 110,204,170

FUND BALANCES Reserved for: Encumbrances 7,048,105 144,418 10,335,413 9,248,260 26,776,196 Unavailable assets 551,383 -- -- 1,035,716 1,587,099 Debt service ------13,240,540 13,240,540 Unreserved: General Designated 54,640,300 ------54,640,300 Undesignated 26,091,177 ------26,091,177 Special revenue funds: Designated ------7,666,824 7,666,824 Undesignated -- 1,265,271 -- 31,439,508 32,704,779 Capital projects funds: Undesignated -- -- 35,830,211 37,185,505 73,015,716 Debt service funds: Undesignated ------6,986,355 6,986,355 Total fund balances 88,330,965 1,409,689 46,165,624 106,802,708 242,708,986

Total liabilities and fund balances $ 159,224,104 $ 14,056,451 $ 51,541,553 $ 128,091,048 $ 352,913,156

The accompanying notes are an integral part of these financial statements. 25 COUNTY OF MONTEREY

Reconciliation of the Governmental Funds Balance Sheet to the Governmental-Wide Statement of Net Assets - Governmental Activities June 30, 2009

Fund balance - Total governmental funds $ 242,708,986

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds. 654,636,105

Other long-term assets are not available to pay for current period expenditures and, therefore are deferred in the governmental funds. 19,369,900

Internal service funds are used by the County to charge the cost of general liability and workers' compensation insurance to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. (18,825,435)

Issuance costs on certificates of participation and revenue bonds are capitalized and amortized over the life of the related debt issue. 3,048,328

Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the governmental funds. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities are reported in the statement of net assets. Balances as of June 30, 2009 are:

Bonds and notes payable$ (65,303,728) Certificates of participation (136,260,000) Unamortized premium on certificates of participation (2,875,603) Unamortized gain on refunding of certificates of participation 2,543,173 Capital lease obligations (253,132) Accrued interest on long-term debt (3,384,700) Compensated absences (30,846,837) Estimated landfill closure and postclosure costs (2,915,243) OPEB liability (5,399,925) (244,695,995)

Adjustment necessary to close Internal Service Funds activities. This is the cummulative excess of revenues over expenses allocable to business-type activities (727,567)

Net assets of governmental activities $ 655,514,322

The accompanying notes are an integral part of these financial statements. 26 COUNTY OF MONTEREY

Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2009

Facility Other General Community Master Plan Governmental Fund Development Implementation Funds Total Revenues: Taxes$ 167,056,856 $ -- $ -- $ 14,230,661 $ 181,287,517 Licenses and permits 9,942,596 -- -- 2,171,830 12,114,426 Fines, forfeitures and penalties 7,395,978 -- -- 1,398,602 8,794,580 Revenue from use of money and property 319,919 79,065 1,865,388 1,608,064 3,872,436 Aid from other governmental agencies 272,667,521 620,485 -- 33,353,971 306,641,977 Charges for services 76,903,170 15,922 -- 25,141,371 102,060,463 Tobacco settlement and miscellaneous 8,876,998 4,144 -- 846,452 9,727,594

Total revenues 543,163,038 719,616 1,865,388 78,750,951 624,498,993

Expenditures: Current: General government 68,166,053 1,423,660 -- 4,467,771 74,057,484 Public safety and protection 174,034,071 ------174,034,071 Public ways and facilities ------65,068,429 65,068,429 Health and sanitation 130,155,966 -- -- 3,808,366 133,964,332 Public assistance 148,420,439 -- -- 8,246,574 156,667,013 Education ------7,387,608 7,387,608 Recreation and cultural services 8,263,216 -- -- 2,834,073 11,097,289 Debt service: Principal ------4,558,314 4,558,314 Interest and debt service costs 613,293 -- -- 9,174,006 9,787,299 Capital outlay -- -- 34,943,520 11,591,416 46,534,936

Total expenditures 529,653,038 1,423,660 34,943,520 117,136,557 683,156,775

Excess (deficiency) of revenues over (under) expenditures 13,510,000 (704,044) (33,078,132) (38,385,606) (58,657,782)

Other financing sources (uses): Issuance of debt ------32,855,000 32,855,000 Premium on issuance of debt ------763,469 763,469 Inception of capital leases ------74,356 74,356 Transfers in 159,908 50,000 -- 55,005,052 55,214,960 Transfers out (19,909,399) (119,430) -- (35,186,131) (55,214,960) Sale of capital assets 186,417 ------186,417 Total other financing sources (uses) (19,563,074) (69,430) -- 53,511,746 33,879,242

Net change in fund balances (6,053,074) (773,474) (33,078,132) 15,126,140 (24,778,540)

Fund balances, beginning of year restated 94,384,039 2,183,163 79,243,756 91,676,568 267,487,526

Fund balances, end of year$ 88,330,965 $ 1,409,689 $ 46,165,624 $ 106,802,708 $ 242,708,986

The accompanying notes are an integral part of these financial statements. 27 COUNTY OF MONTEREY

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Governmental-Wide Statement of Activities - Governmental Activities For the Year Ended June 30, 2009

Net change in fund balance - Total governmental funds $ (24,778,540)

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Expenditures for general capital assets, infrastructure, and other related capital asset adjustments$ 83,710,137 Less current year depreciation (23,077,544) 60,632,593

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (3,089,418)

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. In addition, interest on long-term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. Change in accrued interest on long-term debt (232,013) Change in compensated absences (2,610,866) Change in estimated landfill closure and postclosure 208,227 Change in OPEB liability (2,758,128) Issuance cost on new debt 868,086 Amortization of issuance costs (104,149) Amortization of refunding loss (44,450) Amortization of premiums and discounts 49,430 (4,623,863)

Long-term debt proceeds provide current financial resources for governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Costs associated with the issuance of debt are reported as expenditures in the governmental funds, but deferred and amortized through out the period during which the associated debt is outstanding. Prepayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Debt issued or incurred: Issuance of revenue bonds (32,855,000) Premium on issuance of bonds (763,469) Issuance of capital leases (74,356)

Principal repayments: Certificates of participation 3,310,000 Revenue and special assessment bonds 57,000 Notes and loans 1,164,130 Capital leases 173,078 (28,988,617)

Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of certain activities of the internal service funds is reported with governmental activities. (2,251,635)

Adjustment necessary to close internal service funds activities. This is the current year excess of revenues over expenses allocable to business-type activities 145,251

Change in net assets of governmental activities $ (2,954,229)

The accompanying notes are an integral part of these financial statements. 28 COUNTY OF MONTEREY

Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Year Ended June 30, 2009 Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Taxes, VLF and franchises$ 167,074,812 $ 161,185,807 $ 167,056,856 $ 5,871,049 Licenses and permits 13,661,527 10,476,527 9,942,596 (533,931) Fines, forfeitures and penalties 7,209,664 7,277,664 7,395,978 118,314 Revenue from use of money and property 2,874,097 2,853,890 319,919 (2,533,971) Aid from other governmental agencies 272,599,025 290,907,546 272,667,521 (18,240,025) Charges for services 80,496,129 81,772,173 76,903,170 (4,869,003) Tobacco settlement and miscellaneous 6,647,098 10,989,821 8,876,998 (2,112,823) Other financing sources 587,166 705,266 346,325 (358,941) Total revenues 551,149,518 566,168,694 543,509,363 (22,659,331)

Expenditures: Current: General government 92,300,780 90,077,397 73,160,583 16,916,814 Public safety and protection 188,780,054 194,391,484 189,210,304 5,181,180 Health and sanitation 133,190,156 137,004,768 131,239,245 5,765,523 Public assistance 145,991,049 152,680,137 148,683,553 3,996,584 Recreation and cultural services 11,146,388 11,146,388 8,957,600 2,188,788 Total expenditures 571,408,427 585,300,174 551,251,285 34,048,889

Net change in budgetary fund balances (20,258,909) (19,131,480) (7,741,922) 11,389,558

Budgetary fund balances, July 1 94,384,039 94,384,039 94,384,039 -- Budgetary fund balances, June 30$ 74,125,130 $ 75,252,559 $ 86,642,117 $ 11,389,558

Explanation of differences between budgetary inflows and outflows and gaap revenues and expenditures:

Sources/inflows of resources Actual amounts (budgetary basis) of revenues from the budgetary comparison statement$ 543,509,363 Differences - Budget to GAAP: Transfers from other funds are inflows of budgetary resources but are not revenues For financing reporting purposes (159,908) Sale of capital assets are inflows of budgetary resources but are not revenues For financing reporting purposes (186,417) Total revenues as reported on the statement of revenues, expenditures, And changes in fund balances - governmental funds$ 543,163,038

Uses/outflows of resources Actual amounts (budgetary basis) of expenditures from the budgetary comparison statement$ 551,251,285 Differences - budget to GAAP: Transfers to other funds are outflows of budgetary resources but are not expenditures For budgetary purposes (19,909,399) Encumbrances for supplies and services ordered but not received is reported in the Year the order is placed for budgetary purposes, but in the year the supplies are Received for financial reporting purposes (1,688,848) Total expenditures as reported on the statement of revenues, Expenditures, and changes in fund balances - governmental funds$ 529,653,038

The accompanying notes are an integral part of these financial statements. 29 COUNTY OF MONTEREY

Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Community Development For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 191,000 $ 191,000 $ 79,065 $ (111,935) Aid from other governmental agencies 2,035,000 2,105,000 620,485 (1,484,515) Charges for services 5,000 5,000 15,922 10,922 Other revenue 405,000 405,000 4,144 (400,856) Total revenues 2,636,000 2,706,000 719,616 (1,986,384)

Expenditures: Current: General government 3,730,818 4,500,615 1,482,754 3,017,861 Total expenditures 3,730,818 4,500,615 1,482,754 3,017,861

Other financing sources (uses): Transfers in -- 166,400 50,000 (116,400) Transfers out -- (48,000) (119,430) (71,430) Total other financing sources (uses) -- 118,400 (69,430) (187,830)

Net change in budgetary fund balances (1,094,818) (1,676,215) (832,568) 843,647

Budgetary fund balances, beginning 2,183,163 2,183,163 2,183,163 --

Budgetary fund balances, ending $ 1,088,345 $ 506,948 $ 1,350,595 $ 843,647

Explanation of differences between budgetary inflows and outflows and gaap expenditures:

Uses/outflows of resources

Actual amounts (budgetary basis) of expenditures from the budgetary comparison statement$ 1,482,754

Differences - budget to GAAP: Encumbrances for supplies and services ordered but not received is reported in the year the order is placed for budgetary purposes, but in the year the supplies are received for financial reporting purposes. (59,094)

Total expenditures as reported on the combining statement of revenues, expenditures, and changes in fund balances - governmental funds $ 1,423,660

The accompanying notes are an integral part of these financial statements. 30 COUNTY OF MONTEREY

Statement of Net Assets Proprietary Funds June 30, 2009

Business-Type Activities - Governmental Enterprise Fund Activities Natividad Internal Medical Service Center Funds Assets Current assets: Cash and cash equivalents $ 28,552,261 $ 40,433,739 Imprest cash 2,128 -- Patient’s accounts receivable, net of estimated uncollectable of $97,495,331 17,307,782 -- Accounts receivable -- 32,481 Due from other agencies 1,761,965 -- Inventories 1,723,099 -- Prepaid expenses 1,766,535 122,574 Total current assets 51,113,770 40,588,794

Noncurrent assets: Restricted assets: Held by trustee 540,094 394,790 Capital assets: Non-depreciable 1,276,278 -- Depreciable, net 112,344,081 5,784,313 Deferred charges, net of amortization 966,889 -- Total noncurrent assets 115,127,342 6,179,103 Total assets 166,241,112 46,767,897

Liabilities Current liabilities: Accounts payable and deposits 4,179,640 822,154 Accrued salaries and benefits 2,561,996 -- Accrued interest payable 1,398,478 -- Accrued liabilities 4,914,011 -- Unearned revenue 40,361 -- Current portion of long-term debt and other liabilities 8,898,847 12,338,387 Total current liabilities 21,993,333 13,160,541

Long-term liabilities: Claims liability -- 35,584,047 Bonds and notes payable -- 16,848,744 Certificates of participation 63,045,332 -- Capital leases 237,148 -- Opeb liability 1,018,617 -- Compensated absences 587,356 -- Total long-term liabilities 64,888,453 52,432,791 Total liabilities 86,881,786 65,593,332

Net assets Invested in capital assets, net of related debt 47,265,335 764,373 Unrestricted (deficit) 32,093,991 (19,589,808) Total net assets 79,359,326$ (18,825,435)

Adjustment to reflect the consolidation of internal service fund activities related to enterprise fund 727,567

Net assets of business-type activities$ 80,086,893

The accompanying notes are an integral part of these financial statements. 31 COUNTY OF MONTEREY

Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For the Year Ended June 30, 2009

Business-Type Activities - Governmental Enterprise Fund Activities Natividad Internal Medical Service Center Funds Operating revenues: Net patient services revenues$ 182,174,519 $ -- Other charges for services -- 17,705,318 Other operating revenues 2,053,555 32,986 Total operating revenues 184,228,074 17,738,304

Operating expenses: Salaries and wages 62,991,022 -- Employee benefits 24,687,687 -- Supplies 11,696,905 246,011 Provisions for doubtful accounts receivable 43,036,202 -- Claims expense -- 15,133,308 Utilities 2,960,969 -- Purchased services 33,110,487 753,958 Insurance 2,270,949 1,784,453 Depreciation 7,075,485 746,326 Other 2,973,708 30,875 Total operating expenses 190,803,414 18,694,931

Net operating income (loss) (6,575,340) (956,627)

Non-operating revenues (expenses): Intergovernmental grants 16,079,276 -- Interest income (336,323) (399,821) Interest expense (3,901,029) (895,187) Rental income 1,708,062 -- Donations 664,871 -- Total non-operating revenues (expenses) 14,214,857 (1,295,008)

Change in net assets 7,639,517 (2,251,635)

Net assets, beginning of year 71,719,809 (16,573,800)

Net assets, end of year$ 79,359,326 $ (18,825,435)

Change in net assets, from above$ 7,639,517 Adjustment to reflect the consolidation of internal service funds activities related to enterprise fund (145,251)

Change in net assets of business-type activities$ 7,494,266

The accompanying notes are an integral part of these financial statements. 32 COUNTY OF MONTEREY

Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2009

Business-Type Activities - Governmental Enterprise Fund Activities Natividad Internal Medical Service Center Funds Cash flows from operating activities: Cash received from patients and third party payors$ 138,571,707 $ -- Cash receipts from customers and users 2,053,555 17,712,202 Cash paid to employees for services (85,547,680) -- Cash paid to suppliers for goods and services (55,191,962) (14,529,963)

Net cash provided (used) by operating activities (114,380) 3,182,239

Cash flows from noncapital financing activities: Intergovernmental 14,669,485 -- Donations 664,871 --

Net cash provided (used) by noncapital financing activities 15,334,356 --

Cash flows from capital and related financing activities: Principal paid on capital related debt (3,091,081) (1,462,017) Interest paid on capital related debt (3,943,417) (895,187) Payments related to the acquisition of capital assets (5,159,259) -- Proceeds from the sale of capital assets -- 45,920

Net cash provided (used) by capital and related financing activities (12,193,757) (2,311,284)

Cash flow from investing activities: Cash received from rental income 1,708,062 -- Interest payments received 593,529 983,851 Decrease in fair value of investments (929,852) (1,383,672)

Net cash provided (used) by investing activities 1,371,739 (399,821)

Net increase (decrease) in cash and cash equivalents 4,397,958 471,134 Cash and equivalents, July 1 24,696,525 40,357,395 Cash and equivalents, June 30$ 29,094,483 $ 40,828,529

Reconciliation of cash and cash equivalents to statement of net assets Cash and cash equivalents $ 28,552,261 $ 40,433,739 Imprest cash 2,128 -- Restricted cash 540,094 394,790 Total cash and cash equivalents$ 29,094,483 $ 40,828,529

continued The accompanying notes are an integral part of these financial statements. 33 COUNTY OF MONTEREY

Statements of Cash Flows (continued) Proprietary Funds For the Year Ended June 30, 2009

Business-Type Activities - Governmental Enterprise Fund Activities Natividad Internal Medical Service Center Funds Reconciliation of operating income to net cash Provided by operating activities: Operating income (loss) $ (6,575,340) $ (956,627) Adjustments to reconcile operating income to net Cash provided (used) by operating activities: Depreciation and amortization 7,075,485 746,326 (increase) decrease in provision for doubtful accounts 21,824,045 -- (increase) decrease in accounts receivable (23,277,484) (26,102) (increase) decrease in inventories (437,361) -- (increase) decrease in prepaid items (702,109) (1) Increase (decrease) in accounts payable (146,725) 212,415 Increase (decrease) in other accrued liabilities (203,347) -- Increase (decrease) in patient refunds 379,650 -- Increase (decrease) in unearned revenue (85,332) -- Increase (decrease) in compensated absences 921,346 -- Increase (decrease) in post-employment liability 520,281 -- Increase (decrease) in estimated third-party payor settlements 592,511 -- Increase (decrease) in claims liability -- 3,206,228

Total adjustments 6,460,960 4,138,866

Net cash provided (used) by operating activities$ (114,380) $ 3,182,239

The accompanying notes are an integral part of these financial statements. 34 COUNTY OF MONTEREY

Statement of Fiduciary Net Assets June 30, 2009

Investment Agency Trust Funds Assets Cash and investments held in county treasury$ 616,638,038 $ 25,749,780 Taxes receivable -- 36,008,910 Long-term receivables -- 30,000

Total assets 616,638,038 61,788,690

Liabilities Accounts payable -- 1,996,248 Agency funds held for others -- 59,792,442

Total liabilities -- 61,788,690

Net assets Net assets held in trust for investment pool participants 616,638,038 --

Total net assets $ 616,638,038 $ --

The accompanying notes are an integral part of these financial statements. 35 COUNTY OF MONTEREY

Statement of Changes in Fiduciary Net Assets For the Year Ended June 30, 2009

Investment Trust Additions Contributions to investment pool$ 33,751,771 Interest and investment income (240,611)

Total additions 33,511,160

Deductions Distributions from investment pool 67,813,227

Total deductions 67,813,227

Change in net assets (34,302,067)

Net assets, beginning of year 650,940,105

Net assets, end of year$ 616,638,038

The accompanying notes are an integral part of these financial statements. 36

NOTES TO FINANCIAL STATEMENTS

The notes provided in the financial section are considered an integral and essential part of adequate disclosure and fair presentation of this report. The notes include a summary of significant accounting policies for the County, and other necessary disclosure of pertinent matters relating to the financial position of the County. The notes express significant insight to the financial statements and are conjunctive to understanding the rationale for presentation of the financial statements and information contained in this document.

37

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38 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies

A. The Financial Reporting Entity

The County of Monterey (County) was created pursuant to general law as a subdivision of the State of California. It is governed by a five-member elected Board of Supervisors. As required by generally accepted accounting principles, the accompanying financial statements present the County (the primary government) and its component units, entities for which the government is considered to be financially accountable under the criteria set by Government Auditing Standards Board (GASB) Statement No. 14.

Although they are legally separate from the County, the following blended component units are reported as if they were a part of the County because the Monterey County Board of Supervisors also serves as the governing board of each component unit:

– Monterey County Water Resources Agency, including Storm Drain Maintenance District No. 2 and Gonzales Slough Maintenance District – All County Service Areas – All County Sanitation Districts except Seaside County Sanitation District – Monterey County Redevelopment Agency – Nacimiento Hydroelectric Operations – Monterey County Financing Authority – Monterey County Public Improvements Corporation

Complete financial statements of the Monterey County Redevelopment Agency can be obtained by contacting the County of Monterey, Intergovernmental Affairs, P.O. Box 180, Salinas, CA 93902.

Monterey County Children and Family Commission (Commission) was established under the provisions of the California Children and Families Act. The Commission is a legally separate entity governed by a board of seven members. Three members are representatives of the County’s health care departments, County’s social services departments and the Board of Supervisors. The County Board of Supervisors may remove any Commission member at any time. Since the County Board of Supervisors can impose their will on the Commission, the Commission is considered a discretely presented component unit of the County. Separately issued statements may be obtained by contacting the Commission at 1125 Baldwin Street, Salinas, CA 93906.

39 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

A. The Financial Reporting Entity (continued)

The Monterey County Board of Supervisors appoints a voting majority of the governing boards of the following entities; however, such entities are excluded from the accompanying financial statements due to the fact that (1) the County is not able to impose its will on the entity and (2) there is not a financial benefit/burden relationship between the County and the entity:

– Monterey County Housing Authority – Monterey Bay Unified Air Pollution Control District – All Cemetery Districts – Carmel Highlands Fire Protection District – Mid-Carmel Valley Fire Protection District – Mission Soledad Rural Fire Protection District – Salinas Rural Fire Protection District – North County Public Recreation District

B. New Accounting Pronouncements

The GASB has issued Statement No. 51, Accounting and Financial Reporting for Intangible Assets, which may have a significant impact on the County’s financial reporting process. GASB Statement No. 51 establishes accounting and financial reporting requirements for intangible assets including easements, water rights, timber rights, patents, trademarks and computer software. GASB No. 51 will be effective for the fiscal year ending June 30, 2010.

The GASB has issued Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. This statement establishes accounting and financial reporting requirements for derivative instruments entered into by state and local governments. The requirements of this new statement are effective for financial statements for periods beginning after June 15, 2009.

The GASB has issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This statement enhances the usefulness of fund balance information by establishing fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds.

The definitions of the general fund, special revenue fund types, capital project fund types, debt service fund types and permanent fund types are clarified by the provisions in this statement. Interpretations of certain items within the definition of the special revenue fund type have been provided and, for some governments, those interpretations may affect the activities chosen to be reported as special revenue funds.

40 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

B. New Accounting Pronouncements (continued)

The requirements of this statement are effective for financial statements for periods beginning after June 5, 2010. Fund balance reclassifications made to conform to the provisions of the statement are required to be applied retroactively by restating beginning fund balance.

C. Basis of Presentation

Government-Wide Financial Statements

The statement of net assets and statement of activities display information about the primary government (County) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. All internal balances in the statement of net assets have been eliminated with the exception of those representing balances between governmental activities and the business-type activities, which are presented as internal balances. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the County. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties.

The statement of activities presents a comparison between program expenses and program revenues for each segment of the business-type activities of the County and for each function of the County’s governmental activities. Program expenses include direct expenses, which are clearly identifiable with a specific function, and allocated indirect expenses. Program revenues include 1) charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments for services where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the County’s funds. Elimination of these charges would distort the direct costs and program revenues reported for the various functions.

When both restricted and unrestricted net assets are available, restricted resources are used first, then unrestricted resources as they are needed.

41 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

C. Basis of Presentation (continued)

Fund Financial Statements

The fund financial statements provide information about the County’s funds, including fiduciary funds and blended component units. Separate statements for each fund category – governmental, proprietary and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as nonmajor funds.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operation. The principal operating revenues of the County’s enterprise fund and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

The County reports the following major governmental funds:

• The General Fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the County that are not accounted for through other funds. For the County, the General Fund includes such activities as general government, public safety and protection, public ways and facilities, health and sanitation, public assistance, education and recreation and cultural services.

• The Community Development Fund is used for a variety of economic development activities and for planning and technical assistance studies. This fund is also used to account for monies received from the State and Federal Governments and loaned by the County to individuals and businesses to encourage economic growth.

• The Facility Master Plan Implementation Fund is designated for the renovation of the North, East and West Wings of the Courthouse, the Government Center Parking Structure and the New Health Headquarters. Additionally, funds will be used to address space needs for various other County departments.

42 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

C. Basis of Presentation (continued)

Fund Financial Statements (continued)

The County reports the following major enterprise fund:

• The Natividad Medical Center (Center) accounts for hospital operations involved in providing health services to County residents. Revenues are principally fees for patient services, payments from federal and state programs such as Medicare, Medi-Cal and Short Doyle, realignment revenues and subsidies from the General Fund. For more detailed information on the Center, refer to the Natividad Medical Center audit report.

The County reports the following additional fund types:

• Internal Service Funds account for the County’s self-insurance programs including workers’ compensation and general liability insurance.

• The Investment Trust Fund accounts for the assets of legally separate entities that deposit cash with the County Treasurer. These entities include school and community college districts and other special districts governed by local boards, regional boards and authorities. These funds represent the assets, primarily cash and investments, and the related liability of the County to disburse these monies on demand.

• The Agency Funds account for assets held by the County as an agent for various local governments.

D. Basis of Accounting

The government-wide, proprietary and agency fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Agency funds have no measurement focus and report only assets and liabilities. However, agency funds use the accrual basis of accounting when recognizing receivables and payables.

Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales taxes

43 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

D. Basis of Accounting (continued)

are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligible requirements have been satisfied.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available (“susceptible to accrual”). The County considers property tax revenues to be available if they are collected within 60 days of the end of the current fiscal period. All other revenues are considered to be available if they are collected within 90 days of the end of the current fiscal period. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due. General capital assets acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.

For its business-type activities and enterprise fund, the County has elected under GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that Use Proprietary Fund Accounting, to apply all applicable GASB pronouncements as well as any applicable pronouncements of the Financial Accounting Standards Board, the Accounting Principles Board or any Accounting Research Bulletins issued on or before November 30, 1989 unless those pronouncements conflict with or contradict GASB pronouncements. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units.

E. Cash and Investments

The County follows the practice of pooling cash and investments of all funds with the County Treasurer, except for certain restricted funds which are generally held by outside custodians and classified as “Cash and investments with fiscal agents” on the accompanying financial statements. Interest earned on pooled investments is allocated to the appropriate funds based on the average daily cash balance of each fund for the quarter in which the interest was earned.

44 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

E. Cash and Investments (continued)

For purposes of the Statement of Cash Flows, the proprietary fund types consider all highly liquid investments with a maturity date of three months or less at the time of purchase to be cash equivalents. Proprietary fund types deposits with the County Treasurer are demand-type deposits and are therefore considered to be cash equivalents.

Investment in the Treasurer’s Pool

Statutes authorize the County to invest its surplus cash in obligations of the U.S. Treasury, agencies and instrumentalities, corporate bonds rated P-1 by Standard & Poor’s Corporation or A-1 by Moody’s Investor Service, bankers’ acceptances, certificates of deposit, commercial paper, repurchase agreements, and the State of California Local Agency Investment Fund. Gains and losses are recognized upon sale based upon the specific identification method. Investments in nonparticipating interest-earning investment contracts (guaranteed investment contracts) are reported at cost, commercial paper which have maturities of less than 90 days are reported at amortized cost and all other investments are reported at fair value. The fair values of investments are obtained by using quotations obtained from independent published sources.

The fair value of participants’ position in the County’s investment pool is the same as the value of the pool shares. The method used to determine the value of participants’ equity withdrawn is based on the book value of the participants’ percentage at the date of such withdrawal.

F. Inventories

Inventories are stated at cost (first-in, first-out basis) for governmental funds and lower of average cost or market for proprietary funds. Inventory recorded by governmental funds includes postage and materials, fleet vehicles and parts and supplies for roads. Governmental fund inventories are recorded as expenditures at the time the inventory is consumed. Reported inventories of governmental funds are equally offset by a fund balance reservation to indicate that portion of fund balance not available for future appropriation.

Inventory recorded in the proprietary funds mainly consists of maintenance supplies as well as pharmaceutical supplies maintained by the Center. Inventory is expensed as the supplies are purchased.

45 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

G. Property Taxes

Property taxes attach as an enforceable lien on secured and unsecured property as of January 1, and are levied as of July 1. Secured property taxes are due in two installments on November 1 and February 1 and become delinquent on December 10 and April 10, respectively. Unsecured property taxes are due on July 1 and become delinquent, if unpaid, on August 31. The County bills and collects its own property taxes and also collects such taxes for cities, schools, and special districts.

H. Capital Assets

Capital assets (including infrastructure) are recorded at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. Capital assets include public domain (infrastructure) general capital assets consisting of certain improvements including roads, bridges, lighting system, drainage system, dams and water systems. The County defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. For infrastructure and buildings, the capitalization threshold is $100,000. Capital assets used in operations are depreciated or amortized (assets under capital leases) using the straight-line method over the lesser of the capital lease period or their estimated useful lives in the government-wide statements and proprietary funds.

The estimated useful lives are as follows:

Infrastructure (except for the maintained pavement subsystem) 15 to 50 years Structures and improvements 40 to 50 years Equipment 3 to 25 years

The County has four networks of infrastructure assets – roads, lighting, drainage system, dams and water system.

I. Compensated Absences (Accrued Vacation, Paid-Time-Off, Sick Leave, and Compensatory Time)

Vacation and Paid-Time-Off

Unused vacation and paid-time-off (PTO) leaves may be accumulated up to a specified maximum cap based on an employee’s bargaining unit or management group.

46 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

I. Compensated Absences (Accrued Vacation, Paid-Time-Off, Sick Leave, and Compensatory Time) (continued)

Vacation and Paid-Time-Off (continued)

Vacation and PTO leaves are paid to the employee at the time of separation from County employment. Some County employees have an option to buy back up to 80 hours of vacation or PTO leave.

The current portion of the liability for vacation and PTO leaves is based on an estimated percentage of employees that will separate from County employment in the next fiscal year (turnover rate), applied to the total liability for vacation and PTO leaves.

Sick Leave

Sick Leave can be accumulated indefinitely. Upon retirement or death, unused sick leave is paid up to 500 hours or 750 hours if an employee opts to exchange time to pay for health benefits. All unused sick leave above the 500-750 hours or any unused sick leave for employees separated from the County for other reasons is forfeited.

Compensatory Time

Compensatory time-off can be accrued in lieu of overtime payments. An employee can accumulate compensatory time-off up to 240 hours or 480 hours for public safety and seasonal workers. The compensatory time-off balances are expected to be used within the next fiscal year. All compensatory time-off balances are considered current year liabilities.

The County includes its share of Social Security and Medicare taxes payable on behalf of the employees in the accrual for compensated absences.

J. Bond Issuance Costs and Premium Discounts

In the government-wide financial statements and the proprietary fund types in the fund 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 using a method that approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Unamortized bond issuance costs are reported on the statement of net assets and amortized over the term of the related debt.

47 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

J. Bond Issuance Costs and Premium Discounts (continued)

Gains or losses from advance refundings are deferred and amortized as interest expense over the life of the new refunding debt.

In the fund financial statements, governmental fund types recognize bond premiums and discount, as well as bond issuance costs, during the current period. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

K. Interfund Transactions

Interfund transactions are reflected as either loans, services provided/(received), reimbursements or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as “internal balances”. Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.

Services provided/(received), deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

L. Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

48 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 1: Summary of Significant Accounting Policies (continued)

M. Budgetary Basis of Accounting

In accordance with the provisions of Sections 29000 and 29143, inclusive, of the California Government Code and other statutory provisions, commonly known as the County Budget Act, the County prepares a budget for each fiscal year on or before August 30. Budgeted expenditures are enacted into law through the passage of an Appropriation Ordinance. This ordinance mandates the maximum authorized expenditures for the fiscal year and cannot be exceeded except by subsequent amendments to the budget by the County’s Board of Supervisors.

An operating budget is adopted each fiscal year for the majority of the Governmental Funds. Expenditures are controlled at the department level for the County. Department level expenditures may not legally exceed appropriations. Any amendments or transfers of appropriations between departments or funds are authorized by the County Administrator’s office and must be approved by the Board of Supervisors. Supplementary appropriations normally financed by unanticipated revenues during the year must be approved by the Board of Supervisors. Pursuant to Board Resolution, the County Administrative Officer and/or appointed department heads are authorized to approve transfers and revision of appropriations under $50,000 within a single budget unit as deemed necessary and appropriate unless it is to a capital asset object. Transfers to capital asset objects must be approved by the Board of Supervisors. Budgeted amounts in the budgetary financial schedules are reported as originally adopted and as amended during the fiscal year by resolutions approved by the Board of Supervisors.

The amounts reported in the budgetary basis differ from the basis used to present the basic financial statements in accordance with generally accepted accounting principles (GAAP). The County uses an encumbrances system as an extension of normal budgetary accounting for the general, special revenue, and debt service funds and to assist in controlling expenditures of the capital projects funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations.

Encumbrances outstanding at year-end are recorded as reservations of fund balance since they do not constitute expenditures or liabilities. Unencumbered appropriations lapse at year-end. Encumbered appropriations are carried forward in the ensuing year’s budget.

An annual budget was not adopted for the Natural Disaster Assistance special revenue fund.

49 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 2: Cash and Investments

Cash and investments for most County activities are included in an investment pool. The investment pool includes both voluntary and involuntary participation from external entities. The State of California statutes require certain special districts and other governmental entities to maintain their cash surplus with the County Treasurer.

The County investment pool is not registered with the Securities and Exchange Commission as an investment company. Investments made by the Treasurer are regulated by the California Government Code and by the County’s investment policy. The objectives of the policy are, in order of priority: safety, liquidity, yield, and public trust.

As of June 30, 2009, the County’s cash, deposits and investments were as follows:

With Fiscal Pooled Agents Other Total

Imprest cash and cash on hand$ 65,438 $ -- $ 25,728 $ 91,166 Deposits with financial institutions 4,710,545 769,027 663,823 6,143,395 Outstanding warrants and wires (22,950,503) -- -- (22,950,503) Investments 970,141,215 44,340,287 -- 1,014,481,502

Totals$ 951,966,695 $ 45,109,314 $ 689,551 $ 997,765,560

Total cash and investments at June 30, 2009 were presented on the County’s financial statements as follows:

Primary government$ 332,796,296 Investment trust fund 616,638,038 Agency funds 25,749,780 Discretely presented component unit 22,581,446 Total cash and investments$ 997,765,560

Investments

The following table identifies the investment types that are authorized for the County by the California Government Code or the County’s investment policy, wherever is more restrictive. The table also identifies certain provisions of the County’s investment policy that address interest rate risk, credit risk, and concentration risk.

50 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 2: Cash and Investments (continued)

Investments (continued) Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity of Portfolio in One Issuer

Local agency bonds 5 years None 5% U.S. treasury obligations 5 years None None State of California obligations 5 years None 5% U.S. agency securities 5 years None None Banker's acceptances 180 days 40% 5% Commercial paper 270 days 40% 5% Negotiable CDs/CD placement service 5 years 30% 5% Repurchase agreements 1 year 20% None Reverse repurchase agreements 92 days 20% None Medium term notes 5 years 30% 5% Mutual/money market funds N/A 20% 5% Collateralized bank deposits 5 years None 5% Mortgage pass-through securities 5 years 20% 5% Time deposits 2 years None None Local Agency Investment Fund (LAIF) N/A None* None

* The investment policy limits the pool's investments in LAIF to $40,000,000, regardless of the percentage this represents.

At June 30, 2009, the County had the following investments: Interest Fair WAM Rates Maturities Par Cost Value (Years) Investments in investment pool Federal agency obligations 0.000% - 6.625% 7/13/2009 - 3/9/2011$ 261,000,000 $ 262,414,839 $ 262,414,839 0.35 U.S. treasury obligations 0.000% - 6.000% 7/2/2009 - 12/17/2009 170,000,000 170,737,200 170,737,200 0.21 Medium term notes 0.934% - 5.720% 11/16/2009 - 8/22/2011 69,000,000 68,107,130 68,107,130 0.90 Caltrust medium-term fund Variable 7/30/2009 35,770,076 35,770,076 35,770,076 0.08 Money market mutual funds Variable On Demand 191,700,000 191,700,000 191,700,000 - California asset management program Variable On Demand 154,736,970 154,736,970 154,736,970 - LAIF Variable On Demand 80,000,000 80,000,000 80,000,000 - Total investment pool excluding defaulted securities $ 962,207,046 $ 963,466,215 $ 963,466,215 Weighted average maturity for pool 0.20

Default securities Lehman Brothers medium-term notes N/A In Default$ 10,000,000 $ 1,475,000 $ 1,475,000 N/A Washington Mutual medium-term notes N/A In Default 20,000,000 5,200,000 5,200,000 N/A Total default securities $ 30,000,000 $ 6,675,000 $ 6,675,000

Investments outside investment pool Cash held with fiscal agent Money market mutual funds Variable On Demand$ 17,078,180 $ 17,078,180 $ 17,078,180 - Investment contract 2.260% - 5.171% 9/1/2009 - 9/1/2038 27,262,107 27,262,107 27,262,107 13.32 Total outside investment pool $ 44,340,287 $ 44,340,287 $ 44,340,287

51 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 2: Cash and Investments (continued)

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the County manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. The County limits its exposure to interest rate risk inherent in its portfolio by managing the investment maturities, the weighted average maturity of its portfolio, as well as limiting the weighted average maturity to two years or less.

Credit Risk and Concentration of Credit Risk

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The County Treasurer mitigates these risks by holding a diversified portfolio of high quality investments. The adopted investment policy contains specific limitations on investments by credit quality, maturity length and the maximum allocation by asset class. In all instances, the adopted investment policy is equal to or more restrictive than applicable codified statutes.

Commercial paper obligations must be rated a minimum of F1 by Fitch, P1 by Moody’s or A1 by Standard & Poor’s. Corporate bonds must be rated A or better by one of these three rating agencies. In addition, total exposure of all asset classes to any single issuer shall not exceed 5% of the 12-month projected minimum size of the portfolio, other than securities issued by the U.S. Government, its agencies and sponsored enterprises.

The following is a summary of the credit quality distribution and concentration of credit risk by investment type as a percentage of the County Investment Pool’s fair value at June 30, 2009.

52 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 2: Cash and Investments (continued)

Credit Risk and Concentration of Credit Risk (continued)

Standard & % of Moody's Poor's Portfolio

U.S. treasury obligations Not rated Not rated 3.69% Federal agency obligations AAA AAA 27.04% Medium-term notes A1 AAA 2.06% Medium-term notes A1 AA- 1.03% Medium-term notes A2 A 1.02% Medium-term notes AA2 AA+ 1.50% Medium-term notes Aa3 A+ 0.40% Medium-term notes Ba1 BBB- 1.01% Medium-term notes Not rated Not rated 0.69% Money market mutual funds Not rated Not rated 19.76% Caltrust medium term fund Not rated Not rated 17.60% California asset management fund AAA Not rated 15.95% California local agency investment fund Not rated Not rated 8.25% Total 100.00%

As of the year ended June 30, 2009, the following Federal Agency Obligations, individually, were more than 5% of the County’s pooled investments.

Issuer Amount Federal Home Loan Bank$ 91,648,140 Federal Home Loan Mortgage Corporation 80,525,500 Federal National Mortgage Association 60,196,200

Investment Loss Due to Default

During the first quarter of fiscal year 2008-09, the issuers of two securities held by the Treasury defaulted. These securities were medium term notes issued by Lehman Brothers Holding Company and Washington Mutual Bank for $9.9 million and $20.1 million, respectively and purchased by the County on October 1, 2007 and July 12, 2007, respectively. The investments had maturity dates of April 3, 2009 and May 1, 2009. At the time of purchase, the Lehman note had a credit rating of A+/A1 and the Washington Mutual note was rated A1/A by rating agencies. The County wrote down the book value of its portfolio by $29,868,800 in connection with these defaults.

53 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 2: Cash and Investments (continued)

Custodial Credit Risk

Custodial credit risk for investments is the risk that the County will not be able to recover the invested securities that are in the possession of an outside party. The County’s investment policy requires the use of a safekeeping agent to mitigate custodial risk. Securities are invested on a “Delivery vs. Payment” basis using the custodian agent. In no case does the County engage in securities purchases that are held in broker or dealer accounts. At June 30, 2009, the County’s investment pool had no securities exposed to custodial risk.

Local Agency Investment Fund

The County Treasurer’s Pool maintains an investment in the State of California Local Agency Investment Fund (LAIF). LAIF is part of the Pooled Money Investment Account (PMIA), an investment pool consisting of funds held by the state in addition to those deposited in LAIF. All PMIA funds are managed by the Investment Division of the State Treasurer’s Office. This fund is not registered with the Securities and Exchange Commission as an investment company, but is required to invest according to California Government Code. Participants in the pool include voluntary and involuntary participants, such as special districts and school districts for which there are legal provisions regarding their investments. The Local Investment Advisory Board (Board) has oversight responsibility for LAIF. The Board consists of five members as designated by State Statute.

At June 30, 2009, the County’s investment position in LAIF was $80 million, which approximates fair value and is the same as value of the pool shares which is determined on an amortized cost basis. The total amount invested by all public agencies in PMIA on that day was $50.7 billion. Of that amount, 14.7% was invested in structured notes and asset- backed securities with the remaining 85.3% invested in other non-derivative financial products.

Investment Trust of California Joint Powers Authority Pool

The County Treasurer’s Pool maintains an investment in the Investment Trust of California Joint Powers Authority Pool (CalTRUST). CalTRUST is not registered with the Securities and Exchange Commission as an investment company, but is overseen by a Board of Trustees composed of officials of the public agencies that participate in CalTRUST. The fair value of the County’s position in the pool is approximately the same as the value of the pool shares.

54 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 2: Cash and Investments (continued)

California Asset Management Program Joint Powers Authority Pool

The County Treasurer’s Pool maintains an investment in the California Asset Management Program Joint Powers Authority Pool (CAMP). CAMP is not registered with the Securities and Exchange Commission as an investment company, but is overseen by a Board of Trustees composed of officials of the public agencies that participate in CAMP. CAMP’s investments are limited to those permitted by Government Code Section 53601. The fair value of the County’s position in the pool is approximately the same as the value of the pool shares.

County Investment Pool Condensed Financial Statements

The following represents a condensed statement of net assets and changes in net assets for the Treasurer’s investment pool as of June 30, 2009:

Statement of net assets

Net assets held for pool participants$ 951,966,695

Equity of internal pool participants$ 313,217,532 Equity of external pool participants 638,749,163 Total net assets$ 951,966,695

Statement of changes in net assets

Net investment earnings$ (14,930,891) Investment expenses (914,572) Net contribution from pool participants 4,802,917

Change in net assets (11,042,546)

Net assets at July 1, 2008 963,009,241

Net assets at June 30, 2009$ 951,966,695

The County has not provided nor obtained any legally binding guarantees during the fiscal year ended June 30, 2009 to support the value of shares in the pool.

55 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 3: Interfund Transactions

The composition of interfund balances as of June 30, 2009, is as follows:

Due to/from other Funds

Receivable fund Payable Fund Amount

Other governmental funds Other governmental funds$ 86,370 General fund Other governmental funds 25,091

Totals$ 111,461

Amounts due to and from other funds are for tax increment due as of the end of the fiscal year and temporary loans to cover deficit cash.

Advances to/from other Funds

Receivable fund Payable Fund Amount

Community development Other governmental funds $ 150,000

The above interfund advances are long-term loans that are not expected to be repaid during the next fiscal year.

Transfers

Transfers are indicative of funding for capital projects, debt service, subsidies of various County operations and re-allocations of special revenues. Transfers between funds for the year ended June 30, 2009, were as follows:

Transfer from Transfer to Amount

General fund Community development $ 50,000 Other governmental funds 19,859,399 19,909,399

Community development Other governmental funds 119,430

Other governmental funds General fund 159,908 Other governmental funds 35,026,223 35,186,131 Totals $ 55,214,960

56 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 4: Receivables

Receivables as of June 30, 2009, for the County’s individual major, nonmajor, internal service, and enterprise funds are as follows:

Other Internal Natividad General Community Governmental Service Medical Fund Development Funds Funds Center Receivables: Accounts - net$ 38,073,419 $ -- $ 1,328,118 $ 32,481 $ 17,307,782 Taxes receivable 15,294,101 -- 2,055,845 -- -- Due from other agencies 9,043,420 111,291 3,921,410 -- 1,761,965

Totals$ 62,410,940 $ 111,291 $ 7,305,373 $ 32,481 $ 19,069,747

At June 30, 2009, accounts receivable reported by Natividad Medical Center were reduced by allowances for doubtful accounts, contractual adjustments and estimated third party payor settlements as follows:

Allowance for doubtful accounts $ 8,867,280 Allowance for contractual adjustments 88,628,051 $ 97,495,331

Governmental funds report deferred revenue in connection with receivables for revenues considered unavailable to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. As of June 30, 2009, the various components of deferred revenue and unearned revenue in the governmental funds were as follows:

Unavailable Unearned Total Notes receivable issued from grants on a revolving basis$ -- $ 17,750,013 $ 17,750,013 Grant drawdowns prior to meeting all eligibility requirements -- 36,337,460 36,337,460 Receivables collected after the period of availability 19,369,900 -- 19,369,900 Totals$ 19,369,900 $ 54,087,473 $ 73,457,373

57 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 5: Capital Assets

Capital asset activity for the year ended June 30, 2009 was as follows:

Restated Balance Transfers & Balance July 1, 2008 Additions Retirements Adjustments June 30, 2009 Governmental activities Capital assets, not being depreciated: Land$ 174,834,273 $ -- $ -- $ -- $ 174,834,273 Construction in progress 86,481,597 79,882,992 -- (10,391,878) 155,972,711 Total capital assets, not being depreciated 261,315,870 79,882,992 -- (10,391,878) 330,806,984

Capital assets, being depreciated: Infrastructure 481,215,723 -- -- 10,224,053 491,439,776 Structures and improvements 141,598,021 157,299 -- (36,478) 141,718,842 Equipment 77,736,928 4,022,697 (2,711,218) 204,303 79,252,710 Total capital assets, being depreciated 700,550,672 4,179,996 (2,711,218) 10,391,878 712,411,328

Less accumulated depreciation for: Infrastructure (267,218,278) (12,358,407) -- 7,912 (279,568,773) Structures and improvements (40,238,982) (4,491,139) -- (7,912) (44,738,033) Equipment (53,829,211) (6,974,324) 2,312,447 -- (58,491,088) Total accumulated depreciation (361,286,471) (23,823,870) 2,312,447 -- (382,797,894)

Total capital assets, being depreciated, net 339,264,201 (19,643,874) (398,771) 10,391,878 329,613,434

Government activities capital assets, net$ 600,580,071 $ 60,239,118 $ (398,771) $ -- $ 660,420,418

58 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 5: Capital Assets (continued)

Audited Balance Transfers & Balance July 1, 2008 Additions Retirements Adjustments June 30, 2009 Business-type activities Capital assets, not being depreciated: Construction in progress$ 851,471 $ 2,286,992 $ -- $ (1,862,185) $ 1,276,278 Total capital assets, not being depreciated 851,471 2,286,992 -- (1,862,185) 1,276,278

Capital assets, being depreciated: Structures and improvements 153,242,108 23,255 -- 31,641 153,297,004 Equipment 37,538,016 2,849,491 (479) 1,830,544 42,217,572 Total capital assets, being depreciated 190,780,124 2,872,746 (479) 1,862,185 195,514,576

Less accumulated depreciation for: Structures and improvements (47,091,469) (4,001,137) -- -- (51,092,606) Equipment (29,003,541) (3,074,348) -- -- (32,077,889) Total accumulated depreciation (76,095,010) (7,075,485) -- -- (83,170,495)

Total capital assets, being depreciated, net 114,685,114 (4,202,739) (479) 1,862,185 112,344,081

Business-type activities capital assets, net$ 115,536,585 $ (1,915,747) $ (479) $ -- $ 113,620,359

Depreciation

Depreciation expense was charged to governmental functions as follows:

General government$ 5,100,283 Public safety and protection 2,012,820 Public ways and facilities 14,688,247 Health and sanitation 395,412 Public assistance 252,282 Education 84,236 Recreation and cultural services 544,264 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 746,326

Total depreciation expense - Governmental functions$ 23,823,870

Depreciation expense was charged to the business-type activities as follows:

Natividad Medical Center $ 7,075,485

59 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 6: Leases

Operating Leases

The County has commitments under long-term and personal property operating lease agreements. During the fiscal year ended June 30, 2009, the County paid rents on these leases of approximately $5.6 million. Future minimum lease payments are as follows:

Governmental Business-Type Activities Activities Year Ended June 30: 2010$ 4,329,455 $ 229,167 2011 3,873,434 -- 2012 2,970,231 -- 2013 2,363,641 -- 2014 2,121,267 -- 2015-2019 10,606,335 -- 2020-2024 10,606,335 -- 2025-2028 8,485,068 -- Total minimum lease payments$ 45,355,766 $ 229,167

However, the County believes that it would be able to terminate the leases early, should the need arise, based on California case City of Los Angeles v. Offner, 19 Cal.2d 483 dated February 13, 1942.

Capital Leases

The County leases equipment under certain lease obligations accounted for as capital leases. Included in the governmental and business-type activities are the following capital asset amounts under capital leases:

Governmental Business-Type Activities Activities

Equipment$ 570,586 $ 4,876,880 Less: accumulated depreciation (317,454) (4,876,880)

Totals$ 253,132 $ --

60 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 6: Leases (continued)

Capital Leases (continued)

The following is a schedule of future minimum lease payments under capital leases together with the present value of future minimum lease payments as of June 30, 2009:

Governmental Business-Type Activities Activities Year Ended June 30: 2010$ 93,572 $ 1,204,641 2011 69,246 240,164 2012 58,712 -- 2013 26,029 -- 2014 26,029 -- 2015 6,503 -- Totals 280,091 1,444,805 Less: Amount representing interest (26,959) (45,019) Present value of future minimum lease payments$ 253,132 $ 1,399,786

Note 7: Rental Income Under Operating Leases

The following is a schedule by years of minimum future rental income on noncancellable operating leases as of June 30, 2009. These operating leases, for vacant office spaces located on the campus of Natividad Medical Center, contain no material restrictions. All are to be paid to Natividad Medical Center.

Business-Type Activities Year Ended June 30: 2010$ 665,227 2011 563,591 2012 394,554 2013 93,343

Total$ 1,716,715

Total rental income under operating lease agreements during the year ended June 30, 2009 was $1,708,062.

61 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 8: Long-Term Liabilities

Legal Debt Limit

The County’s legal debt limit for the year ended June 30, 2009 was $663.5 million. This limit is based on 1.25% of the net assessed valuation of property within the County. The County’s outstanding long-term issues payable is approximately $291.1 million, but none is applicable to the debt limit. The County has complied with all significant debt covenants.

Summary of Long-Term Liabilities

Interest Principal Date of Amount Outstanding Governmental activities Maturity Rates Installments Issue Authorized June 30, 2009

Certificates of participation 2007 issue 2008-2038 4.0%-5.0% $2,785,000-$6,845,000 2007 $ 144,400,000 $ 136,260,000 (defeased the 1993 sheriff facility and the 2001 issue master plan financing issue plus new monies for completion of public health and court related facilities) Judgment obligation bonds 2004-2014 3.0%-4.0% $695,000-$870,000 2004 7,470,000 4,015,000 (liquidate litigation liabilities) Revenue bonds Agencies under Board of Supervisors 2004-2036 5.0% $16,000-$37,000 1980-95 56,859,700 1,046,000 Revenue bonds Agencies under Board of Supervisors 2038 4.0%-5.0% $550,000 - $ 2,085,000 2003 $ 32,855,000 32,855,000 (finance salinas valley water project) Notes payable – redevelopment agency 2004-2010 5.73%-6.49% $25,000 2001 250,000 2,083 (finance redevelopment activities) Notes payable – RDA – CA Housing Finance Authority 2014 3.0% Principal and (finance redevelopment activities) interest due 2014 2004 936,146 416,146 Notes payable – parks and recreation (acquire recreational properties) San Antonio Lakes Resort 2023 5.0% $33,095 2008 4,185,000 3,859,141 Lake Nacimento Resort 2023 5.0% $89,478 2008 11,315,000 10,433,985 Loans payable – Bureau of Reclamation Agencies under Board of Supervisors 2004-2037 1.65%-7.63% $16,847-$1,207,699 1995 35,035,790 30,828,498 (infrastructure and facility improvements) Special assessment bonds with governmental commitment: General County 2004-2025 4.25%-7.2% $4,000-$26,000 1984-93 257,000 156,000 (infrastructure and facility improvements)

Business-type activities

Certificate of participation (refunding debt used to make facility improvements) 1998 series e refunding 2004-2027 4.1%-4.7% $1,095,000-$4,935,000 1998 77,375,000 63,530,000 2007 refunding 2008-2028 4.0%-5.0% $315,000-$565,000 2007 8,280,000 7,735,000

62 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 8: Long-Term Liabilities (continued)

Summary of Long-Term Liabilities (continued)

The following is a summary of long-term liabilities transactions for the year ended June 30, 2009:

Amounts Balance Balance Due Within July 1, 2008 Additions Deletions June 30, 2009 One Year Governmental activities: Certificates of participation$ 139,570,000 $ -- $ 3,310,000 $ 136,260,000 $ 3,460,000 Unamortized premium 2,161,563 -- 38,354 2,123,209 -- Unamortized refunding loss (2,587,623) -- (44,450) (2,543,173) -- Judgment obligation bonds 4,730,000 -- 715,000 4,015,000 740,000 Unamortized premium 65,297 -- 10,883 54,414 -- Revenue bonds 1,098,000 32,855,000 52,000 33,901,000 604,000 Unamortized premium -- 763,469 11,075 752,394 -- Notes payable - RDA 39,583 -- 37,500 2,083 2,083 Notes payable - RDA CA Housing Finance Agency 501,146 -- 85,000 416,146 -- Loans payable 46,899,389 -- 1,777,765 45,121,624 1,817,280 Special assessment bonds 161,000 -- 5,000 156,000 6,000 Capital leases 351,854 74,356 173,078 253,132 81,643 Compensated absences 28,235,971 19,845,304 17,234,438 30,846,837 12,968,029 Estimated self-insurance liabilities 43,809,601 19,907,246 16,614,298 47,102,549 11,518,502 Estimated landfill postclosure costs 3,123,470 -- 208,227 2,915,243 208,232

Total governmental activities long-term liabilities$ 268,159,251 $ 73,445,375 $ 40,228,168 $ 301,376,458 $ 31,405,769

Business-type activities Certificates of participation$ 73,610,000 $ -- $ 2,345,000 71,265,000 $ 2,450,000 Unamortized premium (discount) (1,132,830) -- (105,589) (1,027,241) -- Unamortized refunding loss (5,009,835) -- (267,408) (4,742,427) -- Net certificates of participation 67,467,335 -- 1,972,003 65,495,332 2,450,000 Capital leases 2,574,437 -- 1,174,651 1,399,786 1,162,638 Compensated absences 4,952,219 5,451,781 4,530,435 5,873,565 5,286,209

Total business-type activities long-term liabilities$ 74,993,991 $ 5,451,781 $ 7,677,089 $ 72,768,683 $ 8,898,847

Estimated self-insurance liabilities are liquidated by the General Fund and the internal service funds. Compensated absences are generally liquidated by the General Fund and related special revenue funds. Estimated landfill postclosure costs are liquidated from the General Fund.

63 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 8: Long-Term Liabilities (continued)

New Debt Issuances During Fiscal Year 2008-2009, the Monterey County Financing Authority issued $32,855,000 Series A Revenue Bonds. Proceeds of the bonds will be used to finance the Salinas Valley Water Project – an effort to halt further seawater intrusion, provide flood protection, and create new water supplies for the Salinas Valley. The bonds accrue interest at rates from 4 to 5 percent per year with monthly installment payments of principal and interest from $550,000 to $2,085,000, beginning July 1, 2009, and maturing July 1, 2038.

Payment Requirements for Debt Service As of June 30, 2009, annual debt service requirements of governmental activities to maturity are as follows:

Year Ending Bonds Payable Certificates of Participation Loans and Notes Payable June 30: Principal Interest Principal Interest Principal Interest

2010$ 1,350,000 $ 1,805,392 $ 3,460,000 $ 6,166,145 $ 1,819,363 $ 1,399,752 2011 1,404,000 1,750,052 3,630,000 6,007,045 1,858,866 1,426,870 2012 1,460,000 1,692,556 3,795,000 5,839,570 1,902,629 1,275,911 2013 1,518,000 1,638,635 3,980,000 5,645,195 1,948,685 1,211,185 2014 1,583,000 1,576,382 4,180,000 5,441,195 2,413,301 1,153,788 2015 - 2019 4,103,000 7,273,383 22,950,000 24,098,812 10,806,677 4,619,248 2020 - 2024 5,056,000 6,174,803 23,810,000 18,575,707 9,911,869 2,595,765 2025 - 2029 6,108,000 4,810,873 27,520,000 12,867,749 5,545,542 1,592,444 2030 - 2034 7,740,000 3,137,250 30,115,000 6,004,690 5,749,348 921,865 2035 - 2039 7,750,000 993,000 12,820,000 1,207,576 3,583,573 195,087

$ 38,072,000 $ 30,852,326 $ 136,260,000 $ 91,853,684 $ 45,539,853 $ 16,391,915

64 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 8: Long-Term Liabilities (continued)

Payment Requirements for Debt Service (continued) As of June 30, 2009, annual debt service requirements of business-type activities to maturity are as follows: Year Ending Certificates of Participation June 30: Principal Interest

2010$ 2,450,000 $ 3,301,728 2011 2,565,000 3,190,020 2012 2,675,000 3,070,888 2013 2,800,000 2,942,630 2014 2,935,000 2,806,349 2015 - 2019 16,930,000 11,751,231 2020 - 2024 21,470,000 7,216,862 2025 - 2029 19,440,000 1,785,065

$ 71,265,000 $ 36,064,773

Irrevocable Trust

In fiscal year 2006-07, the County issued 2007 refunding certificates of participation to refund existing debt. The proceeds of the refunded bonds were placed in an irrevocable trust for the purpose of generating resources for all future debt payments in accordance with the schedule of remaining payments due. As a result, the refunded bonds are considered to be defeased and the liability does not appear on the governmental and business-type activities’ columns of the Statement of Net Assets and the Proprietary Fund Statements for Natividad Medical Center. As of June 30, 2009, certificates defeased had the following outstanding balances:

Governmental activities: 1993 Sheriff's facility certificates of participation$ 8,400,000 2001 master plan financing certificates of participation 72,170,000

Business-type activities: 1996 Natividad Medical Center certificates of participation 7,315,000

65 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 8: Long-Term Liabilities (continued)

Pledged Revenues

The Monterey County Financing Authority has pledged certain specified assessments, all Hydroelectric Facility net revenues, all ad valorem taxes and all annexation fees to secure the payment of principal and interest on the bonds in accordance with the terms and the provisions of the Indenture. The Indenture provides that the pledge shall constitute a first lien on all such assets. Total principal and interest remaining on the bonds is $62,765,304, payable through June 2038. No interest or principal has been paid as of June 30, 2009. Total pledged revenues for the fiscal year ended June 30, 2009 were $2.1 million.

Note 9: Short-Term Note Payable

On July 1, 2008, the County issued a $30,575,000 tax and revenue anticipation note to manage the temporary cash flow deficits that occur when the timing of required expenditures does not coincide with the timing of the collection of taxes and other revenues. The note was issued in anticipation of collection of taxes and other revenues to be received during the fiscal year ended June 30, 2009, and was repaid with taxes and other revenues on June 25, 2009. The County incurred and paid interest of $914,702.

Short-term note payable activity for the year ended June 30, 2009, was as follows:

Balance Balance July 1, 2008 Additions Retirements June 30, 2009

Short-term note payable$ -- $ 30,575,000 $ 30,575,000 $ --

Note 10: Net Assets/Fund Balances

Net Assets

The government-wide and business-type activities financial statements utilize a net assets presentation. Net assets are categorized as invested capital assets (net of related debt), restricted and unrestricted. These categories are described below:

• Invested in Capital Assets, Net of Related Debt – This category groups all capital assets, including infrastructure, into one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

66 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 10: Net Assets/Fund Balances (continued)

Net Assets (continued)

Net assets invested in capital assets, net of related debt ,was comprised of the following:

Governmental Business-Type Activities Activities

Capital assets, net of accumulated depreciation$ 660,420,418 $ 113,620,359 Outstanding principal of capital-related debt (206,751,001) (66,895,118) Unspent debt proceeds 48,381,581 540,094

Net assets, invested in capital assets, net of related debt$ 502,050,998 $ 47,265,335

• Restricted Net Assets – This category represents net assets that are subject to constraints either (1) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. As of June 30, 2009, the County did not have any net assets that were restricted by enabling legislation.

• Unrestricted Net Assets – This category represents net assets of the County, not restricted for any project or other purpose.

Fund Balances

In the fund financial statements, reserves and designations segregate portions of fund balance that are either not available or have been earmarked for specific purposes. The various reserves and designations are established by actions of the Board and management and can be increased, reduced or eliminated by similar actions.

The term “reserved” is used to indicate that a portion of reported fund balance is (1) legally restricted to a specific use or (2) not available for appropriation or expenditure. The County’s management will sometimes designate portions of unreserved (available) fund balance based on tentative future spending plans. Designated portions of fund balance represent financial resources legally available for uses other than those tentatively planned.

67 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 10: Net Assets/Fund Balances (continued)

Fund Balances (continued)

The County has “reserved” fund balances as follows:

• Reserved for encumbrances – to reflect outstanding contractual obligations for which goods and services have not been received.

• Reserved for unavailable assets – to indicate that certain assets such as imprest cash, inventories, advances, prepaid items and land held for development and resale do not represent available spendable resources.

• Reserved for debt service – to indicate that the fund balance is restricted for the retirement of debt.

The County has designated fund balance as follows to indicate that a portion of the governmental fund balance is designated for the following projects and purposes:

Other General Governmental Fund Funds

Strategic $ 37,291,395 $ 744,671 Automation system 6,101,505 -- Infrastructure improvements 69,014 6,912,447 Vehicle replacement 3,401,430 -- Health clinics 1,070,000 -- Social services 797,715 -- NGEN radio system design 3,155,563 -- Self-insurance 949,512 -- Miscellaneous 1,804,166 9,706 Total other designations $ 54,640,300 $ 7,666,824

Note 11: Employee’s Retirement Plan and Post Retirement Benefits

Plan Description

The County of Monterey contributes to the California Public Employees Retirement System (PERS), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within

68 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 11: Employee’s Retirement Plan and Post Retirement Benefits (continued)

Plan Description (continued)

the State of California. PERS provides retirement and disability benefits, annual cost-of- living adjustments, and death benefits to plan members and beneficiaries. A menu of benefit provisions as well as other requirements are established by State statutes within the Public Employees’ Retirement Law. The County selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local County ordinance. CalPERS issues a separate comprehensive annual financial report which is available to the public. Copies of the CalPERS’ annual financial report may be obtained by contacting the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814.

Funding Policy

Active plan members in PERS are required to contribute a percentage of the annual covered salary of their miscellaneous employees and of their public safety employees. County employees are represented by 18 bargaining units. Of these 18 units, 14 bargaining units represent miscellaneous employees for which the County pays 7% of the PERS retirement costs while the employee pays the remaining portion. The County does not pay any portion of the public safety employees PERS retirement costs. The required contribution rates for fiscal year 2008-09 were 9.84% for miscellaneous employees and 25.75% for public safety employees. The contribution requirements of the plan members are established by state statute and the employer contribution rate is established and may be amended by PERS.

Annual Pension Cost

For fiscal year 2008-09, the County’s annual pension cost was $35,512,168, and was equal to the County’s required and actual contributions.

Three-Year Trend Information for PERS

Annual Percentage Fiscal Pension of APC Year Ending Cost (APC) Contributed

06/30/09 $ 35,512,168 100% 06/30/08 32,100,384 100% 06/30/07 29,003,049 100%

69 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 11: Employee’s Retirement Plan and Post Retirement Benefits (continued)

Annual Pension Cost (continued)

The required contribution for fiscal year 2008-09 was determined as part of the June 30, 2006 actuarial valuation using the entry age normal actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions included (a) 7.75% investment rate of return (net of administrative expenses); (b) projected salary increases that vary by duration of service ranging from 3.25% to 14.45% depending on age, service and type of employment, and (c) 3.25% cost-of-living adjustment. Both (a) and (b) include an inflation component of 3.0%. The actuarial value of plan assets was determined using a technique that smoothes the effect of short-term volatility in the market value of investments over a two to five year period depending on the size of investment gains and/or losses. The unfunded actuarial accrued liability (or excess assets) is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 2006 was thirty-one years.

Funded Status and Funding Progress

The following is the funded status information for each plan as of June 30, 2008, the most recent actuarial valuation date:

Entry Age Normal Actuarial Unfunded/ Annual UAAL as Accrued Value (Overfunded) Funded Covered a % of Liability of Assets Liability Ratio Payroll Payroll

Miscellaneous$ 936,249,365 $ 862,966,236 $ 73,283,129 92.2%$ 235,274,627 31.1% Safety 363,113,495 275,250,058 87,863,437 75.8% 45,713,049 192.2%

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.

The Monterey County Water Resources Agency (MCWRA) Plan

Plan Description

The MCWRA plan of the County of Monterey contributes to the California Public Employees Retirement System (CalPERS), a cost-sharing multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to

70 COUNTY OF MONTEREY

Notes to Financial Statements For the Year Ended June 30, 2009

Note 11: Employee’s Retirement Plan and Post Retirement Benefits (continued)

The Monterey County Water Resources Agency (MCWRA) Plan (continued)

Plan Description (continued)

plan members and beneficiaries. A menu of benefit provisions as well as other requirements are established by State statutes within the Public Employees’ Retirement Law. The County selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local County ordinance. Information on this plan is available on a pooled-basis only and may be obtained by contacting the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814.

Funding Policy

Active plan members in CalPERS are required to contribute 7% for employees of their annual covered salary. The County makes the contributions required of MCWRA employees on their behalf and for their account. The County is required to contribute at an actuarially determined rate of 9.9% of annual covered payroll. The contribution requirements of plan members and the County are established and may be amended by PERS.

Annual Pension Cost

For fiscal year 2008-09, the County’s annual pension cost for the MCWRA plan was $355,669, and was equal to the County’s required and actual contributions.

Three-Year Trend Information for CalPERS

Annual Percentage Fiscal Pension of APC Year Ended Cost (APC) Contributed

06/30/09 $ 355,669 100% 06/30/08 346,700 100% 06/30/07 295,001 100%

Note 12: Other Post Employment Benefits (OPEB)

Plan Description

The County of Monterey Retiree Healthcare Plan (Plan) is a single-employer defined benefit healthcare plan administered by the County. The Plan provides healthcare insurance benefits to eligible retirees. Benefit provisions are established and may be amended by the County.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 12: Other Post Employment Benefits (OPEB) (continued)

Plan Description (continued)

The County provides retiree medical benefits through the California Public Employees’ Retirement System healthcare program. The County contributes the Public Employees’ Medical and Hospital Care Act (PEMHCA) minimum required employer contribution ($97 per month in 2009) towards the retiree monthly premium for eligible retirees participating in PEMHCA.

Funding Policy

The contribution requirements of the plan members and the County are established and may be amended by the County. The County prefunds the plan through the California Employers’ Retiree Benefit Trust (CERBT) by contributing at least 100% of the annual required contribution.

The annual required contribution (ARC) is an amount actuarially determined in accordance with the parameters of GASB Statement 45 – Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pension. The County’s ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize the unfunded actuarial liability over a period of 20 years. The fiscal year 2008-09 ARC is $3,832,000.

For fiscal year 2008-09, the amount of healthcare insurance benefits reimbursed to eligible retirees was $796,951. Of this amount, $646,951, was paid directly by the CERBT, while the County paid $150,000 to establish the OPEB trust with PERS.

CERBT is a tax-qualified irrevocable trust organized under Internal Revenue Code Section 115 and established to pre-fund retiree healthcare benefits. CERBT issues a publicly available financial report including GASB 43 – Financial Reporting for Postemployment Benefit Plans Other than Pension Plans disclosure information in aggregate with the other CERBT participating employers. That report may be obtained by contacting CalPERS, Executive Office, 400 P Street, Sacramento, CA 95814.

Annual OPEB Cost and Net OPEB Obligation

For fiscal year 2008-09, the County’s annual OPEB cost (expense) of $4,075,360 was equal to the annual required contribution and interest expense on the beginning balance of the net OPEB obligation.

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan (as described in the funding policy above), and the net OPEB obligation for fiscal year 2008-09 and 2007-08 are as follows:

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 12: Other Post Employment Benefits (OPEB) (continued)

Annual OPEB Cost and Net OPEB Obligation (continued)

Fiscal Percentage of Net Year Annual Annual OPEB OPEB Ended OPEB Cost Cost Contributed Obligation 6/30/09 $4,075,360 19.5% $6,418,542 6/30/08 3,711,000 15.4% 3,140,133

In future years, three year trend information will be presented. Fiscal year 2007-08 was the first year of implementation of GASB Statement 45, and the County elected to implement prospectively; therefore only two years of trend information is available.

Funded Status and Funding Progress

The funded status of the plan, based on an actuarial valuation as of June 30, 2007, the plan’s most recent actuarial valuation date, was as follows (amounts in thousands):

Actuarial accrued liability (AAL) $28,297 Actuarial value of plan assets -- Unfunded actuarial accrued liability (UAAL) $28,297 Funded ratio (actuarial value of plan assets/AAL) 0% Covered payroll (active Plan members) $264,481 UAAL as a percentage of covered payroll 10.7%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 12: Other Post Employment Benefits (OPEB) (continued)

Actuarial Methods and Assumptions (continued)

In the June 30, 2007 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions included a 7.75% investment rate of return (net of administrative expenses), which is the expected long-term investment return on CERBT investments, and an annual healthcare minimum cost trend rate of 4.5% after 3 years (actual healthcare minimum costs were used for the first 3 years). This rate includes a 3% inflation assumption. The actuarial value of assets is equal to the market value. The UAAL is being amortized as a level percentage of projected payroll over 20 years on a closed basis. The remaining amortization period at June 30, 2009 was 18 years.

Note 13: Joint Powers Agreement

Natividad Medical Center participates in the Beta Healthcare Group (BHG). The purpose of Program Beta (Program), established by a Joint Powers Agreement, is to self-insure member hospital districts for professional liability. The BHG administers the Program pursuant to the joint powers provision of the Government Code of the State of California. After a $5,000 deductible, the BHG provides payment in full on covered individual malpractice claims up to $5,000,000. Claims in excess of $5,000,000 are the responsibility of individual program participants. Also, after a $25,000 deductible, the BHG provides payment on covered directors, officers, and trustee liability claims up to an annual maximum of $500,000. The Center’s contribution to the program was approximately $840,000 in 2009.

Condensed financial information of the Program for the calendar year ended December 31, 2008, (audited by Larson & Rosenberger LLP) is as follows: Cash and investments $ 338,422,852 Other assets 74,357,983 Total assets $ 412,780,835

Loss reserves $ 238,983,867 Other liabilities 51,936,050 Fund balance 121,860,918 Total liabilities and fund balance $ 412,780,835

Total revenues $ 81,723,698 Total expenses (44,327,757) Revenue in excess of expenses before minority interest, member surplus funds, and change in unrealized gains on investments $ 37,395,941

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 13: Joint Powers Agreement (continued)

Financial statements for the Program can be obtained from Beta Healthcare Group, 1443 Danville Blvd., Suite 200, Alamo, CA 94507-1973.

In January 1997, the County entered into a Joint Powers Agreement with the City of Salinas, the City of Gonzales, the City of Greenfield, the City of King, and the City of Soledad creating the Salinas Valley Waste Authority (Authority). The purpose of the Authority, established by the Joint Powers Agreement, is to undertake and perform: solid waste planning and program management, including collection services and siting; and the transfer and disposal of solid waste generated within each of the parties’ jurisdictional boundaries. The Authority administers the agreement pursuant to the joint powers provision of the Government Code of the State of California.

Financial statements for the Authority can be obtained from Salinas Valley Solid Waste Authority, 337 Melody Lane, Salinas, CA 93901.

Condensed financial information of the Authority for the fiscal year ended June 30, 2008 (the most current available) is as follows:

Cash and investments $ 8,494,816 Other assets 26,347,480 Capital assets, net 24,969,876

Total assets 59,812,172

Closure liability 9,567,322 Other liabilities 55,854,351

Total liabilities 65,421,673

Net assets (deficit) $ (5,609,501)

Total operating revenues $ 15,706,134 Total operating expenses (14,223,545) Other revenues and expenses (1,536,348)

Change in net assets $ (53,759)

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 14: Landfill Closure and Postclosure Costs

State and federal laws and regulations require the County to place a final cover on all landfill sites when closed and, for thirty years after, perform mandated maintenance and monitoring functions at those sites. All County owned landfills are closed, thus only the liability for future maintenance and monitoring activities is shown on the statement of net assets. The estimated liability and total costs for the landfill sites are shown below:

Post Closure Groundwater Post Closure Landfill Site Activities Monitoring Liability

Bradley$ 194,003 $ 325,071 $ 519,074 San Ardo II 194,003 325,071 519,074 Lake San Antonio North Shore 194,003 325,071 519,074 Lake San Antonio South Shore 194,003 N/A 194,003 San Ardo I 194,003 N/A 194,003 Parkfield I 194,003 N/A 194,003 Parkfield II 194,003 N/A 194,003 Chualar 194,003 N/A 194,003 Arroyo Seco / Greenfield 194,003 N/A 194,003 Lockwood 194,003 N/A 194,003

Totals$ 1,940,030 $ 975,213 2,915,243

Landfill costs as of June 30, 2009 11,088,752

Total estimated costs to June 30, 2023$ 14,003,995

Post closure activities are comprised of costs which are estimated equally per site for the fourteen remaining years. The liability and total costs are estimated annually based on the premise that all equipment, facilities and services required to monitor and maintain the landfill sites were acquired as of June 30, 2009. Actual total costs may be higher due to future changes in technology or landfill laws and regulations.

The County is required by state and federal laws and regulations to provide annual funding to finance future post closure care costs. The County is in compliance with these regulations, establishing appropriations for these activities, based on the annual estimated liability, in each year’s annual budget.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 15: Commitments and Contingencies

In prior years, the Monterey County Water Resources Agency (MCWRA), a blended component unit of Monterey County, entered into an agreement with the Monterey County Water Pollution Control Agency (MCWPCA) to provide tertiary treated water. The MCWPCA built the tertiary water treatment plant and the MCWRA built the distribution pipelines from the plant to the users. Both projects were financed by loans between each agency and the Bureau of Reclamation and/or State Water Resources Control Board. A special assessment was established and is collected by the MCWRA. Based on the agreement between the MCWRA and the MCWPCA, the financing and operating expenses incurred by the MCWPCA on this project are paid by this special assessment on an advance basis from the MCWRA. The loans entered into directly between the MCWPCA and the lenders are not included in the County’s financial statements.

As of June 30, 2009, the outstanding loan balances of the MCWPCA related to the above project are as follows:

Loan from the Bureau of Reclamation $ 17,888,624 Loan from the State Water Resources Control Board $ 4,898,145

Arbitrage

The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service (IRS) at least every five years. During the current year, the County performed calculations of excess investment earnings on various bonds and financings, and at June 30, 2009 does not expect to incur a significant liability.

Grant Entitlement

The County is a participant in a number of federal and state assisted programs. These programs are subject to compliance audits by the grantors. The audits of these programs for fiscal year 2003-04 and certain earlier years have not been completed. Accordingly, the County’s compliance with applicable program requirements is not completely established. The amount, if any, of expenditures which may be disallowed by the grantors cannot be determined at this time. Management believes it has adequately provided for potential liabilities, if any, which may arise from the grantor’s audits.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 15: Commitments and Contingencies (continued)

Medi-Cal and Medicare Reimbursements

Natividad Medical Center’s Medi-Cal and Medicare cost reports for certain prior years are in various stages of review by the third-party intermediaries and, as such, have not been settled. Management believes it has adequately provided for any potential liabilities which may arise from the intermediaries’ audit.

Construction Commitments

At June 30, 2009, the County had ongoing construction commitments that totaled approximately $39.6 million.

Other

The County is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the County Counsel the resolution of these matters will not have a material adverse effect on the financial condition of the County.

Note 16: Natividad Medical Center – Net Patient Service Revenue and Government Programs

Natividad Medical Center (Center) has agreements with third party payors to provide for payments to the Center at amounts different from its established rates. A summary of the basis of the payment arrangements with major third-party payors follows:

Medicare

Inpatient acute care services rendered to Medicare program beneficiaries are paid at predetermined prospective rates per discharge. These rates vary according to the diagnostic related group that the patient’s condition is classified under. Services other than inpatient acute care are paid based on a reimbursement methodology specific to the type of service which generally entails reimbursement rates at the lower of costs, charges, or a published limit. The Center is reimbursed at a tentative rate during the year that is later subject to final settlement after submission and audit of an annual cost report.

Medi-Cal

Inpatient acute care services rendered to Medi-Cal program beneficiaries are reimbursed under a cost reimbursement methodology that is limited to a maximum allowable rate per discharge. Outpatient hospital services are reimbursed based on a published fee schedule. Skilled nursing services are reimbursed at a published per diem rate. The Center is reimbursed at a tentative rate during the year that is later subject to final settlement after submission and audit of an annual cost report.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 16: Natividad Medical Center – Net Patient Service Revenue and Government Programs (continued)

Short Doyle

Inpatient acute care services rendered to County mental health patients under the Short Doyle program are reimbursed based on a per diem rate specified in an agreement between the Center and the Monterey County Health Department.

Other Third Party Payors

The Center contracts with numerous employers, other county departments, and health plans to provide health care services to their beneficiaries. Reimbursement varies by contract and can be based on a combination of per diem, fee schedule, or percent of charges payment rates.

During the year ended June 30, 2009, patients for which reimbursement was calculated under the third-party payor programs comprised approximately 100% of the Center’s gross patient services revenues, as follows:

Other third parties 34.0% Medi-Cal 48.2% Medicare 16.1% Short Doyle 1.7% Total 100.0%

The State of California provides funding from tobacco taxes and realignment to cover write-offs of accounts receivable pertaining to qualified indigent care under the California Health Care for Indigents program. The Center recognized funding under this program, net of amounts passed through other providers, of approximately $4.5 million in fiscal year 2009, as net patient services revenue.

The Center participates in the Medi-Cal Redesign Waiver Demonstration Program with the California Medical Assistance Commission.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 17: Natividad Medical Center Enterprise Fund – Charity Care

The Center maintains records to identify and monitor the level of charity care it provides. These records include the amount of charges foregone for services and supplies furnished under its charity care policy. The following information measures the level of charity care provided during the fiscal year ended June 30, 2009.

Charges foregone, based on established rate $ 41,204,010

Estimated costs and expenses incurred to provide charity care $ 10,898,461

Equivalent percentage of charity care patients to all patients served 6%

Note 18: Related Party Transactions

Incorporated in 1988, the Natividad Medical Foundation (Foundation) is a non-profit, non-governmental organization separately incorporated from the Center. Recognizing the need for quality health care and decreased funding from the Federal, State, and local levels, community leaders accepted the responsibility of providing financial assistance to the Center and developed the Natividad Medical Foundation.

The criteria established in GASB 39, Determining Whether Certain Organizations are Component Units, determines whether the Foundation is reported as a component unit of the Center. Since the revenues reported by the Foundation are not significant to the Center, the Foundation is not a component unit of the Center, but is a related party.

Note 19: Insurance and Contingent Liabilities

The County is exposed to various risk of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; natural disasters; medical malpractice; and unemployment. The County has chosen to establish risk financing internal service funds where assets are set aside for claim settlements associated with such risks of loss up to certain limits.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 19: Insurance and Contingent Liabilities (continued)

Excess coverage is provided by the California State Association of Counties Excess Insurance Authority (CSAC), a joint powers authority whose purpose is to develop and fund programs of excess insurance for its member counties. A board of directors consisting of representatives of its member counties govern CSAC. CSAC’s financial statements can be obtained at 3017 Gold Canal Drive, Rancho Cordova, CA 95670. The County paid premiums totaling approximately $1.6 million.

The County participates in the CSAC property program. The County’s deductible is $25,000 per occurrence. The County has primary coverage up to $25 million. Coverage in excess of this is provided by a private insurance carrier to an aggregate limit of $45 million.

On July 1, 1998, the County contracted with Liberty Mutual to provide workers compensation insurance coverage. Claims incurred/reported prior to July 1, 1996, remain a part of the County’s self-insurance program for workers compensation and are administered by Helmsman, a wholly owned subsidiary of Liberty Mutual.

The unpaid claims liabilities are based on the results of actuarial studies and include amounts for claims incurred but not reported and adjustment expenses. Claims liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts, and other economic and social factors. General liability and workers’ compensation liabilities are carried at present value using a discount rate of 4%. Premiums are charged by the internal service funds using various allocation methods that include actual costs, trends in claims experience, and number of participants.

The County accounts for its risk financing activities in internal service funds for General Liability and Workers’ Compensation. All other risk financing activities are accounted for in the General Fund. As such, $693,910 of the County’s total estimated unpaid claims liabilities has been recorded as a current liability of the General Fund since that amount is expected to be paid within the succeeding year from expendable, available financial resources.

Changes in the balance of claims liabilities during fiscal years 2008-09 and 2007-08 for all self-insurance risks are approximately as follows:

2008-09 2007-08

Unpaid claims, beginning of year $ 43,809,601 $ 41,691,129 Estimated claims, incurred 19,907,246 29,606,539 Claim payments (16,614,298) (27,488,067)

Unpaid claims, end of year $ 47,102,549 $ 43,809,601

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 19: Insurance and Contingent Liabilities (continued)

The County is a defendant in several lawsuits arising in the normal course of business. In the aggregate these claims seek monetary damages in significant amounts. Litigation where loss to the County is reasonably possible has not been accrued in the accompanying financial statements; however, County Counsel estimates that several lawsuits could result in a significant loss. The County exposure in this case is estimated to be in the multi- million dollar range.

Amounts of settlements exceeded insurance coverage in each of the past three years.

Non-incremental claims adjustments have been included as part of the liability for claims and judgments.

Note 20: Subsequent Events

Investment Pool

In August 2009, the County’s external investment pool sold defaulted securities issued by Washington Mutual Bank for $5.6 million. The note had an original par value of $20 million.

At June 30, 2009, the County’s external investment pool held defaulted medium term notes issued by Lehman Brothers Holding Company with an original par value of $10 million. As of September 2009, this had a fair market value of approximately $1.7 million and had been written off by the County during fiscal year 2008-09.

In an effort to recover its losses, the County has joined with other California counties and public agencies and submitted a claim under the Emergency Economic Stabilization Act of 2008. In addition, the County had retained a law firm to represent its interests in securing an optimal recovery of assets. The ultimate outcome of these efforts is unclear at this time.

Redevelopment Property Tax Increment

In July 2009, legislation was approved that redirects a portion of redevelopment tax increment revenues to fund schools. The California Redevelopment Association is preparing to challenge the law. Unless overturned, the Monterey County Redevelopment Agency estimates that the loss of tax increment revenues will be approximately $2,168,000 and $542,000 for the 2009-10 and 2010-11 fiscal years, respectively.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 20: Subsequent Events (continued)

Fiscal Year 2009-10 Adopted Budget for the State of California

On July 29, 2009, the State of California adopted a revised budget for FY 2009-10 to close a budget gap approximated, as of July 21, 2009, at $26.3 billion. Some of the significant impacts for the County are as follows:

 The State of California will borrow property tax allocations from other counties and their special districts equivalent to 8% of the prior year property tax revenues. This legislation provides for repayment of these funds with interest by June 30, 2013. The legislation also provides financing mechanisms to securitize the State’s repayment obligation through State bond financing or local financing in order to avoid a current year loss of revenue to the counties and their districts.

 A shift of property tax increment in FY 2009-10 and FY 2010-11 from the County Redevelopment Agency to a Supplemental Revenue Augmentation Fund for K-12 schools.

 Decreased Prop. 36 funding for the Counties/Courts Drug Court Programs.

 Elimination or reduction of funding for mental health programs including Healthy Families, Crisis Services, Network Providers, State Hospital and Children’s programs.

 Elimination of reimbursement for the May 2009 Special Election costs.

 Suspension of the Williamson Act Open Space funding.

 Elimination or reduction of funding for Public Health programs including HIV/AIDS, Healthy Families and California Children’s Services programs.

 Additionally, there are statewide impacts to Social Services programs such as CalWorks, In-Home Supportive Services, Child Welfare, and Foster Care that the County is not currently able to estimate at the local level.

Some amount of Federal Stimulus money is expected to be received by the County in the Health and Human Services arena that will mitigate a portion of the effects of the State budget reductions.

Debt Issuance

In July 2009, the County entered into a tax and revenue anticipation note, due June 30, 2010. The note was for $55 million with an interest rate of 2%.

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Notes to Financial Statements For the Year Ended June 30, 2009

Note 21: Restatement of Net Assets and Fund Balances

Adjustments resulting from errors or changes to comply with provisions of the accounting standards are treated as adjustments to prior periods. Accordingly, the County reports these changes as restatements of beginning fund balance / net assets.

The impact of the restatements on the fund balances/net assets as previously reported is presented below:

Government-Wide Fund Statements Statement of Activities Governmental Funds Governmental General Other Governmental Activities Fund Funds Net assets/fund balances, June 30, 2008, as previously reported $ 654,066,826 $ 103,831,877 $ 91,627,905

Prior period adjustments: Prior year's property tax receivable which is unavailable -- (9,406,961) -- Final recognition of revenue and expenses/expenditures 7,786 (40,877) 48,663 Adjustment to correct the outstanding liability for the Boronda Revenue Bonds (16,000) -- -- Adjustment to beginning balance of capital asset 4,616,198 -- -- Adjustment to beginning balance of capital lease obligations (206,259) -- --

Net assets/fund balances July 1, 2008, as restated$ 658,468,551 $ 94,384,039 $ 91,676,568

Note 22: Stewardship, Compliance and Accountability

Deficit Fund Balances/Net Assets

The General Liability internal service fund had deficit net assets of $13,724,558 as of June 30, 2009. The County approved a 5 year plan to fund the deficit in fiscal year 2004-05. Prior to that the County had been on a pay-as-you-go basis. The deficit is a result of the pay-as-you-go plus the settlement of the Lake Resorts.

In addition, the Workers’ Compensation internal service fund had deficit net assets of $5,100,877 as of June 30, 2009. The County approved a 10 year plan to fund the deficit in fiscal year 2004-05. Prior to that the County was on a pay-as-you-go basis which caused the deficit in the fund.

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REQUIRED SUPPLEMENTARY INFORMATION

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Required Supplementary Information For the Fiscal Year Ended June 30, 2009

COUNTY OF MONTEREY EMPLOYEE’S RETIREMENT PLAN SCHEDULE OF FUNDING PROGRESS

The tables below show a three-year analysis of the actuarial value of assets as a percentage of the actuarial accrued liability and the unfunded actuarial accrued liability as a percentage of the annual covered payroll as of June 30:

Funded Status of Miscellaneous Plan

Entry Age Normal Actuarial Unfunded/ Annual Valuation Accrued Value (Overfunded) Funded Covered UAAL as a Date Liability of Assets Liability Ratio Payroll % of Payroll

6/30/06 $ 778,918,948 $ 726,261,720 $ 52,657,228 93.2% $ 192,035,416 27.4% 6/30/07 858,405,731 796,726,808 61,678,923 92.8% 208,760,671 29.5% 6/30/08 936,249,365 862,966,236 73,283,129 92.2% 235,274,627 31.1%

Funded Status of Safety Plan

Entry Age Normal Actuarial Unfunded/ Annual Valuation Accrued Value (Overfunded) Funded Covered UAAL as a Date Liability of Assets Liability Ratio Payroll % of Payroll

6/30/06 $ 294,046,269 $ 229,651,922 $ 64,394,347 78.1% $ 35,671,705 180.5% 6/30/07 322,496,295 252,069,253 70,427,042 78.2% 39,460,056 178.5% 6/30/08 363,113,495 275,250,058 87,863,437 75.8% 45,713,049 192.2%

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Required Supplementary Information For the Fiscal Year Ended June 30, 2009

COUNTY OF MONTEREY RETIREE HEALTHCARE PLAN SCHEDULE OF FUNDING PROGRESS

Funded Status of Miscellaneous Plan

Unfunded Actuarial Actuarial Actuarial Actuarial Annual Valuation Value of Accrued Accrued Funded Covered UAAL as a Date Assets Liability Liability Ratio Payroll % of Payroll

6/30/07 $ -- $ 28,297,000 $ 28,297,000 0% $ 256,156,000 11.0%

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SUPPLEMENTARY INFORMATION

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NONMAJOR GOVERNMENTAL FUNDS

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Combining Balance Sheet Nonmajor Governmental Funds June 30, 2009

Special Debt Capital Revenue Service Projects Funds Funds Funds Total Assets Cash and investments: Held in County Treasury$ 54,112,733 $ 4,594,986 $ 39,606,603 $ 98,314,322 Held with trustee -- 15,586,302 -- 15,586,302 Receivables 6,257,892 406,524 640,957 7,305,373 Due from other funds 6,690 -- 79,680 86,370 Inventory 120,036 -- -- 120,036 Land held for resale and development -- -- 915,680 915,680 Long-term receivables 4,986,224 -- 776,741 5,762,965

Total assets $ 65,483,575 $ 20,587,812 $ 42,019,661 $ 128,091,048

Liabilities Vouchers and accounts payable$ 2,213,131 $ -- $ 713,054 $ 2,926,185 Due to other funds 25,091 86,370 -- 111,461 Accrued salaries and benefits 594,024 -- -- 594,024 Accrued expenses 4,963 -- -- 4,963 Deposits from others 2,908,872 -- 35,270 2,944,142 Deferred revenues 13,661,516 274,547 621,502 14,557,565 Advances from other funds -- -- 150,000 150,000

Total liabilities 19,407,597 360,917 1,519,826 21,288,340

Fund balances Reserved for: Encumbrances 6,849,610 -- 2,398,650 9,248,260 Unavailable assets 120,036 -- 915,680 1,035,716 Debt service -- 13,240,540 -- 13,240,540 Unreserved: Designated, reported in: Special revenue funds 7,666,824 -- -- 7,666,824 Undesignated reported in: Special revenue funds 31,439,508 -- -- 31,439,508 Capital projects funds -- -- 37,185,505 37,185,505 Debt service funds -- 6,986,355 -- 6,986,355

Total fund balances 46,075,978 20,226,895 40,499,835 106,802,708

Total liabilities and fund balances $ 65,483,575 $ 20,587,812 $ 42,019,661 $ 128,091,048

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Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2009

Special Debt Capital Revenue Service Projects Funds Funds Funds Total Revenues: Taxes$ 8,361,736 $ 6,037,602 $ (168,677) $ 14,230,661 Licenses, permits and franchises 2,171,830 -- -- 2,171,830 Fines, forfeitures and penalties 10,186 1,388,416 -- 1,398,602 Revenue from use of money and property 1,000,578 802,968 (195,482) 1,608,064 Aid from other governmental agencies 32,421,749 32,201 900,021 33,353,971 Charges for services 23,392,300 1,593,495 155,576 25,141,371 Other revenue 476,513 -- 369,939 846,452

Total revenues 67,834,892 9,854,682 1,061,377 78,750,951

Expenditures: Current: General government 1,698,380 -- 2,769,391 4,467,771 Public ways and facilities 65,068,429 -- -- 65,068,429 Health and sanitation 3,808,366 -- -- 3,808,366 Public assistance 8,246,574 -- -- 8,246,574 Education 7,387,608 -- -- 7,387,608 Recreation and cultural services 2,834,073 -- -- 2,834,073 Debt service: Principal 85,000 4,408,630 64,684 4,558,314 Interest and debt service costs 62,217 9,103,962 7,827 9,174,006 Capital outlay -- -- 11,591,416 11,591,416

Total expenditures 89,190,647 13,512,592 14,433,318 117,136,557

Excess (deficiency) of revenues over (under) expenditures (21,355,755) (3,657,910) (13,371,941) (38,385,606)

Other financing sources (uses): Issuance of debt -- 32,855,000 -- 32,855,000 Premium on issuance of debt -- 763,469 -- 763,469 Inception of leases 74,356 -- -- 74,356 Transfers in 32,960,868 7,754,722 14,289,462 55,005,052 Transfers out (1,383,103) (32,726,618) (1,076,410) (35,186,131) Total other financing sources (uses) 31,652,121 8,646,573 13,213,052 53,511,746

Net change in fund balance 10,296,366 4,988,663 (158,889) 15,126,140

Fund balances, beginning of year, restated 35,779,612 15,238,232 40,658,724 91,676,568

Fund balances, end of year $ 46,075,978 $ 20,226,895 $ 40,499,835 $ 106,802,708

94

SPECIAL REVENUE FUNDS

Special revenue funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes.

95

SPECIAL REVENUE FUNDS

Road Fund – Carries out basic governmental activities of the County that relate to public ways not accounted for through other funds. County Library – Established as a special taxing authority under the County Library Law of 1911 and, as such, is funded primarily through its own share of property tax to provide library services to residents of Monterey County. In-Home Support Services – Program to provide services to aged, blind and disabled persons who are unable to remain in their homes without assistance. Fish and Game Propagation – Administration of the County’s Fish and Game Commission, which consists of fifteen members, three from each supervisorial district to oversee allocation of fish and game fine monies. Office of Employment Training – Receives federal funds for the design, implementation and oversight of youth and adult employment training services. Community Services – Administration of the Community Services Block Grant for provision of specified programs to advance and advocate for the low-income population. Inclusionary Housing – To facilitate the development of lower income housing throughout Monterey County through either direct grants or low interest rate loans. Disaster Assistance – To help minimize the loss of life and property damage throughout the County resulting from the potential impact of any natural, technological or human-conflict related disasters. Productivity Investment – Established by the Board of Supervisors in February 1996 with $1.1 million allocated from Public Employee Retirement surplus funds to foster innovacation and to provide a source of funding for implementation of cost-effective departmental and formal employee organization projects. Lakes Resort Parks – This fund consists of Lake San Antonio, North and South Shore, and Lake Nacimiento which offers to the public camping, fishing, hiking, equestrian trails, swimming, picnicking, boating and water skiing plus special events are provided. Costs are funded by user fees and, if necessary, by County contribution. Natural Disaster Assistance – Finances the County General Fund expenditures for March 1995 and Winter Storm of 1997 and reflects the anticipated federal and State reimbursements for nonpersonnel related emergency services. Emergency Medical Services – Established at the beginning of 1989 to provide for the collection and distribution of fine proceeds authorized by the California State Legislature’s adoption of Senate Bill 612. Fort Ord Reuse – Implementation of the Fort Ord Redevelopment Project Area A28. Nacimiento Hydroelectric Operations – Responsible for the management of Nacimiento hydroelectric operations in Monterey County. Other Water Resources Agencies – Responsible for the management of groundwater resources and flood control protection in Monterey County. County Service Areas – Provide a variety of services to the unincorporated developments within the County including storm drain and surface water disposal, street and sidewalk maintenance, street lighting, wastewater reclamation and open space maintenance. Sanitation Districts – Administers and maintains four sanitation districts, operating costs are funded with user fees and property taxes. Redevelopment Agency Set Aside Fund – Includes the set aside fund of the Redevelopment Agency of the County of Monterey that accounts for tax increment revenues set aside for low to moderate income housing projects.

96 COUNTY OF MONTEREY

Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2009

In-Home Fish and Road County Support Game Fund Library Service Propagation Assets Cash and investments: Held in County Treasury $ 10,371,274 $ 2,068,869 $ 167 $ 15,926 Receivables 1,472,356 516,499 294,022 -- Due from other funds ------Inventory 120,036 ------Long-term receivables ------

Total assets$ 11,963,666 $ 2,585,368 $ 294,189 $ 15,926

Liabilities and fund balances Liabilities: Vouchers and accounts payable $ 1,146,939 $ 8,333 $ 407 $ -- Due to other funds -- -- 25,091 -- Accrued salaries and benefits 235,602 96,897 7,168 -- Accrued expenses 153 3,486 -- -- Deposits from others 2,813,791 -- 398 -- Deferred revenues 5,882,135 370,275 178,382 --

Total liabilities 10,078,620 478,991 211,446 --

Fund balances: Reserved for encumbrances 688,847 70,065 1,528 -- Unreserved, designated 250,000 217,583 -- -- Unreserved, undesignated 946,199 1,818,729 81,215 15,926

Total fund balances 1,885,046 2,106,377 82,743 15,926

Total liabilities and fund balances$ 11,963,666 $ 2,585,368 $ 294,189 $ 15,926

continued 97 COUNTY OF MONTEREY

Combining Balance Sheet (continued) Nonmajor Special Revenue Funds June 30, 2009

Office of Employment Community Inclusionary Disaster Training Services Housing Assistance Assets Cash and investments: Held in County Treasury $ 387,255 $ 109,146 $ 535,444 $ 258,355 Receivables 29,069 97,232 7,769 -- Due from other funds ------Inventory ------Long-term receivables -- -- 673,259 --

Total assets$ 416,324 $ 206,378 $ 1,216,472 $ 258,355

Liabilities and fund balances Liabilities: Vouchers and accounts payable $ 106,868 $ (568) $ 339 $ -- Due to other funds ------Accrued salaries and benefits 106,351 4,461 -- -- Accrued expenses ------Deposits from others ------Deferred revenues 29,069 -- 673,259 --

Total liabilities 242,288 3,893 673,598 --

Fund balances: Reserved for encumbrances -- -- 149,654 -- Unreserved, designated -- 9,706 -- -- Unreserved, undesignated 174,036 192,779 393,220 258,355

Total fund balances 174,036 202,485 542,874 258,355

Total liabilities and fund balances$ 416,324 $ 206,378 $ 1,216,472 $ 258,355

continued 98 COUNTY OF MONTEREY

Combining Balance Sheet (continued) Nonmajor Special Revenue Funds June 30, 2009

Lake Natural Emergency Productivity Resort Disaster Medical Fort Ord Investment Parks Assistance Services Reuse Assets Cash and investments: Held in County Treasury $ 866,464 $ 408,947 $ 1,094,757 $ 156,029 $ 171,542 Receivables -- 210,743 -- 28,629 -- Due from other funds ------Inventory ------Long-term receivables ------

Total assets$ 866,464 $ 619,690 $ 1,094,757 $ 184,658 $ 171,542

Liabilities and fund balances Liabilities: Vouchers and accounts payable $ -- $ -- $ -- $ -- $ 14,184 Due to other funds ------Accrued salaries and benefits -- 26,093 ------Accrued expenses -- 306 ------Deposits from others ------72,225 Deferred revenues -- 3,488 1,094,757 -- --

Total liabilities -- 29,887 1,094,757 -- 86,409

Fund balances: Reserved for encumbrances -- 93,246 -- -- 93,893 Unreserved, designated ------Unreserved, undesignated 866,464 496,557 -- 184,658 (8,760)

Total fund balances 866,464 589,803 -- 184,658 85,133

Total liabilities and fund balances$ 866,464 $ 619,690 $ 1,094,757 $ 184,658 $ 171,542

continued 99 COUNTY OF MONTEREY

Combining Balance Sheet (continued) Nonmajor Special Revenue Funds June 30, 2009

Agencies Under Board of Supervisors Nacimiento Other Water County Hydroelectric Resources Service Sanitation RDA Operations Agencies Areas Districts Set-Aside Assets Cash and investments: Held in County Treasury $ 1,057,695 $ 21,118,608 $ 8,591,128 $ 1,240,202 $ 5,660,925 Receivables -- 3,325,572 146,450 129,551 -- Due from other funds ------6,690 Inventory ------Long-term receivables ------4,312,965

Total assets$ 1,057,695 $ 24,444,180 $ 8,737,578 $ 1,369,753 $ 9,980,580

Liabilities and fund balances Liabilities: Vouchers and accounts payable $ 555 $ 925,215 $ -- $ 10,859 $ -- Due to other funds ------Accrued salaries and benefits -- 117,452 ------Accrued expenses -- 1,018 ------Deposits from others -- -- (142) 22,600 -- Deferred revenues -- 979,724 90,401 47,061 4,312,965

Total liabilities 555 2,023,409 90,259 80,520 4,312,965

Fund balances: Reserved for encumbrances 31,618 5,536,350 20,840 100,909 62,660 Unreserved, designated -- 2,439,867 4,014,944 734,724 -- Unreserved, undesignated 1,025,522 14,444,554 4,611,535 453,600 5,604,955

Total fund balances 1,057,140 22,420,771 8,647,319 1,289,233 5,667,615

Total liabilities and fund balances$ 1,057,695 $ 24,444,180 $ 8,737,578 $ 1,369,753 $ 9,980,580

continued 100 COUNTY OF MONTEREY

Combining Balance Sheet (continued) Nonmajor Special Revenue Funds June 30, 2009

Totals Assets Cash and investments: Held in County Treasury $ 54,112,733 Receivables 6,257,892 Due from other funds 6,690 Inventory 120,036 Long-term receivables 4,986,224

Total assets $ 65,483,575

Liabilities and fund balances Liabilities: Vouchers and accounts payable$ 2,213,131 Due to other funds 25,091 Accrued salaries and benefits 594,024 Accrued expenses 4,963 Deposits from others 2,908,872 Deferred revenues 13,661,516

Total liabilities 19,407,597

Fund balances: Reserved for encumbrances 6,849,610 Unreserved, designated 7,666,824 Unreserved, undesignated 31,559,544

Total fund balances 46,075,978

Total liabilities and fund balances$ 65,483,575

101 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds For the Year Ended June 30, 2009

In-Home Fish and Road County Support Game Fund Library Service Propagation Revenues: Taxes$ -- $ 6,727,437 $ -- $ -- Licenses, permits and franchises 2,147,561 ------Fines, forfeitures and penalties ------10,186 Revenue from use of money and property (227,343) (3,726) (2,124) (224) Aid from other governmental agencies 23,748,029 145,615 417,362 -- Charges for services 3,627,057 142,585 -- -- Other revenue 55,630 278,987 -- -- Total revenues 29,350,934 7,290,898 415,238 9,962

Expenditures: Current: General government ------Public ways and facilities 29,617,139 ------Health and sanitation ------Public assistance -- -- 586,497 -- Education -- 7,387,608 -- -- Recreation and cultural services ------28,146 Debt service: Principal ------Interest ------Total expenditures 29,617,139 7,387,608 586,497 28,146

Excess (deficiency) of revenues over (under) expenditures (266,205) (96,710) (171,259) (18,184)

Other financing sources (uses): Inception of leases ------Transfers in 2,398,941 239,497 103,306 20,786 Transfers out ------Total other financing sources (uses) 2,398,941 239,497 103,306 20,786

Net change in fund balances 2,132,736 142,787 (67,953) 2,602

Fund balances, beginning of year, restated (247,690) 1,963,590 150,696 13,324

Fund balances, end of year$ 1,885,046 $ 2,106,377 $ 82,743 $ 15,926

continued 102 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenditures and Changes in Fund Balances (continued) Nonmajor Special Revenue Funds For the Year Ended June 30, 2009

Office of Employment Community Inclusionary Disaster Training Services Housing Assistance Revenues: Taxes$ -- $ -- $ -- $ -- Licenses, permits and franchises ------Fines, forfeitures and penalties ------Revenue from use of money and property -- (3,039) (2,950) -- Aid from other governmental agencies 6,913,353 435,659 21,104 -- Charges for services -- -- 123,923 -- Other revenue 5,826 822 7,795 -- Total revenues 6,919,179 433,442 149,872 --

Expenditures: Current: General government -- -- 485,820 -- Public ways and facilities ------Health and sanitation ------Public assistance 7,147,046 513,031 -- -- Education ------Recreation and cultural services ------Debt service: Principal ------Interest ------Total expenditures 7,147,046 513,031 485,820 --

Excess (deficiency) of revenues over (under) expenditures (227,867) (79,589) (335,948) --

Other financing sources (uses): Inception of leases ------Transfers in 245,253 368 -- -- Transfers out -- -- (22,128) -- Total other financing sources (uses) 245,253 368 (22,128) --

Net change in fund balances 17,386 (79,221) (358,076) --

Fund balances, beginning of year, restated 156,650 281,706 900,950 258,355

Fund balances, end of year$ 174,036 $ 202,485 $ 542,874 $ 258,355

continued 103 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenditures and Changes in Fund Balances (continued) Nonmajor Special Revenue Funds For the Year Ended June 30, 2009

Lake Natural Emergency Productivity Resort Disaster Medical Fort Ord Investment Parks Assistance Services Reuse Revenues: Taxes$ -- $ -- $ -- $ -- $ -- Licenses, permits and franchises ------Fines, forfeitures and penalties ------Revenue from use of money and property (16,370) 1,161,872 -- (6,031) (3,628) Aid from other governmental agencies -- 63,626 -- 336,940 -- Charges for services -- 870,820 -- 1,089,251 -- Other revenue -- 10,690 -- 22 -- Total revenues (16,370) 2,107,008 -- 1,420,182 (3,628)

Expenditures: Current: General government ------57,006 Public ways and facilities ------Health and sanitation ------1,643,928 -- Public assistance ------Education ------Recreation and cultural services -- 2,805,927 ------Debt service: Principal ------Interest ------Total expenditures -- 2,805,927 -- 1,643,928 57,006

Excess (deficiency) of revenues over (under) expenditures (16,370) (698,919) -- (223,746) (60,634)

Other financing sources (uses): Inception of leases -- 74,356 ------Transfers in 100,000 1,214,366 -- -- 42,000 Transfers out (510,000) ------Total other financing sources (uses) (410,000) 1,288,722 -- -- 42,000

Net change in fund balances (426,370) 589,803 -- (223,746) (18,634)

Fund balances, beginning of year, restated 1,292,834 -- -- 408,404 103,767

Fund balances, end of year$ 866,464 $ 589,803 $ -- $ 184,658 $ 85,133

continued 104 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenditures and Changes in Fund Balances (continued) Nonmajor Special Revenue Funds For the Year Ended June 30, 2009

Agencies Under Board of Supervisors Nacimiento Other Water County Hydroelectric Resources Service Sanitation RDA Operations Agencies Areas Districts Set-Aside Revenues: Taxes$ -- $ -- $ 1,634,299 $ -- $ -- Licenses, permits and franchises -- 24,269 ------Fines, forfeitures and penalties ------Revenue from use of money and property (9,876) 258,860 (75,775) (24,400) (44,668) Aid from other governmental agencies -- 340,061 ------Charges for services -- 15,025,579 1,292,820 1,220,265 -- Other revenue -- 9,735 1,000 27,183 78,823 Total revenues (9,876) 15,658,504 2,852,344 1,223,048 34,155

Expenditures: Current: General government ------1,155,554 Public ways and facilities 289,789 33,509,599 881,143 770,759 -- Health and sanitation -- -- 869,658 1,294,780 -- Public assistance ------Education ------Recreation and cultural services ------Debt service: Principal ------85,000 Interest ------43,069 19,148 Total expenditures 289,789 33,509,599 1,750,801 2,108,608 1,259,702

Excess (deficiency) of revenues over (under) expenditures (299,665) (17,851,095) 1,101,543 (885,560) (1,225,547)

Other financing sources (uses): Inception of leases ------Transfers in 600,000 26,476,675 22,128 103,963 1,393,585 Transfers out (183,957) (667,000) -- (18) -- Total other financing sources (uses) 416,043 25,809,675 22,128 103,945 1,393,585

Net change in fund balances 116,378 7,958,580 1,123,671 (781,615) 168,038

Fund balances, beginning of year, restated 940,762 14,462,191 7,523,648 2,070,848 5,499,577

Fund balances, end of year$ 1,057,140 $ 22,420,771 $ 8,647,319 $ 1,289,233 $ 5,667,615

continued 105 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenditures and Changes in Fund Balances (continued) Nonmajor Special Revenue Funds For the Year Ended June 30, 2009

Totals Revenues: Taxes $ 8,361,736 Licenses, permits and franchises 2,171,830 Fines, forfeitures and penalties 10,186 Revenue from use of money and property 1,000,578 Aid from other governmental agencies 32,421,749 Charges for services 23,392,300 Other revenue 476,513 Total revenues 67,834,892

Expenditures: Current: General government 1,698,380 Public ways and facilities 65,068,429 Health and sanitation 3,808,366 Public assistance 8,246,574 Education 7,387,608 Recreation and cultural services 2,834,073 Debt service: Principal 85,000 Interest 62,217 Total expenditures 89,190,647

Excess (deficiency) of revenues over (under) expenditures (21,355,755)

Other financing sources (uses): Inception of leases 74,356 Transfers in 32,960,868 Transfers out (1,383,103) Total other financing sources (uses) 31,652,121

Net change in fund balances 10,296,366

Fund balances, beginning of year, restated 35,779,612

Fund balances, end of year $ 46,075,978

106 COUNTY OF MONTEREY

Budgetary Comparison Schedule Road Fund For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Licenses, permits and franchises$ 4,069,176 $ 4,069,176 $ 2,147,561 $ (1,921,615) Revenue from use of money and property 385,000 385,000 (227,343) (612,343) Aid from other governmental agencies 34,879,995 34,879,995 23,748,029 (11,131,966) Charges for services 8,166,787 8,166,787 3,627,057 (4,539,730) Other revenue 1,800 1,800 55,630 53,830 Total revenues 47,502,758 47,502,758 29,350,934 (18,151,824)

Expenditures: Current: Public ways and facilities 49,696,168 49,696,168 30,304,043 19,392,125 Total expenditures 49,696,168 49,696,168 30,304,043 19,392,125

Excess (deficiency) of revenues over (under) expenditures (2,193,410) (2,193,410) (953,109) 1,240,301

Other financing sources (uses): Transfers in 2,000,000 2,000,000 2,398,941 398,941 Total other financing sources (uses) 2,000,000 2,000,000 2,398,941 398,941

Net change in budgetary fund balances (193,410) (193,410) 1,445,832 1,639,242

Budgetary fund balances, beginning (247,690) (247,690) (247,690) --

Budgetary fund balances, ending $ (441,100) $ (441,100) $ 1,198,142 $ 1,639,242

107 COUNTY OF MONTEREY

Budgetary Comparison Schedule County Library Fund For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Taxes$ 6,580,323 $ 6,580,323 $ 6,727,437 $ 147,114 Revenue from use of money and property 17,500 17,500 (3,726) (21,226) Aid from other governmental agencies 121,326 121,326 145,615 24,289 Charges for services 155,050 155,050 142,585 (12,465) Other revenue 305,100 365,100 278,987 (86,113) Total revenues 7,179,299 7,239,299 7,290,898 51,599

Expenditures: Current: Education 8,549,111 8,609,111 7,287,879 1,321,232 Total expenditures 8,549,111 8,609,111 7,287,879 1,321,232

Excess (deficiency) of revenues over (under) expenditures (1,369,812) (1,369,812) 3,019 1,372,831

Other financing sources (uses): Transfers in 239,497 239,497 239,497 -- Total other financing sources (uses) 239,497 239,497 239,497 --

Net change in budgetary fund balances (1,130,315) (1,130,315) 242,516 1,372,831

Budgetary fund balances, beginning 1,963,590 1,963,590 1,963,590 --

Budgetary fund balances, ending $ 833,275 $ 833,275 $ 2,206,106 $ 1,372,831

108 COUNTY OF MONTEREY

Budgetary Comparison Schedule In-Home Support Services For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ -- $ -- $ (2,124) $ (2,124) Aid from other governmental agencies 562,891 830,478 417,362 (413,116) Other revenue ------Total revenues 562,891 830,478 415,238 (415,240)

Expenditures: Current: Public assistance 682,292 833,131 588,025 245,106 Total expenditures 682,292 833,131 588,025 245,106

Excess (deficiency) of revenues over (under) expenditures (119,401) (2,653) (172,787) (170,134)

Other financing sources (uses): Transfers in 119,401 119,401 103,306 (16,095) Total other financing sources (uses) 119,401 119,401 103,306 (16,095)

Net change in budgetary fund balances -- 116,748 (69,481) (186,229)

Budgetary fund balances, beginning 150,696 150,696 150,696 --

Budgetary fund balances, ending$ 150,696 $ 267,444 $ 81,215 $ (186,229)

109 COUNTY OF MONTEREY

Budgetary Comparison Schedule Fish and Game Propagation For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Fines, forfeitures and penalties$ 2,000 $ 2,000 $ 10,186 $ 8,186 Revenue from use of money and property 700 700 (224) (924) Total revenues 2,700 2,700 9,962 7,262

Expenditures: Current: Recreation and cultural services 32,700 32,700 28,146 4,554 Total expenditures 32,700 32,700 28,146 4,554

Excess (deficiency) of revenues over (under) expenditures (30,000) (30,000) (18,184) 11,816

Other financing sources (uses): Transfers in 20,786 20,786 20,786 -- Total other financing sources (uses) 20,786 20,786 20,786 --

Net change in budgetary fund balances (9,214) (9,214) 2,602 11,816

Budgetary fund balances, beginning 13,324 13,324 13,324 --

Budgetary fund balances, ending$ 4,110 $ 4,110 $ 15,926 $ 11,816

110 COUNTY OF MONTEREY

Budgetary Comparison Schedule Office of Employment Training For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Aid from other governmental agencies$ 7,808,000 $ 7,808,000 $ 6,913,353 $ (894,647) Other revenue -- -- 5,826 5,826 Total revenues 7,808,000 7,808,000 6,919,179 (888,821)

Expenditures: Current: Public assistance 7,820,253 7,820,253 7,147,046 673,207 Total expenditures 7,820,253 7,820,253 7,147,046 673,207

Excess (deficiency) of revenues over (under) expenditures (12,253) (12,253) (227,867) (215,614)

Other financing sources (uses): Transfers in 12,253 12,253 245,253 233,000 Total other financing sources (uses) 12,253 12,253 245,253 233,000

Net change in budgetary fund balances -- -- 17,386 17,386

Budgetary fund balances, beginning 156,650 156,650 156,650 --

Budgetary fund balances, ending$ 156,650 $ 156,650 $ 174,036 $ 17,386

111 COUNTY OF MONTEREY

Budgetary Comparison Schedule Community Services For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 8,000 $ 8,000 $ (3,039) $ (11,039) Aid from other governmental agencies 450,804 714,589 435,659 (278,930) Other revenue -- -- 822 822 Total revenues 458,804 722,589 433,442 (289,147)

Expenditures: Current: Public assistance 459,172 722,957 513,031 209,926 Total expenditures 459,172 722,957 513,031 209,926

Excess (deficiency) of revenues over (under) expenditures (368) (368) (79,589) (79,221)

Other financing sources (uses): Transfers in 368 368 368 -- Total other financing sources (uses) 368 368 368 --

Net change in budgetary fund balances -- -- (79,221) (79,221)

Budgetary fund balances, beginning 281,706 281,706 281,706 --

Budgetary fund balances, ending$ 281,706 $ 281,706 $ 202,485 $ (79,221)

112 COUNTY OF MONTEREY

Budgetary Comparison Schedule Inclusionary Housing For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 6,000 $ 6,000 $ (2,950) $ (8,950) Aid from other governments -- -- 21,104 21,104 Charges for services -- -- 123,923 123,923 Other revenue 80,000 80,000 7,795 (72,205) Total revenues 86,000 86,000 149,872 63,872

Expenditures: Current: General government 383,469 969,238 635,474 333,764 Total expenditures 383,469 969,238 635,474 333,764

Excess (deficiency) of revenues over (under) expenditures (297,469) (883,238) (485,602) 397,636

Other financing sources (uses): Transfers out -- (22,128) (22,128) -- Total other financing sources (uses) -- (22,128) (22,128) --

Net change in budgetary fund balances (297,469) (905,366) (507,730) 397,636

Budgetary fund balances, beginning 900,950 900,950 900,950 --

Budgetary fund balances, ending$ 603,481 $ (4,416) $ 393,220 $ 397,636

113 COUNTY OF MONTEREY

Budgetary Comparison Schedule Disaster Assistance For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Expenditures: Current: Public safety and protection$ 258,355 $ 258,355 $ -- $ 258,355 Total expenditures 258,355 258,355 -- 258,355

Net change in budgetary fund balances (258,355) (258,355) -- 258,355

Budgetary fund balances, beginning 258,355 258,355 258,355 --

Budgetary fund balances, ending$ 258,355 $ 258,355 $ 258,355 $ --

114 COUNTY OF MONTEREY

Budgetary Comparison Schedule Productivity Investment For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 30,000 $ 30,000 $ (16,370) $ (46,370) Total revenues 30,000 30,000 (16,370) (46,370)

Excess (deficiency) of revenues over (under) expenditures 30,000 30,000 (16,370) (46,370)

Other financing sources (uses): Transfers in 100,000 100,000 100,000 -- Transfers out (1,220,659) (1,220,659) (510,000) 710,659 Total other financing sources (uses) (1,120,659) (1,120,659) (410,000) 710,659

Net change in budgetary fund balances (1,090,659) (1,090,659) (426,370) 664,289

Budgetary fund balances, beginning 1,292,834 1,292,834 1,292,834 --

Budgetary fund balances, ending$ 202,175 $ 202,175 $ 866,464 $ 664,289

115 COUNTY OF MONTEREY

Budgetary Comparison Schedule Lakes Resort Parks For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 2,906,973 $ 2,906,973 $ 1,161,872 $ (1,745,101) Aid from other governmental agencies -- -- 63,626 63,626 Charges for services 922,000 922,000 870,820 (51,180) Other revenue -- 510,000 10,690 (499,310) Total revenues 3,828,973 4,338,973 2,107,008 (2,231,965)

Expenditures: Current: Recreation and culture services 3,828,973 4,338,973 2,899,173 1,439,800 Total expenditures 3,828,973 4,338,973 2,899,173 1,439,800

Excess (deficiency) of revenues over (under) expenditures -- -- (792,165) (792,165)

Other financing sources (uses): Inception of leases -- -- 74,356 74,356 Transfers in -- -- 1,214,366 1,214,366 Total other financing sources (uses) -- -- 1,288,722 1,288,722

Net change in budgetary fund balances -- -- 496,557 496,557

Budgetary fund balances, beginning ------

Budgetary fund balances, ending$ -- $ -- $ 496,557 $ 496,557

116 COUNTY OF MONTEREY

Budgetary Comparison Schedule Emergency Medical Services For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 20,000 $ 20,000 $ (6,031) $ (26,031) Aid from other governmental agencies 288,806 288,806 336,940 48,134 Charges for services 950,000 950,000 1,089,251 139,251 Other revenue -- -- 22 22 Total revenues 1,258,806 1,258,806 1,420,182 161,376

Expenditures: Current: Health and sanitation 1,472,966 1,669,184 1,643,928 25,256 Total expenditures 1,472,966 1,669,184 1,643,928 25,256

Net change in budgetary fund balances (214,160) (410,378) (223,746) 186,632

Budgetary fund balances, beginning 408,404 408,404 408,404 --

Budgetary fund balances, ending$ 194,244 $ (1,974) $ 184,658 $ 186,632

117 COUNTY OF MONTEREY

Budgetary Comparison Schedule Fort Ord Reuse For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 1,000 $ 1,000 $ (3,628) $ (4,628) Other revenue 822,352 822,352 -- (822,352) Total revenues 823,352 823,352 (3,628) (826,980)

Expenditures: Current: General government 925,550 1,121,644 150,899 970,745 Total expenditures 925,550 1,121,644 150,899 970,745

Excess (deficiency) of revenues over (under) expenditures (102,198) (298,292) (154,527) 143,765

Other financing sources (uses): Transfers in 42,000 42,000 42,000 -- Total other financing sources (uses) 42,000 42,000 42,000 --

Net change in budgetary fund balances (60,198) (256,292) (112,527) 143,765

Budgetary fund balances, beginning 103,767 103,767 103,767 --

Budgetary fund balances, ending$ 43,569 $ (152,525) $ (8,760) $ 143,765

118 COUNTY OF MONTEREY

Budgetary Comparison Schedule Nacimiento Hydroelectric Operations For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ -- $ -- $ (9,876) $ (9,876) Charges for services 250,000 445,000 -- (445,000) Total revenues 250,000 445,000 (9,876) (454,876)

Expenditures: Current: Public ways and facilities 615,841 1,692,008 271,358 1,420,650 Total expenditures 615,841 1,692,008 271,358 1,420,650

Excess (deficiency) of revenues over (under) expenditures (365,841) (1,247,008) (281,234) 965,774

Other financing sources (uses): Transfers in -- 600,000 600,000 -- Transfers out -- (243,705) (183,957) 59,748 Total other financing sources (uses) -- 356,295 416,043 59,748

Net change in budgetary fund balances (365,841) (890,713) 134,809 1,025,522

Budgetary fund balances, beginning 940,762 940,762 940,762 --

Budgetary fund balances, ending$ 574,921 $ 50,049 $ 1,075,571 $ 1,025,522

119 COUNTY OF MONTEREY

Budgetary Comparison Schedule Water Resources Agency For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Licenses, permits and franchises$ 29,000 $ 29,000 $ 24,269 $ (4,731) Revenue from use of money and property 280,445 280,445 258,860 (21,585) Aid from other governmental agencies 561,800 1,762,634 340,061 (1,422,573) Charges for services 11,882,186 11,882,186 15,025,579 3,143,393 Other revenue 300,000 300,000 9,735 (290,265) Total revenues 13,053,431 14,254,265 15,658,504 1,404,239

Expenditures: Current: Public ways and facilities 55,978,686 51,883,166 36,024,074 15,859,092 Total expenditures 55,978,686 51,883,166 36,024,074 15,859,092

Excess (deficiency) of revenues over (under) expenditures (42,925,255) (37,628,901) (20,365,570) 17,263,331

Other financing sources (uses): Transfers in 3,925,000 30,505,790 26,476,675 (4,029,115) Transfers out (511,294) (1,687,000) (667,000) 1,020,000 Total other financing sources (uses) 3,413,706 28,818,790 25,809,675 (3,009,115)

Net change in budgetary fund balances (39,511,549) (8,810,111) 5,444,105 14,254,216

Budgetary fund balances, beginning 14,462,191 14,462,191 14,462,191 --

Budgetary fund balances, ending$ (25,049,358) $ 5,652,080 $ 19,906,296 $ 14,254,216

120 COUNTY OF MONTEREY

Budgetary Comparison Schedule County Service Areas For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Taxes$ 1,597,991 $ 1,597,991 $ 1,634,299 $ 36,308 Revenue from use of money and property 195,795 195,795 (75,775) (271,570) Charges for services 997,105 997,105 1,292,820 295,715 Other revenue -- -- 1,000 1,000 Total revenues 2,790,891 2,790,891 2,852,344 61,453

Expenditures: Current: Public ways and facilities 3,621,793 3,932,237 897,858 3,034,379 Health and sanitation 1,670,980 2,305,287 869,658 1,435,629 Total expenditures 5,292,773 6,237,524 1,767,516 4,470,008

Excess (deficiency) of revenues over (under) expenditures (2,501,882) (3,446,633) 1,084,828 4,531,461

Other financing sources (uses): Transfers in -- -- 22,128 22,128 Total other financing sources (uses) -- -- 22,128 22,128

Net change in budgetary fund balances (2,501,882) (3,446,633) 1,106,956 4,553,589

Budgetary fund balances, beginning restated 7,523,648 7,523,648 7,523,648 --

Budgetary fund balances, ending$ 5,021,766 $ 4,077,015 $ 8,630,604 $ 4,553,589

121 COUNTY OF MONTEREY

Budgetary Comparison Schedule Sanitation Districts For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 69,005 $ 69,005 $ (24,400) $ (93,405) Charges for services 1,168,090 1,168,090 1,220,265 52,175 Other revenues 25,000 25,000 27,183 2,183 Total revenues 1,262,095 1,262,095 1,223,048 (39,047)

Expenditures: Current: Public ways and facilities 2,614,254 3,193,520 781,608 2,411,912 Health and sanitation 1,361,644 1,705,273 1,395,075 310,198 Debt service: Principal 142,157 153,967 -- 153,967 Interest 53,378 57,868 43,069 14,799 Total expenditures 4,171,433 5,110,628 2,219,752 2,890,876

Excess (deficiency) of revenues over (under) expenditures (2,909,338) (3,848,533) (996,704) 2,851,829

Other financing sources (uses): Transfer in 901,254 901,254 103,963 (797,291) Transfers out (2,105,500) (2,105,500) (18) 2,105,482 Total other financing sources (uses) (1,204,246) (1,204,246) 103,945 1,308,191

Net change in budgetary fund balances (4,113,584) (5,052,779) (892,759) 4,160,020

Budgetary fund balances, beginning 2,070,848 2,070,848 2,070,848 --

Budgetary fund balances, ending$ (2,042,736) $ (2,981,931) $ 1,178,089 $ 4,160,020

122 COUNTY OF MONTEREY

Budgetary Comparison Schedule Redevelopment Agency Set-Aside Fund For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Taxes$ 1,548,552 $ 1,548,552 $ -- $ (1,548,552) Revenue from use of money and property 13,500 13,500 (44,668) (58,168) Other revenue 157,600 157,600 78,823 (78,777) Total revenues 1,719,652 1,719,652 34,155 (1,685,497)

Expenditures: Current: General government 4,519,508 7,041,082 1,218,214 5,822,868 Debt service: Principal -- 170,000 85,000 85,000 Interest -- 30,000 19,148 10,852 Total expenditures 4,519,508 7,241,082 1,322,362 5,918,720

Excess (deficiency) of revenues over (under) expenditures (2,799,856) (5,521,430) (1,288,207) 4,233,223

Other financing sources (uses): Transfers in 249 249 1,393,585 1,393,336 Total other financing sources (uses) 249 249 1,393,585 1,393,336

Net change in budgetary fund balances (2,799,607) (5,521,181) 105,378 5,626,559

Budgetary fund balances, beginning, restated 5,499,577 5,499,577 5,499,577 --

Budgetary fund balances, ending$ 2,699,970 $ (21,604) $ 5,604,955 $ 5,626,559

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124

DEBT SERVICE FUNDS

Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. The County debt service funds provide for the repayment of debt, other than those financed by proprietary funds, for certificates of participation, revenue bonds and short-term borrowing.

125

DEBT SERVICE FUNDS

Debt Service County Fund – Created to assure the County meets all the debt service obligations in connection with the County’s adopted financing policies and State statutes so that the County’s credit ratings continue at the current positive levels. The debt is managed by the Auditor-Controller’s Office in coordination with the Chief Administrative Office.

Debt Service Redevelopment Agency (RDA) Fund – Created to account for the debt incurred by the Redevelopment Agency including payments to agencies and the housing set-aside. The debt is managed by the Auditor-Controller’s Office and the Redevelopment & Housing Office of the Resource Management Agency.

County Financing Authority – Established to support the debt service activities funding the County’s portion of the construction of the Salinas Valley Water Project. The fund is managed by the Auditor-Controller’s Office and the Water Resources Agency.

126 COUNTY OF MONTEREY

Combining Balance Sheet Nonmajor Debt Service Funds June 30, 2009

Debt Debt County Service Service Financing County RDA Authority Total

Assets Cash and investments in County Treasury$ 4,503,436 $ 91,550 $ -- $ 4,594,986 Cash with fiscal agent 9,673,791 -- 5,912,511 15,586,302 Taxes receivable -- 406,524 -- 406,524

Total assets$ 14,177,227 $ 498,074 $ 5,912,511 $ 20,587,812

Liabilities and fund balance Liabilities: Due from other funds$ -- $ 86,370 $ -- $ 86,370 Deferred revenues -- 274,547 -- 274,547

Total liabilities -- 360,917 -- 360,917

Fund balances: Reserved for debt service 10,228,439 137,157 2,874,944 13,240,540 Unreserved, undesignated 3,948,788 -- 3,037,567 6,986,355

Total fund balances 14,177,227 137,157 5,912,511 20,226,895

Total liabilities and fund balances$ 14,177,227 $ 498,074 $ 5,912,511 $ 20,587,812

127 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Debt Service Funds For the Year Ended June 30, 2009

Debt Debt County Service Service Financing General RDA Authority Totals Revenues: Taxes$ 14,560 $ 6,023,042 $ -- $ 6,037,602 Revenue from use of money and property 453,646 37,484 311,838 802,968 Aid from other governmental agencies -- 32,201 -- 32,201 Fines, forfeitures and penalties 1,388,416 -- -- 1,388,416 Charges for services 1,593,495 -- -- 1,593,495 Total revenues 3,450,117 6,092,727 311,838 9,854,682

Expenditures: Debt service: Principal 4,408,630 -- -- 4,408,630 Interest and debt service costs 7,299,322 -- 1,804,640 9,103,962 Total expenditures 11,707,952 -- 1,804,640 13,512,592

Excess (deficiency) of revenues over (under) expenditures (8,257,835) 6,092,727 (1,492,802) (3,657,910)

Other financing sources (uses): Issuance of debt -- -- 32,855,000 32,855,000 Premium on issuance of debt -- -- 763,469 763,469 Transfers in 7,705,101 49,621 -- 7,754,722 Transfers out -- (6,513,462) (26,213,156) (32,726,618) Total other financing sources (uses) 7,705,101 (6,463,841) 7,405,313 8,646,573

Net change in fund balances (552,734) (371,114) 5,912,511 4,988,663

Fund balances, beginning 14,729,961 508,271 -- 15,238,232

Fund balances, ending$ 14,177,227 $ 137,157 $ 5,912,511 $ 20,226,895

128 COUNTY OF MONTEREY

Budgetary Comparison Schedule Debt Service - County For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Taxes$ -- $ -- $ 14,560 $ 14,560 Revenue from use of money and property 523,330 263,330 453,646 190,316 Fines, forfeitures and penalties 1,500,000 1,500,000 1,388,416 (111,584) Charges for services 4,180,000 1,600,000 1,593,495 (6,505) Other revenues ------Total revenues 6,203,330 3,363,330 3,450,117 86,787

Expenditures: Debt service: Principal 6,162,304 4,943,256 4,408,630 534,626 Interest and debt service costs 8,617,463 7,234,824 7,299,322 (64,498) Total expenditures 14,779,767 12,178,080 11,707,952 470,128

Excess (deficiency) of revenues over (under) expenditures (8,576,437) (8,814,750) (8,257,835) 556,915

Other financing sources (uses): Transfers in 8,492,195 8,492,195 7,705,101 (787,094) Transfers out (3,500,000) (3,500,000) -- 3,500,000 Total other financing sources (uses) 4,992,195 4,992,195 7,705,101 2,712,906

Net change in budgetary fund balances (3,584,242) (3,822,555) (552,734) 3,269,821

Budgetary fund balances, beginning 14,729,961 14,729,961 14,729,961 --

Budgetary fund balances, ending$ 11,145,719 $ 10,907,406 $ 14,177,227 $ 3,269,821

129 COUNTY OF MONTEREY

Budgetary Comparison Schedule Debt Service - RDA For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Taxes$ 5,097,999 $ 6,404,615 $ 6,023,042 $ (381,573) Revenue from use of money and property -- -- 37,484 37,484 Aid from other governmental agencies -- -- 32,201 32,201 Total revenues 5,097,999 6,404,615 6,092,727 (311,888)

Excess (deficiency) of revenues over (under) expenditures 5,097,999 6,404,615 6,092,727 (311,888)

Other financing sources (uses): Transfers in -- -- 49,621 49,621 Transfers out (6,052,447) (6,646,698) (6,513,462) 133,236 Total other financing sources (uses) (6,052,447) (6,646,698) (6,463,841) 182,857

Net change in budgetary fund balances (954,448) (242,083) (371,114) (129,031)

Budgetary fund balances, beginning 508,271 508,271 508,271 --

Budgetary fund balances, ending$ (446,177) $ 266,188 $ 137,157 $ (129,031)

130 COUNTY OF MONTEREY

Budgetary Comparison Schedule County Financing Authority For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ -- $ -- $ 311,838 $ 311,838 Total revenues -- -- 311,838 311,838

Expenditures: Debt service: interest and debt service costs -- -- 1,804,640 (1,804,640) Total expenditures -- -- 1,804,640 (1,804,640)

Excess (deficiency) of revenues over (under) expenditures -- -- (1,492,802) (1,492,802)

Other financing sources (uses): Issuance of debt -- -- 32,855,000 32,855,000 Premium on issuance of debt -- -- 763,469 763,469 Transfers out -- -- (26,213,156) (26,213,156) Total other financing sources (uses) -- -- 7,405,313 7,405,313

Net change in budgetary fund balances -- -- 5,912,511 5,912,511

Budgetary fund balances, beginning ------

Budgetary fund balances, ending$ -- $ -- $ 5,912,511 $ 5,912,511

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132

CAPITAL PROJECT FUNDS

Nonmajor Capital Project Funds

Capital project funds are used to account for financial resources to be used for implementation and construction of specific Board approved capital equipment or facilities in a timely and cost-effective manner. The following are the County’s nonmajor capital project funds, other than those financed by proprietary funds.

133

CAPITAL PROJECT FUNDS

Major Capital Project Fund

Facilities Master Plan Implementation – Established to account for capital projects undertaken with debt in order to adhere to reporting requirements and assure the County is on schedule with project implementation and completion. Current projects include the Courthouse Complete (north, east and west wings), the Government Center Parking Structure and the New Health Headquarters.

Nonmajor Capital Project Funds

Capital Projects Fund – Created to provide for capital improvements, replacement and construction of new County facilities. The fund is administered by the Architectural Services Division within the Resource Management Agency.

Enterprise Research Planning Fund – Established to account for the implementation of the County’s Enterprise Applications project, including the Financial Accounting, Budget Preparation and the Human Resources/Payroll Systems. The Auditor-Controller’s Office acts as the project manager of the fund.

Facilities Maintenance Projects Fund – Provides for major maintenance including remodeling, improving, renovation, and upgrading of existing County facilities. The fund is administered by the Public Works Department within the Resource Management Agency.

Redevelopment Capital Projects – Provides for the administration and implementation of the Castroville/Pajaro Redevelopment Plan adopted in 1986, Boronda Redevelopment Plan adopted in 1988, and Fort Ord Redevelopment Project Area.

134 COUNTY OF MONTEREY

Budgetary Comparison Schedule Facility Master Plan For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues Revenue from use of money and property$ 2,164,269 $ 2,164,269 $ 1,865,388 $ (298,881) Total revenues 2,164,269 2,164,269 1,865,388 (298,881)

Expenditures Capital outlay 48,015,014 48,015,014 45,176,763 2,838,251 Total expenditures 48,015,014 48,015,014 45,176,763 2,838,251

Net change in budgetary fund balances (45,850,745) (45,850,745) (43,311,375) 2,539,370

Budgetary fund balances, beginning 79,243,756 79,243,756 79,243,756 --

Budgetary fund balances, ending$ 33,393,011 $ 33,393,011 $ 35,932,381 $ 2,539,370

135 COUNTY OF MONTEREY

Combining Balance Sheet Nonmajor Capital Projects Funds June 30, 2009

Enterprise Facilities Redevelopment Capital Research Maintenance Capital Projects Planning Projects Projects Total

Assets Cash and investments in County Treasury$ 23,503,947 $ 932,615 $ 2,538,749 $ 12,631,292 $ 39,606,603 Receivables ------640,957 640,957 Due from other funds ------79,680 79,680 Land held for resale and development ------915,680 915,680 Long term receivable 637,295 -- -- 139,446 776,741

Total assets$ 24,141,242 $ 932,615 $ 2,538,749 $ 14,407,055 $ 42,019,661

Liabilities and fund balance Liabilities: Vouchers and accounts payable$ 307,769 $ 332,535 $ 18,369 $ 54,381 $ 713,054 Deposits from others ------35,270 35,270 Deferred revenues 200,359 -- -- 421,143 621,502 Advances payable ------150,000 150,000

Total liabilities 508,128 332,535 18,369 660,794 1,519,826

Fund balances: Reserved for: Encumbrances 471,449 404,367 738,635 784,199 2,398,650 Unavailable assets ------915,680 915,680 Unreserved 23,161,665 195,713 1,781,745 12,046,382 37,185,505

Total fund balances 23,633,114 600,080 2,520,380 13,746,261 40,499,835

Total liabilities and fund balances$ 24,141,242 $ 932,615 $ 2,538,749 $ 14,407,055 $ 42,019,661

136 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Capital Projects Funds For the Year Ended June 30, 2009

Enterprise Facilities Redevelopment Capital Research Maintenance Capital Projects Planning Projects Projects Totals Revenues: Taxes$ -- $ -- $ -- $ (168,677) $ (168,677) Revenue from use of money and property (208,673) 127,125 (26,264) (87,670) (195,482) Aid from other governmental agencies 556,656 -- -- 343,365 900,021 Charges for services -- -- 141 155,435 155,576 Other revenue ------369,939 369,939 Total revenues 347,983 127,125 (26,123) 612,392 1,061,377

Expenditures: Current: General government ------2,769,391 2,769,391 Debt service: Principal ------64,684 64,684 Interest and debt service costs ------7,827 7,827 Capital outlay 2,563,497 6,951,822 2,076,097 -- 11,591,416 Total expenditures 2,563,497 6,951,822 2,076,097 2,841,902 14,433,318

Excess (deficiency) of revenues over (under) expenditures (2,215,514) (6,824,697) (2,102,220) (2,229,510) (13,371,941)

Other financing sources (uses): Transfers in 4,983,658 1,979,977 2,205,950 5,119,877 14,289,462 Transfers out (1,012,000) -- -- (64,410) (1,076,410) Total other financing sources (uses) 3,971,658 1,979,977 2,205,950 5,055,467 13,213,052

Net change in fund balances 1,756,144 (4,844,720) 103,730 2,825,957 (158,889)

Fund balances, beginning 21,876,970 5,444,800 2,416,650 10,920,304 40,658,724

Fund balances, ending$ 23,633,114 $ 600,080 $ 2,520,380 $ 13,746,261 $ 40,499,835

137 COUNTY OF MONTEREY

Budgetary Comparison Schedule Capital Projects For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 300,000 $ 300,000 $ (208,673) $ (508,673) Aid from other governmental agencies -- -- 556,656 556,656 Other revenue -- 556,656 -- (556,656) Total revenues 300,000 856,656 347,983 (508,673)

Expenditures: Capital outlay 17,422,637 17,045,393 3,034,946 14,010,447 Total expenditures 17,422,637 17,045,393 3,034,946 14,010,447

Excess (deficiency) of revenues over (under) expenditures (17,122,637) (16,188,737) (2,686,963) 13,501,774

Other financing sources (uses): Transfers in -- -- 4,983,658 4,983,658 Transfers out (2,137,166) (3,071,066) (1,012,000) 2,059,066 Total other financing sources (uses) (2,137,166) (3,071,066) 3,971,658 7,042,724

Net change in budgetary fund balances (19,259,803) (19,259,803) 1,284,695 20,544,498

Budgetary fund balances, beginning 21,876,970 21,876,970 21,876,970 --

Budgetary fund balances, ending$ 2,617,167 $ 2,617,167 $ 23,161,665 $ 20,544,498

138 COUNTY OF MONTEREY

Budgetary Comparison Schedule Enterprise Research Planning For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property$ 150,000 $ 150,000 $ 127,125 $ (22,875) Total revenues 150,000 150,000 127,125 (22,875)

Expenditures: Capital outlay 7,287,595 7,287,595 6,918,719 368,876 Total expenditures 7,287,595 7,287,595 6,918,719 368,876

Excess (deficiency) of revenues over (under) expenditures (7,137,595) (7,137,595) (6,791,594) 346,001

Other financing sources (uses): Transfers in 1,829,977 1,829,977 1,979,977 150,000 Total other financing sources (uses) 1,829,977 1,829,977 1,979,977 150,000

Net change in budgetary fund balances (5,307,618) (5,307,618) (4,811,617) 496,001

Budgetary fund balances, beginning 5,444,800 5,444,800 5,444,800 --

Budgetary fund balances, ending$ 137,182 $ 137,182 $ 633,183 $ 496,001

139 COUNTY OF MONTEREY

Budgetary Comparison Schedule Facilities Maintenance Projects For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Revenue from use of money and property $ 50,000 $ 50,000 $ (26,264) $ (76,264) Charges for services -- -- 141 141 Total revenues 50,000 50,000 (26,123) (76,123)

Expenditures: Capital outlay 3,330,034 4,263,934 1,880,679 2,383,255 Total expenditures 3,330,034 4,263,934 1,880,679 2,383,255

Excess (deficiency) of revenues over (under) expenditures (3,280,034) (4,213,934) (1,906,802) 2,307,132

Other financing sources (uses): Transfers in 1,485,000 2,418,900 2,205,950 (212,950) Total other financing sources (uses) 1,485,000 2,418,900 2,205,950 (212,950)

Net change in budgetary fund balances (1,795,034) (1,795,034) 299,148 2,094,182

Budgetary fund balances, beginning 2,416,650 2,416,650 2,416,650 --

Budgetary fund balances, ending $ 621,616 $ 621,616 $ 2,715,798 $ 2,094,182

140 COUNTY OF MONTEREY

Budgetary Comparison Schedule Redevelopment Capital Projects For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Actual Amounts Positive Original Final (Budgetary Basis) (Negative) Revenues: Taxes$ (42,972) $ (42,972) $ (168,677) (125,705) Revenue from use of money and property 115,300 115,300 (87,670) (202,970) Aid from other governmental agencies -- -- 343,365 343,365 Charges for services (112,168) (112,168) 155,435 267,603 Other revenue 877,853 964,905 369,939 (594,966) Total revenues 838,013 925,065 612,392 (312,673)

Expenditures: Current: General government 13,594,319 16,437,953 3,553,590 12,884,363 Debt service: Principal 55,750 55,750 64,684 (8,934) Interest 76,500 76,500 7,827 68,673 Total expenditures 13,726,569 16,570,203 3,626,101 12,944,102

Excess (deficiency) of revenues over (12,888,556) (15,645,138) (3,013,709) 12,631,429 (under) expenditures

Other financing sources (uses): Transfers in 5,468,576 5,645,192 5,119,877 (525,315) Transfers out (112,168) (53,856) (64,410) (10,554) Total other financing sources (uses) 5,356,408 5,591,336 5,055,467 (535,869)

Net change in budgetary fund balances (7,532,148) (10,053,802) 2,041,758 12,095,560

Budgetary fund balances, beginning, restated 10,920,304 10,920,304 10,920,304 --

Budgetary fund balances, ending $ 3,388,156 $ 866,502 $ 12,962,062 $ 12,095,560

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142

INTERNAL SERVICE FUNDS

Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments, or agencies of the County, or to other governments on a cost-reimbursement basis. Financing requirements are based upon actuarial studies that provide several scenarios that estimate ultimate losses. The County has adopted policies to fund each of these funds at the 70% confidence level. Each participant department of the fund’s services contributes to the recovery of expenses based on the participant department’s loss history and exposure to risk. Both funds are managed by the Risk Management Division of the County Administrative Office.

143

INTERNAL SERVICE FUNDS

General Liability Fund – Created to provide for all liability judgments, settlements, and claims against the County, including claims that are not covered by the County’s excess insurance policy.

Workers Compensation Fund – Created to provide for all workers compensation judgments, settlements, and claims against the County, including prevention expenses and the Return-to-Work program.

144 COUNTY OF MONTEREY

Combining Statement of Fund Net Assets Internal Service Funds June 30, 2009

General Workers' Liability Compensation Total Assets Current assets: Cash and cash equivalents$ 5,377,309 $ 35,056,430 $ 40,433,739 Accounts receivable -- 32,481 32,481 Prepaid expenses 122,574 -- 122,574

Total current assets 5,499,883 35,088,911 40,588,794

Noncurrent assets: Restricted assets: Held by trustee 394,790 -- 394,790 Capital assets: Depreciable, net 5,784,313 -- 5,784,313

Total noncurrent assets 6,179,103 -- 6,179,103

Total assets$ 11,678,986 $ 35,088,911 $ 46,767,897

Liabilities and Net Assets Current liabilities: Accounts payable and deposits$ 351,884 $ 470,270 $ 822,154 Current portion of claims liability 2,603,334 8,221,258 10,824,592 Current portion of bonds and notes payable 1,513,795 -- 1,513,795

Total current liabilities 4,469,013 8,691,528 13,160,541

Long-term liabilities: Claims liability 4,085,787 31,498,260 35,584,047 Bonds and notes payable 16,848,744 -- 16,848,744 Total long-term liabilities 20,934,531 31,498,260 52,432,791 Total liabilities 25,403,544 40,189,788 65,593,332

Net assets: Invested in capital assets, net of related debt 764,373 -- 764,373 Unrestricted (deficit) (14,488,931) (5,100,877) (19,589,808)

Total net assets (13,724,558) (5,100,877) (18,825,435)

Total liabilities and net assets$ 11,678,986 $ 35,088,911 $ 46,767,897

145 COUNTY OF MONTEREY

Combining Statement of Revenues, Expenses and Changes in Net Assets Internal Service Funds For the Year Ended June 30, 2009

General Workers' Liability Compensation Total Operating revenues: Charges for services$ 6,133,318 $ 11,572,000 $ 17,705,318 Other operating revenues 502 32,484 32,986

Total operating revenues 6,133,820 11,604,484 17,738,304

Operating expenses: Services and supplies 153,635 92,376 246,011 Claims expense 4,975,686 10,157,622 15,133,308 Purchased services 136,817 617,141 753,958 Insurance 581,638 1,202,815 1,784,453 Other operating expenses -- 30,875 30,875 Depreciation 746,326 -- 746,326

Total operating expenses 6,594,102 12,100,829 18,694,931

Net operating income (loss) (460,282) (496,345) (956,627)

Non-operating revenues (expenses): Interest income (54,233) (345,588) (399,821) Interest expense (895,187) -- (895,187)

Total non-operating revenues (expenses) (949,420) (345,588) (1,295,008)

Change in net assets (1,409,702) (841,933) (2,251,635)

Net assets - beginning of year (12,314,856) (4,258,944) (16,573,800)

Net assets - end of year$ (13,724,558) $ (5,100,877) $ (18,825,435)

146 COUNTY OF MONTEREY

Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2009

General Workers' Liability Compensation Total Cash flows from operating activities: Cash receipts from customers and users$ 6,140,199 $ 11,572,003 $ 17,712,202 Cash paid to suppliers for goods and services (4,698,725) (9,831,238) (14,529,963)

Net cash provided by operating activities 1,441,474 1,740,765 3,182,239

Cash flows from capital and related financing activities: Principal payments on cops, bonds and loans (1,462,017) -- (1,462,017) Interest payments on cops, bonds and loans (895,187) -- (895,187) Proceeds from the sale of capital assets 45,920 -- 45,920

Net cash provided (used) by capital and related financing activities (2,311,284) -- (2,311,284)

Cash flow from investing activities: Interest payments received 143,623 840,228 983,851 Decrease in fair value of investments (197,856) (1,185,816) (1,383,672)

Net cash provided (used) by investing activities (54,233) (345,588) (399,821)

Net increase (decrease) in cash and cash equivalents (924,043) 1,395,177 471,134

Cash and equivalents, July 1 6,696,142 33,661,253 40,357,395

Cash and equivalents, June 30$ 5,772,099 $ 35,056,430 $ 40,828,529

continued 147 COUNTY OF MONTEREY

Statements of Cash Flows (continued) Internal Service Funds For the Year Ended June 30, 2009

General Workers' Liability Compensation Total Reconciliation of operating income to net cash Provided by operating activities: Operating income (loss)$ (460,282) $ (496,345) $ (956,627) Adjustments to reconcile operating income to net Cash provided (used) by operating activities: Depreciation 746,326 -- 746,326 (increase) decrease in accounts receivable 6,379 (32,481) (26,102) (increase) decrease in prepaid expenses (1) -- (1) Increase (decrease) in accounts payable -- 212,415 212,415 Increase (decrease) in claims liability 1,149,052 2,057,176 3,206,228

Total adjustments 1,901,756 2,237,110 4,138,866

Net cash provided (used) by operating activities$ 1,441,474 $ 1,740,765 $ 3,182,239

148

AGENCY FUNDS

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150 COUNTY OF MONTEREY

Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2009

Balance Balance July 1, 2008 Additions Deductions June 30, 2009 Clearing and revolving funds Assets: Cash and cash equivalents$ 2,196,268 $ 4,968,977 $ 5,831,253 $ 1,333,992 Receivables - Other 2,081 -- 2,081 -- Total assets $ 2,198,349 $ 4,968,977 $ 5,833,334 $ 1,333,992

Liabilities: Accounts payable$ 106,090 $ -- $ 155,181 $ (49,091) Assets held as agency for others 2,092,259 5,877,991 6,587,167 1,383,083 Total liabilities$ 2,198,349 $ 5,877,991 $ 6,742,348 $ 1,333,992

Taxes and interest Assets: Cash and cash equivalents$ 8,279,169 $ 3,903,171 $ 961,000 $ 11,221,340 Receivables - Taxes 54,127,864 3,903,097 22,022,050 36,008,911 Total assets $ 62,407,033 $ 7,806,268 $ 22,983,050 $ 47,230,251

Liabilities: Accounts payable$ 1,770,443 $ 806,761 $ 522,207 $ 2,054,997 Assets held as agency for others 60,636,590 7,777,735 23,239,071 45,175,254 Total liabilities$ 62,407,033 $ 8,584,496 $ 23,761,278 $ 47,230,251

Departmental Assets: Cash and cash equivalents$ 8,146,296 $ 258,236 $ 381,030 $ 8,023,502 Long term receivables 30,000 -- -- 30,000 Total assets $ 8,176,296 $ 258,236 $ 381,030 $ 8,053,502

Liabilities: Accounts payable$ 24,365 $ -- $ 34,023 $ (9,658) Assets held as agency for others 8,151,931 206,943 295,714 8,063,160 Total liabilities$ 8,176,296 $ 206,943 $ 329,737 $ 8,053,502

continued

151 COUNTY OF MONTEREY

Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2009

Balance Balance July 1, 2008 Additions Deductions June 30, 2009 Transit Assets: Cash and cash equivalents$ 5,909,777 $ -- $ 738,832 $ 5,170,945 Total assets $ 5,909,777 $ -- $ 738,832 $ 5,170,945

Liabilities: Assets held as agency for others$ 5,909,777 $ 1,290,061 $ 2,028,893 5,170,945 Total liabilities$ 5,909,777 $ 1,290,061 $ 2,028,893 $ 5,170,945

Total all agency funds Assets: Cash and cash equivalents$ 24,531,510 $ 9,130,384 $ 7,912,115 $ 25,749,779 Receivables - Taxes 54,127,864 3,903,097 22,022,050 36,008,911 Receivables - Other 2,081 -- 2,081 -- Long term receivables 30,000 -- -- 30,000 Total assets $ 78,691,455 $ 13,033,481 $ 29,936,246 $ 61,788,690

Liabilities: Accounts payable$ 1,900,898 $ 806,761 $ 711,411 $ 1,996,248 Assets held as agency for others 76,790,557 15,152,730 32,150,845 59,792,442 Total liabilities$ 78,691,455 $ 15,959,491 $ 32,862,256 $ 61,788,690

152

DETAILED BUDGET SCHEDULES

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154 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) General Government Legislative and administrative: Board of Supervisors Salaries and benefits$ 2,142,740 $ 2,182,740 $ 2,164,087 $ 18,653 Services and supplies 765,088 725,088 655,718 69,370 Subtotal 2,907,828 2,907,828 2,819,805 88,023

Clerk of the Board of Supervisors Salaries and benefits -- 377,999 335,005 42,994 Services and supplies -- 224,748 143,023 81,725 Subtotal -- 602,747 478,028 124,719

Assessment Appeals Board Services and supplies 50,000 50,000 5,421 44,579 Subtotal 50,000 50,000 5,421 44,579

Annual County Audit Services and supplies 190,000 190,000 157,063 32,937 Subtotal 190,000 190,000 157,063 32,937

County Memberships Services and supplies 57,000 57,000 54,478 2,522 Subtotal 57,000 57,000 54,478 2,522

County Administrative Office Salaries and benefits 3,184,301 3,184,301 2,753,434 430,867 Services and supplies 571,583 571,583 400,193 171,390 Intra fund transfers (581,167) (581,167) (354,978) (226,189) Subtotal 3,174,717 3,174,717 2,798,649 376,068

Intergovernmental and Legislative Salaries and benefits 1,171,895 793,896 692,042 101,854 Services and supplies 997,811 682,963 604,201 78,762 Intra fund transfers -- -- (66,133) 66,133 Other financing uses -- 90,100 90,033 67 Subtotal 2,169,706 1,566,959 1,320,143 246,816

Total Legislative and Administrative 8,549,251 8,549,251 7,633,587 915,664

continued 155 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) General Government (continued) Finance: Auditor-Controller Salaries and benefits$ 5,871,733 $ 5,619,733 $ 5,587,001 $ 32,732 Services and supplies 696,365 905,046 847,215 57,831 Other charges -- 282,000 281,525 475 Capital assets 56,000 17,319 -- 17,319 Intra fund transfers (1,351,551) (1,351,551) (1,445,778) 94,227 Subtotal 5,272,547 5,472,547 5,269,963 202,584

Revenue Division Salaries and benefits 2,329,918 2,329,918 1,886,142 443,776 Services and supplies 805,483 805,483 468,678 336,805 Capital assets 30,000 30,000 6,200 23,800 Intra fund transfers (58,072) (58,072) (54,421) (3,651) Subtotal 3,107,329 3,107,329 2,306,599 800,730

Treasurer-Tax Collector Salaries and benefits 2,315,757 2,315,757 2,157,062 158,695 Services and supplies 928,450 952,450 798,981 153,469 Capital assets 87,000 63,000 62,044 956 Intra fund transfers (190,010) (190,010) (182,209) (7,801) Subtotal 3,141,197 3,141,197 2,835,878 305,319

Assessor Salaries and benefits 4,986,404 4,972,404 4,926,697 45,707 Services and supplies 692,128 692,128 678,293 13,835 Capital assets 75,000 89,000 89,000 -- Intra fund transfers (140,688) (140,688) (154,512) 13,824 Subtotal 5,612,844 5,612,844 5,539,478 73,366

Purchasing Salaries and benefits 974,113 974,113 867,163 106,950 Services and supplies 143,713 143,713 100,093 43,620 Intra fund transfers (126,363) (126,363) (128,859) 2,496 Subtotal 991,463 991,463 838,397 153,066

Total Finance 18,125,380 18,325,380 16,790,315 1,535,065

continued 156 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) General Government (continued) Counsel: County Counsel Salaries and benefits$ 4,731,023 $ 5,077,616 $ 4,613,150 $ 464,466 Services and supplies 560,598 562,878 492,271 70,607 Intra fund transfers (2,113,505) (2,113,505) (2,246,600) 133,095 Subtotal 3,178,116 3,526,989 2,858,821 668,168

Total Counsel 3,178,116 3,526,989 2,858,821 668,168

Personnel: Human Resources Division Salaries and benefits 3,007,966 2,677,966 2,276,141 401,825 Services and supplies 1,366,719 1,416,719 1,290,812 125,907 Intra fund transfers (367,263) (367,263) (427,467) 60,204 Other financing uses -- 233,000 233,000 -- Subtotal 4,007,422 3,960,422 3,372,486 587,936

Total Personnel 4,007,422 3,960,422 3,372,486 587,936

Elections: Elections Salaries and benefits 914,512 914,512 811,562 102,950 Services and supplies 2,163,263 3,941,828 3,284,599 657,229 Capital assets 25,000 6,561 6,560 1 Subtotal 3,102,775 4,862,901 4,102,721 760,180

Total Elections 3,102,775 4,862,901 4,102,721 760,180

Promotion: Cluster Loan Fund Other financing uses 92,939 92,939 (10,477) 103,416 Subtotal 92,939 92,939 (10,477) 103,416

Development Set-Aside Services and supplies 1,780,151 1,730,151 1,713,509 16,642 Other financing uses -- 50,000 50,000 -- Subtotal 1,780,151 1,780,151 1,763,509 16,642

Economic Development Services and supplies -- 200,000 87 199,913 Subtotal -- 200,000 87 199,913

Total Promotion 1,873,090 2,073,090 1,753,119 319,971 continued 157 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) General Government (continued) Other general government: Facilities Mgmt and Mail Svcs Salaries and benefits$ 3,311,949 $ 3,311,949 $ 2,679,299 $ 632,650 Services and supplies 5,232,675 5,232,675 5,213,888 18,787 Other charges 55,000 55,000 38,380 16,620 Capital assets 45,000 45,000 -- 45,000 Intra fund transfers (702,493) (702,493) (583,575) (118,918) Subtotal 7,942,131 7,942,131 7,347,992 594,139

Vehicle Replacement Capital assets 2,000,000 2,000,000 1,982,856 17,144 Intra fund transfers (1,173,361) (1,173,361) (1,319,543) 146,182 Subtotal 826,639 826,639 663,313 163,326

Equal Opportunity Office Salaries and benefits 475,989 475,989 459,648 16,341 Services and supplies 174,485 174,485 87,645 86,840 Intra fund transfers (4,000) (4,000) -- (4,000) Subtotal 646,474 646,474 547,293 99,181

Fleet Management Salaries and benefits 1,904,708 1,904,708 1,638,038 266,670 Services and supplies 5,131,552 5,131,552 3,991,256 1,140,296 Capital assets 240,000 240,000 -- 240,000 Intra fund transfers (6,446,042) (6,446,042) (4,687,523) (1,758,519) Subtotal 830,218 830,218 941,771 (111,553)

Telecommunications Salaries and benefits 3,006,074 3,006,074 2,667,097 338,977 Services and supplies 2,828,237 3,094,562 2,650,235 444,327 Capital assets 618,000 968,000 330,828 637,172 Intra fund transfers (5,121,121) (5,121,121) (4,814,921) (306,200) Subtotal 1,331,190 1,947,515 833,239 1,114,276

Architectural Services Salaries and benefits 777,072 877,072 840,488 36,584 Services and supplies 1,172,885 1,072,885 408,701 664,184 Intra fund transfers (1,558,549) (1,558,549) (843,767) (714,782) Subtotal 391,408 391,408 405,422 (14,014)

Other General Expenditures Services and supplies 48,750 48,750 7,000 41,750 Subtotal 48,750 48,750 7,000 41,750

continued 158 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) General Government (continued) Insurance Services and supplies$ 2,592,783 $ 2,592,783 $ 2,080,759 $ 512,024 Intra fund transfers (1,411,319) (1,411,319) (671,897) (739,422) Subtotal 1,181,464 1,181,464 1,408,862 (227,398)

Information Technology Salaries and benefits 11,705,171 11,925,067 10,195,937 1,729,130 Services and supplies 5,208,867 5,393,867 4,037,449 1,356,418 Capital assets 235,000 235,000 141,112 93,888 Intra fund transfers (15,144,162) (15,694,046) (13,836,684) (1,857,362) Subtotal 2,004,876 1,859,888 537,814 1,322,074

Resource Management Agency Salaries and benefits 3,831,615 3,806,615 3,699,665 106,950 Services and supplies 414,558 439,558 419,692 19,866 Intra fund transfers (3,888,390) (3,888,390) (3,181,722) (706,668) Subtotal 357,783 357,783 937,635 (579,852)

Risk Management Salaries and benefits 1,559,436 1,559,436 1,215,335 344,101 Services and supplies 293,909 293,909 293,611 298 Intra fund transfers (1,007,242) (1,007,242) (948,351) (58,891) Subtotal 846,103 846,103 560,595 285,508

Records Retention Salaries and benefits 486,873 486,873 385,395 101,478 Services and supplies 130,378 130,378 86,366 44,012 Capital assets 20,000 20,000 -- 20,000 Intra fund transfers -- -- (454) 454 Subtotal 637,251 637,251 471,307 165,944

Printing Services Salaries and benefits 432,527 432,527 372,168 60,359 Services and supplies 771,336 771,336 673,880 97,456 Intra fund transfers (745,235) (745,235) (727,069) (18,166) Subtotal 458,628 458,628 318,979 139,649

Recorder-County Clerk Salaries and benefits 1,039,864 1,039,864 930,952 108,912 Services and supplies 589,110 879,375 692,442 186,933 Capital assets 350,000 350,000 -- 350,000 Subtotal 1,978,974 2,269,239 1,623,394 645,845

continued 159 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) General Government (continued) Housing and Redevelopment Salaries and benefits$ 1,539,294 $ 1,391,939 $ 1,257,891 $ 134,048 Services and supplies 311,083 511,083 332,722 178,361 Intra fund transfers (1,850,377) (1,903,022) (1,514,401) (388,621) Subtotal -- -- 76,212 (76,212)

Other financing uses Services and supplies 12,744,408 6,736,561 423,952 6,312,609 Other charges 646,025 653,872 289,617 364,255 Intra fund transfers 887,696 887,696 -- 887,696 Other financing uses 14,257,600 20,257,600 19,255,137 1,002,463 Subtotal 28,535,729 28,535,729 19,968,706 8,567,023

Contingencies Contingencies 5,447,128 144 -- 144 Subtotal 5,447,128 144 -- 144

Total Other General Government 53,464,746 48,779,364 36,649,534 12,129,830

Total General Government 92,300,780 90,077,397 73,160,583 16,916,814

Public Safety and Protection Judicial: Trial Courts Services and supplies 342,000 333,167 212,812 120,355 Other charges 8,000,000 8,008,833 8,008,832 1 Subtotal 8,342,000 8,342,000 8,221,644 120,356

Grand Jury Services and supplies 118,952 118,952 83,757 35,195 Subtotal 118,952 118,952 83,757 35,195

District Attorney Salaries and benefits 16,046,313 16,170,832 15,849,015 321,817 Services and supplies 1,957,308 1,971,556 1,615,074 356,482 Intra fund transfers (1,542,669) (1,502,669) (1,552,656) 49,987 Subtotal 16,460,952 16,639,719 15,911,433 728,286

Child Support Services Salaries and benefits 9,388,899 9,388,899 8,941,850 447,049 Services and supplies 2,143,502 2,143,502 1,818,710 324,792 Intra fund transfers (58,984) (58,984) (14,448) (44,536) Subtotal 11,473,417 11,473,417 10,746,112 727,305

continued 160 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Public Safety and Protection (continued) Public Defender Salaries and benefits$ 5,969,110 $ 5,970,488 $ 5,964,906 $ 5,582 Services and supplies 878,494 1,018,494 959,552 58,942 Subtotal 6,847,604 6,988,982 6,924,458 64,524

Court Assigned Counsel Salaries and benefits 303,330 75,058 75,057 1 Services and supplies 1,944,152 2,322,424 2,322,422 2 Subtotal 2,247,482 2,397,482 2,397,479 3

Total Judicial 45,490,407 45,960,552 44,284,883 1,675,669

Other protection: Sheriff Salaries and benefits 30,333,318 31,616,908 31,594,835 22,073 Services and supplies 6,270,471 5,469,846 5,282,866 186,980 Capital assets 500,000 627,170 620,139 7,031 Intra fund transfers (235,000) (282,000) (187,328) (94,672) Other financing uses 100,000 117,625 117,625 -- Subtotal 36,968,789 37,549,549 37,428,137 121,412

Joint Gang Task Force Salaries and benefits 532,752 854,755 837,802 16,953 Services and supplies 1,254,573 1,345,238 1,310,705 34,533 Subtotal 1,787,325 2,199,993 2,148,507 51,486

Sheriff's Correctional Division Salaries and benefits 27,292,364 27,417,127 27,136,139 280,988 Services and supplies 4,229,796 4,229,796 3,861,447 368,349 Capital assets -- 40,000 37,801 2,199 Intra fund transfers (12,360) (12,360) (12,360) -- Subtotal 31,509,800 31,674,563 31,023,027 651,536

Inmate Medical Services Services and supplies 5,704,201 5,704,201 5,348,982 355,219 Subtotal 5,704,201 5,704,201 5,348,982 355,219

continued 161 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Public Safety and Protection (continued) Probation Salaries and benefits$ 12,594,988 $ 13,167,441 $ 13,164,594 $ 2,847 Services and supplies 2,364,018 2,004,157 2,003,765 392 Other charges 443,916 230,459 230,459 -- Capital assets -- 8,752 8,752 -- Intra fund transfers (432,235) (432,235) (515,685) 83,450 Other financing uses -- 17,518 14,785 2,733 Subtotal 14,970,687 14,996,092 14,906,670 89,422

Juvenile Hall Salaries and benefits 13,736,473 14,806,692 14,802,964 3,728 Services and supplies 3,488,641 3,691,032 3,648,828 42,204 Capital assets 24,968 30,383 28,467 1,916 Intra fund transfers (240,176) (252,759) -- (252,759) Subtotal 17,009,906 18,275,348 18,480,259 (204,911)

Emergency Communications Salaries and benefits 7,741,958 7,741,958 7,482,065 259,893 Services and supplies 1,466,377 1,817,949 1,680,725 137,224 Capital assets -- 360,754 360,056 698 Intra fund transfers (114,333) (114,333) (114,333) -- Subtotal 9,094,002 9,806,328 9,408,513 397,815

Contributions - Prop 172 Other charges 2,390,121 2,390,121 2,181,494 208,627 Subtotal 2,390,121 2,390,121 2,181,494 208,627

Sheriff's Coroner Salaries and benefits 1,172,748 1,172,748 1,148,381 24,367 Services and supplies 617,757 617,757 612,011 5,746 Subtotal 1,790,505 1,790,505 1,760,392 30,113

Office of Emergency Services Salaries and benefits 606,557 596,557 563,053 33,504 Services and supplies 641,979 1,248,097 1,216,407 31,690 Subtotal 1,248,536 1,844,654 1,779,460 65,194

Agricultural Commissioner Salaries and benefits 5,597,959 5,565,495 5,280,757 284,738 Services and supplies 1,659,711 2,115,284 2,007,728 107,556 Capital assets -- 150,000 133,825 16,175 Intra fund transfers (172,241) (172,241) (67,194) (105,047) Subtotal 7,085,429 7,658,538 7,355,116 303,422 continued 162 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Public Safety and Protection (continued) Produce Inspection Salaries and benefits$ 1,352,105 $ 1,352,105 $ 597,701 $ 754,404 Services and supplies 144,894 144,894 108,926 35,968 Subtotal 1,496,999 1,496,999 706,627 790,372

Surveyor Services and supplies 630,821 1,630,821 1,269,952 360,869 Subtotal 630,821 1,630,821 1,269,952 360,869

Planning Salaries and benefits 3,841,126 3,325,509 3,262,960 62,549 Services and supplies 1,529,849 2,090,623 2,090,425 198 Capital assets 15,000 15,000 -- 15,000 Intra fund transfers -- -- (19,461) 19,461 Subtotal 5,385,975 5,431,132 5,333,924 97,208

Building Services Salaries and benefits 4,831,536 4,597,073 4,418,942 178,131 Services and supplies 1,376,015 1,376,015 1,375,497 518 Capital assets 9,000 9,000 -- 9,000 Intra Fund Transfer -- -- (78) 78 Subtotal 6,216,551 5,982,088 5,794,361 187,727

Total Other Protection 143,289,647 148,430,932 144,925,421 3,505,511

Total Public Safety and Protection 188,780,054 194,391,484 189,210,304 5,181,180

Health and Sanitation Health: Health Salaries and benefits 15,089,044 14,077,044 14,070,754 6,290 Services and supplies 5,315,228 6,005,752 5,842,108 163,644 Capital assets 264,500 264,500 215,470 49,030 Intra fund transfers (4,302,517) (4,302,517) (3,925,972) (376,545) Subtotal 16,366,255 16,044,779 16,202,360 (157,581)

Primary Health Care Salaries and benefits 16,300,647 16,431,847 16,431,847 -- Services and supplies 7,037,488 6,955,485 6,953,033 2,452 Intra fund transfers (2,557,777) (2,249,274) (2,230,128) (19,146) Subtotal 20,780,358 21,138,058 21,154,752 (16,694)

continued 163 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Health and Sanitation (continued) Environmental Health Salaries and benefits$ 7,001,787 $ 7,001,787 $ 6,795,151 $ 206,636 Services and supplies 2,698,833 4,498,833 4,235,646 263,187 Capital assets 65,000 65,000 20,081 44,919 Intra fund transfers (141,000) (141,000) (131,427) (9,573) Subtotal 9,624,620 11,424,620 10,919,451 505,169

Behavioral Health Salaries and benefits 28,100,247 27,831,156 25,995,074 1,836,082 Services and supplies 27,502,460 29,914,508 28,660,953 1,253,555 Other charges 810,000 897,500 846,167 51,333 Capital assets 50,000 50,000 -- 50,000 Intra fund transfers (907,902) (907,902) (773,938) (133,964) Other financing uses 57,750 57,750 14,785 42,965 Subtotal 55,612,555 57,843,012 54,743,041 3,099,971

Public Guardian/Administrator Salaries and benefits 547,247 959,097 959,097 -- Services and supplies 272,287 204,161 198,277 5,884 Intra fund transfers -- -- (7,500) 7,500 Subtotal 819,534 1,163,258 1,149,874 13,384

Alcohol and Drug Programs Salaries and benefits 1,630,614 1,630,614 1,588,069 42,545 Services and supplies 5,183,115 5,519,814 5,458,778 61,036 Other charges 1,227 1,227 -- 1,227 Intra fund transfers (686,898) (686,898) (655,628) (31,270) Other financing uses 22,551 22,551 18,107 4,444 Subtotal 6,150,609 6,487,308 6,409,326 77,982

Contributions - Other Agencies Other charges 388,644 388,644 336,016 52,628 Subtotal 388,644 388,644 336,016 52,628

County Disposal Sites Services and supplies 455,848 455,848 174,826 281,022 Other charges 145 145 54 91 Subtotal 455,993 455,993 174,880 281,113

continued 164 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Health and Sanitation (continued) Medical Care Services Services and supplies$ 2,500,000 $ 2,500,000 $ 2,191,497 $ 308,503 Other charges 167,207 167,207 -- 167,207 Other financing uses 7,087,707 6,779,204 6,200,000 579,204 Subtotal 9,754,914 9,446,411 8,391,497 1,054,914

Emergency Medical Services Salaries and benefits 954,837 954,837 648,188 306,649 Services and supplies 692,090 692,090 632,872 59,218 Other charges 80,000 80,000 80,000 -- Intra fund transfers (120,000) (120,000) (329,990) 209,990 Subtotal 1,606,927 1,606,927 1,031,070 575,857

Children's Medical Services Salaries and benefits 6,369,999 5,639,821 5,633,556 6,265 Services and supplies 1,499,240 1,275,329 1,274,722 607 Other charges 1,030,000 1,383,100 1,383,100 -- Capital Asets 23,000 ------Intra fund transfers (63,730) (63,730) (58,030) (5,700) Subtotal 8,858,509 8,234,520 8,233,348 1,172

Animal Services Salaries and benefits 1,602,404 1,602,404 1,373,801 228,603 Services and supplies 645,367 645,367 605,321 40,046 Subtotal 2,247,771 2,247,771 1,979,122 268,649

Litter Control Services and supplies 523,467 523,467 514,508 8,959 Subtotal 523,467 523,467 514,508 8,959

Total Health 133,190,156 137,004,768 131,239,245 5,765,523

Total Health and Sanitation 133,190,156 137,004,768 131,239,245 5,765,523

Public Assistance Social services: Social Services Salaries and benefits 54,037,448 55,963,621 55,703,511 260,110 Services and supplies 21,982,077 19,843,128 17,583,310 2,259,818 Other charges 252,312 252,312 103,621 148,691 Capital assets 90,000 90,000 48,932 41,068 Intra fund transfers (529,426) (529,426) (691,659) 162,233 Subtotal 75,832,411 75,619,635 72,747,715 2,871,920 continued 165 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Public Assistance (continued) Area Agency on Aging Salaries and benefits$ 356,105 $ 356,105 $ 288,620 $ 67,485 Services and supplies 1,909,611 1,909,611 1,849,423 60,188 Intra fund transfers (105,600) (105,600) -- (105,600) Subtotal 2,160,116 2,160,116 2,138,043 22,073

Linkages Salaries and benefits 171,998 220,740 219,346 1,394 Services and supplies 58,279 33,536 22,167 11,369 Other charges 34,802 26,829 25,251 1,578 Intra fund transfers -- (16,026) (16,026) -- Subtotal 265,079 265,079 250,738 14,341

Multipurpose Senior Svcs Program Salaries and benefits 685,934 597,184 571,023 26,161 Services and supplies 59,997 148,747 148,731 16 Other charges 145,690 145,690 129,787 15,903 Intra fund transfers (33,201) (33,201) -- (33,201) Subtotal 858,420 858,420 849,541 8,879

Total Social Services 79,116,026 78,903,250 75,986,037 2,917,213

Other public assistance: CalWorks/TANF Benefits Other charges 35,910,610 39,804,136 39,489,054 315,082 Subtotal 35,910,610 39,804,136 39,489,054 315,082

Out-of-Home Care Services and supplies 2,550,718 2,617,850 2,558,004 59,846 Other charges 16,817,230 18,249,695 17,980,973 268,722 Subtotal 19,367,948 20,867,545 20,538,977 328,568

IHSS Wages and Benefits Other charges 9,192,698 9,614,936 9,303,768 311,168 Other financing uses 119,608 119,608 102,254 17,354 Subtotal 9,312,306 9,734,544 9,406,022 328,522

Aid to Indigents Other charges 617,792 641,041 634,262 6,779 Subtotal 617,792 641,041 634,262 6,779

continued 166 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Public Assistance (continued) Military and Veterans Affairs Salaries and benefits$ 539,174 $ 539,174 $ 538,167 $ 1,007 Services and supplies 98,582 98,582 84,799 13,783 Subtotal 637,756 637,756 622,966 14,790

Social Services - Other Assistance Services and supplies 445,186 521,240 495,138 26,102 Other financing uses 13,673 13,673 13,673 -- Subtotal 458,859 534,913 508,811 26,102

Child Care Planning Council Salaries and benefits 303,317 303,317 277,617 25,700 Services and supplies 266,435 1,253,635 1,219,807 33,828 Subtotal 569,752 1,556,952 1,497,424 59,528

Total Other Public Assistance 66,875,023 73,776,887 72,697,516 1,079,371

Total Public Assistance 145,991,049 152,680,137 148,683,553 3,996,584

Recreation and Cultural Services Cultural services Cooperative Extension Service Salaries and benefits 318,192 318,192 305,076 13,116 Services and supplies 132,651 132,651 120,146 12,505 Subtotal 450,843 450,843 425,222 25,621

Coop Ext - Reimbursed Projects Salaries and benefits 352,278 352,278 125,844 226,434 Services and supplies 19,276 19,276 7,959 11,317 Subtotal 371,554 371,554 133,803 237,751

Total Cultural Services 822,397 822,397 559,025 263,372

Recreation facilities: Parks Salaries and benefits 5,427,334 5,427,334 5,161,615 265,719 Services and supplies 2,125,055 2,523,053 2,483,162 39,891 Other charges 20,602 22,604 22,603 1 Capital assets 927,000 527,000 120,081 406,919 Intra fund transfers -- -- (136,954) 136,954 Subtotal 8,499,991 8,499,991 7,650,507 849,484

continued 167 COUNTY OF MONTEREY

General Fund Schedule of Expenditures-Budget and Actual on Budgetary Basis (continued) For the Year Ended June 30, 2009

Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Recreation and Cultural Services (continued) Parks - Grant Projects Services and supplies$ 177,000 $ 519,000 $ 338,166 $ 180,834 Capital assets 1,647,000 1,305,000 414,903 890,097 Subtotal 1,824,000 1,824,000 753,069 1,070,931

Lake San Antonio Salaries and benefits -- -- (457) 457 Subtotal -- -- (457) 457

Lake Nacimiento Salaries and benefits -- -- (4,544) 4,544 Subtotal -- -- (4,544) 4,544

Total Recreation Facilities 10,323,991 10,323,991 8,398,575 1,925,416

Total Recreation and Cultural Services 11,146,388 11,146,388 8,957,600 2,188,788

Total General Fund $ 571,408,427 $ 585,300,174 $ 551,251,285 $ 34,048,889

168

STATISTICAL SECTION

169

STATISTICAL SECTION

The information in this section is not covered by the Independent Auditor’s Report, but is presented as supplemental data for the benefit of the readers of the comprehensive financial report.

Financial Trends These schedules contain trend information to help the reader understand how the County’s financial performance and well-being have changed over time. (Schedule 1-4)

Revenue Capacity These schedules contain information to help the reader assess the County’s most significant local revenue sources, property tax and sales tax. (Schedule 5-10)

Debt Capacity These schedules present information to help the reader assess the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future. (Schedule 11-13)

Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the County’s financial activities take place. (Schedule 14-16)

Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs. (Schedule 17-18)

170 Schedule 1 County of Monterey Net Assets by Component Last Eight Fiscal Years* (accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 Governmental activities Invested in capital assets, net of related debt$ 368,529 $ 465,234 $ 470,684 $ 459,041 $ 463,900 $ 472,945 $ 488,623 $ 502,051 Restricted - 95,272 65,960 75,421 94,186 105,712 103,947 105,250 Unrestricted 156,552 (7,278) 532 39,461 42,940 67,582 61,497 48,213 Total governmental activities net assets$ 525,081 $ 553,228 $ 537,176 $ 573,923 $ 601,026 $ 646,239 $ 654,067 $ 655,514

Business-type activities Invested in capital assets, net of related debt$ 62,635 $ 49,678 $ 46,684 $ 55,814 $ 50,634 $ 47,334 $ 46,079 $ 47,265 Unrestricted (26,006) (23,307) (19,159) (1,831) 734 12,522 26,513 32,822 Total business-type activities net assets$ 36,629 $ 26,371 $ 27,525 $ 53,983 $ 51,368 $ 59,856 $ 72,592 $ 80,087

171 Primary government Invested in capital assets, net of related debt$ 431,164 $ 514,912 $ 517,368 $ 514,855 $ 514,534 $ 520,279 $ 534,702 $ 549,316 Restricted - 95,272 65,960 75,421 94,186 105,712 103,947 105,250 Unrestricted 127,546 (30,585) (18,627) 37,630 43,674 80,104 88,010 81,035 Total primary government net assets$ 558,710 $ 579,599 $ 564,701 $ 627,906 $ 652,394 $ 706,095 $ 726,659 $ 735,601

Note: *GASB 44 requires this schedule to present information for the last ten years. However, until the County is able to acquire a full ten-year trend, the title will reflect the actual number of years for which data has been accumulated Schedule 2 County of Monterey Changes in Net Assets Last Eight Fiscal Years* (accrual basis of accounting) (amounts expressed in thousands)

Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009

Expenses Government activities: General government $ 85,809 $ 118,440 $ 76,319 $ 46,864 $ 69,797 $ 74,425 $ 78,259 $ 77,839 Public safety and protection 186,131 160,948 127,057 150,392 153,047 144,628 187,688 177,747 Public ways and facilities 29,686 32,199 50,948 52,600 63,174 44,829 39,158 46,384 Health and sanitation 117,938 88,817 100,883 100,380 93,290 115,157 130,618 135,200 Public assistance 136,114 124,209 120,371 126,017 129,735 136,395 150,406 158,092 Education 6,242 5,722 4,969 5,699 5,958 6,341 7,271 7,559 Recreation and cultural services 7,975 6,857 7,208 6,041 7,154 8,316 10,156 11,156 Interest on long-term debt 5,049 5,885 4,430 5,987 4,650 3,216 8,780 10,173 Total governmental activities expenses 574,944 543,077 492,185 493,980 526,805 533,307 612,336 624,150 Business-type activities: Natividad Medical Center 130,515 137,192 130,310 166,433 137,698 135,634 186,121 194,850 172 Total business type activities expenses 130,515 137,192 130,310 166,433 137,698 135,634 186,121 194,850 Total primary government expenses$ 705,459 $ 680,269 $ 622,495 $ 660,413 $ 664,503 $ 668,941 $ 798,457 $ 819,000 Program Revenues Governmental activities: Charges for services: General government $ 39,242 $ 37,783 $ 42,360 $ 34,516 $ 24,384 $ 38,268 $ 29,719 $ 36,492 Public safety and protection 41,939 40,745 9,743 23,586 26,289 11,786 15,015 16,789 Public ways & facilities 11,441 8,288 26,189 25,790 31,184 24,099 27,436 26,336 Health & sanitation 11,727 13,283 16,385 19,526 23,342 27,163 31,021 30,835 Public assistance 23 68 12 9 6 8 2,083 64 Education 139 159 79 94 110 273 413 492 Recreation & cultural services 4,637 4,489 5,545 5,058 7,774 5,994 7,573 6,974 Operating grants and contributions 310,594 235,457 227,820 244,208 279,696 294,631 286,808 303,181 Capital grants and contributions 9,720 3,174 1,094 427 7,327 718 - - Total governmental activities program revenues 429,462 343,446 329,227 353,214 400,112 402,940 400,068 421,163

continued Schedule 2 County of Monterey Changes in Net Assets (continued) Last Eight Fiscal Years* (accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 Business-type activities: Charges for services: Patient services$ 142,807 $ 128,424 $ 147,993 $ 150,638 $ 107,387 $ 133,071 $ 182,947 $ 185,600 Operating grants and contributions ------12,921 Capital grants and contributions - - 255 - - - 10,339 3,158 Total business-type activities revenues 142,807 128,424 148,248 150,638 107,387 133,071 193,286 201,679 Total primary government program revenues 572,269 471,870 477,475 503,852 507,499 536,011 593,354 622,842 Net (expense) revenue Governmental activities (130,367) (199,631) (162,958) (140,766) (126,693) (130,367) (212,268) (202,987) Business-type activities (2,563) (8,768) (17,938) (15,794) (30,311) (2,563) 7,165 6,829 Total primary net expense$ (132,930) $ (208,399) $ (180,896) $ (156,560) $ (157,004) $ (132,930) $ (205,103) $ (196,158)

General Revenues & Other Changes in Net Assets Government activities: Taxes: 173 Property taxes$ 62,771 $ 66,809 $ 74,994 $ 79,088 $ 127,363 $ 137,625 $ 156,088 $ 149,239 Sales tax 7,437 7,555 6,503 6,717 6,552 5,767 6,782 6,565 Sales tax in-lieu - - - 1,497 - - - - Vehicle license fees and in-lieu 37,463 39,726 33,325 28,493 - - 13,773 12,243 Transient occupancy & other 15,286 15,064 21,679 39,312 23,814 24,627 24,941 24,846 Unrestricted grants & contributions - 2,608 ------Investment earnings 11,415 10,070 5,641 7,355 12,620 14,366 11,609 2,073 Miscellaneous 3,457 6,332 9,934 17,325 10,369 7,213 8,265 5,067 Transfers 14,361 7,095 18,931 - (26,776) (10,372) (4,200) - Total governmental activities 152,190 155,259 171,007 179,787 153,942 179,226 217,258 200,033 Business-type activities: Unrestricted grants & contributions 1,180 608 - 42,253 920 679 - Miscellaneous 2,211 7,997 2,147 - - - 1,371 665 Transfers (14,361) 7,095 (18,931) - 26,776 10,372 4,200 - Total business-type activities (10,970) 15,700 (16,784) 42,253 27,696 11,051 5,571 665 Total primary government$ 141,220 $ 170,959 $ 154,223 $ 222,040 $ 181,638 $ 190,277 $ 222,829 $ 200,698

Change in Net Assets Governmental activities$ 6,438 $ (44,372) $ 8,049 $ 39,021 $ 27,249 $ 48,859 $ 4,990 $ (2,954) Business type activities 1,322 (7,258) 1,154 26,459 (2,615) 8,488 12,736 7,494 Total primary government$ 7,760 $ (51,630) $ 9,203 $ 65,480 $ 24,634 $ 57,347 $ 17,726 $ 4,540

Note: *GASB 44 requires this schedule to present information for the last ten years. However, until the county is able to acquire a full ten-year trend, the title will reflect the actual number of years for which data has been accumulated Schedule 3 County of Monterey Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands)

Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 General Fund Reserved $ 8,583 $ 10,657 $ 10,639 $ 9,959 $ 10,618 $ 8,316 $ 9,756 $ 8,789 $ 8,524 $ 7,600 Unreserved 35,542 36,253 39,886 21,872 41,737 78,701 77,932 92,334 95,308 80,731 Total general fund$ 44,125 $ 46,910 $ 50,525 $ 31,831 $ 52,355 $ 87,017 $ 87,688 $ 101,123 $ 103,832 $ 88,331

All Other Governmental Funds Reserved $ 28,875 $ 26,797 $ 33,352 $ 26,705 $ 40,071 $ 20,528 $ 5,976 $ 4,581 $ 6,071 $ 20,764 Debt service 15,770 12,536 12,655 10,135 9,592 9,684 8,088 16,352 15,238 13,240 Other reserves ------3,816 3,778 ------Unreserved, reported in: Special revenue funds 20,003 26,105 53,403 43,409 28,388 29,316 24,860 31,774 34,326 40,372 Capital project funds 13,882 23,962 105,034 92,491 62,362 67,585 86,317 129,255 117,420 73,016

174 Other designations - - - - - 250 1,500 750 - 6,986 Total all other governmental funds 78,530 89,400 204,444 172,740 140,413 131,179 130,519 182,712 173,055 154,378

Total governmental fund balances$ 122,655 $ 136,310 $ 254,969 $ 204,571 $ 192,768 $ 218,196 $ 218,207 $ 283,835 $ 276,887 $ 242,709 Schedule 4 County of Monterey Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands)

Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Revenues Taxes$ 73,217 $ 82,094 $ 85,013 $ 89,910 $ 136,501 $ 155,107 $ 157,728 $ 181,923 $ 187,810 $ 181,287 Licenses, permits & franchises 9,987 12,569 17,766 12,400 12,097 14,366 13,840 17,545 13,584 12,114 Fines, forfeitures & permits 6,663 12,622 16,021 16,354 4,109 5,244 8,634 4,574 8,079 8,795 Revenues from use of money & property 12,414 10,955 11,415 10,030 5,605 7,111 11,653 13,426 10,580 3,872 Aid from other government agencies 207,275 236,727 357,777 278,357 228,914 244,635 281,804 281,075 284,063 306,642 Charges for current services 64,387 65,473 75,089 76,062 84,107 88,971 96,596 81,442 97,944 102,061 Other revenues 6,835 4,094 3,457 6,331 9,934 8,603 10,222 10,576 11,245 9,728 Total revenues 380,778 424,534 566,538 489,444 481,267 524,037 580,477 590,561 613,305 624,499 Expenditures General government 46,415 54,997 69,062 110,304 73,832 44,532 74,348 74,491 73,785 74,058 Public safety and protection 124,331 132,399 183,795 159,304 125,849 148,873 154,382 149,144 178,397 174,034 175 Public ways & facilities 17,692 24,633 43,260 29,591 41,140 39,031 65,207 32,993 24,895 65,068 Health & sanitation 63,009 77,857 117,399 87,970 100,711 100,452 95,321 116,715 130,333 133,964 Public assistance 96,986 104,615 135,566 124,588 119,820 125,181 129,802 136,993 147,789 156,667 Education 5,314 5,093 6,154 5,826 4,953 5,548 5,851 6,278 7,023 7,388 Recreational & cultural services 5,547 6,211 7,737 6,972 8,759 5,755 7,001 8,584 8,455 11,097 Debt service: Interest 4,703 2,401 3,112 5,929 2,856 5,444 4,432 7,266 6,004 4,559 Principal 15,713 14,041 7,934 3,562 4,643 2,310 3,186 3,633 5,744 9,787 Capital outlay 3,523 7,262 11,855 12,547 16,511 25,120 15,976 36,932 31,090 46,535 Total Expenditures 383,233 429,509 585,874 546,593 499,074 502,246 555,506 573,029 613,515 683,157 Excess of revenues over (under) expenditures (2,455) (4,975) (19,336) (57,149) (17,807) 21,791 24,971 17,532 (210) (58,658) Other Financing Sources (Uses) Transfers in 32,677 39,270 128,124 44,488 39,179 32,128 32,395 31,736 23,121 55,215 Transfers out (27,950) (26,046) (113,763) (37,393) (20,248) (44,314) (57,390) (42,107) (29,821) (55,215) Inception of lease ------71 - 74 Proceeds from borrowing 12,532 5,670 83,658 - 7,579 853 36 146,598 - 33,618 Sale of receivables - - - - - 8,721 - - - - Payment to refund bond escrow agent ------(87,895) - - Miscellaneous 21 - - 24 - - - - 241 187 Total other financing sources (uses) 17,280 18,894 98,019 7,119 26,510 (2,612) (24,959) 48,403 (6,459) 33,879 Net change in fund balances $ 14,825 $ 13,919 $ 78,683 $ (50,030) $ 8,703 $ 19,179 $ 12 $ 65,935 $ (6,669) $ (24,779)

Debt service as a percentage of non-capital expenditures 5.38% 3.89% 2.01% 1.82% 1.58% 1.63% 1.46% 2.05% 2.03% 2.39% Schedule 5 County of Monterey Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) (1) (2) (3) (4) Net Total Fiscal Secured Unsecured Assessed Direct Year Roll Roll Exemptions Valuations Tax Rate 2000 25,177,542 1,361,209 (833,776) 25,704,975 1.00% 2001 27,432,425 1,448,301 (904,216) 27,976,510 1.00% 2002 30,481,587 1,550,890 (1,005,420) 31,027,057 1.00% 2003 33,363,333 1,633,842 (989,319) 34,007,856 1.00% 2004 35,742,970 1,669,501 (1,157,406) 36,255,065 1.00% 2005 38,434,502 1,713,181 (1,235,833) 38,911,850 1.00% 2006 42,538,965 1,859,928 (1,329,452) 43,069,441 1.00% 2007 47,388,757 1,999,660 (1,471,788) 47,916,629 1.00% 2008 51,334,367 2,035,086 (1,525,258) 51,844,195 1.00% 2009 52,454,129 2,234,086 (1,608,033) 53,080,182 1.00%

Source: Monterey County Property Tax Records

Notes: (1) Secured property is generally the real property, defined as land, mineral, timber, and improvements such as buildings, structures, crops, trees and vines. Also included in secured roll are unitary properties, including railroads and utilities which cross the county and are assessed by the State Board of Equalization. (2) Unsecured property is generally personal property including machinery, equipment , office tools, supplies, mobile homes and aircraft. (3) Exempt properties include numerous full and partial exclusions/exemptions. (4) Article XIIIA, added to the California Construction by Proposition 13 in 1978, fixed the base for valuation of property subject to taxes at the full cash value. Additionally, Proposition 13 limits the property tax rate to 1% of assessed value, plus the rate necessary to fund local voter-approved bonds and special assessments.

Prior year figures may change as more accurate information becomes available.

176 Schedule 6 County of Monterey Principal Property Taxpayers June 30, 2009 (amounts expressed in thousands)

2009 2000 Percentage of Percentage of Taxable Total County Taxable Total County Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Dynergy Moss Landing LLC$ 742,000 1 1.40%$ 380,000 2 1.50% Pebble Beach Company 569,418 2 1.07% 513,119 1 2.02% Pacific Gas & Electric Company 345,052 3 0.65% 278,670 3 1.10% Texaco Inc. 282,906 4 0.53% - - - Pacific Bell Company 109,008 5 0.21% 206,859 4 0.82% Pacific Holdings LP ET AL 92,378 6 0.17% - - - California- American Water Company 89,904 7 0.17% - - - Northridge Fashion Center 85,143 8 0.16% - - - D'Arrigo Brothers Company 82,140 9 0.15% - - - 177 Dole Fresh Vegetables Inc. 73,612 10 0.14% 92,027 5 0.36% Coastal Monterey Properties LLC - - 89,041 6 0.35% Tanimura Land Company - - 84,098 7 0.33% Rancho San Carlos Partnership - - 80,148 8 0.32% Basic American Foods Inc. - - 78,042 9 0.31% Thrust IV Inc. - - 18,702 10 0.07% Ten Largest Taxpayers' Total 2,471,561 4.66% 1,820,706 7.18% All Other Taxpayers' Total 50,608,621 95.34% 23,528,376 92.82%

Total $ 53,080,182 100%$ 25,349,082 100%

Source : County of Monterey Property Tax Records

Note: For Total Taxable Assessed Value refer to Schedule 5 "Assessed Value and Actual Value of Taxable Property". Schedule 7 County of Monterey Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) (1)(2) (3) Collected within the Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Fiscal for the Percentage in Subsequent Percentage Year Fiscal Year Amount of Levy Years Amount of Levy

2000$ 270,779 $ 267,351 98.7%$ 3,103 $ 270,454 99.9% 2001 295,668 292,026 98.8% 3,199 295,225 99.9% 2002 326,633 320,879 98.2% 4,451 325,330 99.6% 2003 360,268 353,783 98.2% 5,127 358,910 99.6% 2004 410,453 404,618 98.6% 7,266 411,884 100.4% 2005 440,553 434,059 98.5% 8,378 442,437 100.4% 2006 487,644 476,758 97.8% 7,098 483,856 99.2% 2007 541,741 522,686 96.5% 7,930 530,616 98.0% 2008 588,831 556,021 94.4% 15,065 571,086 97.0% 2009 603,438 576,924 95.6% 29,000 605,924 100.4%

Sources: Monterey County Property Tax Records.

Notes: (1) Includes Secured , Unsecured, and Unitary Taxes levied for the County itself, school districts, cities and special districts under the supervision of their own governing boards. Includes adjustments to the tax rolls from the levy date to delinquency date. (2) Includes amounts collected by the County on behalf of itself, school districts, cities and special districts under the supervision of their own governing boards. (3) Includes adjustments to the levy. Taxes levied less collections to date equal the delinquent taxes receivable.

178 Schedule 8 County of Monterey Debt Service Tax Rates For County And Major Overlapping Government Per $100 of Assessed Value Last Ten Fiscal Years

Fiscal Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 County Wide 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000

Water Resources 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00409 0.00410 0.00329 0.00354 Cities & Special Districts: Carmel 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.01000 0.00911 0.00000 Del Rey Oaks 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Gonzales 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.04495 0.02000 0.00000 0.00000 Greenfield 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.11000 0.22089 0.07107 King City 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.10000 0.16311 0.11944 Marina 0.00460 0.00514 0.03559 0.02753 0.00638 0.00624 0.00624 0.04000 0.04041 0.04860 Monterey 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Pacific Grove 0.00400 0.00500 0.00500 0.00300 0.00700 0.00700 0.03000 0.02317 0.00700 0.01100 179 Sand City 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Seaside 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Soledad 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.02320 0.13000 0.12307 0.15802 Boronda County Sanitation Dist 0.00000 0.00000 0.00000 0.06534 0.00636 0.00800 0.01738 0.01175 0.02612 0.01287 San Lucas County Water Dist 0.00000 0.03349 0.03205 0.03780 0.04472 0.04904 0.05000 0.05099 0.05379 0.05353 Soledad Community Health Care 0.01144 0.11520 0.12900 0.01561 0.01776 0.02120 0.02320 0.02554 0.02844 0.03138 Aromas County Water District 0.00080 0.01200 0.00090 0.00100 0.00700 0.00140 0.00140 0.00170 0.00200 0.00250 School Districts: Alisal Union 0.08780 0.09043 0.09082 0.10008 0.05898 0.06457 0.10415 0.07000 0.08070 0.09759 Aromas/San Juan JT Unif Sch District 0.04840 0.04810 0.04890 0.02390 0.04750 0.06870 0.00750 0.02000 0.01200 0.00700 Bradley Union 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.05559 0.07000 0.14146 0.07107 Cabrillo College 0.03324 0.03002 0.02669 0.03700 0.03800 0.01900 0.01900 0.02100 0.02100 0.00700 Carmel Unified 0.01696 0.01349 0.01784 0.01180 0.01263 0.01324 0.01562 0.01000 0.00911 0.00000 Chualar Unified School District 0.03818 0.03622 0.04746 0.04597 0.04915 0.01547 0.03040 0.00000 0.00000 0.00000 Coalinga Joint Unified 0.02686 0.05109 0.07010 0.03374 0.03281 0.07979 0.11064 0.10000 0.13141 0.04499 Gonzales Union 0.03044 0.02903 0.04666 0.01934 0.03623 0.02986 0.00000 0.02000 0.00000 0.00000 Graves Elementary School District 0.00823 0.02278 0.02305 0.02615 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Greenfield Union 0.04251 0.02869 0.04451 0.06604 0.03787 0.03853 0.07590 0.11000 0.07943 0.07107

continued Schedule 8 County of Monterey Debt Service Tax Rates For County And Major Overlapping Government (continued) Per $100 of Assessed Value Last Ten Fiscal Years

Fiscal Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Hartnell Community College District 0.01852 0.01609 0.02023 0.01714 0.01862 0.01737 0.00000 0.00000 0.00000 0.00000 King City Union 0.03802 0.04118 0.08329 0.08885 0.09977 0.10291 0.08527 0.10000 0.16311 0.11944 Mission Union Elementary School District 0.01945 0.01523 0.01396 0.02767 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Monterey Peninsula Community College 0.01978 0.01994 0.02066 0.01800 0.02062 0.01232 0.00000 0.00000 0.00000 0.00000 North Monterey County Unified 0.03757 0.03406 0.03703 0.04899 0.01340 0.05051 0.00000 0.00000 0.01587 0.01436 Pacific Grove Unified 0.04830 0.02780 0.02297 0.02278 0.02550 0.03086 0.01912 0.02000 0.01617 0.00000 Pajaro JT Unified 0.02686 0.02323 0.02545 0.02900 0.03000 0.01900 0.01900 0.02000 0.01200 0.00700 Pleasant Valley Joint Union 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.05700 0.18000 0.18000 0.18000 Salinas Union High School District 0.29660 0.03372 0.03426 0.03549 0.04312 0.05877 0.03842 0.00000 0.00000 0.00000 San Antonio Union 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.05559 0.07000 0.14146 0.07107 San Ardo Union 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.05559 0.07000 0.14146 0.07107 180 San Lucas Union 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.05590 0.07000 0.14146 0.10700 San Miguel Elementary School 0.03516 0.03517 0.03519 0.03624 0.05122 0.05700 0.00000 0.00000 0.00000 0.00000 Santa Rita Union 0.06798 0.06216 0.03136 0.03255 0.03774 0.04563 0.07921 0.01000 0.04441 0.08131 Shandon Joint Unified 0.00584 0.00600 0.00642 0.00645 0.00646 0.00860 0.00860 0.01000 0.00970 0.01040 Soledad Unified School District 0.06032 0.05209 0.05210 0.06373 0.07575 0.08631 0.09952 0.13000 0.12307 0.15802 Spreckles Union 0.03936 0.05316 0.05882 0.03075 0.04955 0.05455 0.06730 0.04000 0.03223 0.03958 Washington Union 0.04384 0.09276 0.05136 0.05301 0.06992 0.04240 0.09879 0.03000 0.01815 0.02137 West Hills College 0.00000 0.00000 0.01926 0.00057 0.02086 0.02202 0.02715 0.02087 0.06110 0.01388

Source: Monterey County Records Schedule 9 County of Monterey (Unincorporated) Taxable Sales by Category Last Ten Calendar Years (amounts expressed in thousands) (1) (2) (3) Type of Business 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Apparel stores$ 7,848 $ 7,074 $ 7,179 $ 7,405 $ 9,495 $ 9,925 $ 10,678 $ 12,718 $ 11,038 $ 3,605 General merchandise 3,175 2,869 2,473 2,572 2,783 2,776 3,007 3,290 3,364 1,125 Food stores 40,450 41,462 40,375 41,470 42,453 42,188 42,438 48,167 48,764 21,791 Eating and drinking places 60,412 62,138 63,530 62,573 66,348 70,335 70,528 73,684 69,109 31,990 Building materials 74,691 80,296 81,994 95,776 106,079 111,366 109,567 103,922 97,492 36,595 Auto dealers and suppliers 38,462 38,094 38,699 34,699 36,072 40,001 39,653 40,509 37,100 11,745 Service stations 64,244 62,296 57,157 63,593 75,532 88,514 99,384 110,580 121,431 42,250 Other retail stores 79,365 76,332 74,452 74,801 79,269 81,821 84,110 84,440 71,106 27,385 All other outlets 282,404 378,060 339,493 282,769 347,542 374,570 394,659 416,398 402,049 147,926 Totals $ 651,051 $ 748,621 $ 705,352 $ 665,658 $ 765,573 $ 821,496 $ 854,024 $ 893,708 $ 861,453 $ 324,412

County direct sales tax rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.08% 0.08% 181

Source: State of California Board of Equalization and The HDL Companies

Notes: (1) Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the County's revenues. (2) The 2008 figures have been revised to include third and fourth quarter figures of calendar year (3) The 2009 figures are for quarter one and two of calendar year 2009. Schedule 10 County of Monterey Transient Occupancy Tax Actual Receipts Last Ten Fiscal Years

Fiscal Annual Growth Year Revenue Rate 2000$ 12,680,000 11.37% 2001 14,430,000 13.80% 2002 13,286,548 -7.92% 2003 13,476,749 1.43% 2004 13,452,336 -0.18% 2005 14,420,192 7.19% 2006 15,569,105 7.97% 2007 16,912,274 8.63% 2008 16,441,176 -0.05% 2009 15,006,940 -8.72%

TOT revenue trend for period: 2000-09

18000000

16000000

14000000

12000000

10000000 Revenue ($) 8000000

6000000

4000000

2000000

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Fiscal Year

Source : Monterey County Treasurer- Tax Collector Transient Occupancy Tax Statements

Note: The general decline in transient occupancy tax revenue for fiscal year 2009 can be attributed to fewer guests visiting and lower rates as the impact of the recession is felt

182 Schedule 11 County of Monterey Ratios of Outstanding Debt by Type Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount)

Business -Type Government Activities Activities (1) (2) (3) (3) Certificates Special General Judgment Certificates Total Percentage Percentage Fiscal of Capital RDA Revenue Long-term Assessment Obligation Obligation of Capital Primary of Assessed Per of Personal Year Participation Leases Notes Bonds Loans Bonds Bonds Bonds Participation Leases Government Value Capita Income 2000$ 13,860 $ 159 $ - $ 26,140 $ 42,967 $ 1,554 $ 362 $ - $ 85,042 $ - $ 170,084 0.66%$ 426 1.52% 2001 13,360 246 - 13,691 48,637 834 28 - 76,796 - 153,592 0.55% 382 1.27% 2002 92,155 645 205 6,725 51,952 420 24 - 85,710 - 237,836 0.77% 576 1.90% 2003 91,600 403 165 4,242 35,020 183 19 - 83,995 - 215,627 0.63% 516 1.70% 2004 91,025 147 140 1,995 35,003 179 15 7,470 82,180 - 218,154 0.60% 516 1.62% 2005 89,285 205 115 1,477 34,986 175 10 6,750 80,260 - 213,263 0.55% 503 1.52% 2006 87,470 252 953 1,177 33,948 171 5 6,095 77,495 - 207,566 0.48% 489 1.43% 2007 144,400 223 621 1,131 32,910 166 - 5,425 75,950 - 260,826 0.54% 636 1.66% 2008 139,570 158 574 1,082 47,939 161 - 4,730 73,610 2,624 270,448 0.53% 639 1.67% 2009 136,260 253 418 33,901 45,122 156 - 4,015 71,265 1,400 292,790 0.55% 720 1.71%

183 Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements (1) Includes general bonded debt, other governmental activities debt, and business-type activities debt (2) Property value data can be found in Schedule 5; Assessed Value and Actual Value of Taxable Property (3) Population and personal income data can be found in Schedule 14; Demographics and Economic Statistics Schedule 12 County of Monterey Legal Debt Margin Information Last Ten Fiscal Years (amounts expressed in thousands)

Legal Debt Margin Calculation for Fiscal Year 2009

Net assessed value $53,080,182 Debt Limit 1.25% of net assessed value $663,502 Debts applicable to limit: General Obligation bonds - Less: Amount set aside for repayment of debt - Net debt applicable to limit - Legal Debt Margin $663,502

Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Debt limit$ 321,312 $ 349,706 $ 387,838 $ 425,098 $ 453,188 $ 486,398 $ 538,368 $ 598,958 $ 648,052 $ 663,502 184 Less: Total net debt applicable to limit 362 28 24 19 15 10 5 - - - Legal debt margin$ 320,950 $ 349,678 $ 387,814 $ 425,079 $ 453,173 $ 486,388 $ 538,363 $ 598,958 $ 648,052 $ 663,502

Total net debt applicable to the limit as a percentage of debt limit 0.113% 0.008% 0.006% 0.004% 0.003% 0.002% 0.001% n/a n/a n/a

Note: (1) Article XIII A of the California State Constitution and Senate Bill 1656, Statutes of 1978, provided for changing assessed value from 25% of cash value to full cash value. Hence, the 5% limitation on general obligation bond indebtedness imposed by Section 29909 of the Government Code becomes 1.25% of assessed value. (2) Net assessed value can be found in Schedule 5; Assessed Value and Actual Value of Taxable Property Schedule 13 County of Monterey Direct and Overlapping Bonded Debt As of June 30, 2009 (amounts expressed in hundreds)

FY 2008-09 Assessed Valuation (includes unitary utility valuation)$ 53,080,181,171 Less: Redevelopment Incremental Valuation 4,537,564,360 Adjusted Assessed Valuation $ 48,542,616,811

(1) Percentage Debt at Overlapping tax and assessment debt Applicable June 30, 2009 Hartnell Community College District 99.82%$ 76,694,987 Monterey Peninsula Community College District 100 128,658,685 Carmel Unified School District 100 39,143,445 North Monterey County Unified School District 100 18,245,000 Pacific Grove Unified School District 100 36,101,000 Soledad Unified School District 100 4,253,514 King City Joint Union High School District 98.586 14,023,859 Salinas Union High School District and School Facilities Improvement District 100 66,817,636 Alisal Union School District 100 45,370,796 King City Union School District 100 10,564,531 Salinas City School District 100 25,000,000 Santa Rita Union School District 100 23,759,523 Washington Union School District 100 14,055,000 Other School Districts Various 37,006,770 City of Marina 100 8,510,000 City of Pacific Grove 100 685,000 Soledad Community Hospital District 100 1,765,000 Monterey County Water Resources Agency Benefit Assessment District, Zone 2C 100 32,855,000 Community Facilities Districts 100 4,597,542 City 1915 Act Bonds 100 30,703,000 Special District 1915 Act Bonds 100 5,119,000 Total overlapping tax and assessment debt $ 623,929,288

Direct and overlapping General Fund debt Monterey County General Fund Obligations 100.00%$ 207,525,000 Monterey County Judgment Obligations 100 4,015,000 Monterey Peninsula Unified School District Certificates of Participation 100 7,485,000 Salinas Union High School District Certificates of Participation 100 5,445,000 Other School District General Fund Obligations Various 18,711,346 City of Carmel General Fund Obligations 100 8,626,000 City of Marina Pension Obligations 100 4,010,000 City of Monterey General Fund Obligations 100 16,185,000 City of Pacific Grove Pension Obligations 100 17,226,418 City of Salinas Certificates of Participation 100 41,860,000 City of Seaside Pension Obligations 100 6,705,000 Carmel Valley Fire Protection District Certificates of Participation 100 1,470,000 Monterey Bay Unified Air Pollution Control Authority 58.709 1,608,627 Total Direct and overlapping General Fund debt $ 340,872,391

Combined total debt (2)$ 964,801,679

Ratios to 2008-09 Assessed Valuation: Total Overlapping Tax and Assessment Debt 1.18% Ratios to Adjusted Assessed Valuation: Combined Direct Debt ($211,540,000) 0.44% Combined Total Debt 1.99%

Notes: (1) Percentage of each overlapping agency's assessed valuation located within the boundaries of the county. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds, and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.

185 Schedule 14 County of Monterey Demographics and Economic Statistics Last Ten Calendar Years

(1) (2) (2) (3) (4) (5) Calendar Per Capita Total Personal Median School Unemployment Year Population Income Income Age Enrollment Rate 1999 398,900$ 28,186 $ 11,169,200 31.3 69,534 9.70% 2000 401,762 30,005 12,097,144 31.7 71,186 7.40% 2001 512,922 30,723 12,540,815 32.0 72,529 7.80% 2002 518,237 30,800 12,676,027 31.0 73,416 9.00% 2003 422,389 32,469 13,455,580 32.7 73,812 9.00% 2004 423,754 33,952 14,074,798 34.5 73,863 8.40% 2005 424,482 34,172 14,519,770 36.1 71,971 7.30% 2006 410,206 38,193 15,667,000 31.9 69,851 5.70% 2007 407,637 38,373 15,586,498 32.1 69,838 6.60% 2008 408,238 42,144 17,205,000 32.2 69,828 8.50%

Sources: (1) U.S. Census Bureau: Population Division (2) U.S. Department of Commerce, Bureau of Economic Analysis (in thousands). (3) U.S. Census Bureau: Population Division (4) California Department of Education, Education Demographics Unit (5) California Employment Development Department; Labor Market Info Division

Notes: Population data estimates are as of July 2008 Data not available for reporting calendar year Per capita personal income was computed using preliminary Census Bureau mid-year population estimates.

186 Schedule 15 County of Monterey Major Industries by Number of Businesses, Employees and Payroll Last Six Calendar Years (payroll amounts expressed in thousands)

MSA and Industry 2003 2004 2005 2006 2007 2008

Salinas MSA totals: No. of Businesses 11,110 11,270 11,167 11,543 12,646 11,883 No. of Employees 147,529 99,475 150,590 150,949 165,140 151,764 Payroll $1,101,116 $1,162,536 $1,253,717 $1,275,051 $1,484,352 $1,350,632

Agriculture No. of Businesses 630 602 584 577 571 564 No. of Employees 45,581 1,078 51,053 51,097 52,341 52,848 Payroll $266,179 $307,580 $336,288 $342,021 $369,556 $367,621 Mining No. of Businesses 9 10 9 9 8 7 No. of Employees 225 213 192 201 195 207 Payroll $3,677 $2,359 $3,429 $3,742 $3,828 $4,006 Utilities No. of Businesses 25 24 25 26 25 23 No. of Employees 589 480 528 569 553 498 Payroll $10,084 $9,756 $9,714 $8,836 $9,265 $10,210 Construction No. of Businesses 977 995 965 1,012 991 972 No. of Employees 6,516 6,920 6,886 7,367 7,101 6,032 Payroll $68,047 $71,493 $73,121 $80,519 $81,141 $72,734 Manufacturing No. of Businesses 302 293 283 281 267 251 No. of Employees 7,888 7,043 6,735 6,274 6,163 6,017 Payroll $74,410 $73,187 $73,030 $65,346 $64,045 $62,193 Wholesale Trade No. of Businesses 398 411 408 429 421 404 No. of Employees 5,207 4,710 5,016 4,938 4,987 5,313 Payroll $59,362 $59,857 $71,940 $69,628 $72,518 $77,892 Retail Trade No. of Businesses 1,372 1,358 1,300 1,330 1,290 1,272 No. of Employees 16,951 16,969 16,828 16,688 17,045 16,661 Payroll $109,210 $114,448 $120,898 $120,907 $123,776 $123,527 Transportation and Warehousing No. of Businesses 264 240 231 248 250 250 No. of Employees 2,860 2,814 2,955 2,925 3,228 3,152 Payroll $23,957 $26,107 $28,851 $28,644 $34,636 $36,686 Information No. of Businesses 123 119 117 116 105 107 No. of Employees 2,440 2,307 2,310 2,163 2,137 2,052 Payroll $28,549 $31,249 $33,578 $33,618 $35,997 $31,165 Finance and Insurance No. of Businesses 376 375 388 389 398 393 No. of Employees 4,328 3,711 3,757 3,816 3,819 3,548 Payroll $54,759 $50,791 $63,242 $63,144 $69,518 $68,173 Real Estate, Rental and Leasing No. of Businesses 414 428 432 445 420 407 No. of Employees 2,405 2,313 2,364 2,497 2,243 1,940 Payroll $18,598 $20,400 $21,537 $22,315 $21,402 $17,372 Services No. of Businesses 6,220 6,415 6,425 6,681 7,900 7,233 No. of Employees 52,539 50,917 51,966 52,414 65,328 53,496 Payroll $384,284 $395,309 $418,089 $436,331 $598,670 $479,053

continued 187 Schedule 15 County of Monterey Major Industries by Number of Businesses, Employees and Payroll (continued) Last Six Calendar Years (payroll amounts expressed in thousands)

Source: Employment Development Department , Labor Market Information

Notes: Data is confidential if there are fewer than 3 businesses in a category or one employer makes up 80 percent or more of the employment in a category

Data is suppressed because confidential data could be extrapolated if these totals were included

Figures are as per third quarter of the calendar year

Data does not include totals for government employment

Rules instituted by the Federal Bureau of Labor Statistics after September 11, 2001 prohibit state departments of labor or economic security from publicly identifying the names of individual employers. The County of Monterey has removed the Major Employers' data from the statistical section. GASB Statement No 44 allows employment by industry data to be published instead of Major Employers' data.

188 Schedule 16 County of Monterey Full-time Equivalent County Government Employees by Function/Program Approved Budgeted Positions Last Ten Fiscal Years

Fiscal Year

Function/Program 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 General government 514 557 581 596 510 462 489 492 485 507 Public safety and protection 848 1271 1393 1418 1361 1319 1343 1397 1396 1274 Public ways and facilities 181 171 178 178 178 150 153 135 135 373 Health and sanitation 493 548 599 616 614 688 757 820 814 863 Public assistance 770 784 813 838 772 759 775 781 781 817 Recreation and Education 119 123 130 131 130 136 140 145 145 169 Natividad Medical Center 707 740 885 956 795 775 799 754 754 785 Total County governmental positions 3632 4194 4579 4733 4360 4289 4456 4524 4510 4788

Special District: Water Resource Agency 57 57 59 60 60 60 60 60 60 60

189 Total Positions: 3689 4251 4638 4793 4420 4349 4516 4584 4570 4848

Source: Monterey County Recommended Budget Book Position Information

Note: Public ways and facilities includes Resource Management Agency. Schedule 17 County of Monterey Operating Indicators by Function/ Program Last Ten Fiscal Years Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 GENERAL GOVERNMENT 101 Assessment Appeals Board Applications Reviewed 262 234 132 265 331 524 212 123 360 825 115 Revenue Accounts 92,000 92,000 90,000 125,000 125,000 125,000 125,000 125,000 91,764 95,000 117 Treasurer- Tax Collector Number of payments transactions 242,300 218,500 285,000 304,000 329,000 350,000 362,000 354,000 362,000 360,000 Treasury deposits processed 8,290 9,303 9,529 8,500 9,000 8,500 9,100 9,000 9,200 10,000 118 Assessor Deeds processed 19,018 18,561 19,722 21,712 25,181 26,309 24,903 20,460 16,555 16,527 Transfers 12,505 12,005 10,527 10,596 12,338 12,891 13,188 9,790 10,131 6,474 151 Telecommunications Telephone instruments and radios supported unavail unavail 13,500 7,290 7,330 7,061 7,511 7,625 7,920 8,025 Telephone calls completed unavail unavail 7,300,000 10,000,000 14,000,000 18,000,000 16,300,000 17,750,000 19,000,000 18,500,000 193 Information Technology PCs and laptops supported unavail unavail 2,938 3,954 4,149 4,159 4,485 4,643 4,885 5,705 Calls to the Call Center unavail unavail 6,800 7,000 12,000 12,000 15,000 37,000 45,000 45,000 Training classes unavail unavail 1,200 1,350 1,400 1,400 1,650 1,200 2,000 1,400

190 291 Recorder -County Clerk Documents recorded 95,929 86,638 110,804 127,597 157,438 138,690 137,348 114,673 94,913 88,153 Marriage licenses issued 3,381 3,471 3,776 3,278 3,150 3,123 3,067 2,990 2,913 2,828 Fictitious business names filed 2,515 2,580 2,428 2,561 2,810 2,059 3,040 3,097 2,719 2,625 PUBLIC PROTECTION 152 Emergency Communications 911 and non-emergency calls unavail unavail unavail unavail 600,000 600,000 612,000 650,000 614,295 650,000 CAD incidents unavail unavail unavail unavail 556,059 560,422 560,026 560,000 560,000 560,000 224 District Attorney's Office Felonies and misdemeanors reviewed 21,940 18,400 17,968 17,475 17,612 17,146 18,348 18,250 16,123 16,523 Civil cases opened unavail unavail 197 199 191 231 228 253 298 300 225 Child Support Services Cases 22,226 23,728 22,752 22,116 21,280 21,370 20,266 19,860 19,709 19,639 227 Public Defender Felonies reviewed 2,146 2,255 2,688 2,928 3,306 3,798 4,592 5,289 5,977 4,756 Misdemeanors 4,820 4,607 6,192 6,229 6,535 6,859 8,170 7,322 7,834 7,556 Juveniles 1,991 2,013 3,612 1,932 1,864 2,143 1,091 999 929 2,632 228 Court Assigned Counsel Felonies reviewed unavail unavail 618 707 918 952 986 991 996 unavail Misdemeanors unavail unavail 673 646 537 573 609 640 678 unavail Juveniles unavail unavail unavail unavail 194 211 190 198 184 unavail

continued Schedule 17 County of Monterey Operating Indicators by Function/ Program (continued) Last Ten Fiscal Years Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 230 Sheriff -Administration and Enforcement Bureau Warrants reviewed 14,730 12,136 12,500 17,000 13,355 14,538 15,348 15,900 14,890 16,000 Felony and misdemeanor offenses reported 3,051 3,500 3,700 4,700 4,935 5,181 5,447 5,475 10,636 8,568 235 Sheriff- Joint Gang Task Force Felony and misdemeanor arrests n/a n/a n/a n/a n/a 437 573 653 717 537 Task Force and/or Gang Awareness n/a n/a n/a n/a n/a 12 20 55 55 51 251 Sheriff- Custody Operations Bureau Prisoners booked 18,337 18,927 18,022 18,397 17,705 17,919 17,144 16,963 17,434 15,876 Average daily prisoner population 959 972 963 930 1,000 1,100 1,151 1,152 1,085 1,032 Court transportation 27,068 19,473 21,000 23,000 23,047 24,848 25,866 25,387 23,770 21,879 255 Probation Juvenile referrals unavail unavail unavail unavail 3,113 2,892 3,034 3,034 2,841 2,736 Standard reports unavail unavail unavail unavail unavail 2,652 3,581 3,637 3,460 3,228 Supervision unavail unavail unavail unavail unavail 7,089 7,995 8,079 8,485 8,714 256 Juvenile Institutions and Alternative Program Admissions 1,724 1,680 1,800 1,702 1,611 16,335 1,284 1,285 1,323 1,438 292 Sheriff-Coroner Total investigations 1,129 1,082 1,155 1,185 1,178 1,064 1,064 1,015 1,039 1,030 Coroner's cases 309 284 328 345 388 348 287 279 309 290 293 Planning 191 Discretionary permits initiated 334 536 568 635 480 411 748 852 804 691 299 Building Services Building and grading permits 3,401 2,760 3,185 3,471 4,252 3,906 3,681 3,425 2,905 2,614 Plan checks 3,509 3,278 3,404 3,354 2,252 2,388 2,725 2,468 2,097 1,890 Building inspections 21,295 28,615 22,000 23,000 25,154 25,154 26,939 20,901 17,475 15,725 930 Water Resources Total water deliveries- acre- feet 16,749 18,025 19,486 19,628 21,982 17,754 16,663 21,245 23,155 21,598 Nacimiento Hydro Project kilowatt hours 15,423,775 15,307,481 16,550,656 11,569,402 13,027,168 13,118,178 17,427,225 16,928,820 12,138,366 10,150,151 PUBLIC WAYS AND FACILITIES: 300 Public Works Road miles maintained 1,258 1,254 1,243 1,243 1,240 1,240 1,240 1,240 1,240 1,240 Bridges maintained 173 173 173 173 173 173 173 173 173 173 continued Schedule 17 County of Monterey Operating Indicators by Function/ Program (continued) Last Ten Fiscal Years Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 HEALTH AND SANITATION 296 Animal Services Licenses sold 5,301 4,174 3,809 5,991 7,576 7,287 7,724 7,340 7,367 7,400 Service calls 8,306 7,293 6,951 6,400 4,433 3,684 6,050 7,450 7,220 7,500 Animals admitted to shelter 6,391 6,521 5,702 5,452 4,143 4,364 4,083 3,947 3,654 3,750 411 Health Public health nursing home visits 9,540 6,828 9,402 10,233 10,516 8,736 9,110 2,805 6,943 9,080 Births and deaths registered 8,718 9,036 9,036 8,903 9,177 9,260 9,484 9,697 9,287 9,325 Laboratory tests unavail unavail 46,492 57,500 53,819 59,406 60,553 37,563 37,475 3,800 413 Clinic Services Primary care clinic visits 39,921 40,180 47,439 55,245 60,993 99,971 118,165 150,200 145,705 152,942 415 Mental Health Inpatient services (days) 14,442 18,772 23,762 14,107 11,675 17,572 1,345 1,350 2,663 2,700 Locked facilities (days) 6,166 7,452 7,596 7,524 11,122 8,042 13,888 13,888 12,042 12,100 419 Public Guardian Conservatorship cases n/a n/a n/a n/a n/a n/a n/a 239 240 240 Representative payee cases n/a n/a n/a n/a n/a n/a n/a 370 381 381 417 Alcohol and Drug Programs Methadone maintenance dosing 32,977 36,840 43,302 52,742 54,016 54,958 50,509 49,825 52,416 52,077 Narcotic treatment program counseling 11,832 14,280 14,765 19,238 19,086 19,086 23,021 24,338 23,406 22,892 192 Residential bed days 29,537 46,897 50,012 56,344 55,530 55,530 79,426 54,521 54,885 49,686 440 Children's Medical Services CCS Referrals reviewed for medical eligibility 2,150 1,750 1,761 2,181 1,504 2,013 2,476 4,641 2,894 3,000 CCS Referrals opened for medical services 495 550 970 1,196 1,051 1,006 770 1,296 1,810 1,815 CHDP review preventive health screens 46,003 26,123 21,082 16,135 15,880 15,557 17,527 15,450 11,711 11,800 CHDP patient tracking for follow-up screens 2,042 2,132 3,708 3,390 3,327 2,642 2,718 3,561 2,234 2,400 PUBLIC ASSISTANCE 501 Social Services Food Stamps and Medi-Cal 23,464 23,554 26,260 25,488 26,071 27,764 29,200 29,675 30,710 34,377 CWS permanent placement 437 389 104 331 215 306 303 321 317 280 Adult SS In- Home Supportive Services (IHSS 2,034 2,494 93 2,906 2,659 2,694 2,809 2,904 2,997 3,735 531 CalWORKs/TANF Benefits caseloads Ongoing 5,357 4,832 4,543 4,675 4,811 4,359 4,518 4,644 4,301 4,534 Employment services 1,414 1,589 1,935 1,950 1,633 1,373 1,137 1,055 1,037 2,470 Childcare services 529 445 352 334 286 273 247 299 314 427 535 Out-of-Home Care, average monthly caseload Foster care ongoing 485 422 371 402 492 462 535 512 517 495 Court dependent children 22 19 15 12 5 4 4 4 5 5 Aid to adoptions 297 364 437 495 449 578 609 650 683 703 continued Schedule 17 County of Monterey Operating Indicators by Function/ Program (continued) Last Ten Fiscal Years Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 548 In-Home Support Services- Client Services paid cases Personal care services program 1,584 1,930 2,105 2,296 2,037 2,112 2,418 2,529 2,612 3,164 Residual/ Waiver Plus 450 564 596 610 621 581 391 375 385 383 551 Aid to Indigents Regular general assistance 289 221 266 148 178 148 110 105 106 133 559 Military and Veterans Affair caseload items Claims filed 5,790 5,755 5,757 4,489 2,641 2,191 1,878 1,745 1,745 2,279 Veterans transported to VA Medical 2,792 2,653 2,134 1,963 1,545 2,790 884 1,350 1,350 1,179 EDUCATION 611 Library Customers visiting library 640,393 668,324 665,620 637,787 688,246 642,226 694,259 826,716 942,871 1,085,041 Customers using library computers 50,172 113,765 124,657 135,458 140,806 162,531 187,651 229,676 245,082 259,731 621 Cooperative Extension Seminars and presentations organized unavail unavail unavail 174 192 161 200 195 171 126 4-H Youth development activities unavail unavail unavail 4,727 4,744 4,687 5,827 6,032 4,663 4,201 RECREATION AND CULTURAL SERVICES 750 Parks Visitors 1,360,537 1,392,823 1,419,565 1,384,571 1,415,262 1,400,000 1,400,000 1,400,000 1,400,000 1,255,235

Notes: 193 Actuals and Estimates taken from Departmental Workload Information published in the County of Monterey Recommended Budget Books and Departmental Records Court Assigned Counsel statistics not available for 2009 Information from prior years compressed for FY 2009 Schedule 18 County of Monterey Capital Asset Statistics by Function Last Five Fiscal Years* (items expressed in units)

Fiscal Year 2005 2006 2007 2008 2009 General Government Buildings 19 21 21 15 11 Vehicles - 125 134 114 40 Heavy Equipment - 17 13 2 - Communication Towers - - - - 6 Parking Lot - - - - 1

Public Safety and Protection Buildings 20 19 23 27 26 Vehicles 468 493 484 553 411 Heavy Equipment - 36 58 3 - Parking Structure - - 1 1 1 County Cemetery - - - - 1 Gun Range - - - - 1

Public Ways and Facilities Bridges 123 171 171 173 171 Culverts (ft) 218,749 218,749 218,749 219,943 219,943 Drain System Inlets 226 226 226 977 977 Drain System Pipe (ft) 68,752 68,752 68,752 68,752 68,752 Fuel Stations 3 3 3 3 3 Heavy Road Equipment 44 45 44 46 84 Lift Stations 2 16 21 18 16 Maintained Road Miles (paved) 1,239 1,100 1,099 1,100 1,100 Maintenance District Facility Buildings 5 5 5 5 5 Public Parks & Open Space Acreage 4 4 4 8 8 Road Lane Miles 2,611 2,611 2,611 2,480 2,480 Heavy Sanitation Equipment 2 2 2 1 1 Sewer Lines (miles) 54 44 60 45 30 Street Light 106 1,026 - 835 850 Traffic Signals 40 20 20 30 24 Vehicles - 111 89 125 71

Water Resources Dams 2 2 2 2 2 Heavy Equipment 6 6 7 7 7 Hydro-Electric Plants 1 1 1 1 1 Levees 1 1 1 1 1 Pump Stations 2 5 5 5 5 Reclamation Ditches 1 1 1 1 1 Vehicles 24 29 29 30 27 Petrero Tide Gate - 1 1 1 1 Homes - 2 2 2 2 Pipe Miles - 50 50 50 50 Wells - 21 21 21 21 Booster Pumps - 3 3 3 3

continued 194 Schedule 18 County of Monterey Capital Asset Statistics by Function (continued) Last Five Fiscal Years* (items expressed in units)

Fiscal Year 2005 2006 2007 2008 2009 Health Buildings 32 7 15 7 8 Vehicles 94 131 171 161 33 Heavy Equipment 18 1 1 - -

Public Assistance Buildings 2 2 3 4 5 Vehicles 75 107 114 114 101

Recreation and Cultural Services Basketball courts 1 1 1 1 1 Boats 14 14 14 15 15 Buildings 159 175 175 178 175 Heavy Equipment 34 286 317 27 28 Lakes (acres) 10,000 10,000 10,000 10,000 10,000 Land (acres) 12,155 7,025 7,025 7,025 7,025 Parks 7 7 7 7 6 Tennis Courts 1 1 1 1 1 Vehicles 88 94 85 126 107 Communication Tower - - - - 1

Education Bookmobiles 3 3 3 3 3 Buildings 5 4 5 4 5 Vehicles - 15 17 19 17 Heavy Equipment - 6 6 - -

Source: Owned buildings and parcels from Real Property Specialist Report. Vehicles & Heavy Equipment from FleetFocus Equipment Inventory list.

Note: Differences in assets between fiscal years due to updated information sources

*GASB 44 requires this schedule to present information for the last ten years. However, until the County is able to acquire a full ten-year trend, the title will reflect the actual number of years for which data has been accumulated

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