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Deferred Compensation Plan of the Port of Oakland

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Deferred Compensation Plan of the Port of Oakland DEFERRED COMPENSATION PLAN OF THE PORT OF OAKLAND Independent Auditor’s Report, Management’s Discussion and Analysis, and Basic Financial Statements Years Ended June 30, 2016 and 2015 DEFERRED COMPENSATION PLAN OF THE PORT OF OAKLAND Years Ended June 30, 2016 and 2015 Table of Contents Page Independent Auditor’s Report ................................................................................................................... 1 Required Supplementary Information: Management’s Discussion and Analysis ............................................................................................... 3 Basic Financial Statements: Statements of Net Position Due to Participants .................................................................................... 5 Statements of Changes in Net Position Due to Participants .................................................................... 6 Notes to the Basic Financial Statements ..................................................................................................... 7 Century City Los Angeles Newport Beach Oakland Sacramento San Diego Independent Auditor’s Report San Francisco Walnut Creek Deferred Compensation Advisory Committee Woodland Hills and Board of Port Commissioners of the City of Oakland Oakland, California Report on the Financial Statements We have audited the accompanying statements of net position due to participants of the Deferred Compensation Plan of the Port of Oakland (Plan) as of June 30, 2016 and 2015, and the related statements of changes in net position due to participants for the years then ended, which collectively comprise the Plan’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Plan’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by the Plan’s management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the net position due to participants of the Plan as of June 30, 2016 and 2015, and the changes in net position due to participants for the years then ended in accordance with accounting principles generally accepted in the United States of America. Macias Gini & O’Connell LLP 505 14th Street, 5th Floor Oakland, CA 94612 www.mgocpa.com 1 Emphasis of a Matter As discussed in Note 2, the basic financial statements referred to above present only the financial activities of the Plan and do not purport to, and do not present the financial position of the Port of Oakland as of June 30, 2016 and 2015, and the changes in its financial position for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Other Matters - Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Oakland, California January 27, 2017 2 DEFERRED COMPENSATION PLAN OF THE PORT OF OAKLAND Management’s Discussion and Analysis (Unaudited) Years Ended June 30, 2016 and 2015 The following discussion and analysis of the financial performance of the Deferred Compensation Plan of the Port of Oakland (Plan) provides an overview of its financial activities for the years ended June 30, 2016 and 2015. Please read it in conjunction with the Plan’s financial statements, which begin on page 5. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests solely with management of the Port of Oakland. To the best of our knowledge and belief, the basic financial statements, as presented, are accurate in all material respects. Financial Statements The financial report for the Plan includes management’s discussion and analysis, statements of net position due to participants, statements of changes in net position due to participants, and notes to the basic financial statements. These financial statements are prepared on the accrual basis of accounting. The Plan is administrated by Great-West Life & Annuity Insurance Company (Great-West). As of February 2015, Great-West uses the branded name Empower Retirement. The Plan’s assets are held in trust by Wells Fargo Bank. The following table indicates the net position due to participants as of June 30 (dollars in thousands): 2016 2015 2014 Investments at fair value: Stable value fund $ 24,969 $ 25,135 $ 24,870 Mutual funds 47,328 48,662 49,016 Total investments at fair value 72,297 73,797 73,886 Loans receivable from participants 573 609 560 Net position due to participants$ 72,870 $ 74,406 $ 74,446 The following table indicates the changes in net position for the years ended June 30 (dollars in thousands): 2016 2015 2014 Net additions to net position $ 3,790 $ 6,540 $ 13,197 Deductions from net position (5,326) (6,580) (3,657) Change in net position (1,536) (40) 9,540 Net position due to participants, beginning of year 74,406 74,446 64,906 Net position due to participants, end of year $ 72,870 $ 74,406 $ 74,446 Net position due to participants decreased from $74.4 million at June 30, 2015 to $72.9 million at June 30, 2016. The major factors causing the reduction in net position due to participants for the year ended June 30, 2016 were withdrawals by participants that exceeded contributions by participants and losses on investments. Net position due to participants of $74.4 million at June 30, 2015 remained consistent with that at June 30, 2014. 3 DEFERRED COMPENSATION PLAN OF THE PORT OF OAKLAND Management’s Discussion and Analysis (Unaudited) Years Ended June 30, 2016 and 2015 Request for Information Requests for additional information about this report, should be addressed to the Financial Services Division, Port of Oakland, 530 Water Street, Oakland, California 94607 or visit the Port’s website at www.portofoakland.com. 4 DEFERRED COMPENSATION PLAN OF THE PORT OF OAKLAND Statements of Net Position Due to Participants June 30, 2016 and 2015 (Dollars in Thousands) 2016 2015 ASSETS Investments at fair value: Stable value fund$ 24,969 $ 25,135 Mutual funds 47,328 48,662 Total investments at fair value 72,297 73,797 Loans receivable from participants 573 609 NET POSITION DUE TO PARTICIPANTS$ 72,870 $ 74,406 See accompanying notes to the basic financial statements. 5 DEFERRED COMPENSATION PLAN OF THE PORT OF OAKLAND Statements of Changes in Net Position Due to Participants Years Ended June 30, 2016 and 2015 (Dollars in Thousands) 2016 2015 ADDITIONS TO NET POSITION: Contributions by participants$ 3,997 $ 3,642 Net investment income and adjustments to fair value (207) 2,898 Total additions to net position 3,790 6,540 DEDUCTIONS FROM NET POSITION: Withdrawals by participants
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