PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 1, 2017
NEW ISSUE BOOK-ENTRY ONLY RATING Moody's: “MIG 1” See “RATING.”
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Notes is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed constitute an offer to sell sell to offer an constitute on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See "TAX MATTERS."
$26,000,000* CITY OF BERKELEY 2017-18 TAX AND REVENUE ANTICIPATION NOTES
Dated: Date of Delivery Due: July 19, 2018
The notes captioned above (the “Notes”) will be issued in denominations of $5,000 or any integral multiple thereof. Principal and interest on the Notes will be payable upon maturity. The Notes are to be delivered as fully registered Notes, without coupons and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York (as described in APPENDIX E – BOOK-ENTRY ONLY SYSTEM). DTC will act as securities depository of the Notes. Purchases will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof. The Notes are not subject to redemption prior to maturity.
cumstances shall this Preliminary Official Statement Statement Official Preliminary this shall cumstances The Notes are by statute general obligations of the City of Berkeley, California (the “City”), payable solely from taxes, income, revenues, cash receipts and other moneys that are received by the City for the General Fund for fiscal year 2017-18 and that are generally available for the payment of current expenses and other obligations of the City (the “Unrestricted Moneys”). The
solicitation or sale would be unlawful prior to registration or qualification under the the under qualification or registration to prior unlawful be would sale or solicitation Notes are secured by a pledge of Unrestricted Moneys to be received by the City in (a) an amount equal to fifty percent (50%) of the principal amount of the Notes in the month of January 2018; (b) an amount equal to fifty percent (50%) of the principal amount of the Notes in the month of May 2018; and (c) an amount sufficient to pay interest as due on the Notes at their maturity, in the month of June 2018 (such pledged amounts being hereinafter called the “Pledged Revenues”). The Pledged Revenues will be deposited into, and held by the City in, a special fund designated “City of Berkeley, California, 2017-18 Tax and Revenue Anticipation Notes Special Account,” as established in the City’s Resolution adopted on July 25, 2017.
Principal of and interest on the Notes are payable in lawful moneys of the United States of America upon maturity, and interest on the Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months and accrues from the date of delivery.
The Notes are legal investments for commercial banks in California and are eligible to secure deposits of public moneys in California.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.
The following firm, serving as municipal advisor to the City, has structured this issue.
MATURITY SCHEDULE
Interest Rate Reoffering Yield CUSIP†
The Notes are offered when, as and if issued and received by the Underwriter, subject to the approval of legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. Certain legal matters will be passed upon for the City by Jones Hall, A Professional Law Corporation, as Disclosure Counsel, and by the City Attorney. It is anticipated that the Notes, in definitive form, will be available for delivery through DTC in New York, New York on or about August 24, 2017.
Dated: August __, 2017
of such jurisdiction . jurisdiction such of
* Preliminary; subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no cir or a solicitation of an offer to buy nor shall there be any sale of theselaws securitiessecurities in any jurisdiction in which such offer
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Notes other than those contained in this Official Statement and, if given or made, such information or representation must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of the Notes by any person to make such offer, solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers of the Notes. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts.
The information set forth in this Official Statement has been obtained from sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriter. The information and expressions of opinion stated in this Official Statement are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the information or opinions set forth herein or in the affairs of the City since the date hereof. This Official Statement is submitted in connection with the sale of the Notes referred to herein and may not be reproduced or used, in whole or in part, for any purpose, unless authorized in writing by the City.
The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption contained in such Act. The Notes have not been registered under the securities laws of any state.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE NOTES TO CERTAIN DEALERS AND BANKS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.
The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.
Although the City maintains an internet website for various purposes, none of the information on that website is incorporated by reference in this Official Statement or is intended to assist investors in making any investment decision or to provide any continuing information with respect to the Notes or any other bonds or obligations of the City.
CITY OF BERKELEY, CALIFORNIA
ELECTED OFFICIALS
Jesse Arreguin, Mayor Linda Maio, Councilmember District 1 Cheryl Davila, Councilmember District 2 Ben Bartlett, Councilmember District 3 Kate Harrison, Councilmember District 4 Sophie Hahn, Councilmember District 5 Susan Wengraf, Councilmember District 6 Kriss Worthington, Councilmember District 7 Lori Droste, Councilmember District 8
CITY OFFICIALS
Dee Williams-Ridley City Manager
Henry Oyekanmi Jovan Grogan Director of Finance Deputy City Manager
Zach Cowan Ann-Marie Hogan City Attorney City Auditor
PROFESSIONAL SERVICES
Municipal Advisor
NHA Advisors, LLC San Rafael, California
Bond Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation San Francisco, California
TABLE OF CONTENTS
INTRODUCTORY STATEMENT ...... 1 THE NOTES ...... 1 Description of the Notes ...... 1 Purpose of Issue ...... 2 Book-Entry Only System ...... 2 SECURITY FOR AND SOURCES OF PAYMENT OF THE NOTES ...... 2 Security for the Notes ...... 2 Available Sources of Repayment ...... 3 Monthly Cash Flows ...... 4 CITY INVESTMENT POLICY AND PORTFOLIO ...... 7 SPECIAL RISK FACTORS ...... 9 Bankruptcy Considerations ...... 9 Limitations on Remedies ...... 9 CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS...... 10 Limitations on Revenues ...... 10 Expenditures and Appropriations ...... 12 Future Initiatives ...... 12 LEGAL OPINION ...... 13 TAX MATTERS ...... 13 CONTINUING DISCLOSURE ...... 15 ABSENCE OF MATERIAL LITIGATION ...... 16 UNDERWRITING ...... 16 MUNICIPAL ADVISOR ...... 16 RATING ...... 17 ADDITIONAL INFORMATION ...... 17
APPENDIX A – CERTAIN INFORMATION CONCERNING THE CITY OF BERKELEY APPENDIX B – THE CITY’S COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 APPENDIX C – FORM OF BOND COUNSEL OPINION APPENDIX D – FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX E – BOOK-ENTRY ONLY SYSTEM
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OFFICIAL STATEMENT
$26,000,000* CITY OF BERKELEY 2017-18 TAX AND REVENUE ANTICIPATION NOTES
INTRODUCTORY STATEMENT
General. This Official Statement, which includes the cover page, the appendices hereto and this Introductory Statement, is provided to furnish information in connection with the sale by the City of Berkeley, California (the “City”), of its 2017-18 Tax and Revenue Anticipation Notes (the “Notes”).
The Notes are issued in full conformity with the Constitution and laws of the State of California (the “State”), including Article 7.6, Chapter 4, Part 1, Division 2, Title 5 (commencing with Section 53850 of the Government Code of the State), (the “Law”) and under the Law are general obligations of the City payable solely from those taxes, income, revenues, cash receipts and other moneys that are received by the City for the General Fund for fiscal year 2017-18 and that are generally available for the payment of current expenses and other obligations of the City (the “Unrestricted Moneys”). The Notes are authorized by a resolution adopted by the City Council on July 25, 2017 (the “Resolution”). The City may, under the Law, issue the Notes only if the principal of and interest on the Notes will not exceed 85% of the estimated amount of the uncollected Unrestricted Moneys that will be available for the payment of said Notes. Proceeds from the sale of the Notes will be deposited into a segregated account in the General Fund and used and expended by the City for any purpose for which it is authorized to expend funds from the General Fund.
THE NOTES
Description of the Notes
The Notes will be issued in the principal amount and at the interest rate shown on the cover page of this Official Statement. Principal of and interest on the Notes are payable in lawful moneys of the United States of America upon maturity, and interest on the Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months and accrues from the date of delivery.
The Notes will be dated the date of delivery and will mature on July 19, 2018. The Notes are to be delivered as fully registered Notes, without coupons, and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository of the Notes. Purchases will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof.
* Preliminary; subject to change.
Purpose of Issue
Proceeds of the Notes will provide moneys to meet the City’s General Fund cash flow requirements during the 2017-18 fiscal year commencing July 1, 2017, and ending June 30, 2018, including current expenses, capital expenditures, and the discharge of other obligations or indebtedness.
Book-Entry Only System
DTC will act as securities depository for the Notes. The Notes will be issued as fully- registered certificates registered in the name of Cede & Co. (DTC’s partnership nominee). One fully-registered certificate will be issued for each maturity of the Notes, each in the aggregate principal amount of such maturity, and will be deposited with DTC. See “APPENDIX E – BOOK- ENTRY ONLY SYSTEM.”
So long as the Notes are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal and interest with respect to the Notes will be made to DTC as provided as in the representation letter delivered on the date of issuance of the notes. The City cannot and does not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium, if any, with respect to the Notes paid to DTC or its nominee as the registered owner, or will distribute any prepayment notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The City is not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to a Beneficial Owner with respect to the Notes or an error or delay relating thereto.
SECURITY FOR AND SOURCES OF PAYMENT OF THE NOTES
Security for the Notes
The principal amount of the Notes, together with the interest thereon, is payable from Unrestricted Moneys, being the first taxes, income, revenue, cash receipts, and other moneys that are received by the City for the General Fund for fiscal year 2017-18 and which are generally available for the payment of current expenses and other obligations of the City. Estimated Unrestricted Moneys exceed estimated payment requirements by more than eight to one. See “THE NOTES – Available Sources of Payment.”
As security for the repayment of principal of and interest on the Notes, the City has pledged to deposit into a special fund designated as the “2017-18 Tax and Revenue Anticipation Note Special Account” (the “Special Account”) the first Unrestricted Moneys to be received by the City as follows: (a) an amount equal to fifty percent (50%) of the principal amount of the Notes in the month of January 2018; (b) an amount equal to fifty percent (50%) of the principal amount of the Notes in the month of May 2018; and (c) an amount sufficient to pay interest as due on the Notes at their maturity, in the month of June 2018 (such pledged amounts, the “Pledged Revenues”). The Notes are equally and ratably secured by the City's pledge of the Pledged Revenues.
The principal of the Notes and the interest thereon shall constitute a first lien and charge against and shall be paid from the first moneys received by the City from such Pledged Revenues, and to the extent not so paid shall be paid from any other moneys of the City lawfully
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available therefor. In the event there are insufficient Unrestricted Moneys received by the City to permit the deposits into the Special Account of the full amount of the Pledged Revenues to be deposited in the applicable month, by the last business day of such month, then the amount of such deficiency shall be satisfied and made up from any other moneys of the City lawfully available for the payment of the Notes and the interest thereon.
All Pledged Revenues, as and when received, shall be deposited by the City into the Special Account, which will be held by the City for the payment of the principal of and interest on the Notes at maturity. Amounts deposited by the City into the Special Account shall be applied solely for the purpose of paying the principal of and interest on the Notes. Such amounts shall be invested by the City in legal investments, as permitted by Section 53601 of the Government Code of the State. See “CITY INVESTMENT POLICY AND PORTFOLIO.”
Available Sources of Repayment
The Notes, in accordance with State law, are general obligations of the City, but are payable only out of Unrestricted Moneys, which include the taxes, income, revenues, cash receipts and other moneys that are received by the City for the General Fund for fiscal year 2017-18 and that are generally available for payment of current expenses and other obligations of the City. The Constitution of the State substantially limits the City's ability to levy ad valorem taxes. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS.” The City may, under existing law, issue the Notes only if the principal of, and interest on, the Notes will not exceed 85% of the estimated uncollected Unrestricted Moneys that will be available for the repayment of the Notes.
The Note coverage ratio is shown in the following table, and is the ratio of estimated Unrestricted Moneys to the amount of Unrestricted Moneys needed to pay principal of and interest on the Notes.
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The table below gives detail as to the sources of estimated Unrestricted Moneys and the Note Coverage Ratio.
CITY OF BERKELEY Estimated Unrestricted Moneys Fiscal Year 2017-18
Source Amount
Available Cash Balance, July 1, 2017 $20,393,090
Taxes (including property tax, sales tax and other taxes) 130,521,156
Other Revenue 31,713,806
Proceeds of the Notes(1)* 26,390,360
Transfers In 9,750,960
TOTAL UNRESTRICTED MONEYS* $218,769,372
ESTIMATED PRINCIPAL PLUS INTEREST NEEDED FOR NOTE REPAYMENT* $26,704,167
NOTE COVERAGE RATIO* 8.19x
* Preliminary; subject to change. (1) Excluding underwriter’s discount and costs of issuance. Source: City of Berkeley Finance Department.
Monthly Cash Flows
The City has prepared the accompanying monthly General Fund cash flow statements covering fiscal year 2016-17 and the projected fiscal year 2017-18. The General Fund is used to finance the ordinary operations of the City and is available for any legal authorized purposes. While expenditures generally occur evenly throughout the fiscal year, cash receipts occur unevenly. As a result, the General Fund cash balance tends to show a deficit during parts of the fiscal year. The projections are based on the City’s budget and current financial condition.
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City of Berkeley FY 2016-17 Actual/Projected General Fund Cash Flows*
July August September October November December January February March April May June TOTAL Beginning Balance $46,660,159 $58,473,347 $55,034,987 $48,765,680 $40,462,150 $32,494,705 $64,857,079 $48,795,983 $51,581,245 $52,845,400 $47,066,172 $33,971,767 $46,660,159
CASH RECEIPTS Property Tax $1,503,743 $2,862,859 $3,805,585 $1,272,980 $187,416 $30,132,566 ($44,820) $512,993 $7,130,413 $19,194,815 $2,238,850 $3,832,090 $72,629,490 Sales Tax 1,302,284 3,994,218 2,064,196 1,192,556 1,820,473 2,148,457 1,318,740 1,877,176 1,421,301 1,111,331 1,623,500 1,630,000 21,504,232 Other Taxes 2,148,198 2,189,091 1,818,496 2,407,276 1,725,706 2,299,401 5,299,101 10,147,933 7,491,035 3,262,309 1,929,000 1,879,000 42,596,546 License and Permits 23,556 29,256 59,256 36,587 29,624 63,561 70,609 47,167 77,045 46,332 33,000 33,000 548,993 Subventions & Grants 0 4,126 5,955 2,796 0 5,470,366 0 0 191,031 5,570,477 0 196,868 11,441,619 Service Fees 732,536 747,354 564,868 516,367 701,982 865,051 943,240 588,612 764,448 596,668 613,195 762,989 8,397,309 Fines and Penalties 539,150 495,594 588,949 718,472 (88,984) 1,011,720 640,947 503,517 504,046 594,448 550,000 550,000 6,607,859 Miscellaneous 37,750 54,391 125,539 177 995 808 6,579 13,134 930 (4,620) 5,000 5,000 245,683 Interest Income 118,673 135,900 195,938 331,193 130,959 339,302 125,399 117,252 54,561 101,287 174,359 375,177 2,200,000 Rents and Royalties 2,798 15,127 11,238 15,011 6,393 8,568 4,778 23,581 6,982 3,511 8,122 29,892 136,001 Franchises 21,553 243,080 0 19,790 243,319 0 20,376 255,119 0 925,089 260,264 0 1,988,590 Transfers In/Indirect Costs 933,914 641,114 840,733 1,113,880 659,062 664,952 1,117,970 659,729 903,948 1,229,658 662,746 901,750 10,329,456 Loan Repayment from Others 0 0 0 0 0 0 0 0 0 0 0 0 0 TRAN Proceeds 17,173,090 0 0 0 0 0 0 0 0 0 0 0 17,173,090 TOTAL RECEIPTS $24,537,245 $11,412,110 $10,080,753 $7,627,085 $5,416,945 $43,004,752 $9,502,919 $14,746,213 $18,545,739 $32,631,305 $8,098,036 $10,195,767 $195,798,868
CASH DISBURSEMENTS General Government $3,030,727 $2,577,708 $2,723,902 $2,440,838 $3,225,944 $3,125,319 $2,791,168 $2,358,162 $3,453,602 $3,874,671 $3,336,788 $4,797,875 $37,736,703 Public Safety 4,479,492 7,046,624 9,964,457 7,153,746 6,859,285 7,529,867 7,452,723 7,180,509 10,444,623 7,271,899 6,920,987 9,832,647 92,136,858 Highways and Streets 119,356 111,473 165,510 129,081 126,295 127,318 105,930 91,224 140,147 99,653 98,383 150,035 1,464,404 Health and Human Service 368,591 638,951 936,263 638,755 720,267 748,165 724,587 777,887 1,043,212 868,004 782,315 1,222,517 9,469,514 Culture - Recreation 361,645 680,814 597,951 389,359 345,080 430,007 374,772 367,433 530,987 384,339 356,148 497,049 5,315,583 Urban Redevelopment/Housing 305,254 591,959 640,390 334,912 380,456 404,772 466,622 471,907 778,535 586,142 481,727 805,529 6,248,205 Econ Dev & Assistance 59,288 656,764 183,210 131,371 284,383 180,660 71,679 56,814 105,607 55,966 53,343 466,986 2,306,071 Debt Service 0 0 0 0 0 0 0 0 0 0 0 Transfers Out/Other 2,435,594 2,153,109 197,752 4,460,952 162,752 493,722 4,626,437 162,752 162,752 4,626,436 162,752 6,162,752 25,807,762 Set up Stabilization Reserve Fund 0 0 0 0 0 0 0 0 0 12,421,507 0 0 12,421,507 Set up Catastrophic Reserve Fund 0 0 0 0 0 0 0 0 0 10,163,051 0 0 10,163,051 TRAN Principal Pledge 0 0 0 0 0 0 8,500,000 0 0 0 8,500,000 0 17,000,000 TRAN Interest Pledge 0 0 0 0 0 0 0 0 0 0 0 339,056 339,056 Prepayment to CalPERS 0 0 0 0 0 0 0 0 0 0 0 0 0 Advances from GF/(Repayment to GF) 1,564,110 393,068 940,625 251,602 1,279,928 (2,397,452) 450,097 494,263 622,119 (1,941,136) 500,000 (500,000) 1,657,224 TOTAL DISBURSEMENTS $12,724,057 $14,850,470 $16,350,060 $15,930,616 $13,384,390 $10,642,378 $25,564,015 $11,960,951 $17,281,584 $38,410,532 $21,192,441 $23,774,443 $222,065,937
Interfund Borrowings $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Cash Flow $11,813,188 ($3,438,360) ($6,269,307) ($8,303,531) ($7,967,445) $32,362,374 ($16,061,096) $2,785,262 $1,264,155 ($5,779,227) ($13,094,405) ($13,578,677) ($26,267,069)
Ending Balance $58,473,347 $55,034,987 $48,765,680 $40,462,150 $32,494,705 $64,857,079 $48,795,983 $51,581,245 $52,845,400 $47,066,172 $33,971,767 $20,393,090 $20,393,090
* Actual through April 2017. Source: City of Berkeley
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City of Berkeley FY 2017-18 Projected General Fund Cash Flows (Including FY 2017-18 TRAN)
July August September October November December January February March April May June TOTAL Beginning Balance $20,393,090 $38,588,133 $34,822,065 $26,710,826 $19,526,618 $10,748,870 $40,230,879 $21,255,485 $23,579,312 $23,708,255 $40,524,968 $22,243,728 $20,393,090
CASH RECEIPTS Property Tax $1,404,375 $2,673,681 $3,554,111 $1,188,861 $175,032 $28,141,400 ($41,858) $479,094 $6,659,234 $17,926,418 $2,090,907 $3,578,865 $67,830,120 Sales Tax 1,194,320 3,663,083 1,893,067 1,093,689 1,669,549 1,970,342 1,209,412 1,721,552 1,303,470 1,019,198 1,488,906 1,494,867 19,721,456 Other Taxes 2,167,011 2,208,262 1,834,421 2,428,357 1,740,819 2,319,538 5,345,507 10,236,802 7,556,636 3,290,879 1,945,893 1,895,455 42,969,580 License and Permits 29,561 36,714 74,363 45,914 37,176 79,765 88,610 59,192 96,687 58,144 41,413 41,413 688,952 Subventions & Grants 0 3,920 5,657 2,656 0 5,196,692 0 0 181,474 5,291,795 0 187,019 10,869,212 Service Fees 776,918 792,634 599,091 547,652 744,513 917,461 1,000,388 624,274 810,763 632,818 650,346 809,216 8,906,073 Fines and Penalties 552,444 507,814 603,471 736,187 (91,178) 1,036,666 656,751 515,932 516,474 609,105 563,561 563,561 6,770,789 Miscellaneous 26,697 38,465 88,781 125 704 571 4,653 9,288 658 (3,267) 3,536 3,536 173,746 Interest Income 119,266 136,580 196,918 332,849 131,614 340,999 126,026 117,838 54,834 101,793 175,231 377,053 2,211,000 Rents and Royalties 2,854 15,429 11,463 15,311 6,521 8,739 4,874 24,052 7,122 3,581 8,284 30,490 138,720 Franchises 21,192 239,012 0 19,459 239,247 0 20,035 250,850 0 909,609 255,909 0 1,955,314 Transfers In/Indirect Costs 881,611 605,209 793,648 1,051,498 622,152 627,712 1,055,359 622,781 853,323 1,160,792 625,629 851,248 9,750,960 Loan Repayment from Others 0 0 0 0 0 0 0 0 0 0 0 0 0 TRAN Proceeds 26,390,360 0 0 0 0 0 0 0 0 0 0 0 26,390,360 TOTAL RECEIPTS $33,566,609 $10,920,803 $9,654,990 $7,462,559 $5,276,148 $40,639,886 $9,469,755 $14,661,656 $18,040,674 $31,000,864 $7,849,615 $9,832,723 $198,376,282
CASH DISBURSEMENTS General Government $4,578,649 $3,559,520 $3,448,704 $2,611,406 $3,451,376 $3,343,719 $2,986,218 $2,522,953 $3,694,943 $4,145,437 $3,569,966 $5,133,155 $43,046,046 Public Safety 4,808,750 7,295,473 10,192,334 7,237,929 6,940,003 7,618,476 7,540,424 7,265,007 10,567,532 7,357,472 7,002,431 9,948,354 93,774,186 Highways and Streets 175,634 156,612 221,622 165,909 162,328 163,643 136,153 117,251 180,132 128,085 126,452 192,841 1,926,662 Health and Human Service 635,158 809,299 1,062,540 654,667 738,210 766,803 742,637 797,265 1,069,200 889,627 801,803 1,252,971 10,220,180 Culture - Recreation 570,366 838,630 713,283 416,711 369,322 460,215 401,100 393,245 568,289 411,339 381,167 531,966 6,055,633 Urban Redevelopment/Housing 457,576 722,215 750,589 366,750 416,624 443,251 510,981 516,768 852,545 641,863 527,522 882,105 7,088,790 Econ Dev & Assistance 96,759 742,369 214,405 144,720 313,281 199,018 78,963 62,587 116,338 61,653 58,763 514,439 2,603,295 Debt Service 0 0 0 0 0 0 0 0 0 0 0 0 0 Transfers Out/Other 2,548,674 162,752 162,752 2,548,674 162,752 162,752 2,548,674 162,752 162,752 2,548,674 162,752 162,752 11,496,712 Set up Stabilization Reserve Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 Set up Catastrophic Reserve Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 TRAN Principal Pledge* 0 0 0 0 0 0 13,000,000 0 0 0 13,000,000 0 26,000,000 TRAN Interest Pledge* 0 0 0 0 0 0 0 0 0 0 0 704,167 704,167 Prepayment to CalPERS 0 0 0 0 0 0 0 0 0 0 0 0 0 Advances from GF/(Repayment to GF) 1,500,000 400,000 1,000,000 500,000 1,500,000 (2,000,000) 500,000 500,000 700,000 (2,000,000) 500,000 (3,100,000) 0 TOTAL DISBURSEMENTS $15,371,566 $14,686,871 $17,766,229 $14,646,767 $14,053,895 $11,157,877 $28,445,149 $12,337,828 $17,911,732 $14,184,150 $26,130,855 $16,222,750 $202,915,671
Interfund Borrowings $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Cash Flow $18,195,043 ($3,766,068) ($8,111,239) ($7,184,208) ($8,777,747) $29,482,009 ($18,975,394) $2,323,828 $128,942 $16,816,714 ($18,281,240) ($6,390,027) ($4,539,389)
Ending Balance $38,588,133 $34,822,065 $26,710,826 $19,526,618 $10,748,870 $40,230,879 $21,255,485 $23,579,312 $23,708,255 $40,524,968 $22,243,728 $15,853,702 $15,853,702
* Preliminary; subject to change. Source: City of Berkeley
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CITY INVESTMENT POLICY AND PORTFOLIO
The authority to invest the City’s funds is derived from a resolution adopted annually by the City Council delegating to the Director of Finance and the Treasurer of the City the authority to invest these funds within the guidelines of Section 53600 et seq. of the Government Code of the State (the “Government Code”). The Government Code also directs the City to present an annual investment policy (the “Investment Policy”) for confirmation to the City Council. The City Council voted to affirm the Investment Policy and designate the investment authority on June 27, 2017. The Investment Policy may be revised by the City Council at any time.
The objectives of the Investment Policy are preservation of capital, liquidity and yield. The Investment Policy addresses the soundness of financial institutions in which the City may deposit funds, types of investment instruments permitted by the City and the Government Code, investment duration and the amount which may be invested in certain instruments. The Investment Policy also reflects and supports the City’s policy positions on important social and environmental issues, as contained in formal City Council actions including the Nuclear-Free Berkeley Act, the Responsible Investment Ordinance, the Oppressive States Contract Resolution and Divestment from Publicly-Traded Fossil Fuel Companies and Gun Manufacturers and Tobacco companies. Summarized below are the permitted investments under the Investment Policy. These policies may further restrict investment options available to the City.
Maximum Maximum Investment Maximum Percentage/Dollar In One Authorized Investment Type Maturity of Portfolio Issuer Bank/Time Deposit Accounts 5 years 100% N/A Money Market Funds N/A 100% N/A Repurchase Agreements 1 year 10% N/A Reverse Repurchase Agreements 7 days 10% N/A Banker’s Acceptances 7 days 40% 30% U.S. Government Securities (Treasury bills, 5 years Notes and Bonds) 30 years* 100% N/A U.S. Agency Securities by Agency 5 years 30 years* 100% N/A Negotiable Certificates of Deposit 5 years 30 years* 30% $250,000 Local Agency Bonds 5 years 30 years* 100% N/A Commercial Paper 180 days 25% $5M or 2% Medium Term Notes 5 years 30 years* 30% 30%
* Maturities over five years, up to 30 years, are authorized only for Retiree Medical Plan Trust and debt service reserve funds.
As of April 30, 2017, the City portfolio included $326,313,720 in pooled investments. The average life of the investments was 743 days and the weighted yield was 1.060% from January 1 to April 30, 2017. The following is a list of investments held by the City:
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CITY OF BERKELEY City Pooled Investments (As of April 30, 2017)
Market % of Total Security Value Portfolio Medium Term Corporate Notes and Municipal Notes $10,132,280 3.11% Federal Agency Coupon Notes 219,515,844 67.27 Money Market Fund and Loans 96,665,596 29.62 TOTAL: $326,313,720 100.00%
Source: City of Berkeley Finance Department Source: City of Berkeley Finance Department
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SPECIAL RISK FACTORS
The following information should be considered by prospective investors in evaluating the Notes; however, this information does not purport to be an exhaustive listing of the risks and other considerations, which may be relevant to an investment in the Notes.
Bankruptcy Considerations
In 1994, Orange County, California issued its 1994-1995 Tax and Revenue Anticipation Notes (the “Orange County Notes”) under the same statutory authority as the Notes. On December 6, 1994, Orange County filed a petition in bankruptcy. Subsequently, Orange County declined to set aside the taxes and revenues it had pledged for the repayment of the Orange County Notes and a noteholder brought suit to compel Orange County to do so. A March 8, 1995 ruling of the United States Bankruptcy Court for the Central District of California, held that the lien securing the Orange County Notes did not attach to revenues received by Orange County after the filing of its bankruptcy petition on December 6, 1994, and therefore, Orange County was not required to set aside the revenues pledged under the note resolution following the bankruptcy. The Bankruptcy Court ruled that under the United States Bankruptcy Code (the “Bankruptcy Code”), the lien did not attach to revenues received by Orange County after December 6, 1994, because the lien was a consensual security interest rather than a statutory lien. In July 1995, the United Stated District Court for the Central District of California reversed the decision of the Bankruptcy Court. Orange County appealed the decision of the District Court to the United States Court of Appeals for the Ninth Circuit. Before the Ninth Circuit rendered a decision, the parties settled their disputes. Accordingly, if the City were to file for bankruptcy, it is not clear whether it would be required to set aside revenues pledged under the Resolution as described above.
In addition, the Pledged Revenues and other moneys that will be set aside to pay the Notes will be held in the City’s General Fund, and these funds will be invested in the pooled investment fund. Should the City go into bankruptcy, a court might hold that the owners of the Notes do not have a valid lien on the Pledged Revenues. In that case, unless the owners could “trace” the funds, the owners would merely be unsecured creditors of the City. There can be no assurance that the owners of the Notes could successfully so “trace” the Pledged Revenues.
Limitations on Remedies
The rights of the owners of the Notes are subject to the limitations on legal remedies against cities in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. Additionally, enforceability of the rights and remedies of the owners of the Notes and the obligations incurred by the City, may become subject to the following: the Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditor’s rights generally, now or hereafter in effect; equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Constitution; and the reasonable and necessary exercise in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the owners of the Notes to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation, or modification of their rights.
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CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS
Limitations on Revenues
Article XIIIA of the California Constitution. Article XIIIA of the State Constitution, adopted and known as Proposition 13, was approved by the voters in June 1978. Section 1(a) of Article XIIIA limits the maximum ad valorem tax on real property to one percent of “full cash value,” and provides that such tax shall be collected by the counties and apportioned according to State law. Section 1(b) of Article XIIIA provides that the one-percent limitation does not apply to ad valorem taxes levied to pay interest and redemption charges on (i) indebtedness approved by the voters prior to July 1, 1978, or (ii) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast on the proposition, or (iii) bonded indebtedness incurred by a school district or community college district for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters of the district, but only if certain accountability measures are included in the proposition. The tax for payment of the City’s general obligation bonds falls within the exception for bonds approved by a two-thirds vote.
Section 2 of Article XIIIA defines “full cash value” to mean the county assessor’s valuation of real property as shown on the fiscal year 1975-76 tax bill, or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred. The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or to reflect a reduction in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced in the event of declining property value caused by substantial damage, destruction or other factors. Legislation enacted by the State Legislature to implement Article XIIIA provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax except the 1% base tax levied by each County and taxes to pay debt service on indebtedness approved by the voters as described above.
Since its adoption, Article XIIIA has been amended a number of times. These amendments have created a number of exceptions to the requirement that property be reassessed when purchased, newly constructed or a change in ownership has occurred. These exceptions include certain transfers of real property between family members, certain purchases of replacement dwellings for persons over age 55 and by property owners whose original property has been destroyed in a declared disaster, and certain improvements to accommodate disabled persons and for seismic upgrades to property. These amendments have resulted in marginal reductions in the property tax revenues of the City.
Both the California State Supreme Court and the United States Supreme Court have upheld the validity of Article XIIIA.
Article XIIIC and Article XIIID of the California Constitution. On November 5, 1996, the voters of the State approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the California Constitution and contains a number of interrelated provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges.
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On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature. The amendments to Article XIIIC define “taxes” that are subject to voter approval as “any levy, charge, or exaction of any kind imposed by a local government,” with certain exceptions.
Taxes. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City (“general taxes”) require a majority vote; taxes for specific purposes (“special taxes”), even if deposited in the City’s General Fund, require a two-thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.
Property-Related Fees, Charges and Assessments. Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property- related fees, charges, and assessments for municipal services and programs. These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred, (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party, and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.
Reduction or Repeal of Taxes, Fees and Charges. Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund. If such repeal or reduction occurs, the City’s ability to pay debt service on the Notes could be adversely affected.
Burden of Proof. Article XIIIC provides that local government “bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.” Similarly, Article XIIID provides that in “any legal action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate compliance” with Article XIIID.
Impact on City’s General Fund. The approval requirements of Articles XIIIC and XIIID reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase the taxes, fees, charges or taxes in the future that the City may need to meet increased expenditure needs.
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The City does not believe that any material source of General Fund revenue is subject to challenge under Articles XIIIC or XIIID.
Judicial Interpretation. The interpretation and application of Articles XIIIC and XIIID will ultimately be determined by the courts with respect to a number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination.
Expenditures and Appropriations
Article XIIIB of the California Constitution. In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and local governments are subject to an annual “appropriations limit” or “Gann Limit” imposed by Article XIIIB of the State Constitution, which effectively limits the amount of such revenues that government entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” exclude tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds.
Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in cases of emergency; however, the appropriations limit for the three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government.
The State and each local government entity have their own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Each school district is required to establish an appropriations limit each year. In the event that a school district’s revenues exceed its spending limit, the district may increase its appropriations limit to equal its spending by taking appropriations limit from the State.
Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years. If the aggregate “proceeds of taxes” for the preceding two-year period exceed the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.
Future Initiatives
Article XIIIA, Article XIIIB, Article XIIIC, Article XIIID and Proposition 111 were each adopted as measures that qualified for the ballot pursuant to California’s initiative process. From time to time other initiative measures could be adopted, further affecting City revenues or the
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City’s ability to expend revenues. The nature and impact of these measures cannot be predicted by the City.
LEGAL OPINION
The statements of law and legal conclusions set forth in this Official Statement under the heading “TAX MATTERS” have been reviewed by Bond Counsel. Bond Counsel's employment is limited to a review of the legal proceedings required for the authorization of the Notes and to rendering the opinion discussed below. Such opinion will not consider or extend to any documents, agreements, representations, offering circulars or other material of any kind concerning the Notes not mentioned in this paragraph. Bond Counsel takes no responsibility for the accuracy, completeness or fairness of this Official Statement. Bond Counsel’s compensation is contingent upon the delivery of the Notes. Certain legal matters will be passed upon for the City by the City Attorney.
TAX MATTERS
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Notes is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, provided, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings.
The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Tax Code") that must be satisfied subsequent to the issuance of the Notes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of issuance of the Notes.
If the initial offering price to the public (excluding bond houses and brokers) at which each Note is sold is greater than the amount payable at maturity thereof, then such difference constitutes "original issue premium" for purposes of federal income taxes and State of California personal income taxes, de minimis original issue premium is disregarded. Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Note (said term being the shorter of the Note's maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Note for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Note is amortized each year over the term to maturity of the Note on the basis of a constant interest rate compounded on each interest or principal payment date (with straightline interpolations between compounding dates). Amortized Note premium is not deductible for federal income tax purposes. Owners of premium Notes, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Notes.
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If the initial offering price to the public (excluding bond houses and brokers) at which a Note is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes, de minimis original issue discount is disregarded. Under the Tax Code, original issue discount is generally treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. However, in the case of short-term tax-exempt obligations (such as the Notes), Notice 94-84 issued by the Internal Revenue Service provides generally that, until the Service provides further guidance, taxpayers may treat stated interest on certain short-term obligations, such as the Notes, either as includible in stated redemption price at maturity or as not included in stated redemption price at maturity. A taxpayer, however, must treat stated interest payable at maturity on all short-term tax-exempt bonds in a consistent manner. A short-term tax-exempt bond is defined as a tax- exempt bond with a term that is not more than one year from the date of issue.
Owners of discounted Notes, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Notes.
In the further opinion of Bond Counsel, interest on the Notes is exempt from California personal income taxes.
Owners of the Notes should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Notes may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Notes other than as expressly described above.
A copy of the proposed form of opinion of Bond Counsel is attached hereto as APPENDIX C.
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CONTINUING DISCLOSURE
The City has covenanted for the benefit of the holders of the Notes to provide notices of the occurrence of certain enumerated events. The notices of enumerated events will be filed by the City with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the notices of enumerated events is summarized under the caption “APPENDIX D – Form of Continuing Disclosure Certificate.” These covenants have been made in order to assist the purchaser of the Notes in complying with Rule 15c2- 12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”).
The City and its related governmental entities have previously entered into numerous disclosure undertakings under the Rule in connection with the issuance of long-term obligations (See “APPENDIX B – The City’s Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016.” Notes to Financial Statements, Note 3”). In order to meet its continuing disclosure obligations, the City retained NHA Advisors, LLC as dissemination agent. The City’s prior dissemination agent, the City and the City's affiliated governmental entities have not, on a handful of occasions during the past five years, fully complied, in all material respects, with the City's disclosure undertakings.
Specifically, from fiscal years 2011-12 through 2012-13:
(i) Audited financial statements and Annual Reports with respect to several series of the City's bonds (or series of bonds of the City's affiliated governmental entities) were not filed on a timely basis or were not filed. In several instances, the City (or its affiliated governmental entities) submitted audited financial statements and annual reports to the prior dissemination agent, but they were misfiled, not filed, or filed late to the applicable information repository.
(ii) Material event notices were not filed on a timely basis or were not filed in response to changes to the underlying bond ratings of certain of the City's obligations and changes to the credit ratings of bond insurance companies that insured its bonds.
(iii) Annual Reports with respect to several series of the City's bonds (or series of bonds of the City's affiliated governmental entities), failed to include all of the required financial and operating data.
(iv) The City failed to file on a timely basis notice that certain bonds had been defeased and redeemed.
In addition, in the first half of 2014, material event notices were not filed in connection with changes to the credit ratings of bond insurance companies that insured two series of the City’s bonds.
Supplemental Annual Reports, notices of the rating changes and filings to correct all known filing errors made by the prior dissemination agent, the City and the City's affiliated governmental entities in their attempts to fully comply with the City's continuing disclosure were filed in connection with a prior bond issuance and the City is currently in compliance with its continuing disclosure undertakings.
To ensure future compliance with its continuing disclosure undertakings, the City has developed procedures for including all required continuing disclosure information in the
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supplementary section of its audited financial statements. In addition, the City engaged NHA Advisors, LLC to review this information annually to ensure compliance with its continuing disclosure undertakings.
Neither the County nor any other entity other than the City shall have any obligation or incur any liability whatsoever with respect to the performance of the City’s duties regarding continuing disclosure.
ABSENCE OF MATERIAL LITIGATION
No litigation is pending or threatened concerning the validity of the Notes, and a certificate to that effect will be furnished to the underwriter at the time of the original delivery of the Notes. The City is not aware of any litigation pending or threatened questioning the political existence of the City or contesting the City's ability to receive ad valorem taxes or to collect other Unrestricted Moneys or contesting the City's ability to issue and retire the Notes.
There are a number of lawsuits and claims pending against the City. The aggregate amount of the uninsured liabilities of the City, and the timing of any anticipated payments of judgments that may result from suits and claims, will not, in the opinion of the City, materially affect the finances of the City or impair its ability to repay the Notes. A certificate of the City to this effect will be available at the time of original delivery of the Notes.
UNDERWRITING
The Notes were purchased by ______(the “Underwriter”) at a price of $______(representing $______aggregate principal amount of the Notes plus a purchase premium of $______, less an Underwriter’s discount of $______). The purchase contract for the Notes provides that the Underwriter will purchase all of the Notes if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase contract, the approval of certain legal matters by counsel and certain other conditions.
The Underwriter may offer and sell Notes to certain dealers and others at prices lower than the offering price stated on the cover page hereof. The offering price may be changed from time to time by the Underwriter.
MUNICIPAL ADVISOR
The City has retained NHA Advisors, LLC, San Rafael, California, as municipal advisor (the “Municipal Advisor”) in connection with the preparation of this Official Statement and with respect to the issuance of the Notes. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor is a municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The Municipal Advisor’s compensation is contingent upon the delivery of the Notes.
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RATING
Moody’s Investor Services Inc. has assigned a rating to the Notes as shown on the cover of this Official Statement. The City supplied certain information to the rating agency to be considered in evaluating the Notes. The rating issued reflects only the views of such rating agency, and any explanation of the significance of such rating should be obtained from the rating agency. There is no assurance that the rating will be retained for any given period of time or that the same will not be revised downward or withdrawn entirely by such rating agency if, in its judgment, circumstances so warrant. Any downward revision or withdrawal of the rating obtained may have an adverse effect on the market price of the Notes.
ADDITIONAL INFORMATION
The purpose of this Official Statement is to supply information to purchasers of the Notes. Quotations from and summaries and explanations of the Notes and the Resolution and of statutes and documents contained herein do not purport to be complete, and reference is hereby made to the Resolution, statutes and documents for full and complete statements of their provisions. Additional information can be obtained from the City’s Director of Finance.
This Official Statement speaks only as of its date, and the information presented in this Official Statement is subject to change. Any statements in this Official Statement involving matters of opinion, whether or not expressly stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement among the City and any purchaser or owners of the Notes. This Official Statement and its distribution have been authorized and approved by the City Council of the City.
CITY OF BERKELEY, CALIFORNIA
By: City Manager
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APPENDIX A
CERTAIN INFORMATION CONCERNING THE CITY OF BERKELEY
Introduction
The City of Berkeley, California (the “City”) is located in Alameda County (the “County”) on the east side of the San Francisco Bay, approximately 10 miles northeast of San Francisco. The City encompasses a total area of approximately 19 square miles and had an estimated population of 121,238 as of January 1, 2017, giving it the highest population density of any city in the East Bay. The City is defined to a large degree, both culturally and economically, by the presence of the University of California campus located on the eastern side of the City. The University of California is a major component of the City's economy, employing approximately 12,700 full- and part-time workers.
The City is among the oldest in California. The City was founded in 1864, incorporated as a town in 1878, and incorporated as a City in 1909. The City's first charter was adopted in 1895.
Population
Population figures for the City, County and State for the last five years are shown in the following table.
CITY OF BERKELEY Population Estimates As of January 1
City of County of State of Year Berkeley Alameda California 2013 116,118 1,555,241 38,030,609 2014 117,383 1,574,497 38,357,121 2015 118,780 1,594,569 38,714,725 2016 119,915 1,627,865 39,255,883 2017 121,238 1,645,359 39,523,612
Source: State Department of Finance estimates (as of January 1).
City Government
The City operates under a Council-Manager form of government. The City is governed by a nine-member City Council, eight of whom are elected by district, plus the Mayor, who is elected on a city-wide basis. The Mayor and the City Council members serve four-year terms. The Council appoints a City Manager who is responsible for daily administration of City affairs and preparation and submission of the annual budget under the direction of the Mayor and the City Council for the Mayor's submission to the City Council. The City Manager appoints a Director of Finance to supervise the City's financial affairs. The Director of Finance also serves as the City's Treasurer.
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The City Attorney, City Clerk and Director of Finance are appointed by the City Manager subject to City Council approval. The City Auditor is elected at the same time as the Mayor.
Member District Term Expires Jesse Arreguin Mayor 11/30/2020 Linda Maio 1 11/30/2018 Cheryl Davila 2 11/30/2020 Ben Bartlett 3 11/30/2020 Kate Harrison 4 11/30/2018 Sophie Hahn 5 11/30/2020 Susan Wengraf 6 11/30/2020 Kriss Worthington 7 11/30/2018 Lori Droste 8 11/30/2018
CITY FINANCIAL INFORMATION
Accounting Policies and Financial Reporting
The accounts of the City are organized on the basis of funds and account groups, to account for different activities. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, 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. The City’s general fund and other governmental fund types use the modified accrual basis of accounting. All of the City’s other funds, including proprietary fund types and fiduciary fund types use the accrual basis of accounting. The basis of accounting for all funds is more fully explained in the “Notes to the Financial Statements” contained in APPENDIX B.
The City Council employs, at the beginning of each fiscal year, an independent certified public accountant who, at such time or times as specified by the City Council, at least annually, and at such other times as he or she shall determine, examines the combined financial statements of the City in accordance with generally accepted auditing standards, including such tests of the accounting records and such other auditing procedures as such accountant considers necessary. As soon as practicable after the end of the fiscal year, a final audit and report is submitted by such accountant to the City Council and a copy of the financial statements as of the close of the fiscal year is published.
The City, all its funds and the funds of certain other component entities of the City are audited annually by a certified public accounting firm. The firm of Badawi and Associates, Certified Public Accounts, Oakland, California, is the City’s current auditor (the “Auditor”). The comprehensive annual financial report of the City for fiscal year 2015-16 is attached hereto as APPENDIX B. The City’s financial statements are public documents and are included within this Official Statement without the prior approval of the Auditor.
The Governmental Accounting Standards Board (“GASB”) published its Statement No. 34 “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments” on June 30, 1999. Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United
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States. Generally, the basic financial statements and required supplementary information should include (i) Management’s Discussion and Analysis; (ii) government-wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmental funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City’s financial statements are prepared in conformance with the requirements of Statement No. 34.
Comparative Financial Statements
The following tables provide a four-year history of the City’s Comparative Balance Sheet, General Fund revenues, expenditures, transfers, and ending fund balances.
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CITY OF BERKELEY GENERAL FUND BALANCE SHEET (Fiscal Year Ending June 30) (Dollar amounts in thousands)
Actual Actual Actual Actual 2012-13 2013-14 2014-15 2015-16 ASSETS: Cash and investments in treasury* $59,334 $67,259 $74,532 $82,615 Receivables (net of allowance where applicable): Accounts 12,666 13,472 6,310 7,072 Interest 542 608 507 534 Taxes 6,184 6,355 5,329 9,421 Due from other funds 5,328 2,415 4,465 2,920 Due from Components Units ------Notes receivable 3,648 3,648 3,648 3,595 Other 553 544 477 353 Total assets 88,255 94,301 96,267 106,512
LIABILITIES: Accounts payable 4,771 4,974 5,500 1,768 Accrued salaries and wages 2,456 2,941 3,531 4,502 Deposits held 902 943 883 840 Deferred revenue 11,068 -- 4,493 -- Other liabilities 3,146 3,805 3,578 3,706 Tax and revenue anticipation notes 25,000 24,995 24,995 24,995 Total liabilities 47,342 37,658 42,980 35,811
FUND BALANCES Reserved for: Encumbrances/Assigned to 2,002 10,954 3,831 3,686 Notes receivable/Nonspendable 3,648 3,648 3,648 3,595
Unreserved/Unassigned, report in: General fund 35,261 39,214 45,810 57,743 Total fund balances 40,912 45,692 53,289 65,025
Total liabilities and fund balances $88,255 $94,301 $96,269 $106,512
* Cash and investments in treasury includes restricted cash and investments. Source: City of Berkeley, Comprehensive Annual Financial Reports for 2012-13 through 2015-16
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CITY OF BERKELEY STATEMENT OF GENERAL FUND REVENUES, EXPENDITURES AND BALANCES (Fiscal Year Ending June 30) (Dollar amounts in thousands)
Revised Actual Actual Actual Actual Budget 2012-13 2013-14 2014-15 2015-16 2016-17 REVENUES: Taxes $109,027 $115,220 $120,869 $133,249 $130,478 Licenses and Permits 545 578 494 323 675 Subvention and Grants/Intergovernmental 9,605 10,122 10,686 11,208 10,807 Service Fees 8,288 8,431 9,899 9,528 8,397 Fines and Forfeitures 8,342 8,048 5,943 6,371 7,280 Rents 120 108 537 215 144 Franchises 1,810 1,834 1,821 1,673 1,827 Interest 1,707 3,431 2,349 1,784 2,200 Other 522 524 439 48 170 TOTAL REVENUES 139,966 148,308 153,037 165,400 161,978
EXPENDITURES: General Government 27,038 26,345 27,953 28,244 39,263 Public Safety 80,898 83,295 84,925 89,076 91,524 Highways and Streets 1,383 1,087 1,193 1,337 2,034 Health and Human Services 6,475 6,602 6,761 7,354 9,528 Culture-Recreation 5,156 5,260 5,452 5,848 5,724 Community Development 6,231 6,631 6,647 6,057 6,798 Economic Development 1,884 1,990 1,949 2,325 2,542 Debt Service 103 106 85 372 200 TOTAL EXPENDITURES 129,259 131,315 134,967 140,512 157,613
Excess Revenues Over (Under) Expenditures 10,707 16,992 18,070 24,788 4,365
Transfers In(out)/Other (7,164) (12,213) (10,472) (13,052) (15,798)
Net Change in Fund Balance 3,543 40,912 7,598 11,735 (11,433)
Fund Balance, July 1 38,069 4,779 45,692 53,289 65,025 Prior Period Adjustment (700) ------
Fund Balance, June 30* $40,912 $45,692 $53,289 $65,025 $53,592
* Totals may not add due to rounding. Source: City of Berkeley Comprehensive Annual Financial Reports; City of Berkeley for Fiscal Year 2016-17 Budget.
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General Fund Budget
Budgetary Process and Administration. The City employs a two-year budget process. In year one of the biennial budget cycle, the City Council formally adopts authorized appropriations for the first fiscal year and approves “planned” appropriations for the second fiscal year. In year two, the City Council considers revisions and formally adopts authorized appropriations for the second fiscal year. Although the budget cycle covers a two-year period, the City Charter requires that the City Council adopt an annual appropriations ordinance for each budget year.
From about January to May of each year, the City Council meets in public to discuss policies and priorities for the upcoming budget. The City Manager prepares a proposed budget based on input from department heads, and presents this to the City Council by the first Monday in May of a budget year or as fixed by the City Council. The City also maintains additional budgetary controls to ensure compliance with the annual appropriated budget. The City Manager is authorized to transfer budgeted amounts within funds as deemed necessary to meet the City’s needs; however, revisions that alter the total budget or move amounts from one fund to another must be approved by the City Council.
See “SECURITY FOR AND SOURCES OF PAYMENT OF THE NOTES – The City’s Approach to Budgeting and Current Budget Status” in the body of this Official Statement.
Revenues and expenditures relating to the City’s general governmental operations are budgeted and accounted for in the City’s general fund, including public safety, highways and streets, health and welfare, culture and recreation, community development, housing and economic development. General taxes and fees support most of these activities. The “business” or proprietary activities of the City are accounted for in each of eight enterprise funds, which include those established for Refuse Collection, Marina Operations, Sanitary Sewers, Clean Storm Water, Permit Service Center, Off-Street Parking, Parking Meter, and Building Purchases & Management. These activities are intended to be completely or largely self-supporting through user fees and charges.
The balance of this Appendix is concerned with the operations and performance of the City’s General Fund, unless otherwise noted.
Adopted Biennial Budget; Fiscal Year 2017 Mid-Year Budget Update. The City is currently in the second year of its adopted fiscal year 2015-16 and 2016-17 budget (the “Fiscal Year 2016 & 2017 Adopted Budget”). The Fiscal Year 2017 Mid-Year Budget Update projects a $7,300,000 increase in General Fund revenues over the amounts contained in the adopted budget for fiscal year 2016-17. The increase is due to an expected increase in property transfer tax revenue of $7,000,000 (see “– Property Transfer Tax”), and in sales tax revenue of $300,000, over the respective amounts budgeted in the Fiscal Year 2016 & 2017 Adopted Budget. The Fiscal Year 2017 Mid-Year Budget Update also reports that General Fund expenditures are tracking amounts budgeted in the Adjusted Budget approved by City Council on November 29, 2016, which included an additional appropriation of $16,200,000 for projects and programs that were not completed in fiscal year 2015-16 and were carried forward into fiscal year 2016-17. In addition, although several departments are projecting savings, these savings will be absorbed by the Policy and Fire departments, which are projected to exceed their budgets by $1,100,000 and $571,001, respectively. The majority of costs are tied to overtime tied to additional services and increased hiring.
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General Fund Reserves
Establishment of General Fund Reserve. On December 13, 2016, the City Council adopted a General Fund reserve policy, establishing a General Fund reserve (the “Reserve”), to prepare for the impact of economic cycles and catastrophic events and assure fluctuations in revenue do not impede the City’s ability to meet expenditure obligations. When revenues fail to meet the City’s normal operating requirements, or the need for disbursements temporarily exceeds receipts, the Reserve, upon a majority vote of the City Council, may be used in accordance with the standards set forth herein.
The Reserve is composed of two elements: a Stability Reserve and a Catastrophic Reserve:
1) A Stability Reserve is maintained to mitigate loss of service delivery and financial risks associated with unexpected revenue shortfalls during a single fiscal year or during a prolonged recessionary period. The purpose of the Stability Reserve is to provide fiscal stability in response to unexpected downturns or revenue shortfalls, and not to serve as a funding source for new programs or projects.
2) A Catastrophic Reserve is maintained for the purpose of sustaining General Fund operations in the case of a public emergency, such as a natural disaster or other catastrophic event. The Catastrophic Reserve will be used to respond to extreme, onetime events, such as earthquakes, fires, floods, civil unrest, and terrorist attacks. The Catastrophic Reserve will not be accessed to meet operational shortfalls or to fund new programs or projects.
The Reserve is accounted for in the Unassigned fund balance of the City’s balance sheet.
Target Reserve Levels. Fifty-five percent of the Reserve is allocated to the Stability Reserve and 45% to the Catastrophic Reserve.
The short-term goal for the Reserve is a minimum of 13.8% of 2016-17 adopted General Fund revenues; the intermediate goal for the Reserve is a minimum of 16.7% of adopted General Fund revenues by the end of fiscal year 2019-20 (the “Intermediate Goal”); the long- term goal for the Reserve is a minimum of 20% of the adopted General Fund revenues, to be achieved within no more than 10 years of the adopted of the General Fund Reserve Policy (“Long-Term Goal”). Based on a risk assessment (according to best practices), to be updated at least every five years, the City Council may consider increasing or lowering the Reserve level.
Replenishment of the General Fund Reserve. The City Manager will recommend a replenishment schedule for all monies proposed for appropriation from the Reserve. The replenishment schedule will be adopted simultaneous with the appropriation to withdraw Reserve funds or, if infeasible due to emergency circumstances, no more than three months from the date of the withdrawal appropriation. Repayment shall begin no more than five years from the date of withdrawal and be completed within 10 years from the date of withdrawal.
While staff envisions that, in most cases, repayment will start as soon as possible, the repayment guidelines are meant to reflect a commitment to maintain a sufficient Reserve, while
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also recognizing that a use of Reserve amounts may occur during an economic downturn and it may be necessary to postpone repayment while the economy improves.
State Budget and its Impact on the City
Fiscal Year 2017-18 State Budget. Information about the fiscal year 2017-18 State budget and other State budgets is regularly available at various State-maintained websites. An impartial analysis of the budget is posted by the Legislative Analyst Office at www.lao.ca.gov. In addition, various State official statements, many of which contain a summary of the current and past State budgets, may be found at the website of the State Treasurer, www.treasurer.ca.gov. The information referred to in this paragraph is prepared by the respective State agency maintaining each website and not by the City or Underwriter, and the City and Underwriter take no responsibility for the continued accuracy of the Internet addresses or for the accuracy or timeliness of information posted there, and such information is not incorporated in this Official Statement by these references.
Dissolution of Redevelopment Agencies. State legislation enacted as part of the 2011 Budget Act, and upheld by the California Supreme Court, resulted in the formal dissolution of redevelopment agencies, including the Berkeley Redevelopment Agency (the “Former Redevelopment Agency”), effective as of February 1, 2012. The impact on the City’s General Fund of the dissolution of the Former Redevelopment Agency is minimal because the City is in the process of winding down its redevelopment program, and the funding the City received from the Former Redevelopment Agency prior to its dissolution only supported 1.5 full-time employees.
Ad Valorem Property Taxes
Tax Levies and Collections. Property taxes account for approximately 29% of the City’s general fund revenues for fiscal year 2015-16. Taxes are levied for each fiscal year on taxable real and personal property that is situated in the City as of the preceding January 1. A supplemental roll is developed when property changes hands, which produces additional revenue.
A ten percent penalty attaches to any delinquent payment for secured roll taxes. In addition, property on the secured roll with respect to which taxes are delinquent becomes tax- defaulted. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty to the time of redemption. If taxes are unpaid for a period of five years or more, the property is subject to auction sale by the County Tax Collector.
In the case of unsecured property taxes, a 10% penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of 1.5% per month begins to accrue beginning November 1 of the fiscal year, and a lien is recorded against the assesse. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on specific property of the taxpayer; (3) filing a certificate of delinquency for recording in the County Recorder’s office in order to obtain a lien on specified property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assesse.
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The County levies (except for levies to support prior voter-approved indebtedness) and collects all property taxes for property falling within that county’s taxing boundaries.
The following is a table summarizing the historical and current assessed valuation of the taxable property in the City.
CITY OF BERKELEY ASSESSED VALUATION 2007-08 TO 2016-17
Fiscal Year Local Secured Utility Unsecured Total Percent Change
2007-08 $11,160,531,045 $1,324,910 $606,785,227 $11,768,641,182 -- 2008-09 11,918,409,630 473,910 671,983,004 12,590,866,544 6.99% 2009-10 12,085,578,735 473,910 720,264,455 12,806,317,100 1.71 2010-11 12,147,575,627 555,664 677,887,524 12,826,018,815 0.15 2011-12 12,525,929,662 555,664 667,789,011 13,194,274,337 2.87 2012-13 12,834,926,300 555,664 673,174,230 13,508,656,194 2.38 2013-14 13,686,258,913 555,664 677,170,723 14,363,985,300 6.33 2014-15 14,116,003,890 630,615 658,143,878 14,774,778,383 2.86 2015-16 15,224,697,461 388,860 702,428,523 15,927,514,844 7.80 2016-17 16,200,483,693 388,860 711,062,469 16,911,935,022 6.18
Source: Alameda County Auditor-Controller
The City does not participate in the Teeter Plan. The following table shows secured tax charges and delinquencies within the City during the past 10 years.
CITY OF BERKELEY SECURED TAX CHARGES AND DELINQUENCIES 2006-07 TO 2015-16 (Dollar amounts in thousands)
Amount Delinquent % Delinquent Fiscal Year Secured Tax Charge(1) June 30 June 30
2006-07 $33,552,146.54 $1,189,361.30 -- 2007-08 36,038,297.51 1,680,289.97 4.66% 2008-09 38,438,858.24 1,757,281.78 4.57 2009-10 38,834,067.28 1,222,174.35 3.15 2010-11 38,858,160.99 937,557.29 2.41 2011-12 40,085,111.77 814,536.14 2.03 2012-13 40,863,072.01 588,607.19 1.44 2013-14 43,482,172.03 491,490.18 1.13 2014-15 45,452,269.29 477,676.28 1.05 2015-16 48,936,168.63 607,465.93 1.24
(1) 1% General Fund apportionment. Source: California Municipal Statistics, Inc.
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Tax Rates. The table below shows historical property tax rates within the City:
CITY OF BERKELEY TYPICAL TAX RATE PER $100 ASSESSED VALUATION (TRA 13-000 – 2016-17 Assessed Valuation: $16,911,935,022)
Fiscal Fiscal Fiscal Fiscal Fiscal Year Year Year Year Year 2012-13 2013-14 2014-15 2015-16 2016-17 Countywide Rate $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 Berkeley Unified School District Bonds .1406 .1544 .1353 .1321 .1327 Peralta Community College District .0434 .0419 .0412 .0337 .0256 Bay Area Rapid Transit .0043 .0075 .0045 .0026 .0080 East Bay Regional Park District .0051 .0078 .0085 .0067 .0032 East Bay Municipal Utility District .0068 .0066 .0047 .0034 .0028 City of Berkeley .0470 .0535 .0505 .0433 .0445 Total $1.2472 $1.2717 $1.2447 $1.2218 $1.2168
Source: Alameda County Auditor-Controller
Principal Taxpayers. The twenty largest taxpayers in the City, as shown on the 2016- 17 secured tax roll, and the amounts of their assessed valuation for all taxing jurisdictions within the City, are shown below.
CITY OF BERKELEY LARGEST 2016-17 LOCAL SECURED TAXPAYERS
2016-17 % of Property Owner Primary Land Use Assessed Valuation Total (1) 1. Bayer Healthcare LLC Industrial $ 292,944,903 1.80% 2. EQR Acton Berkeley LP Apartments 151,278,534 0.93 3. Granite Library Gardens LP Apartments 73,918,097 0.45 4. CVBAF ACQ LLC Apartments 70,946,704 0.43 5. Hanumandla J. and Hanumandla R. Reddy Trust Apartments 67,199,275 0.41 6. CPF Berkeley Varsity LLC Apartments 50,920,000 0.31 7. Essex Berkeley 4th Street LP Apartments 49,127,223 0.30 8. SC Hillside Berkeley Inc. Apartments 48,496,723 0.30 9. 1950 MLK LLC Apartments 38,182,929 0.23 10. Ed Roberts Campus Office Building 37,462,707 0.23 11. Fifth & Potter Street Associates LLC Industrial 37,292,629 0.23 12. DS Gilman Village LP Shopping Center 33,831,174 0.21 13. 7th Street Properties II Industrial 29,929,087 0.18 14. Archstone Southwest Berkeley LLC Apartments 29,837,576 0.18 15. Numano Sake Company Inc. Industrial 29,467,257 0.18 16. BVP Fulton LLC Apartments 29,456,798 0.18 17. 2600 Tenth Street LLC Office Building 29,035,743 0.18 18. Mach I GE Campanile LLC Apartments 28,626,515 0.18 19. Garr Land & Resource Management, Inc. Industrial 28,565,822 0.18 20. Raaj Berkeley Owner LLC Hotel 28,018,538 0.17 $1,184,538,234 7.26%
______(1) 2016-17 Local Secured Assessed Valuation: $16,317,650,893. Source: California Municipal Statistics, Inc.
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Other General Fund Revenues
In addition to property taxes, the City has several other major tax and fee revenue sources, as described below. The following table summarizes the City’s actual general fund revenues from fiscal year 2012-13 through fiscal year 2015-16 (actuals) and fiscal year 2016-17 (budgeted) revenues.
CITY OF BERKELEY GENERAL FUND REVENUES
Revised
Actual Actual Actual Actual Budget Revenue Revenue Revenue Revenue Revenue FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Real Property $40,210,337 $42,181,381 $44,187,339 $48,046,766 $48,715,854 Property Transfer Tax 11,663,871 14,017,607 15,178,243 17,452,190 17,500,000 Unsecured Property 2,298,522 2,496,321 2,602,010 2,661,235 2,936,296 Sales Tax 15,708,700 16,500,324 16,708,652 17,656,894 18,101,700 Business License 15,386,878 15,370,377 16,102,327 18,089,403 16,483,200 Hotel Tax 5,562,168 6,169,161 7,038,640 7,813,366 7,152,440 Utility Users Tax 14,350,002 14,321,714 14,302,057 14,211,318 14,291,500 Vehicle In-Lieu 8,738,075 9,277,702 9,616,322 10,308,802 10,269,057 Parking Fines 8,484,032 6,850,399 6,932,288 6,134,784 7,017,500 Moving Violations 248,798 670,363 673,244 252,752 235,069 Interest 3,320,372 2,465,334 2,650,102 2,465,654 2,200,00 Service Fees 8,170,473 8,463,613 9,556,323 9,439,102 8,397,308 Soda Tax -- -- 242,986 1,712,891 1,600,000 SUB-TOTAL $134,142,228 $138,784,296 $145,547,547 $154,532,266 154,899,9924 Other Revenues 16,023,652 16,431,847 18,450,547 19,823,406 16,171,567 TOTAL $150,165,880 $155,216,143 $163,997,992 $174,355,672 $171,071,491
Source: City of Berkeley FY 2017 Mid-Year Budget Update; City of Berkeley Budget Office. Revenues were recorded using the budget basis of accounting (i.e Cash).
Sales and Use Tax. The sales tax is an excise tax imposed on retailers for the privilege of selling or leasing tangible personal property. The use tax is an excise tax imposed for the storage, use, or other consumption of tangible personal property purchased from any retailer. The total sales tax rate within the City is currently 9.25%. The proceeds of sales and uses taxes imposed within the City are distributed by the State to various agencies, with the City receiving 1.0% of the amount collected.
Collection of the sales and use tax is administered by the California State Board of Equalization. Under its procedures, the State Board of Equalization projects receipts of the sales and use tax on a quarterly basis and remits an advance of the receipts of the sales and use tax to the City on a monthly basis. The amount of each monthly advance is based upon the State Board of Equalization’s quarterly projection. During the last month of each quarter, the State Board of Equalization adjusts the amount remitted to reflect the actual receipts of the sales and use tax for the previous quarter. The Board of Equalization receives an administrative fee based on the cost of services provided by the Board to the City in administering the City’s sales tax, which is deducted from revenue generated by the sales and use tax before it is distributed to the City.
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Total taxable sales during calendar year 2015 in the City were reported to be $1.604 billion, a 3.7% increase over the total taxable sales of $1.547 billion reported during calendar year 2014. Annual figures are not yet available for 2016.
CITY OF BERKELEY TAXABLE TRANSACTIONS (Figures in Thousands)
2011 2012 2013 2014 2015 Retail and Food Services: Apparel Stores $58,189 $58,945 $58,294 $59,369 $57,048 Gen. Merchandise Stores 9,796 10,984 11,876 12,292 15,165 Food Stores 99,355 102,640 113,764 123,572 133,916 Eating and Drinking Places 247,864 274,112 286,626 323,125 347,926 Home Furnishings and Appliances 60,559 63,544 68,097 74,682 74,514 Bldg. Materials, Farm Implements 79,168 83,947 90,090 90,104 98,958 Auto Dealers, Auto Supplies 111,874 129,075 124,818 126,527 125,716 Gas/Service Stations 96,585 104,802 99,403 94,630 83,285 Other Retail Stores 252,917 241,548 240,873 248,626 255,133 Total Retail and Food Services $1,016,307 $1,069,598 1,093,841 1,152,938 1,191,661 All Other Outlets 306,720 353,778 365,931 394,169 413,156 TOTAL ALL OUTLETS $1,323,027 $1,423,376 $1,459,772 $1,547,107 $1,604,817
Source: State Board of Equalization
Factors that have historically affected sales tax revenues include the overall economic growth of the Bay Area, competition from neighboring cities, the growth of specific industries within the City, the City’s business attraction and retention efforts, and catalog and Internet sales. In fiscal year 2015-16, revenues from sales and use taxes increased by 5.7% from fiscal year 2014-15. The 2017 Mid-Year Budget Update projects that sales tax revenues will be approximately $18.1 million, which is $300,000 higher than the $17.8 million budgeted in the Fiscal Year 2016 & 2017 Adopted Budget.
Utility Users Tax. The City imposes a 7.5% tax on users of gas, electricity and telephone, as well as cellular telephone services for billing addresses within the City. The tax is not applicable to State, County, or City agencies, or to insurance companies and banks. Some of the factors affecting this revenue stream include consumer demand for these utilities, legislative and regulatory action, rate changes, and the evolution of technology. Telecommunications and cable generated approximately 24% of this revenue in fiscal year 2015-16, with revenue from gas and electricity usage generating approximately 76%. Electricity and gas rates are expected to be higher, but reductions in usage should partially offset the effect of the rate increases. In fiscal year 2015-16, revenues from utility users taxes decreased by 0.63% from fiscal year 2014-15.
Business License Tax. The City requires all businesses within the City to be licensed and imposes a business license tax on all business locations and a new license registration fee on applicants for a new license. The annual tax is generally determined based on the type of business and the business’s gross receipts. The tax rate varies between $0.60 per $1,000 gross receipts for grocers, on the low end, and $25.00 per $1,000 gross receipts for cannabis clubs on the high end. Most types of businesses are required to pay a minimum tax of at least $51 per year. The overall revenue from this tax is dependent on the number of license renewals each year and the growth of businesses and industries within the City and the Bay Area more generally. In fiscal year 2015-16, revenues from the business license tax increased by 12.34% from fiscal year 2014-15.
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Property Transfer Tax. The City collects a 1.5% tax on the value of any documented sale or transfer of real property within the City. The tax is due when the transfer is recorded with the County. Title companies collect the tax as part of the sale closing process and remit the funds to the County when sales or transfers are finalized. The County remits the amounts due monthly, and the amounts are credited to the general fund. A buyer of residential housing built before 1989 may voluntarily choose to reserve up to one-third of the transfer tax to perform seismic upgrades. Buyers typically have up to one year to complete the work and file for a rebate. Previously the title companies held the reserved amount in escrow until the work was completed, but since May 2007, the City has held the money in escrow accounts, with the interest going to the City. In fiscal year 2015-16, revenues from property transfer taxes increased by 14.98% from fiscal year 2014-15. The 2017 Mid-Year Budget Update projects that property transfer tax revenues will be $17,500,000, a $7,000,000 increase over the $10,500,000 budgeted in the Fiscal Year 2016 & 2017 Adopted Budget.
It is the City Council’s policy that property transfer tax in excess of $10.5 million is treated as one-time revenue to be transferred to the Capital Improvement Fund for capital infrastructure needs.
Parking Fines. The City issues and adjudicates citations and civil penalties for parking violations through its own administrative structure. It has a great degree of control over the administration of parking fines, although issuing agencies within the County try to standardize parking penalties to the extent possible. Revenue from parking fines is affected by the penalties imposed for violations, the number of employees issuing tickets, how many tickets employees are able to issue, and the number of working parking meters, among other factors. Currently, the City must remit an additional $12.50 per citation to the State/County for State and County construction funds, Maddy emergency medical fund, and DNA identification fund. In fiscal year 2015-16, revenues from parking fines decreased by 1.83% from fiscal year 2014-15.
Vehicle in Lieu Fees. Vehicle license fees (“VLF”) imposed for the operation of vehicles on state highways are collected by the State Department of Motor Vehicles in lieu of personal property taxes on vehicles. In connection with the offset of the VLF, the State Legislature authorized appropriations from the State General Fund to “backfill” the offset so that local governments, which receive all of the vehicle license fee revenues, would not experience any loss of revenues. The legislation that established the VLF offset program also provided that if there were insufficient State General Fund moneys to fully “backfill” the VLF offset, the percentage offset would be reduced proportionately (i.e., the license fee payable by drivers would be increased) to assure that local governments would not be underfunded.
As part of the 2004 Budget Act negotiations, an agreement was made between the State and local government officials under which the VLF rate was permanently reduced from 2% to 0.65%. In order to protect local governments, the reduction in VLF revenue to cities and counties from this rate change was replaced by an increase in the amount of property tax they receive. Commencing in fiscal year 2004-05, local governments began to receive their full share of replacement property taxes, and those replacement property taxes now enjoy constitutional protection against certain transfers by the State because of the approval of Proposition 1A at the November 2004 election.
As a part of its fiscal year 2009-10 budget, California increased the vehicle license fee from 0.65% to 1.15% for registration fees due on or after the May 19, 2009 special election. This provision expired on July 1, 2011. On July 1, 2011, vehicle license fees returned to 0.65%, and
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the City is unaware of any current State legislative efforts likely to increase these in fees in the future.
In fiscal year 2015-16, the VLF revenues increased by 7.20% from fiscal year 2014-15.
Sugar Tax. In 2015, the voters approved a one-cent per ounce excise tax on sugar- sweetened beverages. In fiscal year 2015-16 revenues from the soda tax were approximately $1.8 million. The Fiscal Year 2017 Mid-Year Budget Update projects that the City will receive $1.6 million in revenues in fiscal year 2016-17 from the soda tax.
Other Revenues. The City also collects additional general fund revenues from franchise fees, transient occupancy taxes, ambulance fees, and other more minor sources. Under the City’s cable and electric and gas franchise fee arrangements, the local cable provider pays an annual franchise fee of 5% of gross revenues, and the electricity and gas providers pay the greater of 2% of gross receipts attributable to miles of line operated or 0.5% of gross receipts. The transient occupancy tax, also known as the hotel tax, is a 12% tax on the room charge for rental of transient lodging; it is paid by the hotel guest. The City also has an agreement with the County to be the exclusive provider of all emergency ground ambulance services within the City; the specific ambulance fee depends on the type of service delivered and is billed to clients or their insurance companies. Finally, other more minor revenue sources include payments for moving violations, interest on existing funds, and other service fees.
Retirement Programs
PERS Plan Description. The City contributes to three plans in California Public Employees’ Retirement System (“PERS”). The first plan covers all of the City’s full-time and part-time benefited sworn uniformed fire employees and all chiefs (and is referred to as the Safety Fire Plan in this Official Statement). The second covers all of the City’s full-time and part- time benefited sworn uniformed police employees and all chiefs (and is referred to as the Safety Police Plan in this Official Statement). The third plan covers all remaining eligible City employees (and is referred to as the Miscellaneous Plan in this Official Statement). These plans are agent multiple-employer defined benefit pension plans administered by PERS, which acts as a common investment and administrative agent for participating public employers within the State of California.
PERS Plan Eligibility. For a more detailed discussion of the eligibility requirements for the City’s PERS retirement plans, see Appendix B, Note III(C).
PERS Plan Contributions. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the PERS Board of Administration (the “Board of Administration”). The required employer contribution rate for fiscal year 2015-16 was 24.0%, 36.6%, and 48.6% of annual covered payroll for Miscellaneous Plan, Safety Fire Plan and Safety Police Plan employees, respectively; for fiscal year 2016-17, the rates are 25.9%, 38.8% and 52.1%, respectively; for fiscal year 2017-18, the rates are 27.90%, 39.90%, and 56.60%, respectively. The contribution requirements of the plan members are established by State statute, and the employer contribution rates are established and may be amended by PERS.
Implementation of GASB Nos. 68. Commencing with fiscal year ended June 30, 2015, the City implemented the provisions of GASB Statement Nos. 68, which require certain new pension disclosures in the notes to its audited financial statements commencing with the audit
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for fiscal year 2014-15. Statement No. 68 generally requires the City to recognize its proportionate share of the unfunded pension obligation by recognizing a net pension liability measured as of a date (the measurement date) no earlier than the end of its prior fiscal year. As a result of the implementation of GASB Statement Nos. 68, the City reflected a restatement of its beginning net position as of July 1, 2014.
For a more detailed discussion of the eligibility requirements for the City’s retirement plans, see Appendix B, Note III(C) for detailed information about the actuarial assumptions underlying the contributions.
The City’s fiscal year 2015-16 contributions to the pension plans and the funded status of the pension plans are set forth below.
Plan Plan Net Fiduciary Net Pension Position as a Liability as a Percentage Percentage of the Total Covered of Covered Fiscal Year Total Pension Plan Fiduciary Contributions Net Pension Pension Employee Employee Ended Liability Net Position Employer Liability Liability Payroll Payroll PERS – Miscellaneous Plan 6/30/2016 902,228,876 $641,339,412 $20,032,929 $260,889,464 71.08% $85,480,937 305.20%
PERS – Public Safety Fire Plan 6/30/2016 $246,704,540 $176,593,232 $5,967,197 $70,111,308 71.58% $16,185,414 433.18%
PERS – Public Safety Police Plan 6/30/2016 $372,226,444 $226,135,306 $10,777,599 $146,091,138 60.75% $22,289,585 655.42%
Recent Actions by PERS. At its April 17, 2013, meeting, the Board of Administration approved a recommendation to change the PERS amortization and smoothing policies. Prior to this change, PERS employed an amortization and smoothing policy that spread investment returns over a 15-year period with experience gains and losses paid for over a rolling 30-year period. After this change, PERS will employ an amortization and smoothing policy that will pay for all gains and losses over a fixed 30-year period with the increases or decreases in the rate spread directly over a 5-year period. The new amortization and smoothing policy was used for the first time in the June 30, 2013, actuarial valuations in setting employer contribution rates for fiscal year 2015-16.
On February 18, 2014, the Board of Administration approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying to all benefit groups, is a new 20-year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years, the cost of those benefits will increase as a result. The Board of Administration also assumed earlier retirements for Police 3%@50, Fire 3%@55, and Miscellaneous 2.7%@55 and 3%@60, which will increase costs for those groups. As a result of these changes, rates will increase beginning in fiscal year 2016-17 (based on the June 30, 2014 valuation) with full impact in fiscal year 2020-21.
On November 18, 2015, the Board of Administration adopted a funding risk mitigation policy intended to incrementally lower its discount rate - its assumed rate of investment return - in years of good investment returns, help pay down the pension fund's unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. The policy
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establishes a mechanism to reduce the discount rate by a minimum of 0.05 percentage points to a maximum of 0.25 percentage points in years when investment returns outperform the existing discount rate, currently 7.5%, by at least four percentage points. PERS staff modeling anticipates the policy will result in a lowering of the discount rate to 6.5% in about 21 years, improve funding levels gradually over time and cut risk in the pension system by lowering the volatility of investment returns. More information about the funding risk mitigation policy can be accessed through PERS’ web site at the following website address: https://www.calpers.ca.gov/page/newsroom/calpers-news/2015/adopts-funding-risk-mitigation- policy. The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City and is not incorporated in this Official Statement by reference.
On December 21, 2016, the Board of Administration voted to lower its discount rate from the current 7.5% to 7.0% over the next three years according to the following schedule.
Fiscal Year Discount Rate 2017-18 7.375% 2018-19 7.250 2019-20 7.000
For public agencies like the City, the new discount rate would take effect July 1, 2018. Lowering the discount rate means employers that contract with PERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities. Active members hired after January 1, 2013, under the Public Employees' Pension Reform Act will also see their contribution rates rise. The three-year reduction of the discount rate will result in average employer rate increases of about 1 percent to 3 percent of normal cost as a percent of payroll for most miscellaneous retirement plans, and a 2 percent to 5 percent increase for most safety plans. Additionally, many PERS employers will see a 30 to 40 percent increase in their current unfunded accrued liability payments. These payments are made to amortize unfunded liabilities over 20 years to bring the pension fund to a fully funded status over the long-term.
Dollar Contribution Based on Projected PERS Rate Increases. The City’s projected annual financial contributions as a result of the PERS rate changes for the next five years are shown in the table below, with dollar amounts shown in millions:
2016-17 2017-18 2018-19 2019-20 2020-21 Budgeted(1) Projected(1) Projected Projected Projected Miscellaneous(2) $31.08 $32.33 $31.80 $34.71 $37.82 Police 12.17 13.22 14.35 15.41 16.28 Fire 6.08 6.67 7.44 8.13 8.63 Total $49.33 $52.23 $53.59 $58.25 $62.73
(1) Fiscal year 2016-17 and 2017-18 are based on CalPERS' actual rates. Fiscal year 2018-19 through 2020-21 are based on the actuary's projections. Rates used reflect current MOU agreements. (2) Miscellaneous includes the 8% employee share paid by the City on behalf of the employees and negotiated employee contributions to the City’s rate.
Berkeley Police Retirement Income Benefit Plan. Up to December 22, 2012, the City maintained the Berkeley Police Retirement Income Benefit Plan (“BPRIBP”), a single-employer defined benefit income plan, for its police retirees and surviving spouses. Effective September 19, 2012, police retired on or after this date are no longer covered by BPRIBP. The City replaced this plan with the “Retiree Health Premium Assistance Coverage Plan.”
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The City’s fiscal year 2015-16 contribution to the BPRIBP and the funded status of the BPRIBP is set forth below.
Plan Plan Net Fiduciary Net Pension Position as a Liability as a Percentage Percentage of the Total Covered of Covered Fiscal Year Total Pension Plan Fiduciary Contributions Net Pension Pension Employee Employee Ended Liability Net Position Employer Liability Liability Payroll Payroll Berkeley Police Retirement Income Benefit Plan 6/30/2016 $76,422,898 $6,552,208 $1,943,978 $69,870,690 8.57% $19,428,123 10.006%
For a more detailed discussion of the BPRIP, see Appendix B, Note IV(1).
Peace Officers Research Association of California. Effective December 23, 2012, the City established a new sick leave program called Peace Officers Research Association of California (“PORAC”). If a sworn member of the Berkeley Police department has an accrued sick leave balance on December 23, 2012 that exceeds 200 hours, one half of all those hours in excess of 200 shall be maintained in a separate account. The financial value of those hours shall be converted and deposited into the employee’s PORAC medical trust account over five successive years in equal installments commencing on January 1, 2013. The conversion was at the employee’s rate of pay on December 23, 2012. The City may accelerate the payment of hours to be converted. The remaining fifty percent of the sick leave balance in excess of 200 hours was credited into the employee’s separate “catastrophic/service time” bank no later than February 1, 2013, up to a maximum of 500 hours.
The City’s contribution to PORAC for fiscal year ending June 30, 2016 was $711,068.
Safety Members Pension Fund. In addition, the City maintains the Safety Members Pension Fund (“SMPF”), a defined benefit plan for fire and police officers who retired prior to March 1973. In March 1973, all active fire and police officers were transferred from SMPF to PERS. The City pays the benefits to SMPF members on a pay-as-you-go basis, primarily through a Funding Agreement, purchased by the Berkeley Civic Improvement Corporation on behalf of the City in 1989. For the fiscal year ended June 30, 2016, the City’s contribution to SMPF was $1,104,309.
The funded status of the SMPF as of June 30, 2016, the most recent actuarial date, is set forth below:
Unfunded UAAL Actuarial Actuarial as Actuarial Actuarial Accrued Accrued Percentage Valuation Asset Liability-Entry Liability- Funded Covered of covered Date Value Age UAAL Ratio Payroll Payroll Berkeley Safety Members Pension Fund 6/30/2016 $662,934 $3,764,006 $3,101,072 17.61% N/A N/A
For a more detailed discussion of the SMPF, see Appendix B, Note IV(2).
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Post-Employment Health Benefits
The City offers certain post-employment health benefits to retirees. There are three plans: (i) the City of Berkeley Fire Employees Retiree Health Plan (“FRHF”), (ii) the City of Berkeley Miscellaneous Employees Retiree Health Plan (“RHPAP”) and (iii) the Police Retiree Premium Assistance Plan (“PRPAP”).
The City has adopted Government Accounting Standards Board Statement 45 which requires governmental agencies to change their accounting for Other Post-Employment Benefits (“OPEB”) from pay-as-you-go to an accrual basis.
See Appendix B, Note IV for information about the City’s OPEB liabilities.
City of Berkeley Fire Employees Retiree Health Plan. The FRFH is a single-employer defined benefit medical plan. To be eligible for benefits, sworn Fire employees must retire from the City on or after July 1, 1997, be vested in a PERS pension, and retire from the City on or after age 50. Benefits commence immediately upon retirement. Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime. The amount the City contributes toward the Fire Employees Retiree Health Plan is 4.5% per year regardless of the amount of increase in the underlying premium rate. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City Labor Negotiating Team, and are approved by the City Manager and City Council. As of July 1, 2016, there were 125 active employees, 35 retirees deferred and 62 retirees receiving benefits.
The City’s targeted funding policy is equal to the service cost for active employees plus an amount to amortize unfunded liabilities over 30 years (rolling 30-year amortization) as a level percentage of payroll. The City strives to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.
For the FRFH, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for fiscal year 2015-16 and the three preceding years were as follows:
Percentage of Fiscal Year Annual OPEB Net OPEB Ended Annual OPEB Cost Contributed Asset 6/30/2013 $729,963 95% $(38,397) 6/30/2014 829,699 96 (4,948) 6/30/2015 864,975 100 (2,383) 6/30/2016 853,748 98 12,362
The funded status of the FRFH as of July 1, 2016, the date of the most recent actuarial report, is set forth below:
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Actuarial Unfunded UAAL Accrued Actuarial as Actuarial Actuarial Liability Accrued Percentage Valuation Value of (AAL)-Unit Liability- Funded Covered of covered Date Assets Credit UAAL Ratio Payroll Payroll Berkeley Fire Employees Retiree Health Plan (FRHF) 7/1/2016 $9,409,766 $25,274,305 $15,864,539 37.2% $14,714,000 107.8%
The actuarial value of the assets in the FRFH as of July 1, 2016 was equal to their market value.
City of Berkeley Miscellaneous Employees Retiree Health Premium Assistance Plan. The RHPAP is a single-employer defined benefit medical plan. It provides retiree health benefits to eligible retirees and his/her spouse or domestic partner. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City, and are approved by the City Council.
Retirees who are at least age 50, with at least 8 years of service with the City at the time of separation from service are eligible to receive retiree health benefits commencing at age 55. Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime. The City pays the monthly cost of the monthly premiums up to a participant’s applicable percentage of the base dollar amount and subject to annual 4.5% increases regardless of the amount of increase in the underlying premium rate. As of July 1, 2016, there were 1,021 active employees.
The City’s targeted funding policy is equal to the normal cost for active employees plus an amount to amortize unfunded liabilities over 30 years as a level percentage of payrolls. The City is required to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City negotiating staff, and approved by the City Council.
For the RHPAP, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2015-16 and the three preceding years were as follows:
Percentage of Fiscal Year Annual Annual OPEB Net OPEB Ended OPEB Cost Contributed Obligation 6/30/2013 $3,122,564 62.9% $3,375,598 6/30/2014 3,574,421 51.0 5,126,082 6/30/2015 3,785,359 41.0 7,367,230 6/30/2016 3,492,010 52.0 9,050,063
The funded status of the RHPAP as of July 1, 2016, the most recent actuarial report, is set forth below:
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Unfunded UAAL Actuarial Actuarial as Actuarial Accrued Actuarial Accrued Percentage Valuation Liability Value of Liability- Funded Covered of covered Date (AAL) Assets UAAL Ratio Payroll Payroll Berkeley Miscellaneous Employees Retiree Health Plan (RHPAP) 7/1/2016 $55,629,654 $21,019,439 $34,610,215 37.8% $90,188,000 38.4%
The actuarial value of the assets in the RHPAP as of July 1, 2016 was equal to their market value.
Police Retiree Premium Assistance Plan. Effective September 19, 2012, the City replaced the “Berkeley Police Retirement Income Benefit Plan” with the “Retiree Health Premium Assistance Coverage Plan” for any police employees hired on or after that date, as well as any current employees who retire on or after such date. Under the newly established retiree health premium assistance plan, benefits will be the paid by the City directly to the provider who is providing retiree health coverage to the retiree or his or her surviving spouse. The maximum amount will be equal in value to the City sponsored health plan.
In order to be eligible for the Retiree Health Premium Assistance Coverage a “Retiree” must meet all of the following criteria:
(a) A person who is vested in, and (b) Has reached the age of 50, and (c) Has retired from the City at age 50 or thereafter, and (d) Has applied for and is receiving a pension from at the time of retirement.
The maximum amount the City will contribute toward the payment of medical insurance premiums is based on the employee’s years of service as a sworn member of the Berkeley Police Department at time of retirement. The retiree must have at least 10 years of service as a sworn member of the Berkeley Police Department to qualify for this benefit.
Years of Service City Percentage 10 to 14 25% Either the single party or two-party amount 15 to 19 50 Either the single party or two-party amount 20 or more 100 Either the single party or two-party amount
Beginning September 19, 2012, each month after the employee retires the City will pay the health care service provider an appropriate percentage based on years of service above an amount equal to $1,200 per month for two-party coverage for the retiree and a qualifying spouse/domestic partner or $600 per month for single party coverage. Upon death of either the retiree or the retiree’s spouse, the City will only pay the appropriate percentage of the single party rate to the provider on behalf of the surviving retiree or spouse/domestic partner. If there is no spouse/domestic partner at the time of retirement, the City shall only pay the single party rate. The retiree and/or surviving spouse/domestic partner will be responsible for payment of the difference between the amount the City contributes toward payment of the premium and the actual premium cost. The funds for this difference will come from the retirees retirement account and the retiree must authorize such withdrawal of funds.
Beginning July 1, 2013 and effective each July 1 thereafter, the base rates the City contributes toward payment of the premium amount described in the preceding paragraph shall
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be increased by either the amount Kaiser increases the retiree medical premium for that year, or 6%, whichever is less. The retiree and/or surviving spouse/domestic partner shall pay the difference between the amount the City contributes toward payment of the premium and the actual premium cost. As of July 1, 2015, there were 165 active employees and 5 retirees.
The following shows the calculation of the Annual Required Contribution for FY 2015-16:
Amount Normal Cost at Year End $3,489,250 Amortization of UAAL 2,474,831 Annual Required Contribution (ARC) $5,964,081
The actuarial cost method used for determining the benefit obligations is the Projected Unit Credit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on the assumptions and census data described this report. The Actuarial Accrued Liability (AAL) is the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service to data over service at expected retirement. The Normal Cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution, the Unfunded AAL is amortized as a level percentage of payroll over 30 years.
As of July 1, 2016, the most recent actuarial valuation date, the plan was 3.2% funded. The actuarial accrued liability for benefit was $41.0 million, and the actuarial value of assets was $1.3 million, resulting in an unfunded accrued liability of $39.7 million. The fair value of the assets was determined using market values as of the date of the actuarial report. 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. Funded stats of the plan as of July 1, 2016, the most recent actuarial valuation date is as follows:
Actuarial Unfunded UAAL Accrued Actuarial as Actuarial Actuarial Liability Accrued Percentage Valuation Value of (AAL)-Unit Liability- Funded Covered of covered Date Assets Credit UAAL Ratio Payroll Payroll Berkeley Police Employees Retiree Premium Assistance Plan 7/1/2016 $1,312,820 $41,027,517 $39,714,697 3.20% $20,610,000 192.70%
Defined Contribution Plans
The City offers certain supplemental retirement and income plans to retirees. See Appendix B, Note IV(C) for information about the City’s defined contribution plans.
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Labor Relations
As of May 1, 2017, the City employed approximately 1,299 full-time equivalent budgeted employees. There are seven employee unions as shown below. In addition, the City employs approximately 118 unrepresented Executive Management, Confidential professional or Confidential Office support positions. The City has not experienced any work stoppages or strikes by its employees.
CITY OF BERKELEY Labor Relations
Contract Expiration Labor Organization Employees Date
Berkeley Fire Fighters Association/I.A.F.F. Local 1227 6 June 17, 2017(1) Berkeley Police Association 123 June 30, 2017(1) I. B. E. W. Local 1245 159 June 17, 2017(1) Service Employees International Local 1021 12 June 16, 2018 Maintenance and Clerical Chapters Service Employees International Local 1021 421 October 20, 2018 Community Services and Part-Time Recreation Leaders Association Chapters Public Employees Local 1 309 October 29, 2018 Unrepresented Employees 151 None
(1) Terms of contract remain in effect after expiration until new contract becomes effective. Source: City of Berkeley
Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, or restriction of assets; errors or omissions; injuries to employees; or acts of God.
The City is self-insured for liability claims below $350,000. The City is a member of the Bay Cities Joint Powers Insurance Authority (“BCJPIA”). The BCJPIA consists of 20 municipal or public agency members, all located within the metropolitan San Francisco Bay Area. The BCJPIA provides general liability, auto liability, and errors and omissions coverage between $350,000 and $1,000,000. The California Affiliated Risk Management Authority (“CARMA”) provides additional coverage to the BCJPIA and its member entities for claims in excess of $1,000,000, up to $29,000,000.
The City is self-insured for workers’ compensation. Payments are made to the Workers’ Compensation Self-Insurance Internal Service Fund by transfers from the City’s general fund and other funds of the City on a pay-as-you-go basis.
The City requires pre-employment physical examinations for high risk, high hazard employees as well as annual examination for all uniformed officers. As part of its workers’ compensation program, copies of all injured employee medical reports are monitored by a third- party agent to ensure that injured employees receive proper care.
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Existing General Fund Obligations
The City currently has outstanding long-term general fund debt and lease obligations described below. The City has never defaulted on the payment of principal of or interest on any of its indebtedness.
Certificates of Participation. In June 2010, The Bank of New York Mellon Trust Company, N.A., executed and delivered certificates of participation on behalf of the City in the aggregate principal amount of $5,750,000. The City’s underlying rental obligation is a general obligation payable from any available funds of the City. The certificates bear interest at rates between 3.00%-5.75% and the final maturity date is August 1, 2040. As of the date of this Official Statement, the principal balance outstanding was $5,235,000.
Lease Revenue Bonds. In October 2012, the Berkeley Joint Powers Financing Authority (the “Authority”) issued lease revenue bonds on behalf of the City in the aggregate principal amount of $27,260,000 to refund the Authority’s 1999 Lease Revenue Bonds and 2003 Certificates of Participation. The City’s underlying rental obligation is a general fund obligation of the City. The bonds bear interest at rates between 3.00%-5.00%, and the final maturity date is October 1, 2031. As of the date of this Official Statement, the principal balance outstanding was $23,030,000.
Pension Obligation Bonds. In May 1998, the City issued pension obligation refunding bonds in the aggregate principal amount of $12,415,000 to refund the City’s certificates of participation issued in February 1989. The certificates were sold to satisfy a portion of the City’s obligations under an ordinance adopted to provide payments to the Safety Members Pension Fund. The bonds bear an interest rate of 5.00% and the final maturity date is June 1, 2018. As of the date of this Official Statement, the principal balance outstanding was $250,000. The obligation to repay the bonds is a general fund obligation of the City.
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Statement of Direct and Overlapping Debt
The ability of land owners within the City to pay property tax installments as they come due could be affected by the existence of other taxes and assessments imposed upon the land.
The statement of direct and overlapping debt (the “Debt Report”) set forth below was prepared by California Municipal Statistics, Inc. as of May 1, 2017. The Debt Report includes only such information as has been reported to California Municipal Statistics, Inc. by the issuers of the debt described therein and by others. The Debt Report is included for general information purposes only. The City takes no responsibility for its completeness or accuracy.
Direct and Overlapping Bonded Debt (As of May 1, 2017)
2016-17 Assessed Valuation: $17,029,208,422
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 5/1/17 Bay Area Rapid Transit District 2.636% $ 15,820,745 East Bay Municipal Utility District, Special District No. 1 17.475 614,246 Peralta Community College District 18.775 74,063,620 Berkeley Unified School District 99.997 250,787,476 City of Berkeley 100.000 86,465,000 City of Berkeley Community Facilities District No. 1 100.000 3,355,000 East Bay Regional Park District 4.066 5,025,169 City of Berkeley Thousand Oaks Heights AFUU Assessment District 100.000 1,130,000 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $437,261,256
DIRECT AND OVERLAPPING GENERAL FUND DEBT: Alameda County and Coliseum Obligations 6.702% $ 57,446,159 Alameda County Pension Obligation Bonds 6.702 1,857,760 Alameda-Contra Costa Transit District Certificates of Participation 7.937 1,398,896 Peralta Community College District Pension Obligation Bonds 18.775 29,972,006 City of Berkeley Lease Revenue Bonds and Certificates of Participation 100.000 28,265,000 (1) City of Berkeley Pension Obligations 100.000 520,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $119,459,821
COMBINED TOTAL DEBT $556,721,077 (2)
Ratios to 2016-17 Assessed Valuation: Direct Debt ($86,465,000) ...... 0.51% Total Direct and Overlapping Tax and Assessment Debt ...... 2.57% Combined Direct Debt ($115,250,000) ...... 0.68% Combined Total Debt ...... 3.27%
(1) Excludes issue to be sold. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Source: California Municipal Statistics, Inc.
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Employment
The unemployment rate in the Oakland- Hayward-Berkeley MD was 3.9 percent in March 2017, down from a revised 4.0 percent in February 2017, and below the year-ago estimate of 4.5 percent. This compares with an unadjusted unemployment rate of 5.1 percent for California and 4.6 percent for the nation during the same period. The unemployment rate was 3.9 percent in the County and 4.1 percent in Contra Costa County.
The table below list employment by industry group for Alameda and Contra Costa Counties for the years 2012 to 2016.
OAKLAND- HAYWARD-BERKELEY MD (Alameda and Contra Costa Counties) Annual Averages Civilian Labor Force, Employment and Unemployment, Employment by Industry (March 2016 Benchmark)
2012 2013 2014 2015 2016 Civilian Labor Force (1) 1,336,300 1,344,100 1,355,600 1,374,800 1,394,400 Employment 1,218,700 1,245,500 1,275,000 1,308,100 1,334,200 Unemployment 117,500 98,600 80,600 66,700 60,200 Unemployment Rate 8.8% 7.3% 5.9% 4.8% 4.3% Wage and Salary Employment: (2) Agriculture 1,500 1,400 1,300 1,200 1,300 Mining and Logging 900 900 800 900 900 Construction 52,000 56,400 58,600 62,400 67,500 Manufacturing 79,900 80,100 82,800 86,600 89,900 Wholesale Trade 43,700 45,200 46,200 47,600 49,000 Retail Trade 104,100 107,700 109,900 113,000 115,000 Transportation, Warehousing, Utilities 32,900 33,500 35,600 38,300 38,700 Information 22,100 21,500 21,300 22,400 26,400 Finance and Insurance 33,400 33,500 32,600 32,800 40,300 Real Estate and Rental and Leasing 15,400 16,200 16,800 16,800 17,000 Professional and Business Services 166,500 173,400 178,800 183,000 180,800 Educational and Health Services 164,700 170,500 173,100 178,400 184,900 Leisure and Hospitality 91,800 97,200 102,100 106,300 111,400 Other Services 36,400 37,000 37,500 38,000 39,200 Federal Government 14,200 13,800 13,800 13,800 13,900 State Government 38,500 38,900 39,300 39,800 39,800 Local Government 110,100 110,600 113,400 115,200 120,200 Total, All Industries (3) 1,008,000 1,037,500 1,063,600 1,096,300 1,136,100
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (3) Totals may not add due to rounding. Source: State of California Employment Development Department.
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The following tables show the major employers in the City and the County.
CITY OF BERKELEY Major Employers 2016
Number of % of Total Employer Employees Employment University of California Berkeley 14,983 22.30% Lawrence Berkeley National Laboratory 3,363 5.01 Sutter East Bay Hospitals 2,117 3.15 Berkeley Unified School District 1,682 2.50 Bayer Corporation 1,462 2.18 City of Berkeley 1,353 2.01 Siemens Corporation 765 1.14 Kaiser Permanente Medical Group 629 0.94 Berkeley Bowl Produce 597 0.89 FHR Claremont Hotel Management Comp 514 0.77
Source: City of Berkeley, Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016.
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COUNTY OF ALAMEDA Major Employers (Listed Alphabetically) 2017
Employer Name Location Industry Alameda County Law Enforcement Oakland Government Offices-County Alameda County Sheriff's Ofc Oakland Government Offices-County Alameda Health System San Leandro Health Care Management Alta Bates Summit Medical Ctr Berkeley Hospitals Alta Bates Summit Medical Ctr Oakland Hospitals Bayer Health Care Berkeley Laboratories-Pharmaceutical (mfrs) California State-East Bay Hayward Schools-Universities & Colleges Academic Children's Hosp & Research Ctr Oakland Hospitals Coopervision Inc Advanced Pleasanton Optical Goods-Wholesale Dell EMC Pleasanton Computer Software East Bay Water Oakland Transit Lines Highland Hospital Oakland Hospitals Kaiser Oakland Oakland Health Services Life Scan Inc Fremont Physicians & Surgeons Equip & Supls-Mfrs Merritt Pavilion Lab Oakland Laboratories-Medical Oakland Police Patrol Div Oakland Police Departments Residntial Stdents Svc Program Berkeley Schools-Universities & Colleges Academic Safeway Inc Pleasanton Grocers-Retail Tesla Motors Fremont Automobile Dealers-Electric Cars Transportation Dept-California Oakland Government Offices-State University of Ca-Berkeley Berkeley Schools-Universities & Colleges Academic University of CA-BERKELEY Berkeley Schools-Universities & Colleges Academic Valley Care Health System Livermore Health Services Washington Hosp Healthcare Sys Fremont Hospitals Western Digital Corp Fremont Electronic Equipment & Supplies-Mfrs
Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2017 2nd Edition.
Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.”
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The following table summarizes the total effective buying income for the City of Berkeley, the County of Alameda, the State and the United States for the period 2012 through 2016.
CITY OF BERKELEY AND COUNTY OF ALAMEDA Effective Buying Income As of January 1, 2012 through 2016
Total Effective Median Household Buying Income Effective Buying Year Area (000’s Omitted) Income 2012 Berkeley $3,581,245 $46,898 Alameda County 43,677,855 55,396 California 864,088,828 47,307 United States 6,737,867,730 41,358
2013 Berkeley $3,513,983 $48,301 Alameda County 43,770,518 57,467 California 858,676,636 48,340 United States 6,982,757,379 43,715
2014 Berkeley $3,909,548 $52,592 Alameda County 47,744,408 60,575 California 901,189,699 50,072 United States 7,357,153,421 45,448
2015 Berkeley $4,264,478 $56,194 Alameda County 52,448,661 64,030 California 981,231,666 53,589 United States 7,757,960,399 46,738
2016 Berkeley $4,618,113 $59,958 Alameda County 56,091,066 67,631 California 1,036,142,723 55,681 United States 8,132,748,136 48,043
Source: The Nielsen Company (US), Inc.
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Construction Activity
Provided below are the building permits and valuations for the City of Berkeley for calendar years 2011 through 2015. Annual figures are not yet available for calendar year 2016.
CITY OF BERKELEY Total Building Permit Valuations (Valuations in Thousands)
2011 2012 2013 2014 2015 Permit Valuation New Single-family $1,150.3 $1,382.3 $3,462.0 $5,453.0 $2,995.0 New Multi-family 4,500.0 12,100.0 6,261.7 23,757.6 53,876.1 Res. Alterations/Additions 33,936.8 35,020.5 37,857.3 53,835.6 52,549.5 Total Residential 39,587.1 48,502.8 47,581.0 82,946.2 109,420.6 New Commercial 693.5 7,744.6 8,689.9 31,152.1 20,246.9 New Industrial 0.0 110.0 0.0 0.0 0.0 New Other 65.0 0.0 1823.6 12,156.5 7,770.1 Com. Alterations/Additions 43,056.9 30,095.7 37688.6 46,571.3 44,962.7 Total Nonresidential 43,815.4 37,950.3 48,202.1 89,779.9 72,979.7
New Dwelling Units Single Family 4 4 15 15 6 Multiple Family 38 94 45 249 459 TOTAL 42 98 60 264 465
Source: Construction Industry Research Board, Building Permit Summary.
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APPENDIX B
THE CITY’S COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR YEAR ENDED JUNE 30, 2016
B-1 CITY C?F BLRKLLLY CALIFC?RNIA
Comprehensive Annual Financial Report for Year Ended June 30, 2016 CITY OF BERKELEY CALIFORNIA Comprehensive Annual Financial Report
For the fiscal year ended June 30, 2016
Prepared by Finance Department CITY OF BERKELEY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2016
TABLE OF CONTENTS
INTRODUCTORY SECTION Letter of Transmittal 1-22 GFOA Certificate of Achievement 23 Government Structure 24 List of Elected and Appointed Officials 25 Organizational Chart 26
FINANCIAL SECTION Independent Auditor's Report 29-31 Management's Discussion and Analysis 33-49
Basic Financial Statements Government-wide Financial Statements: Statement of Net Position 52 Statement of Activities 53
Fund Financial Statements Governmental Funds: Balance Sheet 54 Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Position - Governmental Activities 55 Statement of Revenues, Expenditures, and Changes in Fund Balances 56 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities - Governmental Activities 57
Proprietary Funds: Statement of Net Position 58 Statement of Revenues, Expenses and Changes in Fund Net Position 59 Statement of Cash Flows 60-61
Fiduciary Funds: Statement of Fiduciary Net Position 62 Statement of Changes in Fiduciary Net Position 63
Notes to the Financial Statements 65-154 Notes to the Private Trust Funds of the Successor Agency 155-156
Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances - General Fund - Budgetary Basis 158 Schedule of Revenues, Expenditures and Changes in Fund Balances - Other Major Special Revenue Funds - Budgetary Basis 159-160 Schedule of Funding Progress - CALPERS, Safety Members Pension Fund (SMPF), Police Retirement Income Benefit Plan, and OPEB Plans 160-172 Note to Required Supplementary Information 173
Other Supplementary Information: Combining and Individual Fund Statements and Schedules: 175
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Major Capital Project Funds - Budgetary Basis 176
Fund legend for Nonmajor Governmental Funds 177-185
Combining Balance Sheet - Nonmajor Governmental Funds 186-194 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 195-203 CITY OF BERKELEY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2016
TABLE OF CONTENTS
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Budget and Actual - Nonmajor Governmental Funds - Budgetary Basis 204-229
Fund legend for Internal Service Funds 230
Combining Statement of Net Position - Internal Service Funds 231 Combining Statement of Revenues, Expenses and Changes in Fund Net Position- Internal Service Funds - Budgetary Basis 232 Combining Statement of Cash Flows - Internal Service Funds 233-234
Fund legend for Fiduciary Funds 235
Combining Statement of Fiduciary Net Position - Pensions and Other Employee Benefit Trust Funds 236 Combining Statement of Changes in Fiduciary Net Position - Pension and Other Employee Benefit Trust Funds 237
Fund legend for Agency Funds 239
Statement of Changes in Assets and Liabilities - Agency Funds 240
STATISTICAL SECTION Index to Statistical Section 243 Financial Trends: Net Position by Component 244 Changes in Net Position 245-247 Fund Balance, Governmental Funds 248 Changes in Fund Balances, Governmental Funds 249-250 Revenue Capacity: Assessed Value and Estimated Actual Values of Taxable Property 251 Direct and Overlapping Property Tax Rates 252 Principle Property Tax Payers 253 Property Tax levies and Collections 254 Debt Capacity: Ratios of Outstanding Debt by Type 255 Ratios of General Bonded Debt Outstanding 256 Direct and Overlapping Governmental Activities Debt 257 Legal Debt Margin Information 258 Demographic and Economic Information: Demographic and Economic Statistics 259 Principal Employers 260 Full-Time-Equivalent City Government Employees by Function/Program 261 Operating Information: Operating Indicators 262-264 Capital Asset Statistics by Function/Program 265
City of Berkeley General Obligation and General Fund Obligations Continuing Disclosure 267-282 Report Information
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL AND ON COMPLIANCE 283-284 AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I.INTRODUCTORY Department of Finance Office of the Director MEMORANDUM
DATE: December 27, 2016
TO: Honorable Mayor and Members of the City Council, City Manager, and Citizens of the City of Berkeley
FROM: Henry Oyekanmi, Director of Finance
RE: Presentation of the Comprehensive Annual Financial Report
It is our pleasure to submit this Comprehensive Annual Financial Report (CAFR) for the City of Berkeley (the City) for the fiscal year ended June 30, 2016.
The CAFR has been prepared by the Finance Department in conformance with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB). This CAFR consists of management’s representations concerning the finances of the City of Berkeley and the City’s management assumes full responsibility for the completeness, accuracy and reliability of all of the information presented in this report, including all disclosures. The report has been compiled in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain an understanding of the City’s financial affairs have been included.
The City’s management has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and, to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal controls should not exceed anticipated benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert to the best of our knowledge and belief, that this financial report is complete and reliable in all material respects.
An annual financial audit, performed by independent certified public accountants, is required by the City Charter. For Fiscal Year 2016, the independent audit was conducted by Badawi & Associates, Certified Public Accountants. The goal of the audit was to provide reasonable assurance that the financial statements of the City of Berkeley for the fiscal year ended June 30, 2016 are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The auditors expressed an opinion that the City’s financial statements for the fiscal year ended June 30, 2016 are fairly stated in conformity with generally accepted accounting principles in the United States.
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GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the Independent Auditor’s report.
THE REPORTING ENTITY
This report combines the financial statements of the City and the Rent Stabilization Board (RSB) in accordance with principles defining the governmental reporting entity adopted by the Governmental Accounting Standards Board (GASB). The Rent Stabilization Board is a discretely presented component unit because the citizens elect its nine-member Board of Commissioners. It also receives support services from the City, and it provides regulation of residential rents throughout the City.
PROFILE OF THE CITY
The City of Berkeley is located in Alameda County on the east side of the San Francisco Bay approximately ten (10) miles east of San Francisco. The City encompasses a total area of approximately 19 square miles and has an estimated population of 119,915, giving it the highest population density of any city in the East Bay. The City is defined to a large degree, both culturally and economically, by the presence of the University of California campus located on the eastern side of the City.
The City of Berkeley is among the oldest cities in California. It was founded in 1864, incorporated as a town in 1878, and incorporated as a city in 1909. The original City Charter was adopted in 1895. At the geographic midpoint of the Greater Bay Area, Berkeley is 20 minutes from San Francisco and close to population centers in Contra Costa County and the Silicon Valley. The City is governed by a City Council composed of members elected from eight districts to serve four-year terms, and a Mayor who serves as the president of the City Council, elected citywide to a four-year term. The City’s FY 2016 adopted budget included $394,620,938 of expenditures and reserves, of which $159,862,009 was allocated to the General Fund of the City and $234,758,929 to all other funds. The City employs approximately 1,353 full-time equivalent employees.
The City provides a full range of services exceeding that of most similarly-sized cities in California. Services include public safety (police and fire); sanitation and sewer; leisure (parks, recreation and marina); health, housing and community services, including City funded health clinics; animal control; public improvements; planning and zoning; general and administrative services; and library services. In addition, the City’s reporting entity includes the financial activities of the Rent Stabilization Board.
The budget process is the vehicle through which the City establishes goals and objectives, and prioritizes the desired programs or services that the City should provide, and which can be financed by the City’s projected revenue for the budget year. It is the vehicle through which policy decisions are made, effected, controlled and monitored. Under the City Charter, the City Manager is responsible for preparing and recommending an operating budget and a capital improvements budget for City Council consideration and adoption.
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The City of Berkeley employs a two-year budget process. In year one of the biennial budget cycle, the City Council formally adopts authorized appropriations for the first year of the two- year budget and approves “planned” appropriations for the second fiscal year. In year two of the budget cycle, the City Council considers revisions and formally adopts authorized appropriations for the second fiscal year. Although the budget cycle covers a two-year period, the City Charter requires that the City Council adopt an annual appropriations ordinance for each budget year.
The City's Capital Budget is considered a part of the City's Five-Year Capital Improvement Plan. Upon adoption each year by Council, the projects included in the annual budget represent legal appropriations. Capital expenditures are not fully "consumed" in the year of expenditure but instead produce long-term, tangible, future benefits.
In addition to this budget planning process, the City maintains budgetary controls. The City’s objective in maintaining budgetary control is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. The City Manager is authorized to transfer budgeted amounts within funds as deemed necessary in order to meet the City’s needs. However, revisions that alter the total budget or move amounts from one fund to another must be approved by the City Council. Activities of the General Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, and Proprietary Funds are included in the annual appropriated budget.
The City maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Purchase orders, contracts, and other commitments for the expenditure of money are secured in order to reserve that portion of the applicable appropriation. Encumbrances outstanding at year-end are reported as reservations of fund balance. Unencumbered amounts lapse at year-end and may be appropriated as part of the following year’s budget.
ECONOMIC CONDITION AND FISCAL OUTLOOK
In FY 2016, the City’s revenue continued to grow and resulted in increases in most economically-sensitive and most property-related revenue sources in the General Fund. The total of Economically-sensitive revenue sources increased by $6.6 million or 15.6% during the fiscal year. There was also an increase of $6.4 million or 9.9% in Property-related revenues.
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Table 1 PROPERTY-RELATED TAXES (modified accrual basis of accounting) Description FY 2016 FY 2015 Difference Real property $ 48,148,741 $ 44,082,239 $ 4,066,502 9.2% Personal property 2,644,085 2,620,834 23,251 0.9% Supplemental 1,461,342 1,461,459 (116) 0.0% Property transfer 17,499,825 15,153,844 2.345.981 15.5% Redemptions 728,632 791,338 (62,706) (7.9)% Total $ 70,482,625 $ 64,109,714 $6,372,911 9.9%
Table 2 ECONOMICALLY-SENSITIVE INCOME (modified accrual basis of accounting) Description FY 2016 FY 2015 Difference Sales tax $ 20,577,996 $ 17,111,938 $ 3,466,058 20.3% Business license tax 18,089,403 16,098,978 1,990,425 12.4% Transient occupancy 7,879,633 7,131,568 748,065 10.5% tax Investment income 2,784,234 2,348,867 (1) 435,367 18.5% Total $ 49,331,266 $ 42,691,351 $ 6,639,915 15.6%
(1) Includes approximately $.3 million in one-time increase in the market value of investments held by the General Fund in FY 2016. GASB Statement Number 31 requires that investments held at year-end be marked-to-market, and the increase or decrease in the market value of the investments be added to or subtracted from interest income.
During FY 2016, the City of Berkeley’s financial position improved and the City continued to be financially strong and continues to benefit from participation in the Bay Area’s diverse and stable economy. The City continues to maintain a bond rating of AA+ from Standard and Poor’s, and Aa2 at Moody’s, two of the national debt rating agencies.
The City is home to the main campus of the University of California. With 38,204 students and approximately 14,983 employees, the University provides a high degree of economic stability for the City and has spurred growth in the high technology and biotechnology sectors. The Lawrence Berkeley Laboratory also has 3,363 employees, and the Sutter East bay Hospitals has approximately 2,117 employees. Despite the large student population, the City has an average household income of $100,496, according to the US Census Bureau, Census 2010, ESRI Business Analyst Forecast for 2016.
During the fiscal year, the local economy grew consistent with regional trends. Berkeley’s current economic base consists of over 12,655 licensed businesses operating in the City. These businesses include private manufacturing, technology research, retail and service businesses, educational services, healthcare and social assistance, consulting, arts and entertainment, hospitality services, along with several state, federal, and non-profit institutions. These businesses provide employment for 67,172 workers (up from 65,048 in June 2015). The City’s revenue base generated approximately $2.06 billion in taxable sales taxes during FY 2016, an increase of 20.5% from the $1.71 billion in FY 2015. In addition, the City’s unemployment rate
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(as reported by the State of California Employment Development Department) declined from 4.0% in June 2015 to 3.8% in June 2016, compared to 4.7% for the County, 5.7% for the state and 4.9% for the U.S.
Growth in assessed valuation on secured property increased by 7.9% to $15.2 billion in FY 2016, for a strong level of $126,756 per capita. The tax base is diverse, with the top ten property taxpayers accounting for 5.8% of total assessed valuation.
The City takes an active role in guiding economic development to serve the business and residential community. The City manages a number of programs intended to assist in local business expansion and retention efforts, provides permit assistance to new businesses, seeks appropriate sites, and works directly with local businesses and merchant organizations to improve the local business climate. Major business development programs have also been initiated and are funded, in part, by a grant from the Metropolitan Transportation Commission (MTC), including managing parking for greater efficiency, and planning for the construction of larger replacement City parking facilities.
Since 1994, the City Council resolved to promote environmentally sustainable businesses in Berkeley and formally adopted the Precautionary Principle based on the outcomes of the Kyoto Accord.
Community Planning - City Work Plan. One of the major components of the City’s efforts to develop an integrated budget process is the establishment of policy priorities by the City Council. One element of this process is an attempt, through the biennial Budget and the annual Citywide Work Plan, to align City Council and community expectations with resources available to the City to deliver desired results.
ADDRESSING LONG-TERM UNCERTAINTIES/ FINANCIAL POLICIES
The City, like most other cities throughout the state, as well as the state of California itself, faces significant long-term costs in the areas of employee and retiree costs, capital assets, and infrastructure. The City weathered the effects of the recession over the last six years by reducing expenditures and deferring capital improvement costs. Expenditure controls during that period also included assessing some employee benefits on a pay-as-you-go basis. As the economy begins to recover, the City must strategically address its long-term obligations. The goal is to achieve a stable fiscal position that allows the City to move forward strategically, as the economy slowly recovers, to address historically underfunded infrastructure needs, and to plan carefully for employee costs and benefits.
While we have established a stability budget for FY 2016 and FY 2017, we still need to continue to develop solutions that resolve the long-term challenges presented by expenditures growing faster than revenues. The Council has adopted budget development policies which have served the City well over the long term, and has also established several budget policies that begin to address some of the long-term problems.
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The fiscal policies adopted by the Council include:
Focusing on the long-term fiscal health of the City by adopting a two-year budget and conducting multi-year planning; Building a prudent reserve; Developing long-term strategies to reduce unfunded liabilities; Controlling labor costs while minimizing layoffs; Allocating one-time revenue for one-time expenses; Requiring enterprise and grant funds to balance and new programs to pay for themselves; and Any new expenditure requires revenue or expenditure reductions. Property Transfer Tax received in excess of $10.5 million dollars will be treated as one- time revenue to be used for the City’s capital infrastructure needs (fund 610). As the General Fund subsidy to the Safety Members Pension Fund declines over the next several years, the amount of the annual decrease will be used to help fund the new Police Employee Retiree Health Plan (fund 903).
Also, used as a guide to developing the budget is the “fix it first” approach in which we fund current capital improvements before funding new projects.
The proposed budget provides a plan to control costs and maximize the use of City resources. It is a balanced budget and thus does not require further General Fund expenditure reductions. The General Fund, however, is less than half of the City’s total budget. Many of the special funds that were struggling are starting to become healthy again due to the City Council and City staff actions over the last several years that have allowed the City to effectively manage and balance its budget as we begin to recover from some very difficult times.
LONG-TERM DEBT RATINGS
Standard & Poor’s Corporation and Moody’s Investors Service assigned the General Obligation Bonds ratings of AA+ and Aa2, respectively, upon their issuance. The City was able to maintain these ratings in the face of challenges to the local economy and the City’s budgets, due to a proven record of sound fiscal management by the Mayor, City Council, City Manager and City staff.
SPENDING LIMITATION
Article XIIIB of the California Constitution, also known as the GANN spending limit, restricts the amount of “proceeds of taxes” California governments may spend. As of June 30, 2016, the City was $53.0 million or 23.7% under the total Article XIIIB (Gann) spending limitation. The City was not impacted by the spending limitation in FY 2016.
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MAJOR COMMUNITY IMPACTS AND INITIATIVES
1. MAJOR CAPITAL PROJECTS
(a). Waterfront Overview: The Marina Fund is an enterprise fund that covers the costs of operations, maintenance, and capital improvements at the Berkeley Marina. Revenue for the fund comes from berth rentals and property leases. The Marina is in need of major infrastructure improvements such as dock and piling replacements, pier upgrades, street improvements, parking lot and restroom renovations and dredging totaling between $15-40 million over the next five years.
In FY 2016, the City painted the two-story office building at 125-127 University, completed a pilot float replacement project and funded the analysis of the University Avenue restructuring and paving project. Additionally, a portion of the yearly $250,000 Marina capital budget has been carried over to FY 2017 to help fund the launch ramp gate/parking lot, South Cove Access/Restroom and the bait shop wall replacement projects.
In FY 2017, the City will use the grants received from the California Department of Boating and Waterways, State Coastal Conservancy, Costco Busan Grant program and Marina Fund to complete the South Cove Access/Restroom, Bay Trail Segment 3, ADA dock at South Cove and the Berkeley Pier study.
In FY 2018, the City will apply to the California Department of Boating and Waterways Loan Program to complete the replacement of docks F and G.
(b). Parks and Recreation Facilities: The City relies on the Parks Tax and General Funds to provide annual revenues to fund the major maintenance and capital improvements of City parks, park buildings and pools. The Passing of Measure F on November 4, 2014 by the voters has increased this allocation by $1.2 million. Additional funds are available from the 2008 voter approved East Bay Regional Park District Parks Bond (Measure WW), that provides funding for major capital projects for parks. Despite these funding sources, parks, parks buildings and pools have approximately $55 million in unfunded major maintenance and capital projects in the next five years.
FY 2016 funds were used to complete Terrace View Park basketball court and access improvements, Virginia-McGee Totland Park, Ohlone Dog Park, Grove Park basketball and tennis courts, Rose Garden trellis, James Kenney (Siding, Seismic and ADA), and the Aquatic Park South pathway, parking and lighting project.
FY 2017 funds will be used to finish construction at James Kenney, John Hinkle upper picnic/ pathways, San Pablo Park restroom, Glendale-Laloma basketball court, significant Skate Park repairs, and additional pathways in Aquatic Park. Additionally FY 2017 funds will pay for the design of Strawberry Creek courts, John Hinkel Park play area, Marin Circle Fountain improvements and improvements to Becky Temko Park. (c). Camps: In FY 2016, the City continued the conceptual design work for Berkley Tuolumne Camp (BTC). The conceptual design will lead to a joint Federal Environmental Analysis (NEPA) with the United States Forest Service and a State of California Analysis (CEQA) that will be
7 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 8 submitted in FY 2017. Additional work with the City’s insurance companies, FEMA and Cal OES representatives around the funding of the rebuild of fire destroyed BTC has continued. At Echo Lake Camp in 2016, the City completed the Echo Lake Make-up Air project and the rebuild of three cabins. In 2017, the leach design will be completed along with the partial construction of an ADA pathway throughout the camp.
During FY 2016, Cazadero Music and Arts Camp on the Russian River sustained a significant landslide which endangered the root structure of numerous trees and knocked the two-story Jenson dormitory off its foundation. In order to open camp, staff contracted to remove 16 large trees. This tree removal cost approximately $270,000 and was funded by an emergency allocation from the General Fund. In FY 2017, staff will work to design a slide mitigation and demolish and rebuild the Jensen dormitory. Funding for these projects have not been identified.
(d). Libraries: Access and professional assistance to information remain at the core of the services offered by the Berkeley Public Library. Based on similar-sized cities in California, the Berkeley Public Library ranks among the state’s top public libraries per capita for circulation of materials, items in the library collection, and program attendance.
With a collection of over 600,000 catalogued items of books, magazines, CDs, DVDs, audio books, and tools, as well as newspapers, access to online games and databases, and even board games, the Library welcomed over 1.3 million patron visits in FY 2016. Total check-outs of catalogued items during the fiscal year at the Central Library, the four neighborhood branch libraries, including the Tool Lending Library at the Tarea Hall Pittman South Branch Library -- topped 1.8 million transactions. Free public-use computers, laptops, and tablets; and unlimited Wi-Fi, offered unrestricted access to the Internet and the world at large via a newly installed connection to the ultra-fast high-capacity 100Gbps California Research and Education Network (CalREN), a world-class statewide fiber infrastructure providing connectivity among California’s cities, universities, K-12 institutions, and public libraries.
A diverse program of daily activities and events either sponsored or hosted directly by the Library attracted a wide cross-section of ages and interests to all five Library locations. It’s a given that somewhere in the Library there is a film, seminar, lecture, or children’s program going on. And for those wanting to improve their basic reading and writing skills, the Library’s adult literacy program introduced in 1987 provided a variety of services such as one-on-one tutoring with trained volunteers, family literacy programming for students with small children, computer- assisted learning, and small group instruction.
2. PUBLIC WORKS
(a). Measure M Streets & Watershed General Obligation Bond: In November 2012, Berkeley voters approved Measure M, a $30 million general obligation (GO) bond to significantly accelerate the implementation of the 5-Year Street Paving Plan and, when appropriate, install green infrastructure, as it is defined in the Watershed Management Plan (WMP).
Since program inception in 2014, citywide paving work has commenced at double the rate prior to bond passage, with approximately 17 miles of street paving completed to date and five green infrastructure installations. The City will continue paving and green infrastructure work for 42
8 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 9 additional miles of paving and 8 to 10 additional green infrastructure projects through FY 2019. The Program recently surpassed the half way point and released a Measure M Mid-Program Report documenting the many Program accomplishments.
In FY 2016, completion of the following projects resulted in approximately 14.8 miles of street paving: 2015 Measure M, 2015 Reconstruct, Potter/Bolivar, and FY 2015 Measure M Surface Seal.
(b). Sewer Capital Projects: Sewer projects involve operations, maintenance, and capital improvements of the City’s sewer collection system. Revenue for the fund mainly comes from sanitary sewer service fees.
In 2009, the EPA and the State and Regional Water Quality Control Boards sued EBMUD and all agencies conveying flows to EBMUD (Satellite agencies) for violation of the Clean Water Act. In 2014, all parties agreed to a stipulated settlement known as the final Consent Decree (CD), which required the City to be in compliance in 12 years. To comply with the CD, the City is required to rehabilitate an average of 4.2 miles of sewer pipeline annually based on a three- year rolling average. Rate hikes were implemented to support the added financial load of the CD requirements.
Major sanitary sewer CIP projects completed in FY 2016 include Hopkins Street et al., Arlington Avenue et al., Shattuck Avenue et al. and Warring Street et al. The completed scope was approximately three miles of sanitary sewer pipeline. Also in FY 2016, staff completed the design for FY 2017 sewer rehabilitation improvements at Adeline Street et al., MLK Jr. Way et al. and Virginia Street et al. The estimated construction cost of the FY 2017 CIP projects is $8.5 million. Construction is scheduled to start in Fall 2016 and projected to be completed by June 30, 2017.
(c). Facilities Capital Projects: Major projects undertaken by the facilities capital program in FY 2016 include building renovations to Fire Station No. 1, 1947 Center Street, and James Kenney Community Center. Construction at Fire Station No. 1 is underway with completion anticipated in Fall 2016. Improvements at Fire Station No. 1 include a complete interior renovation at an approximate construction cost of $800,000. Construction at 1947 Center Street is also underway, and includes interior renovation work to the Basement through Fourth Floors to accommodate the move of the Planning Department and Permit Service Center into the building in the Fall of 2016. The total construction costs for the 1947 Center Street renovation is approximately $7 million. The design and advertisement for the James Kenney Community Center Seismic Upgrade project was completed in FY 2016. Construction is scheduled to begin in Fall 2016, at an estimated construction cost of $2.3 million.
(d). Center Street Garage: Design of a new garage to replace the Center Street Garage began in FY 2014 and was completed in FY 2016. The new garage will meet modern seismic codes and increases parking capacity from 440 to 720 parking spaces. Additionally, there will be secure valet and self- service parking for over 300 bikes, rooftop photoelectric panels for electricity generation, capacity to anchor a micro-grid system to supply emergency power to critical City facilities, capacity to charge up to 57 electric vehicles, a rainwater capture system, an art display area, and
9 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 10 micro-retail space on the ground floor. The finished design was put out to bid and a $33,524,400 construction contract was awarded in June 2016. Construction funding consists of $5,218,764 from the Off-Street Parking fund and $28,305,236 in parking revenue bonds backed only by the parking enterprise without any funds or backing from the General Fund. Construction activities began in July 2016 and are projected to be completed Fall 2017.
(e). Automated License Plate Reader Program: GoBerkeley, the City’s demand-responsive parking management program, uses up-to-date parking occupancy data to set prices and time limits to improve availability and reduce traffic congestion. Planning for a more reliable, cost-effective, and City-operated parking data collection system began in 2013, and staff ultimately chose Automated License Plate Recognition (ALPR) technology as a means of simultaneously collecting data and improving parking enforcement. In 2016, the ALPR equipment was installed on five (5) parking enforcement vehicles and connected to the City’s existing parking permit and citation issuance systems. Staff are currently working with a data analysis vendor to refine an algorithm that blends ALPR occupancy data with meter payment records to provide accurate estimates of parking occupancies at different days and times. Development of this algorithm is projected to be completed by the third quarter of FY 2017.
3. COMMUNITY EMERGENCY PREPARATION
The following overview describes the City’s comprehensive efforts to reduce risk, to better prepare for disasters and safety actions taken during the fiscal year to ensure community safety and preparedness. Other City efforts include staff training, response preparations, exercises, community preparedness initiatives, local and regional coordination and other preventive programs that are underway or are in development.
(a). Pre-Disaster Mitigation Efforts: Since 1989, Berkeley has invested in disaster mitigation on many fronts. The City Council established an Office of Emergency Services in July 1989 and convened the commission that later became the Disaster Fire and Safety Commission. This leadership continued and acted to make risk reduction and community sustainability a priority.
Thus far, the City’s mitigation efforts include establishment of ordinances requiring mandatory retrofit for unreinforced masonry buildings, as well as soft-story buildings. The City has multiple vegetation management programs to mitigate wildfire risk. The City also adopted an updated Local Hazard Mitigation Plan. Hazards include earthquakes, wildfires, landslides, floods, hazardous materials accidents, terror attacks and other multi-hazard events.
(b). Employee Disaster Response Training: Training for City staff is required to meet the mandates of California Code of Regulations Title 19 Section 2401, 2930 and 2935, and the Homeland Security Presidential Directive 5 that requires workers to use the Standardized Emergency Management System and the National Incident Management System. All local government staff are designated Disaster Service Workers, according to State law. Consequently, it is critical that the City provide adequate training for staff to know their disaster response responsibilities and have learning opportunities to deepen that knowledge. Keeping training and disaster exercises on the organization’s larger schedule is a challenge when months of advance planning and practice must be maintained. In FY 2016, the training programs included National Incident Management (NIMS), Incident Command System (ICS) courses, and tabletop exercises.
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In addition, a multi-year training and exercise plan is in place that will ensure SEMS/NIMS required training for city staff. The City has also launched a Disaster Cost Recovery Strategic Planning effort that will allow the government to be better prepared to take full advantage of federal relief funds in the event of a disaster.
(c). Community Disaster Preparedness: The City has always been a leader in engaging community and neighborhood groups to be disaster ready. The City offered training classes, made presentations to the public, updated the City’s website information, and engaged in other outreach activities to strengthen disaster preparedness for the Berkeley community. In FY 2016, the City launched Berkeley Ready, a program that encompasses disaster resilience and preparedness measures. Components of the program include a two year pilot of Community Resilience Centers which will bring disaster supplies and training to neighborhoods with historically lower participation in traditional classes. Also part of Berkeley Ready is the free year-round Community Emergency Response Team (CERT) classes offered to anyone living or working in the Berkeley community. Designed for people interested in taking the next step in disaster preparedness, classes cover basic preparedness, disaster mental health, disaster first aid, fire suppression, light search and rescue, shelter operations, and radio communication/incident command system. Public participation in the Berkeley Ready program exceeded 2,500 people in FY 2016.
Berkeley voters approved Measure GG in November of 2008, providing critical resources to ensure minimum staffing of all fire suppression companies; enhance the City’s Emergency Operations Center; and to continue to focus on community preparedness, including resources for Community Emergency Response Training (CERT) and community caches. Through 2016, there have been an average of 10 caches awarded annually, bringing the total to 100 citywide.
In FY 2014, the City Council authorized two new community preparedness programs funded by Measure GG, a neighborhood dumpster program and an automatic earthquake gas shutoff valve program. Both are incentives for individuals and neighborhoods to organize and participate in training.
To facilitate overall community preparedness, OES coordinated, with the help of CERT volunteers, an October Citywide CERT Exercise. The day of activities promoted preparedness to individuals and neighborhoods. The day culminated with a community meeting to discuss the Exercise and future activities with City leadership.
(d). Response: The City uses an emergency notification system to keep people informed during disasters. The Berkeley Emergency Notification System (BENS) is a telephone notification system that can contact residents and businesses through an automatic message service center in the event of an emergency. Berkeley’s emergency radio station is 1610 AM. Over the years, the City has activated its Emergency Operations Center (EOC) and responded to a number of disasters.
(e). Recovery: The City’s Finance Department has established procedures and protocols to document expenditures incurred during disaster operations. These procedures are constantly being reviewed as new regulations and procedures for submitting documentation for FEMA are implemented both at the Federal and State level.
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(f). Health and Human Service Programs: The Public Health Division (PHD) receives CDC and state health department grants to develop plans for large PH emergencies such as bioterrorism or pandemic influenza and to coordinate with health care providers, clinics and hospitals on emergency surge capacity. The PHD coordinates its response to public health emergencies (outbreaks, pandemics) by activating the Public Health Departmental Operations Center (PH DOC), a group of public health staff members specially trained for disease investigations and emergency response. In 2014, the PHD updated plans to improve services for the City’s most vulnerable populations with special attention in South and West Berkeley (i.e. Homebound Seniors through Meals on Wheels) and incorporated specific roles for the Mental Health Division to assist in a large scale emergency response. PHD also helped develop a FAST (Functional Assessment Service Team) recruiting Berkeley specific members to Alameda County FAST. FAST members work with emergency response personnel to conduct assessments of people with access and functional needs (PAFN) in emergency shelters. FAST members facilitate the process of getting resources needed by the people with access and functional needs. These resources may include durable medical equipment, consumable medical supplies, prescribed medications, or a person to assist with activities of daily living. PHD continues to collaborate with the Office of Emergency Services in providing disaster preparedness training, education and resources to all Berkeley residents, particularly in South and West Berkeley.
(g). Disaster Fire Protection: In the November 2000 election, Berkeley voters approved Measure Q, which provided $8 million in funding for an Above Ground Portable Water System. This system is designed to provide water for firefighting independent of the domestic water system provided by the local water district. The engineering studies of the domestic water system infrastructure determined that after a major earthquake or in the event of high fire flow demands that can occur during wild land/urban firestorms, the system may not be usable or able to support firefighting operations. The City contracted with Hytrans Systems located in Holland for a pump and hose system that allows use of salt or fresh water sources like the San Francisco Bay or lakes to provide water for firefighting.
The system includes two 6,000-gpm pumps (HS 900) and six containers each with one mile of 12 inch ultra large diameter hose. The pumps and containers can be moved and deployed by trucks using a lift arm loading system. An 8,000 square foot warehouse for both storage of the water system was constructed and is now operational.
(h). Other Disaster Mitigation Efforts: The City’s Corporation Yard facility plays a crucial role in the Public Works Department’s overall operations and serves as a center for emergency responses and disaster recovery operations. One of the main Corp Yard buildings was seismically unsafe. In July 2006, the State Office of Emergency Services approved a pre-disaster mitigation program grant from the Federal Emergency Management Agency for the relocation of employees from the building, site preparation, and seismic retrofit of the building to essential services standards in the amount of $2.8 million, with local matching funds in the amount of $962,633. Additional local funds have been allocated to the project bringing the current project budget to $7.3 million. The project was completed in July 2012 and now houses the supervisory staff for both Public Works and Parks operations and maintenance as well as serves as the Public Works Department’s Operation Center (PW DOC) for emergency responses.
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4. ECONOMIC DEVELOPMENT
Berkeley’s economic development strategy seeks to build on existing strengths to accomplish goals that have been identified by the City Council and citizen planning processes:
(a). Revitalize Downtown Berkeley and strengthen its role in the local and regional economy: Downtown Berkeley’s existing strengths include the success of its growing Arts District in attracting a regional nighttime clientele and the emergence of the Downtown as a residential neighborhood. The Arts District is anchored by the recently renovated Berkeley Repertory Theatre that attracts an annual audience of 180,000 and employs more than 400 artists, artisans and administrators. The new Peet’s Theater stage (at Berkeley Rep) has been completely refurbished with an advanced sound system and lighting technologies to make it more attractive to theatergoers. Other theaters in the area include the 180 seat Aurora Theatre and the 440 seat Freight and Salvage, a traditional musical performance venue. New this year is the adaptive reuse of the U.C. Theater, a state of the art concert hall featuring a soundscape engineered by the local (and nationally acclaimed) Meyer Sound, quality food and drink offerings, and capacity for 1,400 in concert attendance. Since its opening in April 2016, the venue has quickly become a premier East Bay contemporary music venue boasting a strong line up of popular musical acts and headliners. The nighttime audience of these and other arts organizations has attracted quality restaurants to Downtown such as Gather, Revival Bar and Grill, Eureka Burger, and Comal. On the edges of the Arts District, the restaurant Five in the renovated 200-room Shattuck Hotel and sweetgreen salad shop in the former Oscar’s fast food diner space, offer a range of new dining options for arts patrons. Triple Rock, one of the first microbreweries in the state of California, is currently undergoing an expansion and renovation; and Giovanni’s, a classic Berkeley restaurant and watering hole, is undergoing a significant expansion to incorporate active and outdoor uses including a bocce ball court and a patio bar. In January of 2016, the Diller Scofidio + Renfro designed Berkeley Art Museum/Pacific Film Archive opened to great fanfare at the corner of Oxford and Center Street. The museum has already become a transformative cultural anchor - the largest single investment to date in Downtown Berkeley’s arts cluster.
Thanks to the construction of more than 1,500 new housing units since the mid-1990s, Downtown has become an attractive location for urban living. The 148-unit New Californian on the NW corner of University and Martin Luther King Jr. Way continues to be fully leased, as is the 143-unit Berkeley Center project, located on Center Street, one block from the Arts District. Due to an extremely strong local and regional housing market, there are approximately 1,500 additional Downtown housing units either under construction, approved, or in the entitlements pipeline. Notable projects under construction include: the Stonefire Apartments at 1974 University Ave with 98 units, Addison Arts Apartments at 1935 Addison Street with 69 units, and the recently completed Varsity Berkeley at 2024 Durant with 78 units, which leased up at a rapid pace (as of July 2016, only 12 apartments remained available).
UC Berkeley has also been active in Downtown area development, opening a new student center in late 2015, and currently constructing an office/education building on Berkeley Way. The 320,000 square foot Berkeley Way West project adjacent to the Energy Biosciences Building is slated to house the Graduate School of Education, the School of Public Health, and the Department of Psychology. The project will include more than 7,000 square feet of retail space on the ground floor, and classrooms, offices, open workstations, on the seven floors above. A
13 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 14 new aquatics center on Bancroft Way, and a recently entitled 783 bed-dorm project (Stiles Hall) are also under construction.
The campus area and Downtown Berkeley continue to be a popular location for startups and University spinout businesses to get a foothold in the office market. The nearly billion dollar pipeline of research investment at the University of California Berkeley and Lawrence Berkeley National Laboratory is a catalyst for entrepreneurship and the Downtown, within close walking distance of campus, is a logical launch pad for these new businesses. The City has supported the startup business growth in Downtown and throughout the City through support and promotion of new incubators and co-working spaces.
The “Skydeck Innovation Accelerator/Incubator” was launched in 2012 and has graduated a number of growing companies that have moved to office spaces elsewhere in Downtown Berkeley. Located on the top floor of the Chase Building on Shattuck Avenue, the Skydeck now houses more than 15 spinouts and more than 50 worker/entrepreneurs. In addition, Helios West, a 112,800 square foot building that houses the Energy Biosciences Institute, is now anchoring the northern part of Downtown on its site at Shattuck and Berkeley Way. Several other private incubators and co-working spaces have sprung up in Downtown in recent years including The HUB, Sandbox Suites, and NextSpace which operates in the former Wells Fargo Annex. Downtown’s largest incubator, WeWork, opened in early 2015 and now occupies an entire 6 story office building in Downtown, housing close to 600 people. Staff believes this trend towards co-working will continue in the future as demand grows for small and flexible office spaces. This optimism is also based partly on the University’s plan to build up to 600,000 square feet of new research, office and public service space on the eastern edge of the Downtown in the coming years.
Finally, the Berkeley Start-up Cluster, a partnership of the City, U.C. Berkeley, the Downtown Berkeley Association and the Berkeley Chamber of Commerce, has been doing ongoing work to ‘brand’ the near-to-campus area as a place of innovation and entrepreneurship. The berkeleystartupcluster.com website provides a range of resources that are helpful to budding tech businesses. The City of Berkeley hosts a separate website, www.locateinberkeley.com, which displays all vacant commercial space in Berkeley, with a special module for inexpensive space close to campus. The Downtown Berkeley Association’s tagline, “It Starts Here” is reflective of the broad goals of the Start-up Cluster as well.
(b). Strengthen neighborhood commercial districts such as Solano, Elmwood, Telegraph, Adeline, Fourth Street, San Pablo, North Shattuck and University Avenue: The City seeks to encourage shopping opportunities close to residential neighborhoods, which reduces the need to drive for short trips. Efforts are underway to support expansion of district-based niche marketing campaigns that recognize local strengths and “district identity.” In 2016, staff continued its marketing initiatives in several districts including the Adeline and Sacramento corridors, in Downtown and on Telegraph Avenue. The City facilitates five business improvement districts (BIDs) in the Downtown, Telegraph, Elmwood, North Shattuck, and Solano commercial districts that generate funds through a self- assessment to help promote and maintain their districts. There is also a Tourism BID which is funded by the self-assessment of Berkeley’s hotels and motels and directly supports Visit Berkeley, the City’s Convention and Visitor’s Bureau. Over the past year, the City has provided
14 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 15 technical assistance to each of the BIDs, with particular focus on Downtown Berkeley Association, which has commenced a renewal campaign; Telegraph Business Improvement District, which has brought on dynamic new staff leadership and is going through a reauthorization and expansion process; and Elmwood Business Improvement District, which was re-established in 2014. The revitalization of Telegraph Avenue continues to be a major strategic priority. The City, in partnership with community stakeholders and with support from the UC Berkeley Chancellor’s Community Partnership Fund, recently began implementation of the Telegraph Public Realm Plan. The plan creates a framework for near-term public realm enhancements that will improve the pedestrian experience and the retail environment in the Telegraph district. It will also empower the City and its partners to attract funding for comprehensive streetscape improvements. This is especially relevant now that the Telegraph district has been designated by Association of Bay Area Governments (ABAG) and Metropolitan Transportation Commission (MTC) as a Priority Development Area, which qualifies the district for significant regional funding opportunities. In 2016, the City continued work on the Adeline Corridor Specific Plan that will guide development within the district in the coming decades. Adeline Street is an important corridor for South Berkeley, with several distinct commercial clusters and some notable opportunities for transit-oriented residential and commercial development. The City received a $750,000 planning grant from ABAG and MTC to develop this plan and continues to conduct comprehensive community outreach. The plan is expected to be completed and adopted by summer 2017. In FY 2016, the Office of Economic Development continued its contract with the community-led “Buy Local Berkeley” initiative which is also fiscally supported by the Berkeley Chamber of Commerce. The effort uses multiple communication channels to encourage residents to shop at local, independent businesses to retain money and tax revenues in the community. Buy Local Berkeley has over 400 affiliated businesses and over 5,000 subscribers to its electronic newsletter. OED’s financial support of this initiative will continue into FY 2017. (c). Support creation of good jobs for local residents: Berkeley’s average unemployment rate for Q4 2015 (October – December) was 3.6%, down from 4.2% during the same period the previous year. In comparison, Alameda County’s average unemployment rate in Q4 2015 was 4.5%, while California’s was 5.8%. The unemployment rate continues to fall despite a slight increase in the overall participation in the labor force. As of Q3 2015, there were 66,348 jobs located in Berkeley. Berkeley’s jobs-to-employed-residents ratio is calculated at approximately 1.12. The industry sectors that showed the greatest job growth in Berkeley from 2014 to 2015 include Professional Services (9% growth, or about 750 new jobs) and Food and Beverage Services (7% growth, or about 400 new jobs). While more than 34% of the jobs in Berkeley are in the public sector (14,983 at UC Berkeley, 3,363 at Lawrence Berkeley Laboratory, and 1,353 at the City of Berkeley, 1,682 at Berkeley Unified School District, 210 at Berkeley City College) about 43,641 are employees in the private sector (CA Employment Development Department, Monthly Labor Force Data; Bureau of Labor Statistics, Quarterly Census of Employment and Wages, December 2015). Large private sector employers include Sutter East Bay Hospitals (Alta Bates and Herrick campuses) with 2,117, the Bayer Corporation with 1,462, and Kaiser Permanente with 629, and Berkeley Bowl with 597, and Pacific Steel Casting with 247. More than 90% (4,724) of Berkeley’s 5,212 private employers have fewer than 20 employees. Berkeley’s strong employment sectors include food services, biomedical/biopharmaceutical, computer systems
15 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 16 design services, printing and publishing, environmental consulting services, and arts and entertainment. As of spring 2016, there are nearly 300 startups based in Berkeley offering 278 open jobs in software and bio science fields and over $270 million of venture investment capital was raised by Berkeley-based companies in 2015. 158 “Green” businesses (i.e. businesses that either help the environment or enterprises that have instituted environmental friendly practices) have located in Berkeley. (City of Berkeley Office of Economic Development, June 2015). As of June 2016, there were 12,655 active business licenses in the City of Berkeley, with the number of active business licenses growing steadily over the past decade, for example, the total figure grew by 54% from 2005 to 2015. In 2015, growth slowed somewhat (to 1%). Further research shows that 46.3% of active businesses in Berkeley are minority- and/or female owned. Lessors of Residential Buildings and Dwellings and Non-Residential Buildings (as defined by NAICS code) make up the largest single group of business licenses issued (25%). The American Community Survey data from 2013, shows that 45% of Berkeley’s 58,612 employed residents (2013) also work in Berkeley. This high proportion is due in part to the fact that UC faculty have a strong propensity to live in Berkeley, as well as the fact that students who live in Berkeley often have part-time jobs close to where they live. Berkeley’s economy has a greater number of jobs than employed residents: at least 64,313 employee positions (July 2013) and over 8,000 self-employed (2013 ACS 1-Year Estimates). As a result, many people who live elsewhere in the Bay Area commute to Berkeley work sites. In order to reduce impacts on the environment from commuting as well as provide jobs to unemployed local residents, the City attempts to increase the number of people who both live and work in Berkeley. The City’s Work Source employment program requires certain new and expanding businesses to consider Berkeley residents first in their hiring.
(d). Increase technology transfer from UC Berkeley and Lawrence Berkeley National Laboratory and encourage startups in the Downtown and West Berkeley: In recent years, federal, state and private sources have provided more than one billion dollars in new funding for research at UC Berkeley and Lawrence Berkeley National Laboratory in areas that are national priorities such as biofuels, energy conservation, advanced telecommunications and biomedical engineering. Berkeley is working closely with the tech transfer staff of both UC and the Lab to retain local startups that are commercializing new technology as well as attract national companies to set up research centers in Berkeley. This collaboration is productive for all parties. The companies benefit from the City’s entrepreneurial climate and from interaction with UC faculty and graduate students. Studies have shown that many initial-stage start-ups want to locate close to Campus. As described above, the Berkeley Start-up Cluster is attempting to address these problems by supporting development of the near-to-campus entrepreneurial ecosystem. As companies get established and grow in Downtown they will inevitably begin looking for larger spaces. The City is working to encourage them to consider locating in larger industrial and office spaces in West Berkeley. Zoning changes made in recent years were intended to increase the number of research and development firms, some of which will eventually decide to manufacture new products in West Berkeley. To help seed the ground, the City’s Office of Economic Development is actively working with the City of Emeryville to promote its Berkeley/Emeryville BIO branding strategy. This is an effort to support the cluster of life science and bio pharmaceutical companies concentrated in the two cities. Together, West Berkeley and Emeryville have more bio-lab space than Mission Bay
16 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 17 in San Francisco. The two cities are working actively to document the cluster, host regular meet- up events, and support the growth of new bio-lab spaces that can accommodate additional growth.
West Berkeley hosts an incubator for bioscience businesses seeking to commercialize their innovations. The QB3 East Bay Innovation Center (EBIC) is modeled on the highly successful “QB3 Garage” incubator at UCSF and is the result of a unique public-private sector partnership between UC Berkeley, UCSF, Lawrence Berkeley National Laboratory, Wareham Development, and the cities of Berkeley and Emeryville. Over 50% of the space in QB3 EBIC is devoted to top-quality wet-laboratories, with the balance of the suite being support functions, offices, common lunch and break area, and a formal conference room for important meetings.
Significantly, Berkeley is now experiencing some substantial development of new buildings that will further support the local bioscience industry. A new 105,000 square foot bio-lab building at 740 Heinz in West Berkeley was completed in the fall of 2015 and by the spring of 2016, Aduro Biotech had leased all of 740 Heinz’s 105,000 square feet for cancer drug development. Bayer HealthCare announced in April 2015 that it will invest $100 million to build a new product testing facility at the company’s 45-acre West Berkeley manufacturing site that will support their next generation of Hemophilia A therapies.
(e). Generate location-based economic data to monitor and analyze local business trends and help fill commercial vacancies: Economic Development staff has recently updated its complete ground floor space inventory in all the City’s commercial districts and is tracking the commercial vacancy rates closely. This effort has proven valuable as an analytic tool, and staff has been able to generate reports that outline and assess sectoral and sub-sectoral trends within specific commercial neighborhoods. For the commercial vacancy work referenced above, staff has also completed an inventory and contact listing of all commercial spaces within five blocks of the U.C. Berkeley Campus (locateinberkeley.com) in order to attract and incubate new companies emerging from the University and Lawrence Berkeley National Lab. Staff eventually intends to generate similar data for the West Berkeley industrial area as resources permit. In addition, staff produces semiannual reports (the Berkeley Economic Dashboard and Commercial District Dashboards) and is routinely publishing the information online in an accessible format (see: http://www.ci.berkeley.ca.us/oed/reports/) for clients and researchers to use. The dashboard reports outline the state of real estate and business development and commercial vacancy in Berkeley. For example, the most recent dashboard report shows that citywide, there are 23 multi-unit (5+ units) housing projects totaling 1,605 housing units that are entitled for development or under construction. An additional 17 multi-unit projects totaling 1,254 units are proposed and seeking entitlement. By comparison, about 1,100 units in multi-unit projects were completed from 2005 to 2014 in the city. The majority of these development projects are clustered along University Avenue, San Pablo Avenue, and in the Downtown and Telegraph districts.
(f). Market Berkeley’s visitor appeal and support Berkeley’s Hotel/Motel Industry: The City provides annual support to Visit Berkeley (the Berkeley Convention and Visitors’ Bureau) for its comprehensive marketing efforts aimed at promoting local tourism and hospitality services. The Berkeley Convention and Visitors’ Bureau also runs the Berkeley Film Office that markets the City to the film and television industry. In FY 2017, the Council will review an extension of the
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“Tourism Business Improvement District (BID)” that assesses all of the City’s hotel and motel properties for the purposes of promoting increased tourism to Berkeley. This BID, now in operation for nearly five years, has effectively doubled the budget of Visit Berkeley and has had a very positive impact on the local visitor and tourism industry. Hotel occupancy has risen consistently year over year since the Tourism BID’s establishment in late 2012. In June of 2016, City Council approved the largest hotel and mixed use retail project in Berkeley to date: a 16-story, 335 room hotel to be developed by the Pyramid Hotel group at 2129 Shattuck Ave (at the corner of Center Street). The project is expected to break ground in early 2017, and generate an estimated $2.7 million per year in tax revenue to the city’s general fund (over the next eight years). After year eight, this figure will substantially increase because of the expiration of a rebate designed to assist project feasibility. (g). Build on Berkeley’s strength as a regional hub of arts and culture: More than 130 arts and cultural organizations comprise an arts community that collectively is among the largest employment sectors in Berkeley. The arts provide some 3,400 jobs, reach an annual audience of 1.7 million people, and have a combined budget of approximately $70 million. Arts, culture, entertainment and restaurants help drive the City’s economic engine. The City provides substantial support to the Berkeley Art Center and also small annual arts grants to approximately 53 non-profit arts groups. The City also provides funds for public art commissions based on a 1.5 percent for art program that is tied to City building and infrastructure spending.
Recent public art commission’s program include the installation of an impressive sculpture of local civil rights hero William Byron Rumford in the median of Sacramento Street, and a temporary bear sculpture “Ursus Redivivus” made of escalator parts at the Shattuck BART Plaza. The Civic Arts Commission also paid for a public art consultant to participate with urban designers on a current effort to redesign the streetscape along Telegraph Avenue. The resulting Telegraph Avenue Public Realm Plan was presented at City Council in June 2016 and is already under implementation, with two new murals underway. The plan outlines the framework to guide sidewalk and pedestrian improvements in the portion of Telegraph Avenue that is immediate to the South of Campus for years to come. The Civic Arts Commission has also committed similar funding to provide a public art consultant to the current Adeline Corridor Plan effort now underway in South Berkeley.
Significant new development of Downtown arts and cultural institutions as described above (The U.C. Theatre and the new Berkeley Art Museum/Pacific Film Archive) has cemented Downtown Berkeley as the richest (and transit accessible) concentration of arts and cultural institutions in the Bay Area. Another exciting development in the local art scene was the commencement of an effort to update the City’s 2004 Cultural Plan paid for by a $50,000 grant from the William and Flora Hewlett Foundation. This money has been matched by an additional $50,000 from a U.C. Chancellor’s Grant and the City’s public art budget. When completed, the updated Plan will provide a blueprint for building the strength of Berkeley’s arts programs and institutions that have established the City as a regional center for the arts, culture and entertainment. 5. CLIMATE ACTION PLAN
The Berkeley Climate Action Plan was adopted by City Council on June 2, 2009. The Plan guides the development and implementation of actions that reduce Berkeley’s greenhouse gas emissions. The Plan includes the following:
18 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 19 x An inventory of Berkeley’s main greenhouse gas emissions sources; x A forecast of how those emissions are expected to change over time; x Recommendations for actions the City government and community can implement to achieve greenhouse gas reductions and other community benefits such as increased green job opportunities, enhanced community sustainability and resiliency, and improved public health; and, x A timeline for the Plan’s implementation, including identifying specific actions, existing and potential costs, and funding sources
Using the Climate Action Plan as a guide, the City continues to advance efforts to reduce local greenhouse gas emissions and achieve other associated benefits. In FY 2016, the City advanced implementation of the Climate Action Plan in several important ways, including: a) Tracking our Progress on Climate Action Plan Metrics and Goals: The City monitors and reports a range of metrics designed to illustrate the status of progress toward meeting our Climate Action Plan and greenhouse gas emissions reduction goals. The most recent data (2013) show that community-wide greenhouse gas (GHG) emissions, including emissions from transportation, building energy use, and solid waste disposal, are approximately 9% below year 2000 baseline levels. Key highlights include a 22% reduction in GHG emissions from residential buildings since 2000 and a 59% decrease in the GHG emissions associated with solid waste disposal since 2000 levels. These metrics and a range of others are available online at www.cityofberkeley.info/climateprogress b) Building Energy Saving Ordinance (BESO): Berkeley's Building Energy Saving Ordinance (BESO) became effective December 1, 2015 as Berkeley Municipal Code 19.81. BESO requires Berkeley building owners to complete energy efficiency opportunity assessments and publicly report a building's energy efficiency information with the goal of helping building owners save energy and motivate them to complete energy efficiency upgrades. With nearly half of all Berkeley’s greenhouse gas emissions resulting from building energy use, an energy assessment is the first step towards understanding how to curb building energy use and identifying what specific measures can be taken to make a building more efficient, safe, and comfortable. BESO energy assessments provide building owners and prospective buyers easy-to-understand energy data about building performance and information about available incentives to propel energy upgrades. BESO is required prior to sale of a house or whole building, except for large buildings over 25,000 square feet and on a phased-in schedule for all buildings, except houses. As of December 2015, all medium and small buildings, including single family homes are required to complete an energy assessment at the time of sale. Larger buildings will be required to comply on a regular phase-in schedule set to begin in 2018. In FY 2016, 292 buildings completed BESO energy assessments. BESO replaced both the Residential and Commercial Energy Conservation Ordinances (RECO and CECO). c) Electrical Vehicles: The City continued its efforts to encourage electric vehicles (EV) by removing barriers for EV adoption, increasing EV infrastructure, and by providing technical assistance and streamlined permitting for both residential and commercial EV charging stations. In our region, an EV produces approximately 70% less greenhouse gas emissions than a conventional vehicle. In late 2014, the City received a grant from the 11th Hour Project to help launch a Residential Curbside Electrical Vehicle Charging Pilot Program. This 3 year Curbside Pilot Program allows Berkeley
19 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 20 residents who lack a garage or driveway to install a new space for charging on their property or install an EV charging station at the curb adjacent to their home. To date, the Curbside Pilot Program has created 3 residential curbside EV charging stations and 1 new charging space on private property; 3 additional residential curbside EV charging station projects are currently being installed or permitted. In addition, the City of Berkeley installed 6 dual-port charging stations, providing 12 charging ports across 3 locations, for public charging. These EV charging stations went into service in September 2015 and at the close of FY2016 have been used for more than 2,500 charge-ups, saving over 2,000 gallons of gasoline and over 7,000 kg of GHG emissions. Use of EVs in Berkeley continues to grow; at the end of 2015 there were 1,233 plug- in EVs registered in Berkeley, equivalent to an EV for every 97 Berkeley residents. d) Resilience Strategy: The Rockefeller Foundation named Berkeley as a grantee of the 100 Resilient Cities in December 2013. In FY2016, Berkeley completed a citywide Resilience Strategy. It was the culmination of extensive collaboration with regional, state, and federal government agencies and addresses how Berkeley can better prepare the community for a range of shocks such as earthquakes and stresses such as climate change. The goals of the Resilience Strategy are the following: 1) Build a connected and prepared community 2) Accelerate access to reliable and clean energy 3) Adapt to the changing climate 4) Advance racial equity 5) Excel at working together within City government to better serve the community and 6) Build regional resilience. e) Brighter Futures Berkeley- Solar Jobs and Installations for Low-Income Homes: In FY 2016, Berkeley was awarded a grant from Partners for Places and two local place-based foundations to partner with GRID Alternatives and Rising Sun Energy Center to ensure that low- income communities are not left out of the solar movement. The $70,000 grant is three-fold: 1) it will provide free comprehensive solar installation and job training to low-income jobseekers in solar installation and 2) it will create a citywide solar plan for multifamily affordable housing buildings and low-income single-family homeowners and 3) it will result in the direct installation of several pilot rooftop solar installations to benefit low-income households. f) Community Choice Energy: Berkeley is considering joining Alameda County’s Community Choice Energy (CCE) program. CCE allows public agencies to purchase electricity as an alternative to investor owned utilities (like PG&E). In FY 2016, Alameda County conducted an analysis of forming a CCE to serve local jurisdictions, including Berkeley. The Berkeley Energy Commission and the Office of Energy and Sustainable Development also hosted a free public workshop on Community Choice Energy to provide community members with an overview of CCE and to solicit public comments to inform the Commission’s recommendation to Council. The Berkeley City Council will decide whether or not to join Alameda’s Community Choice Energy program in fall 2016. g) Clean Energy Microgrid Grant: In FY 2016, Berkeley was awarded a $1.5 million grant from the California Energy Commission to design a clean energy microgrid. The grant partnership, which includes Lawrence Berkeley National Laboratory and others, will design a solar powered microgrid that would enable energy to be produced and stored at the new Center Street Garage. The two year grant will be used to conduct a feasibility analysis and create a design of a microgrid that could be used to provide clean emergency back-up power for key Berkeley buildings in case of a major loss of power. This system would also, on a daily basis, provide power for electric vehicle charging stations, reduce energy costs, and reduce greenhouse gas emissions. At the end of the grant period, the City will pursue grant and other funding opportunities to build and install the microgrid.
20 December 27, 2016 Presentation of the Comprehensive Annual Financial Report Page 21 h) Georgetown University Energy Prize: The City is a semifinalist in the Georgetown University Energy Prize. It is a friendly competition between small and medium sized cities to see which city can save the most energy over a two year period, beginning January 2015. The winning city will receive a $5 million prize towards making the city more sustainable and energy efficient.
6. LEGISLATIVE IMPACTS/SUCCESSOR AGENCY TO THE BERKELEY REDEVELOPMENT AGENCY The Redevelopment Agency of the City of Berkeley was established to eliminate blight and provide construction financing for affordable housing. There were two Redevelopment Project Areas: Savo Island and West Berkeley Project Areas.
On June 29, 2011, Governor Brown signed Assembly Bill 1X 26 (AB 1X 26) eliminating redevelopment agencies throughout the State in order to protect funding for core public services at the local level.
Pursuant to City Council action taken on January 17, 2012, the City elected to serve as the Successor Agency to the Berkeley Redevelopment Agency of the City of Berkeley (Successor Agency). The Successor Agency is a separate legal entity, which serves as a custodian for the assets and liabilities of the dissolved Redevelopment Agency pending distribution to the appropriate taxing entities after the payment of enforceable obligations. The activity of the Successor Agency is overseen by an Oversight Board comprised of individuals appointed by various government agencies and the City of Berkeley as Successor Agency of the former Redevelopment Agency.
AWARDS
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2015. In order to receive this prestigious award of the Certificate of Achievement, the city must publish and submit such report to the GFOA for their evaluation. This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to fulfill the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
The City also received the GFOA's award for Distinguished Budget Presentation for the biennium (two-year period) beginning July 1, 2013 and staff plans to pursue that award for the current budget.
21 DecemberDecember 27,27, 20162016 Presentation of the Comprehensive Annual Financial Report Page 22
ACKNOWLEDGMENTS
The preparation of this report could not be accomplished without the efforts of the following individuals: Accounting Manager, Marvin Tam, Noel Kan, the CAFR Project Lead, Victor Lo and the entire Accounting Division of the Finance Department as well as the City's Budget Manager, Teresa Berkeley-Simmons, the accounting Firm of Badawi & Associates, CPA, and the continued support of sound financial management by Mayor Tom Bates and the City Council.
Due to the efforts of the entire City staff, the City's accounting and financial reporting systems continue to improve, as well as the quality of the information being reported to our citizens, the City Council, Department heads and Managers, Bond-holders, Federal, State and County agencies, and to other users of the City's financial reports.
22 Government Finance Officers Association
Certificate of Achievement for Excellence in Financial Reporting
Presented to City of Berkeley California
For its Comprehensive Annual Financial Report for the Fiscal Year Ended
June 30, 2015
Executive Director/CEO
23 ' Board Trustees I Library Stabilization of Rent STRUCTURE Board '- / '- '\ COUNCIL ' Manager & 2016 ELECT City Cl
24 DIRECTORY OF CITY OFFICIALS
ELECTED OFFICIALS
City Auditor - Ann-Marie Hogan
Mayor - Tom Bates Vice-Mayor- Linda Maio
Council members
Linda Maio Darryl Moore Max Anderson Jesse Arreguin Laurie Capitelli Susan W engraf Kriss Worthington Lori Droste
APPOINTED BY CITY COUNCIL
City Manager - Dee Williams-Ridley
25 CITY OF BERKELEY ORGANIZATION CHART
RENT STABILIZATION BOARD CITIZENS OF BERKELEY CITY AUDITOR I BOARDS & COMMISSIONS
BOARD OF LIBRARY TRUSTEES 11111111- - -- MAYOR & COUNCIL --- - - POLICE REVIEW COMM ISi ON
CITY MANAGER DEPUTY CITY MANAGER LIBRARY I
HUMAN RESOURCES
I
CITY ATIORNEY - CITY CLERK - INFORMATION TECHNOLOGY
I
PARKS, RECREATION & WATERFRONT HEALTH, HOUSING & FINANCE - - COMMUNITY SERVICES I
PLANNING
I POLICE ~ ~ ECONOMIC DEVELOPMENT
PUBLIC WORKS
I
BUDGET & FISCAL FIRE - MANAGEMENT I
NEIGHBORHOOD SERVICES
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INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California
Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business- type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of City of Berkeley, California (City), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Address: 180 Grand Avenue, Suite 1500 Oakland, CA 94612 • Phone: 510.768.8251 • Fax: 510.768.8249
To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California Page Two
Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2016, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 33-49, budgetary comparison information 157-159, and pension information on pages 160 to 170, and schedules of funding progress other post-employment benefit plans on page 172 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and budgetary comparison schedules on pages 176 and 204-229, statistical section, and continuing annual disclosure are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedules on 176 and 204-229 are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and budgetary comparison schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections, and continuing annual disclosure have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
30 To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California Page Three
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 27, 2016, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.
Badawi and Associates Certified Public Accountants Oakland, California December 27, 2016
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Berkeley, we offer readers of the City of Berkeley’s financial statements this narrative overview and analysis of the financial activities of the City of Berkeley for the fiscal year ended June 30, 2016. We encourage readers to consider the information presented here in conjunction with additional information that we have completed in our letter of transmittal, which can be found on pages 1-22 of this report. All amounts, unless otherwise indicated, are expressed in millions of dollars.
Financial Highlights
The City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $43.6 million at the close of the fiscal year ended June 30, 2016. Included in this amount was a balance of ($399.9) million in unrestricted net position. Unrestricted net position is net position that may be used to meet the City’s ongoing obligations to citizens and creditors. The negative amount was due to the implementation of GASB Statement No.68 related to Accounting and Financial Reporting for Pensions in FY 2015.
During the year, the City’s total Deferred Outflows of Resources increased to $34.9 million and $7.2 million respectively for the governmental activities and business type activities. Deferred outflows of resources represent a consumption of net assets by the government that is applicable to a future reporting period. The government has only one type of item, which arises only under the accrual basis of accounting that qualifies for reporting in this category. GASB Statement No. 68 requires recognition of deferred outflows of resources for changes in the net pension liability of employers that arise from several types of events. Accordingly, the item, deferred outflows of resources, is reported only in the Statement of Net Position under the government-wide financial statements. Those requirements include recognition by an employer of a deferred outflow of resources for its contributions made to a defined benefit pension plan between the measurement date of the report on net pension liability and the end of the employers reporting period.
During the year, the City’s total net position increased by $37.7 million from a restated $5.9 million. Governmental activities revenues increased by $26.2 million while governmental activities expenses increased by $5.7 million. Business-type activities revenues increased by $2.0 million, while business activities expenses decreased by $1.0 million.
As of June 30, 2016, the City’s governmental funds reported a combined ending fund balance of $221.4 million, an increase of $22.4 million. Approximately 32.1% percent of this total amount ($71.1 million) is available for spending at the government’s discretion (Assigned to and unassigned fund balance).
The total cost of all City programs increased by $4.7 million from $316.0 to $320.7 million. This was accounted for primarily by increases (decreases) in the following functions/activities: $7.3 million in Public Safety, ($2.1) million in Highways and Streets, $1.0 million in Interest on long-term debt, and $2.9 million in Permit Service Center.
As of June 30, 2016 the assigned to and unassigned to fund balance for the General fund was $61.3 million or 38.8% of FY 2016 total General fund expenditures and transfers out.
The City’s total long-term debt increased by $41.8 million during the current fiscal year. During the year, the long-term debt for the City’s governmental funds increased by $40.6 million. This increase was accounted for by the following: (1) regular principal payments of $41.5 million; (2) increase in new debt of $40.8 million due to 2015 GO Refunding bonds with premium; (3) increase in compensated absence payable of $2.0 million ; (4) increase in net pension liability for CalPERS Miscellaneous plan $6.8 million, CalPERS Fire plan $2.3 million and CalPERS Police plan $6.5 million; (5) increase of police retirement income plan of $14.8 million; (6) increase in police retiree premium assistance plan of $5.3 million; (7) an increase in OPEB miscellaneous employee retiree health plan of $1.3 million; (8) an increase in capital lease obligations of $2.8 million, and (9) a decrease in Safety member pension fund of ($.5) million.
33 The long-term debt for business activities increased by $1.2 million. This increase was accounted for by the following: (1) regular principal payments of $1.9 million. (2) $2.8 million increase in net pension liability for miscellaneous employees and (3) $.3 million increase in net OPEB obligations for miscellaneous employees.
During the year, the City’s deferred inflows of resources decreased to $35.0 million and $6.7 million for the governmental activities and business type activities respectively. Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental fund balance sheet. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. GASB Statement 68 requires the recognition of net differences between projected and actual earnings on pension plan investment, change of assumptions, difference between expected and actual experience, as an increase (decrease) in pension expense for the current portion. For the future portion, it is treated as deferred inflows of resources, and is reported only in the Statement of Net Positon under the Government-wide financial statements, and to be amortized for the next four years. In FY 2016, the City issued the 2015 GO Refunding Bonds and reported $1.1 million of deferred inflows of resources for the difference between the face value of the refunding bonds and the reacquisition price of the refunded bonds, and will recognize it as a component of interest expense in a systematic and rational manner over the remaining life of the bonds that were refunded.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Berkeley’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private sector business. The statement of net position presents information on all of the City’s assets, deferred outflow, deferred inflow and liabilities. The difference between the assets plus deferred outflow and liabilities plus deferred inflow is reported as “Net Position”. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position is improving or deteriorating. You will need to consider other nonfinancial factors, such as changes in the City’s property tax base and the condition of the City’s roads, to assess the overall health of the City. The statement of activities presents information showing how the government’s net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish governmental activities functions of the City that are principally supported by taxes and intergovernmental revenues 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 City include all of the City’s basic services that are considered to be governmental activities: general government, public safety, highways and streets, health and welfare, culture-recreation, community development/housing and economic development. Property taxes, business license taxes, transient occupancy taxes, sales taxes, utility users’ taxes, ambulance fees and franchise fees finance most of these activities. The
34 business-type activities of the City include a Parking related operation, a Clean Storm Water operation, a Marina, a Sanitary Sewer operation, a Refuse Collection and Disposal operation, a Permit Service Center, and Building Purchases and Management. The government-wide financial statements include not only the City itself (known as the primary government), but also a legally separate Rent Stabilization Board for which the City is financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. Implementation of Recently Issued accounting Principles
During the fiscal year, the City adopted GASB Statement No. 72, Fair Value Measurement and Application.
Issued in February 2015, this Statement requires that state and local governments measure certain assets or liabilities at fair value. The new standard is effective for periods beginning after June 15, 2015. Application of this Statement is effective for the City’s fiscal year ending June 30, 2016. This Statement provides guidance for determining a fair value measurement for financial reporting purposes. The Statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value investments.
This Statement requires fair value measurements for certain investments not previously measured at fair value.
Also, prior to the effective date or implementation of GASB 72, the following assets were required to be measured at fair value. When the City acquires the following assets during or after fiscal year 2016, it will now be required to measure these assets at acquisition value (market-based entry price):
Donated capital assets Donated works of art, historical treasures and similar assets Capital assets acquired through a non-exchange transaction Capital assets received in a service concession arrangement
This Statement also establishes a hierarchy of three levels of inputs to the valuation techniques that are used to measure fair value.
Level 1 inputs are directly observable, quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets in active markets or quoted prices for identical or similar assets in markets that are not active. Level 3 inputs are unobservable inputs, such as management’s assumption of the default rate among underlying mortgages of a mortgage-backed security.
Level 3 is used only if Level 1 and Level 2 inputs are not available.
The government-wide financial statements can be found on pages 52-53 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 City of Berkeley, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Some funds are required to be established by State law and
35 by bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. All of the funds of the City of Berkeley can be divided into three categories: governmental, proprietary, and fiduciary.
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 government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Berkeley maintains 87 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General fund, Grant fund, Library fund and Capital Improvements fund, all of which are considered to be major funds. Data from the other 83 governmental funds are combined into a single, aggregated presentation. The City of Berkeley adopts an annual appropriated budget for its General fund, special revenue funds, capital project funds, and debt service funds. The budgetary comparison schedules have been provided for the General Fund, Library Fund, and Grants fund, which are major Special Revenue Funds to demonstrate compliance with this budget under “Required Supplementary Information other than MD&A section”. The basic governmental fund financial statements can be found on pages 54-57 of this report. Proprietary funds—The City of Berkeley maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Berkeley uses enterprise funds to account for its Zero Waste, Marina Operation/Maintenance, Sanitary Sewer, Clean Storm Water, Permit Service Center, Off-Street Parking, Parking Meter, and Building Purchase and Management operations, which are all considered to be major funds of the City of Berkeley. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Berkeley’s various functions. The City of Berkeley uses internal service funds to account for its equipment maintenance replacement, building maintenance, central services, computer replacement, workers’ compensation program, sick leave and vacation payout, public liabilities, and catastrophic loss reserves. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more details. The eight internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund statements can be found on pages 58-61 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Berkeley’s own programs. The accounting used for fiduciary funds is much like that for proprietary funds. The basic fiduciary fund financial statements can be found on pages 62-63 of this report.
36 Notes to the financial statements. The notes 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 the financial statements can be found on pages 65-154 of this report.
Notes to the Private Trust Funds of the Successor Agency. The notes provide additional information that is essential to a full understanding of the data provided for the transition from the Berkeley Redevelopment Agency as governmental funds to the Successor Agency as the Private Trust Funds. The notes can be found on pages 155-156 of this report
Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Berkeley’s progress in funding its obligation to provide pension benefits and other postemployment benefits to its employees. Required supplementary information can be found on pages 159-173 of this report.
The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information on pensions and other postemployment benefits. Combining and individual fund statements and schedules can be found on pages 175-240 of this report.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City of Berkeley, assets and deferred outflows exceeded liabilities and deferred inflows by $43.6 million at the close of the fiscal year ended June 30, 2016. By far the largest portion of the City of Berkeley’s net position of $300.9 million reflects its investment in capital assets (e.g., infrastructure, land, buildings, machinery and equipment, construction in progress); less any related debt used to acquire those assets that are still outstanding. There was an increase of $7.9 million from $293 million in FY 2015 to $300.9 million in FY 2016. The City of Berkeley uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Berkeley’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
37 Table 1 City of Berkeley Statement of Net Position (In Millions)
Governmental Business-type Activities Activities Total 2016 2015 2016 2015 2016 2015 Assets: Current and other assets $ 317.1 $ 292.6 $ 65.0 $ 57.3 382.1$ $ 349.9 Capital assets 222.3 216.4 181.5 172.2 403.8 388.6 Total assets 539.3 509.0 246.5 229.5 785.9 738.5
Deferred Outflows of Resources: Deferred outflows related to pension plan employer contribution 34.7 32.3 7.2 6.5 41.9 38.7 Deferred outflows due to the difference between projected and actual earnings 0.2 - - - 0.2 - Total Deferred Outflows of Resources 35.0 32.3 7.2 6.5 42.2 38.7
Liabilities: Other liabilities 45.6 46.9 8.3 5.2 53.9 52.2 Long-term debt outstanding 592.6 552.0 96.0 94.8 688.5 646.8 Total liabilities 638.1 598.9 104.3 100.0 742.4 699.0
Deferred Inflows of Resources: Net difference between projected and actual earnings on pension plan investments 8.1 60.0 1.6 12.5 9.7 72.4 Deferred inflows due to changes of assumptions 13.7 - 2.5 - 16.2 - Deferred inflows between expected and actual experience on pension plans 12.4 - 2.6 - 15.0 - Deferred inflows due to the refundings of debt 1.1 - - - 1.1 - Total Deferred Inflows of Resources 35.3 60.0 6.7 12.5 42.0 72.4
Net positions: Net investment in Capital Assets 141.6 144.1 159.3 148.8 300.9 293.0 Restricted for Debt services 14.1 10.3 - - 14.1 10.3 Restricted for Special purposes 115.3 103.1 115.3 103.1 Restricted for Capital project 13.2 12.0 13.2 12.0 Unrestricted (383.3) (387.1) (16.7) (25.3) (399.9) (412.4)
Total net position $ (99.1) $ (117.6) $ 142.7 $ 123.5 $ 43.6 $ 5.9
The restricted component of Net Position $142.6 million represents debt services, special purposes, and capital project requirements. There was an increase of $17.2 million from $125.4 million in FY 2015 to $142.6 million in FY 2016. The remaining balance of unrestricted component of Net Position $(399.9) million may be used to meet the City’s ongoing obligations to citizens and creditors. There was an increase of $12.4 million from $(412.4) million in FY 2015 to $(399.9) million in FY 2016. At June 30, 2016 and June 30, 2015, the City reported negative balances in unrestricted net position for its governmental activities and business-type activities after adjusting for implementation of GASB Statement No.68 for Accounting and Financial Reporting for Pensions in FY 2015. The City’s net position was ($99.1) million and $142.7 million from governmental activities and business type activities, respectively. Governmental activities. Governmental activities increased the City’s net position by $18.6 million in FY 2016. Business-type activities increased the City’s net position by $19.2 million. Key elements of these changes are as follows:
38
Table 2 Statement of Activities and Change in Net Position (In Millions) Governmental Business-type Activities Activities Total 2016 2015 2016 2015 2016 2015 Revenues Program revenues: Charges for services $ 29.9 $ 20.2 $ 95.6 $ 93.5 $ 125.5 $ 113.6 Operating contributions and grants 35.1 33.3 0.1 0.4 35.2 33.7 Capital contributions and grants 2.2 2.0 2.2 2.0 Total program revenues 67.2 55.4 95.7 93.9 162.9 149.3 General revenues Taxes: Property taxes For general purposes 80.8 73.7 80.8 73.7 For debt services 7.2 7.8 7.2 7.8 For special purposes 36.2 33.3 36.2 33.3 Sales taxes 20.6 17.1 20.6 17.1 Utility users taxes 14.2 14.4 14.2 14.4 transient occupancy traxes 7.9 7.1 7.9 7.1 Business license tax 18.8 16.1 18.8 16.1 Other taxes 3.5 3.9 3.5 3.9 Investment income 3.4 2.5 0.2 0.0 3.6 2.5 Miscellaneous 2.8 5.1 2.8 5.1 Total general revenues 195.4 181.0 0.2 0.0 195.6 181.0 Total revenues 262.6 236.4 95.9 93.9 358.5 330.3
Expenses General government 31.3 31.5 31.3 31.5 Public safety 114.1 106.8 114.1 106.8 Highways and streets 17.6 19.7 17.6 19.7 Health and welfare 19.7 19.4 19.7 19.4 Culture and recreation 34.7 35.5 34.7 35.5 Community development/housing 17.6 17.7 17.6 17.7 Economic development 4.2 3.9 4.2 3.9 Interest on long-term debt 4.8 3.8 4.8 3.8 Parking related 8.4 8.9 8.4 8.9 Marina operations and maintenance 5.1 5.1 5.1 5.1 Sewer services 12.1 13.5 12.1 13.5 Clean storm water 2.8 2.9 2.8 2.9 Refuse services 31.0 32.6 31.0 32.6 Permit service center 14.9 12.0 14.9 12.0 Building purchase and management 2.4 2.7 2.4 2.7
Total expenses 244.0 238.3 76.7 77.7 320.7 316.0
Increase in net position before transfers 18.6 (1.9) 19.2 16.0 37.7 14.2 Transfers (0.1) (0.1) 0.1 0.1 0.0 - Increase ( decrease ) in net position 18.5 18.5 19.1 16.1 37.7 14.2
Net position, July 1 (restated) (117.6) (115.6) 123.5 107.3 5.9 (8.3) Net position, June 30 $ (99.1) $ (117.6) $ 142.7 $ 123.5 $ 43.6 $ 5.9
Total governmental activities revenues increased approximately $26.2 million. Key factors in that increase were the following: Charges for services increased by $9.8 million or 32.7%, which was attributable to: o A $6 million increase in the ambulance fee revenue accrual compared to FY 2015. o A net increase of $2.9 million from affordable housing mitigation fees, meal programs donations and rental housing safety program inspection fees.
39 Operating grants and contributions increased by 4.3% from $33.8 million in FY 2015 to $35.3 million in FY 2016 largely due to a $2.4 million increase in Measure BB revenue from $0.6 million in FY 2015 to $3.0 million in FY 2016.
Property transfer tax revenue increased by $2.3 million, from $15.1 million in FY 2015 to $17.5 million in FY 2016, primarily as a result of three large property sales made in September 2015 (paid to the City in October 2015), which totaled $98.3 million in property sales and generated $1,474,875 in property transfer taxes.
Real property tax revenue increased by $3.9 million from $44.1 million in FY 2015 to $48.0 million in FY 2016, consistent with the increase in assessed value of 7.85% from $14.1 billion in FY 2015 to $15.2 billion in FY 2016 Sales tax revenue increased by 13.7% or $3.5 million from $17.1 million in FY 2015 to $20.6 million in FY 2016 resulting from strong sales in restaurants; food markets; furniture/appliances and recreation products. Soda tax revenues increased from $0.2 million in FY2015 to $1.8 million in FY 2016. A sugary beverages and soda tax, Measure D, was passed by 76.17% of the voters on November 4, 2014. Transient Occupancy Tax revenue increased by $.7 million. This increase was due to double-digit growth at nine of the City’s largest hotels, 8% growth in its largest hotels, and higher collection of delinquent payments. Investment income increased by $0.9 million or 36.3%, from $2.5 million in FY 2015 to $3.4 million in FY 2016 primarily as a result of slightly higher available cash balances, and significantly higher interest rates. General Government expenses increased by $.2 million due to the following: Grant payments to community agencies increased by $.8 million due to an increase in their allocations. Higher reimbursements of indirect costs from Enterprise funds, which reduced expenditures by $.6 million. Public Safety expenses increased by $7.3 million primarily due to the following: There was $.6 million more in FY 2016 for temporary disability payments due to injuries. Overtime pay increased $1.0 million, and the police and fire sick and vacation relief payment increased $.4 million. In addition, the compensated absence costs increased $1.3 million The rates to fund all pension plans increased: For misc. employees, the rate increased 2.12%, from 21.91% to 24.03%; for fireman, the rate increased 2.42%, from 33.16% to 35.58%; for police, the rate increased 2.02% from 46.57% to 48.59. As a result, pension expense increased by $1.1 million The retiree medical benefits increased $.5 million as the rate for funding the police’s retiree premium assistance plan and PORAC medical trust increased 2.43%, from 7.22% to 9.65%. Worker’s comp. expense increased $.3 million, as a result of rate increases. The charges to the Fire department’s facilities maintenance service increased $.4 million, as a result of a rate increase. Depreciation expense increased almost $1 million.
40 Highway and streets expenses decreased by $2.1 million in FY 2016, as a result of a decrease of $2.8 million for professional services fees from the Led Street Light Conversion project from the California Energy Commission Fund. Culture and recreation expenses decreased $.7 million for the following reasons: A decrease of $.7 million in retirement expenses. The following charts illustrate the City’s governmental expenses by function and revenues by source. As shown, General revenues such as property, sales, utility users and business license taxes are not shown by function but are effectively used to support citywide programs. Taxes are by far the largest segment of revenues (72.05%) followed by grants and subventions (14.20%) and charges for services (11.39%). Public safety is the largest function in terms of expenses (46.76%), followed by culture and recreation (14.23%), general government (12.84%), highway and streets (7.21%), and community development (7.21%).
Fiscal Year 2016 Governmental Activities
Sources of Revenue
Charges for Services 11.39%
Grants & Subventions 14.20%
Investment Income 1.29%
Other 1.07%
Taxes 72.05%
41 Economic Functional Expenses Development 1.71% Interest 1.96% Community Development General 7.21% Government 12.84% Culture & Recreation 14.23%
Health & Welfare 8.08% Public Safety 46.76% Highways & Streets 7.21%
Business-type activities.
The City’s Business-type activities provide the same type of information found in the proprietary fund financial statements, but in less detail. During FY 2016, Business-type activities increased the City’s net position by $19.1 million. Key elements of this increase are as follows:
Zero waste Fund net position increase by $.8 million Marina Operations Fund net position increase by $1.6 million Sanitary Sewer Fund net position increase by $2.5 million Permit Service Center Fund net position increase by $.4 million Off Street Parking Fund net position increase by $2.2 million Parking Meter Fund net position increase by $1.7 million Building purchase and Management Fund net position increase by $.3 million An adjustment of $2.4 million to reflect the consolidation of internal service fund activities related to enterprise funds.
42 Sources of Revenue Grants & Business - type Activites Subventions Investment Income 0.10% 0.17%
Charges for Services 99.73%
Program Revenue and Expense Business - type Activities amounts expressed in dollars $45,000,000 40,584,755 $40,000,000
$35,000,000 32,380,423
$30,000,000
Revenue $25,000,000 Expense $20,000,000 15,791,647 15,005,471 14,924,967 13,377,169
$15,000,000 12,358,621
$10,000,000 8,752,188 6,826,754 5,204,404 2,950,548
$5,000,000 2,449,042 2,259,848 2,090,399
$0 Sewer Marina Parking Water Zero Waste Clean Storm Clean Permit Center & Management Building Purchase
Financial Analysis of the City’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in
43 assessing the City’s financing requirements. In particular, Assigned to and unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
As of June 30, 2016, the City’s governmental funds reported combined fund balances of $221.4 million, an increase of $22.4 million from the prior fiscal year.
The General Fund is the chief operating fund of the City. As of June 30, 2016, fund balances for “assigned to” and “unassigned” in the General Fund is $3.7 and $57.7 million, respectively, and total fund balance was $65.0 million. As a measure of the General Fund’s liquidity, it may be useful to compare both assigned to and unassigned fund balance and total fund balance to total expenditures. Assigned and unassigned fund balance represents 38.8% of total General Fund expenditures and transfer out of $158.2 million, while total fund balance represents 41.1% of that same amount.
The fund balance of the City’s General Fund increased by $11.7 million. The increase in operations was primarily accounted for by the following: o A $4.0 million increase in secured property taxes; a $2.3 million increase in property transfer tax, a $2.0 million increase in sales taxes; a $1.5 million increase in soda taxes; and a $2.0 million increase in business license tax.
The fund balance of the City’s Grants Fund increased by $3.5 million. The increase was primarily accounted for by the following:
o A total increase of $2.4 million in the Federal Home grant, Shelter Plus Care, and CalTrans Grant; o A decrease of $.9 million in health and welfare expenditures.
The fund balance of the Library Fund increased by $1.4 million. The increase was primarily accounted for by an increase of $.9 million in Library tax revenue.
The fund balance of the City’s Capital Improvement Fund (CIP) increased by $1.4 million, primarily as a result of total expenditures in the CIP fund exceeding revenues by $5.2 million, , but offset by net transfers in of $6.6 million. The fund balance of the Non-Major Governmental Funds increased by $4.4 million. The increase in operations was primarily accounted for by a 2015 GO bonds refunding premium of $4.1 million.
General Fund Budgetary Highlights:
The City Council approved an original annual appropriation ordinance of $159,862,009 and made supplementary budget appropriations totaling $11,415,677 during the year. The supplementary budget appropriations consisted of the following: (1) FY 2015 outstanding encumbrances of $3,067,844; (2) unencumbered carryovers of $3,471,535; and (3) other budget adjustments of $4,876,298.
General fund expenditures were $5.3 million less than the approved budget, and the following functions accounted for most of this decrease:
44 General government - $.9 million under budget due to personnel savings from vacancies and lower benefit costs and non-personnel savings. Highway and Streets- $1.4 million under budget due to personnel savings from vacancies and lower benefit costs and non-personnel savings. Community Development & Housing- $3.0 million under budget due to personnel savings from vacancies and lower benefit costs and non-personnel savings.
Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Please refer to Statement of Net Position and Statement of Revenues, Expenses, and Changes in Net Assets of Proprietary Funds for the below information:
Total net position of the enterprise funds as of June 30, 2016 and the changes in net position are summarized below:
Net Position as of Net Position as of Changes - Increase Fund June 30, 2016 June 30, 2015 (Decrease) Zero Waste $ (8,490,204) $ (16,583,665) $ 8,093,458 Marina Operations 2,714,065 1,113,295 1,600,769 Sanitary Sewer 114,856,933 112,393,108 2,463,825 Clean Storm Water 15,869,146 15,799,347 69,799 Permit Center (1,787,469) (2,198,807) 411,338 Off-street Parking 18,406,898 16,193,994 2,212,903 Parking Meter 467,860 (1,240,157) 1,708,015 Building Purchase and Management (3,605,054) (3,874,048) 268,995 Total$ 138,432,175 $ 121,603,074 $ 16,829,102
The net increase of $8.1 million in net position in the Zero Waste was $2.5 million more than the increase in FY 2015; that $2.5 million increase over FY 2015 was primarily accounted for by the following: o A $1.6 million increase in Refuse service fees income. o A reduction in pension expenses of $1.0 million.
There was a net increase of $1.6 million in net position in the Marina Operations in FY 2016, compared to a $.1million increase in net position in FY 2015. The key factors were: o Less interest expenses and operating grants totaling $.2 million. o An operating revenue increase of $.4 million due to a fee rate increases in berth rentals and live-aboard.
The net increase of $2.5 million in net position in the Sanitary Sewer was primary due to the following key factors: o A decline in employee benefits pension expenses of $.6 million. o A decrease of $1 million in material and supplies expenses.
The net increase of $.4 million in net position in the permit service center was a drop from a FY 2015 increase of $5.3 million. The decrease of $4.9 million was caused by a decrease of
45 permit related revenues of $2.1 million, and a $2.8 million increase in expenses such as personnel costs, professional costs and supplies and materials. The net increase of $2.2 million in net position for the Off-Street Parking Fund in FY 2016 was $.9 million more than what it was in FY 2015 due to the following: o $.7 increase in transfer in from Parking meter fund to reimburse the fund as the Center Street Garage goes through a demolition and rebuilding process, o $.1 million increase related interest revenue and interest expense deduction as the revenue bonds were paid off in FY 2015. o $.1 million increase in parking revenue from the garages. The net increase of $1.7 million in net position for the Parking Meter Fund in FY 2016 was primarily due to the following: o A $.2 million reduction in operating expenses, especially in materials and supplies. o A $.4 million increase in net income before contributions and transfers. The net increase of $.3 million in the Building Purchases and Management Fund net position was primarily due to the following: o $.3 million decrease in operating expenses from $2.0 million in FY2015 to $1.7 million in FY 2016.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital assets The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2016 totaled $403.8 million (net of accumulated depreciation), which is $15.2 million more than the total as of June 30, 2015. This investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure and construction in progress (See Table 3 below.).
Capital assets for governmental activities increased by $5.9 million. The increase was primarily due to the addition of $17.5 million in capital assets for infrastructure for streets improvements and pavements, and for equipment. This was offset by an increase of $11.9 million in accumulated depreciation. Capital assets for business type activities increased by $9.3 million. The increase was primarily due to the addition of $.9 million for the new garage and $6.8 million in infrastructure for sanitary sewer and clean storm projects. This was offset by an increase of $.8 million in accumulated depreciation.
46 Table 3 City of Berkeley Capital Assets at Year-End (Net of Depreciation, in Millions)
Government Business-Type Activities Activities Total 2016 2015 2016 2015 2016 2015
Land 21.8$ 21.8$ 3.0$ 3.0$ 24.7$ 24.7$ Buildings and improvements 82.1 86.0 23.3 22.9 105.4 108.9 Improvements other than building 10.7 10.4 11.1 11.0 21.7 21.4 Machinery and equipment 17.3 16.0 3.3 1.5 20.6 17.5 Infrastructure 87.0 81.9 136.8 132.7 223.7 214.6 Construction in progress 3.4 0.4 4.1 1.1 7.5 1.5
$222.3 $ 216.4 $ 181.5 $ 172.2 $ 403.8 $ 388.6
Additional information on the City’s capital assets can be found in note III C on page 78-80 of this report.
Long-term debt. At year-end, the City had total long-term obligations from governmental activities of $592.6 million, an increase of $40.6 million or 7.6% from the previous year (as shown in table 4). The June 30, 2016 total included: $85.8 million in general obligation bonds including a premium of $4.6 million, $5.7 million in Certificates of Participation including a premium of $.4 million, $5.5 million in lease revenue bonds including a premium of $.5 million , $.5 million in pension refunding bonds, $4.1 million in capital lease obligations, loans and notes payable of $9.8 million, $12.7 million in compensated absences - other, $.1 million in compensated absences - PORAC, and $31.6 million in workers’ compensation and public liability judgments and claims. A net OPEB Obligation and Net Pension Obligation of $23.5 million and $413.3 million, respectively, were added. Please refer to Note 1.D to the Financial Statements for more details.
47 Table 4 City of Berkeley Outstanding Debt, at Year-End (In Millions)
Government Business-Type Activities Activities Total 2016 2015 2016 2015 2016 2015
General obligation bonds -- including $4.6M premium$ 85.8 $ 84.6 $85.8$ 84.6 Lease revenue bonds -- including $.5M premium 5.5 5.7 $0.0 $22.0 5.5 27.7 Pension refunding bonds 0.5 0.8 0.5 0.8 Certificates of participation -- including $.4M premium 5.7 5.8 - - 5.7 5.8 Capital leases 4.1 2.0 4.1 2.0 Loans and notes payable 9.8 10.3 - 8.5 9.8 18.9 Compensated absences - PORAC 0.1 0.5 0.1 0.5 Compensated absences - Other 12.7 10.7 - 2.4 12.7 13.2 Landfill liabilities - 2.1 - 2.1 Judgments and claims 31.6 31.2 31.6 31.2 Net OPEB Obligation 23.5 16.9 - 1.6 23.5 18.5 Net Pension Liabilities 413.3 383.4 - 58.1 413.3 441.5
$592.6 $552.0 $0.0 $ 94.8 $ 592.6 $ 646.8
Standard & Poor’s Corporation and Moody’s Investors Service have assigned the general obligation bonds ratings of AA+/Aa2.
Additional information on the City’s long-term debt can be found in note III D of this report.
ECONOMIC FACTORS AND ADDRESSING LONG-TERM UNCERTAINTIES
During the fiscal year, the local economy grew consistent with regional trends. Berkeley’s current economic base consists of over 12,655 licensed businesses operating in the City. These businesses include private manufacturing, technology research, retail and service businesses, educational services, healthcare and social assistance, consulting, arts and entertainment, hospitality services, along with several state, federal, and non-profit institutions. These businesses provide employment for 67,172 workers (up from 65,048 in June 2015). The City’s revenue base generated approximately $2.06 billion in taxable sales taxes during FY 2016, an increase of 20.5% from the $1.71 billion in FY 2015. In addition, the City’s unemployment rate (as reported by the State of California Employment Development Department) declined from 4.0% in June 2015 to 3.8% in June 2016, compared to 4.7% for the County, 5.7% for the state and 4.9% for the U.S.
Growth in assessed valuation on secured property increased by 7.9% to $15.2 billion in FY 2016, for a strong level of $126,756 per capita. The tax base is diverse, with the top ten property taxpayers accounting for 5.8% of total assessed valuation.
While the City has established a stability budget for FY 2016 and FY 2017, the City still needs to continue to develop solutions that resolve the long-term challenges presented by expenditures growing faster than revenues. The Council has adopted budget development policies which have served the City well over the long term, and has also established several budget policies that begin to address some of the long-term problems.
48 The fiscal policies adopted by the Council include:
Focusing on the long-term fiscal health of the City by adopting a two-year budget and conducting multi-year planning; Building a prudent reserve; Developing long-term strategies to reduce unfunded liabilities; Controlling labor costs while minimizing layoffs; Allocating one-time revenue for one-time expenses; Requiring enterprise and grant funds to balance and new programs to pay for themselves; and Any new expenditure requires revenue or expenditure reductions. Property Transfer Tax in excess of $10.5 million dollars will be treated as one-time revenue to be received for the City’s capital infrastructure needs.
As the General Fund subsidy to the Safety Members Pension Fund declines over the next several years, the amount of the annual decrease will be used to help fund the new Police Employee Retiree Health Plan.
Also, used as a guide to developing the budget is the “fix it first” approach in which we fund current capital improvements before funding new projects.
The proposed budget provides a plan to control costs and maximize the use of City resources. It is a balanced budget and thus does not require further General Fund expenditure reductions. The General Fund, however, is less than half of the City’s total budget. Many of the special funds that were struggling are starting to become healthy again due to the City Council and City staff actions over the last several years that have allowed the City to effectively manage and balance its budget as we begin to recover from some very difficult times.
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City’s Finance Department, at the City of Berkeley, 2180 Milvia Street, Third Floor, California 94704.
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50 BASIC FINANCIAL STATEMENTS
51 Units 10,100 27,197 79,985 178,457 143,720 589,399 215,627 230,052 162,126 628,095 178,457 628,095 178,457 178,457 5,714,089 4,208,495 (5,109,853) (5,288,310) 5,053,443 4,874,986 1_0,201,992 Rent Stabilization $ $ Comeonent __ 70,586 441,798 241,159 713,313 4,103,003 5,119,685 1,103,446 4,715,666 9,708,408 1,418,576 4,545,103 2,047,493 9,564,731 Total 7,505,322 13,173,675 18,228,356 43,569,766 46,487,460 13,078,542 23,544,658 14,108,873 16,183,342 15,032,832 42,028,027 10,895,666 20,242,267 24,995,000 42,159,194_ 41,918,035 20,644,856 21,741,562 31,848,208 24,729,182 87,943,616 300,930,041 742,427,620 668,276,987 (399,920,192) 785,866,216 105,402,111 371,533,591 403,768,094 223,745,061 261,522,399 $ $ 32 503,710 429,324 277,548 1,644,298 6,743,303 2,466,982 2,632,023 3,165,706 1,707,806 5,406,594 7,186,017 7,186,017 3,296,002 4,069,296 2,979,050 4,121,269 4,243,883 92,801,160 (16,664,516) 11,084,390 23,277,789 142,676,057 56,682,027 104,291,848 136,771,452 181,477,979 246,525,191 Activities Government $ Business-Type $ Prima!}'. Position 70,586 989,252 441,798 241,159 713,313 2016 5,119,685 4,103,003 1,103,446 4,715,666 8,064,110 1,543,783 4,267,555 5,489,072 7,856,925 3,436,026 13,173,675 13,078,542 18,228,356 46,487,460 14,108,873 23,544,658 12,400,809 13,716,360 35,284,724 Net 17,076,561 24,995,000 {4,243,883) 34,973,177 (99,106,291) 34,732,018 17,348,854 10,657,172 86,973,609 82,124,322 21,750,132 31,848,176 83,822,347 141,589,468 159,340,573 575,475,827 638,135,771 (383,255,676) 197,103,958 174,429,633 539,341,027 Berkeley 222,290,115 204,840,372 30, of of Activities Governmental June City $ $ Statement net statements. assets plans earnings plan financial capital actual depreciated, pension for plans on and these pension being of on contribution pension part Subtotal projected assets, on experience earnings RESOURCES integral RESOURCES employer capital OF actual between an OF actual plan and Total are assumptions depreciation: and uncollectibles) of Housing RESOURCES for notes notes difference pension RESOURCES INFLOWS Ill): OUTFLOWS buildings and OF expected assets to the education depreciated: year change projected OF to than wages to (Note accumulated POSITION and one allowance Capital of related being due refunding anticipation year and between progress due Payable equipment of resale registration other in NET welfare between DEFERRED than in LIABILITIES on DEFERRED net not ASSETS accompanying development for one INFLOWS OUTFLOWS and (net liabilities rent investments projects for: and revenues - Redevelopment assets: I payable purposes gain investments inflows inflows The recreation outflows outflows more Interest service salaries revenue held Held enforcement balances and assets assets TOTAL in within TOTAL TOTAL Liabilities TOTAL TOTAL POSITION and Investment and difference Capital Urban Park, Economic Health Other Law Debt Highway and Highway streets Due. Due Infrastructure Improvements Machinery Buildings Land Cash Construction Unrestricted Net NET Deferred Restricted Deferred Net Deferred investments DEFERRED Noncurrent Unearned Other Deposit Advances Tax Accrued LIABILITIES DEFERRED Deferred Deferred Accounts Accrued Capital Capital Restricted Property Inventories Internal Cash Receivables ASSETS
52 Units (147,705) (147,705) (147,705) Rent (4,962,148) {5,109,853) Stabilization $ $ Component 71,940 195,733 389,424 887,304 (769,596) (184,542) (867,827) 5,860,663 3,583,973 2,169,816 3,582,337 7,879,633 4,431,198 2,759,600 7,231,134 1,733,145 2,818,585 9,589,535 4,867,296 Total (4,778,074) (4,819,397) (3,504,378) 37,709,102 43,569,766 (4,913,110) 14,186,649 18,773,158 17,316,575 11,704,798 20,577,996 18,941,727 80,791,426 195,645,391 (32,234,835) (98,762,932) (26,997,459) (157,936,284) (176,878,011) $ $ and Position 332 Revenue 74,271 Net 242,625 168,021 887,304 (769,596) (184,542) in 1,733,145 9,589,535 2,818,585 4,867,296 Government 19,184,352 18,941,727 18,941,727 142,676,057 123,491,705 Activities Business-Type $ $ (Expense) Primary Changes Net 71,608 (74,271) 195,733 389,424 (867,827) 3,415,952 2,169,816 3,582,337 7,879,633 2,759,600 4,431,198 7,231,134 18,524,751 (4,778,074) 18,773,158 (4,913,110) (3,504,378) 14,186,649 {4,819,397) 17,316,575 11,704,798 20,577,996 80,791,426 {99,106,291} 195,402,766 (32,234,835) (98,762,932) (26,997,459) (117,631,042) Activities (176,878,011) (176,878,011) Governmental $ $ and 2016 2,194,454 Capital 2,194,454 2,194,454 Grants 30, $ $ $ Contributions June Activities and 99,845 99,845 50,000 of Revenues Berkeley 215,955 851,742 431,547 7,547,674 8,837,214 35,167,186 17,233,054 of Operating Grants Ended $ $35,267,031 Contributions $ Program City Year for Statement the 629,397 4,299,028 4,299,028 2,087,827 2,256,349 1,666,472 1,633,130 6,709,274 5,226,574 2,298,241 3,915,028 15,774,949 14,880,418 95,587,341 40,529,067 13,349,457 29,904,512 Services 14,535,669 For Charges $ $125,491,853 $ programs purposes service specific transfers 72,193 purposes: to 963,345 224,633 137,202 453,257 debt general Position 1,246,597 4,963,104 2,075,271 Indirect assets {4,963,104) (5,172,500) subventions and Expenses Allocation for for taxes $ $ Net statements. special in tax state restricted capital levied levied for of revenues taxes earnings occupancy license financial taxes taxes, taxes, 4,446,733 4,446,733 2,440,891 2,632,789 8,482,161 4,778,074 4,622,717 4,183,775 Changes 13,641,048 11,098,488 71,782,356 28,864,261 17,539,056 19,734,011 17,456,443 34,749,031 36,516,533 sales 320,889,623 taxes taxes users 249,107,267 114,150,343 government unrestricted general on Expenses revenues: these Library Parks Paramedic Fire of Business Utility Other Property Transient Property Property Sales Position--ending Position--beginning $ $ Total $ Gain Investment Contributions not Miscellaneous Other Taxes: Primary part Net Net Transfers: General integral housing an and are management maintenance activities debt and and notes Units center streets water recreation development activities: activities: welfare long-term government development and units: purchase government related on services business-type and governmental activities operations service services and safety storm Stabilization Government: Component primary Total Total accompanying Rent Building Refuse Permit Clean Sewer Marina Parking Interest Economic Public Highways Health Culture Community General The Component Total Total Business-type Functions/Programs Primary Governmental
53 City of Berkeley Balance Sheet Governmental Funds June 30, 2016
SQecial Revenue CaQital Project Other Total General Capital Governmental Governmental Fund Grants Libra[}'. lmQrovement Funds Funds
ASSETS Cash and investments in treasury $ 57,619,853 $ 19,050,918 $ 8,118,174 $ 12,406,365 $ 62,644,985 $ 159,840,295 Restricted Cash and investments 24,995,000 6,853,176 31,848,176 Receivables (net of allowance where applicable): Accounts 7,072,222 156,082 1,337 1,107,740 8,337,381 Interest 534,417 41,225 399,789 975,430 Taxes 9,421,286 192,474 1,317,534 10,931,294 Special assessments 205,850 205,850 Subventions/grants 6,626,044 544,223 7,170,267 Due from other funds 2,920,341 2,278,768 5,199,109 Notes receivable 3,595,304 27,689,143 7,757,390 16,608,551 55,650,388 Other 353,081 1 45,205 398,288 Property held for resale 713,313 713,313 Total Assets 106,511,504 53,522,188 8,311,986 22,483,748 90,440,365 281,269,791
LIABILITIES Accounts payable 1,768,426 775,893 261,100 353,614 1,193,042 4,352,076 Accrued salaries .an_d wages 4,501,609 451,153 520,506 64,388 2,011,361 7,549,017 Due to other funds 4,168,086 1,031,023 5,199,109 Deposits held 839,923 12,933 136,396 989,252 Unearned revenues 405,533 30,000 6,264 441,798 Tax and revenue anticipation note 24,995,000 24,995,000 Other liabilities 3,706,404 152,637 3,859,041 Total Liabilities 35,811,362 5,800,666 811,605 430,935 4,530,724 47,385,290
DEFERRED INFLOWS OF RESOURCES Unavailable revenue 5,675,636 5,013,079 1,337 554,285 1,277,812 12,522,149 Total Deferred Inflows of Resources 5,675,636 5,013,079 1,337 554,285 1,277,812 12,522,149
FUND BALANCES
Restricted 3,595,304 46,220,026 7,499,044 7,757,390 85,176,095 150,247,860 Assigned 3,686,427 13,741,138 17,427,565 Unassigned 57,742,775 (3,511,583) (544,267) 53,686,924
Total Fund Balances 65,024,506 $42,708,443 $7,499,044 21,498,528 84,631,829 221,362,351 Total liabilities, Deferred Inflows of Resources, and Fund Balances $ 106,511,504 $ 53,522,188 $ 8,311,986 $ 22,483,748 $ 90,440,365 $ 281,269,790
The accompanying notes are an integral part of these financial statements. 54 City of Berkeley Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2016
Fund balances - total governmental funds (Page 54) $ 221,362,351
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, not reported in the funds. Land 21,750,132 Construction in progress 3,436,026 Buildings 82,124,322 Improvements other than buildings 10,657,172 Machinery and equipment 17,348,854 Infrastructure 86,973,609 Governmental activities capital assets, net 222,290,115 less: capital assets for Internal service funds (16,281,929) Net: 206,008,186
Net OPEB (obligations) and assets and Net pension liability in governmental activities are not due and payable and therefore, are not reported in the funds. Net pension liability - Berkeley Police Retirement Income Benefit (69,870,690) Net pension liability- Safety Member Pension Plan (3,101,072) Net pension liability - CALPERS miscellaneous plan (140,759,255) Net pension liability - CALPERS Police Plan (130,445,826) Net pension liability - CALPERS Fire Plan (57,564,762) Net OPEB obligation - Police Retiree Premium Assistance Plan (16,449,480) Net OPEB obligation - Misc Retiree (6,655,192) Net OPEB obligation - Fire (12,362)
Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. Unavailable revenue 12,522,149 Deferred outflows on pension plan employer contribution 33,371,544 Deferred outflows due to difference between projected and actual 35,800,015
Internal service funds are used by management to charge the costs of public liability, equipment maintenance, building maintenance, supply warehouse, workers compensation, electrical warehouse and catastrophic loss services to individual funds. The assets and liabilities of the internal services funds are included in governmental activities in the statement of net assets. 7,465,281
Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. Accrued Interest Payable on long-term debt (1,504,140) Bonds, certificates of participation, notes and loans (107,237,776) Compensated absences - Porac (144,528) Compensated absences - Other (12,323,805)
Other long-term liabilities and deferred outflows are not available to pay for current period therefore, are deferred in the funds. Net deferred inflows on differences between projected & actual earnings on pension plan investments (43,311,664) Deferred inflows due to change of assumptions (13,249,305) Deferred inflows due to expected and actual (11,902,508) Deferred inflows due to the advance refundings resulting in defeasance debt (1,103,446)
Net position of governmental activities (Page 52) $ (99,106,291)
The accompanying notes are an integral part of these financial statements.
55 City of Berkeley Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Fiscal Year ended June 30, 2016 Special Revenue Capital Project
Other Total Capital Governmental Governmental General Grants Library Improvement Funds Funds
Revenues: Taxes $ 133,248,832 $ $ 17,318,794 $ $ 32,249,227 $ 182,816,853 Licenses and permits 322,629 322,629 Intergovernmental 11,207,839 21,682,461 74,167 16,402,726 49,367,193 Charges for service 9,528,107 283,450 44,494 5,907,244 15,763,295 Fines and penalties 6,370,878 208,661 182,211 6,761,750 Rents and royalties 214,944 809,332 1,024,276 Franchise 1,672,742 208,105 1,880,847 Private contributions and donations 1,909 137,944 55,880 195,733 Investment income 2,784,234 159,021 881 23,480 362,156 3,329,771 Miscellaneous 48,016 33,176 39,785 1,324,563 1,445,540 _____ ...... ------...... Total revenues 165,400,130 22,124,932 17,773,624 107,759 57,501,444 262,907,888 ------.. ·------...... ------Expenditures: Current: General government 28,244,384 214,490 18,533 810,159 1,924,850 31,212,417 Public safety 89,075,971 264,390 8,845,477 98,185,838 Highway and streets 1,337,222 1,450,992 17,722,516 20,510,730 Health and welfare 7,353,796 10,437,886 3,550,593 21,342,275 Culture-recreation 5,847,745 923,002 16,329,926 453,555 11,830,503 35,384,731 Community development and housing 6,056,830 5,247,958 4,634,230 15,939,018 Econon:iic development 2,324,591 225,000 1,703,380 4,252,971 Debt service: Principal repayment 2,160,325 2,160,325 Interest and fiscal charges 311,570 4,581,550 4,893,120 Refunding Bonds issuance costs 60,250 368,167 428,417 Capital outlay: Highway and streets 2,685,349 2,685,349 Community development and housing 1,134,745 225,136 1,359,880
Total expenditures 140,612,359 18,538,718 16,348,459 5,308,808 57,546,727 238,355,071
Excess(deficiency) of revenues over(under) expenditures 24,787,771 3,586,214 1,425,164 (5,201,049) (45,283) 24,552,817
Other financing sources(uses): Transfers in 4,515,979 9,510,512 6,557,259 20,583,750 Transfers out (17,568,294) (79,621) (2,908,097) (3,908,321) (24,464,333) Face value of refunding bonds issued 36,680,000 36,680,000 Premium on refunding bonds issued 4,144,029 4,144,029 Payment to refunded bond escrow agent (38,480,000) (38,480,000) Call Premium on refunded bonds (604,600) (604,600)
Sale of capital assets 4,065 500 11,009 15,574
Total other financing sources(uses) (13,052,315) (75,556) 6,602,915 4,399,377 (2,125,579)
Net change in fund balances 11,735,456 3,510,658 1,425,164 1,401,866 4,354,093 22,427,238
Fund Balance, July 1, 2015 53,289,050 39,197,786 6,073,880 20,096,662 80,277,736 198,935,113
Fund Balance, June 30, 2016 $ 65,024,506 $ 42,708,443 $ 7,499,044 $ 21,498,528 $ 84,631,829 $ 221,362,351
The accompanying notes are an integral part of these financial statements.
56 City of Berkeley Reconciliation of the Statement of Revenues, Expenditure, and Change in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2016
Net change in fund balances - total governmental funds (Page 54) $ 22,427,238
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The capital outlay expenditures are therefore added back to fund balance 14,020,367 Deletion of capital assets due to sale is therefore deducted from fund balance (8,327) Depreciation expense is therefore deducted from fund balance (11,769,545)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Tax receivable 1,184,800 Grant receivable (1,307,327) Accounts receivable 100,035
Issuance of long term debt provides current financial resources to governmental funds but incurring debt increases long-term liabilities in the Statement of Net Position. Repayment of principal on long-term debts is an expenditures in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities. Face Value of refunding bonds issued (36,680,000) Principal payments of GO bonds, pension refunding bonds, lease reveneu bonds, COP, and Loans Payable 2,160,325 Payment to refunded bond escrow agent 38,480,000 Capitalization of premium on debt (4,144,029)
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. Compensated absences (1,966,550) Amortization of premium on debt 248,292 Recognize deferred gain on refunding for 2015 GO Bonds (1,195,400) Amortization of Deferred inflow for 2015 GO refunding bonds 91,954 Net Pension Liability (Assets) - CalPERS accrued interest Net Pension expense - Berkeley Police Retirement Income Benefit Plan (14,670,920) Net Pension expense - Safety Members Pension Fund (196,846) Net Pension expense - CALPERS misc. plan 8,603,459 Net Pension expense - CALPERS police plan 1,504,659 Net Pension expense - CALPERS fire plan 2,697,024 Net OPEB expense - Police Retiree Premium Assistance Plan (5,290,978) Net OPEB expense - Misc. Retiree (1,272,463) Net OPEB assets - Fire (14,745) Net Police sick leave program (PORAC) 393,931 Accrued Interest Payable (411,814)
Internal service funds are used by management to charge the costs of certain activates to individual funds. The net revenue (expense) of the internal service funds is reported with governmental activities. Loss 1,735,301 Transfers in/out 4,093,880 Transfers out (287,570)
Change in net position of governmental activities (Page 53) $ 18,524,751
The accompanying notes are an integral part of these financial statements.
57 30,169 Service 39,643 70,586 498,301 311,302 467,055 383,728 197,339 211,172 870,401 367,483 307,908 153,449 (431,321) 3,271,042 1,360,474 1,360,474 6,714,674 1,136,993 4,132,222 3,058,518 12,140,486 11,709,165 11,511,593 49,880,693 43,166,018 27,421,000 16,281,929 16,281,929 13,223,411 16,179,325 28,820,752 45,224,112 $ $ Internal ~658 ~041 32 2,481 201,395 310,682 275,070 606,766 392,455 888,307 429,324 407,645 503,710 1,644,298 4,243,883 2,632,023 6,743,303 2,466,982 1,942,940 6,967,138 1,166,616 1,707,806 2,138,830 Total 5,406,594 7,186,017 7,186,017 2,979,050 4,069,295 4,121,269 20,139,908 60,804,181 92,801,158 11,490,690 60,803,296 35,972,166 (20,908,399) 20,709,861 142,676,057 159,340,573 138,432,174 104,291,848 181,478,012 242,281,308 181,477,979 174,429,634 $ $ 32 927 849 4,453 86,578 33,793 21,111 31,674 28,244 84,516 17,838 67,953 92,263 92,263 780,677 888,307 187,386 742,419 1,660,960 1,247,776 Purchases 1,327,321 2,069,740 (3,605,054) (5,266,014) 22,201,058 20,139,908 20,953,282 18,590,319 16,520,579 16,520,547 16,520,547 Management $ & $ Bldg. 3,421 32,519 160,108 467,860 256,285 656,608 173,130 240,215 170,622 174,331 819,263 699,716 699,716 (860,269) 1,328,129 funds. Meter 6,264,368 5,920,616 7,290,481 1,026,113 1,328,129 7,715,233 1,328,129 1,324,708 2,291,066 6,387,104 4,096,038 Parking $ $ 984 to enterprise Funds Activities-- 5,165 5,566 19,888 81,561 31,835 29,838 18,589 19,504 86,916 86,916 735,432 759,186 450,189 424,135 200,071 9,295,886 9,111,011 1,209,375 1,291,709 9,111,011 9,111,011 3,753,428 4,065,874 6,605,266 3,694,570 18,406,898 Parking 19,610,918 Off-Street related $ $ Entererise Business-type Position activities Funds 2016 6,722 Net 66,302 71,843 73,450 Service 604,562 377,686 566,653 434,790 376,942 396,070 553,729 Berkeley fund 30, 1,505,105 1,548,901 of 1,094,666 1,650,591 1,650,591 1,505,105 1,505,105 (3,292,574) 1,505,105 (1,787,469) 7,955,285 4,449,805 Center 14,778,138 15,872,804 13,966,406 of 13,983,645 12,478,540 10,499,907 $ $ Permit June service City Proprietary ~tatement 2,481 5,142 internal 65,386 98,100 74,675 10,426 69,451 54,703 51,402 Storm 28,194 104,663 268,149 285,754 285,754 of 766,476 264,823 473,459 2,547,271 2,616,722 2,417,893 (1,832,641) Water 17,701,787 15,869,146 18,468,263 17,701,787 17,701,787 17,701,787 $ Clean $ activities consolidation 62,244 40,426 498,871 311,660 364,107 the 467,589 326,580 278,449 1,278,120 1,786,989 1,446,296 1,362,029 1,362,029 (6,120,025) 1,323,401 7,798,490 2,322,626 4,152,463 14,002,424 11,524,748 Sewer 114,856,933 120,976,958 Sanitary 128,775,448 120,976,958 120,976,958 120,936,532 business-type reflect $ of $ to Position 24,521 175,093 201,355 109,386 164,113 142,409 448,592 128,656 310,682 141,236 154,400 272,725 306,388 478,042 Net 478,042 557,386 Adjustment 619,424 2,714,065 2,512,710 6,967,138 1,209,952 4,044,939 9,790,530 9,790,530 9,233,144 1,710,202 3,057,553 5,387,179 Marina 11,283,142 12,215,435 12,493,094 Oeerations $ $ ~177,709 215 9,935 926,922 579,073 868,800 201,395 706,995 606,766 267,421 392,455 204,260 628,977 4,543,913 2,374,795 Zero 1,071,708 1,166,616 1,935,676 4,605,555 2,530,707 2,530,707 1,089,529 4,543,913 (8,490,204) 1,876,729 3,454,384 4,543,913 5,234,349 8,304,782 Waste 21,413,470 24,000,334 28,605,889 19,959,773 (13,034,117) 15,415,860 $ $ earnings actual net statements. and assumptions of earnings contribution expected infrastructure, actual change these financial to of and and employer due between part plan RESOURCES equivalents RESOURCES projected net payable resources payable OF integral equipment, assets resources net wages penion OF of assets liabilities difference difference cash of an Progress on and on on payable liablities liabilities in assets are and assets, capital equivalents between absences absences payable payable Liability property, in current inflows judgments judgments outflows term obligation carts cash INFLOWS (deficit) bonds payable payable cash bonds payable inflows inflows notes OUTFLOWS held receivables, outflows noncurrent interest salaries current liabilities: non capital current assets: Liabilities for: lease Liabilities and lease and Position assets: payable payable long liabilities and liabilities: Service assets: Pension OPEB difference Net Total Total Deferred Total liabilities Buildings, Construction Land Total Total POSITION Deferred assets investment Deferred Revenue Net Net Deferred Claims Capital Other Notes Net Landfill Revenue Notes Claims Capital Compensated Recycling Landfill Deposits Other Compensated Accrued Accrued Deferred Accounts Restricted Inventory Capital Investments Cash Accounts Debt Unrestricted Restricted NET Net Total Total DEFERRED Total Noncurrent LIABILITIES: Current DEFERRED Total Total Noncurrent Current ASSETS accompanying The
58 Funds 64,361 37,151 86,181 17,886 58,289 236,472 699,641 ~287,570} (113,391) 3,812,310 7,896,855 4,093,880 4,090,545 4,053,394 1,250,603 1,297,740 1,297,281 2,850,438 4,259,464 2,825,355 2,691,549 6,302,439 9,175,684 3,064,048 4,001,973 11,7'09,165 23,087,517 10,199,564 27,140,911 Service $ $ __ _l!!temal 332 99,845 41,380 168,021 133,757 ~754,529) 2,355,248 2,763,164 1,519,184 1,715,134 5,399,123 4,963,102 6,116,433 3,943,138 Total 2,127,516 2,256,349 3,423,718 5,428,819 4,794,896 2,087,827 6,709,274 (2,688,893} (1,022,726) 19,184,352 16,829,104 16,754,836 17,509,364 78,077,977 14,894,506 14,570,011 24,782,209 95,587,341 14,880,418 13,349,457 40,529,067 $ $ 113 3,499 4,366 14,105 67,773 268,993 458,187 468,675 877,127 182,742 112,581 299,520 229,347 (189,194) (657,869} (661,368) 1,787,674 2,256,349 Purchases 2,256,349 (3,605,054) (3,874,048) Management $ $ & Bldg. funds. 11,976 10,915 12,560 77,154 467,860 339,321 698,959 506,581 301,133 493,710 1,708,019 3,304,157 6,023,635 3,292,181 1,541,674 Meter 2,380,949 ~,315,816 (1,935,459) 9,315,816 (1,240,157) Parking $ Position $ enterprise to Net in Funds Activities-- 4,753 (7,920) 15,736 11,976 15,736 25,536 65,292 related 900,000 301,596 162,510 208,545 254,890 315,068 2,212,904 1,320,824 1,305,088 2016 2,728,553 1,390,363 4,033,641 4,033,641 Parkin!;! 18,406,898 16,193,994 Off-Street __ $ $ 30, Changes Ente!£rise activities Business-type and June Funds fund 16,698 20,121 16,698 15,436 36,703 55,582 Service 411,339 786,176 769,478 Berkeley 135,654 266,677 (394,958) 1,246,596 2,439,332 1,459,039 6,172,528 3,177,924 Center 2,127,516 3,423,718 5,428,819 (1,787,469) 4,794,896 (2,198,807) 15,005,471 of Ended service $ $ Permit ______j_§_,774,949 Expenses, City Proprietary Year internal activities of the 2,572 1,930 2,572 3,910 3,260 69,800 Storm 81,428 (25,085} 955,034 224,633 602,062 246,518 541,521 962,394 (860,149) (862,721} 2,950,548 Water For 2,087,827 15,799,347 Revenues, $15,869,146 Clean $ of business-type consolidation of 332 the 90,501 44,549 44,217 24,090 18,443 28,080 963,345 918,977 536,262 282,892 382,989 (193,023} 2,463,824 2,566,346 2,521,797 2,863,558 2,399,325 4,223,552 Sewer Statement 12,358,621 14,880,418 2,087,827 Sanitary position 14,880,418 reflect 112,393,108 $114,856,933 to $ net in 17,635 99,845 41,380 23,157 (21,578} Change Adjustment 128,086 119,121 453,257 252,713 454,749 463,527 (219,454} (336,933) 1,113,295 1,600,772 2,714,065 1,622,350 1,841,803 4,867,471 1,056,663 1,857,268 6,709,274 Marina 6,709,274 Oeerations $ $ 31,263 55,688 12,667 17,550 88,690 (24,425) 207,441 653,047 879,083 (110,870} statements. 8,093,456 8,204,326 8,173,063 2,075,271 9,044,961 4,926,152 Zero 5,675,031 8,793,661 (8,490,204} Waste 32,356,004 40,529,067 (16,583,665) 40,529,067 $ $ financial these of assets part contributions (expenses) services charge capital before (loss) integral fees of revenue maintenance position (expenses): charge an expenses (loss) revenues fees service net ( ) ( are income professional claims in revenues fees fees disposal supplies fees transfers service maintenance water and earnings and ( ) ( revenues on rentals notes services grants benefits Income and compensation nonoperating operating administration operating and maintenance expense permits related store out service in position--beginning expenses: revenues: position--ending service Change Net Operating storm revenues permits fees checking net Total Total net Total Operating Gain(loss) Interest Investment Depreciation Utilities Insurance Judgments Specialized Communication General Materials and Repairs Personnel Employee Transportation Other Central Building Plan Equipment Workers' Other Other Contract Building Clean Refuse Sewer Parking Marina operations and Total Transfers Transfers Total Nonoperating Operating Operating accompanying The
59 Funds 80,018 (82,372) (27,784) (109,973) (657,150) (287,570) 1,106,128 8,187,490 8,269,862 3,778,526 4,093,880 7,352,432 (3,558,148) (4,245,252) 16,179,325 (6,375,006) (9,590,527) (3,826,891) 15,073,197 27,144,857 Service $ $ Internal 332 I 69,217 99,845 174,116 2,045,758 6,312,557 7,688,627 2,763,164 (1,158,347) (7,361,205) (7,277,469) (1,534,788) (2,688,893) 14,070,401 18,664,135 20,709,893 21,751,095 94,926,934 Tota (17,331,477) (30,996,242) (42,179,597) $ $ -32 58,646 (72,941) 742,451 623,084 683,804 623,052 458,187 458,187 (779,192) (857,675) (633,472) (378,792) Purchases 1,312,341 2,324,605 (1,709,808) Management $ $ & Bldg. 162,233 339,321 1,301,719 2,291,066 Meter 1,301,719 2,128,834 3,757,346 9,316,846 (1,334,093) (1,334,093) (1,596,138) (1,935,459) (1,382,453) (4,177,047) Parking $ $ (7,920) 314,085 578,136 892,080 900,000 (255,494) 3,694,570 3,837,424 3,380,486 3,259,288 1,631,753 3,992,368 (2,980,773) (2,980,773) (2,105,121) Parking Off-Street $ $ Funds (899) 20,121 398,290 Service 651,953 (374,837) (394,958) 4,449,805 5,279,799 4,051,516 5,280,698 (1,505,400) (1,505,400) (9,875,176) (5,258,774) Center 15,785,903 Enterprise $ Permit $ (647) 1,793 27,635 Water (25,085) 264,823 446,546 237,189 444,753 929,949 955,034 (721,316) (720,669) (417,990) (883,302) 2,082,743 Clean (1,617,431) Storm $ $ 332 37,827 90,501 248,845 (214,630) (102,522) (193,023) 2,322,626 4,115,052 4,152,879 2,073,782 4,794,523 (6,771,098) (6,556,800) Sewer (2,523,736) (7,216,778) 14,535,037 Sanitary $ $ 7,792 78,267 99,845 (18,652) (42,750) (21,578) 107,857 540,704 551,564 (689,182) (298,041) (348,391) 1,710,202 1,602,344 1,672,555 6,260,209 Marina (1,487,382) (3,100,272) Operations $ $ statements. financial 22,672 (30,764) 728,167 (379,072) (110,870) (110,870) 5,234,349 4,506,183 Zero 8,348,614 (2,111,754) (2,134,426) (1,619,807) ------· (1,209,971) Waste 40,629,223 (16,722,002) (15,558,607) these $ of $ part integral an related are 2016 activities activities activities: 2016 assets and 2015 30, 30, Flows notes 1, capital Funds June assets capital investing capital non operating July June related services Cash financing services cash of activities BERKELEY activities: by by by Paid of by in and assets ended and OF customers capital (used) (used) (used) (used) Proprietary accompanying year disposal from investing CITY capital non lnfrastucture operating goods employees' capital equivalents, equivalents, Statement the sales purchases Judgments The of of (decrease) for for from in out equivalents activities activities activities: advance from from from from received paid cash cash For received provided and provided provided provided paid paid received cash and and flows flows flows flows increase cash cash cash cash Interest Investment Investment and Proceeds Purchases Purchases Debt repayment financing Interest lnterfund financing financing Grants Transfers Transfers Claims Ca~h Cash Cash Cash Cash Net Net Cash Net Cash Net Cash Net Cash 60 Funds 86,181 17,248 59,087 26,302 21,805 (10,559) 513,411 376,044 445,783 699,958 (107,290) 7,352,432 2,850,438 4,053,394 {1,593,188) Service $ $ $ Internal 2,696 98,803 12,317 94,034 320,266 (721,278) (660,408) 2,466,983 2,632,022 2,711,835 5,399,123 21,751,095 17,509,369 (10,806,678) Total $ $ 925 3,467 3,232 2,343 5,286 {9,261) 31,674 33,793 34,818 68,256 (65,778) 877,127 468,675 (138,749) Purchases 1,312,341 Management $ $ $ & Bldg. 976 1,030 11 18,317 32,385 56,816 77,154 (70,232) 240,215 256,285 264,056 641,405 3,757,346 Meter 3,292,181 (1,052,266) Parking $ ! $ 2,696 2,254 (8,724) 15,736 31,835 12,317 29,838 32,800 94,034 (41,273) 301,596 (130,708) 1,631,753 1,305,088 Parking Off-Street $ $ $ Funds 17,597 11,195 83,815 10,954 15,436 112,251 651,953 566,653 133,013 604,562 622,894 Service 369,614 769,478 (165,674) (2,482,238) Center Enterprise $ Permit $ $ 779 6,502 (5,084) 12,809 98,100 14,985 (28,682) (38,731) Water 104,663 107,837 602,062 (417,990) (429,730) (862,721) Clean Storm $ $ $ 6,390 {7,148) 57,441 60,343 467,589 498,870 513,998 348,450 (136,710) (345,381) 4,794,523 2,863,558 2,521,797 {2,048,284) Sewer Sanitary $ $ $ 9,842 14,297 22,203 24,437 21,906 (10,497) (47,982) 175,092 180,402 454,749 (718,904) (449,066) 1,672,555 1,841,803 Marina Operations $ $ $ statements. financial 33,016 (39,080) 106,127 868,800 926,922 164,114 152,092 955,030 100,156 207,441 (287,335) (254,013) 8,348,614 1,245,204 Zero 8,173,069 {3,805,799) Waste these $ $ of $ part Actual Actual integral Contribution Assumption Vs vs an in activities: are 2016 investments of 30, (loss) -Employer Expected Change Projected Flows notes - - (loss) - financing provided Funds June payable value operating Wages Cash and income Assets BERKELEY by fair of Assets Assets Assets income cash of and in ended of of of activities: OF Absences net capital, Liabilities (used) operations judgement cash: accompanying to Proprietary year Obligation operating Receivable Payable CITY Inflow Inflow Inflow Outflow Salaries reconcile Statement and of the The from in: Liabilities operating (decrease) OPEB Pension For investing, provided by operating (loss) operations Net Claims Deferred Deferred Net Deferred Compensated Other Deferred Inventories Accounts Accrued Accounts Change Depreciation net cash activities (used) from Increase/ to Noncash Net Income Reconciliation Adjustments to 61 CITY OF BERKELEY Statement of Fiduciary Net Position Fiduciary Funds June 30, 2016
Private Trust Pension and Other Funds - Post-employment Successor Benefit Agency of Trust Funds Former RDA Agency Funds
Assets Cash and cash equivalents $ 3,874,900 $ 768,892 $ 4,477,508 Restricted cash and cash equivalents Investments, at fair value: Medium Term Notes 17,057,005 US Agency Securities 7,680,888 State and Local agency bonds 9,062,135 Savo Island Loan 392,000 Guaranteed Investment Contracts 662,934 Interest receivable 607,352 Taxes receivable 16,421 Other accounts receivable 404,141 Total assets 39,337,215 768,892 4,898,070
Deferred Outflows of Resources Deferred outflows of pension plan employer contribution 36,988 Net deferred inflows/outflows between projected and actual earnings on pension plan investments
Total Deferred Outflows of resources 36,988
Liabilities Accounts payable 1,681 Pension benefits payable 45,201 Interest payable 51,536 Other liabilities 7,688 Bonds payable 1,049,829 Other agency obligations 4,898,070 Net Pension Liabilities (Calpers Misc Plan) 311,524 Total liabilities 45,201 1,422,259 4,898,070
Deferred Inflows of Resources Net deferred inflows/outflows between projected and actual earnings on pension plan investments 3,783 Deferred inflows on change of assumptions 13,645 Deferred inflows Expected vs actual earning 14,558 Total Deferred Inflows of resources 31,986
Net Position Restricted For: Employee pension benefits Held in Trust 7,304,048 Employee OPES benefits Held in Trust 31,987,966 Held in trust City of Berkeley Successor Agency assets (648,365) Total net position $ 39,292,014 $ (648,365)
The accompany notes are an integral part of these financial statements
62 CITY OF BERKELEY Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Year Ended June 30, 2016
Private Trust Pension and Other Funds - Post-employment Successor Benefit Agency of Trust Funds Former RDA
ADDITIONS: Tax increment income $1,028,132 Contributions: Employer $ 5,607,926 Investment income 2,504,674 2 Total Additions 8,112,600 1,028,134
DEDUCTIONS: General government 1,892 Community development 82,889 Benefits payment for service 3,833,310 Benefits payment for disability 383,471 Administrative expenses 182,008 Interest payment 31,551 Pass through to COB 404,871 Total Deductions 4,398,789 521,202
Change in net position 3,713,811 506,932
Net Position - beginning 35,578,203 (1,155,297)
Net Position - ending $ 39,292,014 $ (648,365)
The accompanying notes are an integral part of these financial statements
63 THIS PAGE LEFT INTENTIONALLY BLANK
64 CITY OF BERKELEY
Notes to the Basic Financial Statements
June 30, 2016
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Reporting Entity The City of Berkeley (the City) is a municipal corporation created under the laws of the State of California. The City operates under its own charter. The current charter provides for a Council-Manager form of government and the City is governed by an elected mayor and eight-member council. The City provides the following services: public safety (police and fire); sanitation and sewer; housing; leisure (parks, recreation, and marina); health and human services, including City funded health clinics; animal control; public improvements; planning and zoning; library services; and general and administrative services.
As required by generally accepted accounting principles, these financial statements present the City of Berkeley and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of the City’s operations. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete. Each discretely presented component unit is reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that it is legally separate from the City.
Successor Agency Trust for Assets of Former Redevelopment Agency. On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Berkeley that previously had reported Berkeley redevelopment agency (BRA) within the reporting entity of the City as a blended component unit.
The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 17, 2012, the City Council elected the City to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 65.574-N.S. As a result, BRA is no longer reported as a component unit of the City. Please refer to more details under “Notes to the Successor Agency” section.
65 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Discretely Presented Component Units. The Rent Stabilization Board (Rent Board) is responsible for the proper administration of programs to regulate residential rents; protecting tenants from unwarranted rent increases and arbitrary, discriminatory or retaliation evictions; helping maintain the diversity of the Berkeley community; and to ensure compliance with legal obligations relating to the rental of housing. The nine member Board of Commissioners is elected by the citizens. However, the Rent Board is fiscally dependent upon the City because the City Council authorizes any bonded debt, and provides support services such as accounting, human resources, payroll, information technology and finance.
Complete financial statements for each of the individual component units may be obtained at the entity’s administrative offices:
Rent Stabilization Board 2125 Milvia Street Berkeley, California
B. Financial Statement Presentation Government-Wide Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements except in the case of interfund services provided and used, which are not eliminated in the consolidation process. 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 and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Fund Financial Statements
The fund financial statements provide information about the City’s funds, including its fiduciary funds. Separate statements for each fund category, such as governmental, proprietary and fiduciary, are presented. The emphasis of fund financial statements is on the major governmental and enterprises funds of the City, and they are reported separately in the accompanying financial statements, all remaining governmental funds are aggregated and reported as nonmajor funds in the accompanying financial statements.
66 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the governmental-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate column in the fund financial statements.
The City reports the following major governmental funds:
General Fund is the City’s primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund.
Grants Fund accounts for grant monies received from other governments and private sources to be used to cover expenditures for providing public services and improving public safety.
Library Fund accounts for all monies received and expended for the operation of the City’s main and branch libraries, the major source of revenues are special taxes approved by two thirds of the voters.
Capital Improvement Fund accounts for expenditures for land, buildings, major reconstruction and renovation of structures, and for major landscaping or park improvements financed by local revenues.
The government reports the following major proprietary funds:
Zero Waste Fund accounts for the monies received and expended from refuse collection services, including the surcharge to provide for expenses incurred in the collection and disposal of solid waste materials as well as for plans, surveys, engineering expenses, property acquisition and construction costs of facilities for future refuse disposal.
Marina Operations Fund accounts for the day-to-day operations of the Berkeley Marina.
Sanitary Sewer Fund accounts for the collection of revenues from sanitary sewer charges, and the expenses related to the operation, maintenance, replacement, reconstruction, and repair of sanitary facilities.
Clean Storm Water Fund accounts for the fees collected to improve the quality of storm water discharged from the City’s storm drainage system.
Permit Service Center Fund accounts for revenues from customers processing development permit application (i.e., building and zoning permits) and the funds expended to operate the permit review functions of the Permit Service Center.
Off Street Parking Fund accounts for the operations of the City’s Center Street garage, Sather Gate garage, Sather Gate Mall leases, and Oxford/Fulton parking lot.
Parking Meter Fund accounts for the collection of coins from the City’s parking meters and for the purchasing, leasing, installing, repairing, maintaining, operating, removing, and policing of the meters.
67 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Building Purchases & Management Fund accounts for the purchase and management of the building at 1947 Center Street.
Additionally, the City reports the following fund types:
Internal Service Funds account for equipment maintenance replacement, building maintenance, central services, computer replacement, workers’ compensation, sick and vacation payouts, public liability, and catastrophic loss services to other departments of the City on a cost reimbursement basis.
The Pension Trust Funds accounts for the activities of the Safety Members Pension Fund, which provides pension benefits on a pay-as-you-go basis for fire and police employees hired on or before February 28, 1973; Police Retirement and Pension Annuity fund and the Police Retirement Income Benefit Plan. It also accounts for the Other Post-employment Benefits Trust Funds, including the Retiree Medical Benefit Trust, Berkeley Police Employees Retiree Health Plan Trust Fund and Fire Medical Trust funds and allocated sources to provide medical benefits for retirees.
The Private Trust Funds accounts for Successor Agency activities of the former Berkeley Redevelopment Agency, which was dissolved on January 31, 2012 under AB 1X 26. Please refer to more details above in Section 1 under “Successor Agency Trust for Assets of Former Redevelopment Agency”.
The Agency Funds account for the District 47 Underground/Miller, Sustainable Energy, Thousand Oaks Heights Applicant Funded Utility Undergrounding special assessment tax monies, Measure H School Tax, Community Facilities District No. 1 Disaster Fire Protection special assessment tax monies, Sick Leave Entitlement, Berkeley Tourism BID, and Elmwood Business Improvement District.
The effect of interfund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. General revenues include all taxes.
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 operations. The principal operating revenues for all the enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include personnel services, employee benefits, repairs and maintenance, professional services, transportation, materials and supplies, claims and judgments, rent, insurance, utilities, communications, general administration and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources as they are needed.
68 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants are recognized as revenues as soon as all eligibility requirements imposed by the grantor have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Expenditures generally are 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.
Property taxes, utility users taxes, transient occupancy taxes, ambulance fees, interest, and sales taxes associated with the current fiscal year are all considered susceptible to accrual and so have been recognized as revenues of the current fiscal year. All other revenue items are considered to be measurable and available only when the City receives cash.
D. Use of Estimates A number of estimates and assumptions relating to the reporting of revenues, expenditure/expenses, assets, deferred outflows of resources, liabilities and deferred inflows of resources, and the disclosure of contingent liabilities were used to prepare these financial statements in conformity with accounting principles generally accepted in the United States of America, actual results could differ from these results.
E. Implementation of Recently Issued Accounting Principles During fiscal year 2016, the City adopted the following Governmental Accounting Standards Board (GASB) Statements:
GASB Statement No. 72, Fair Value Measurement and Application
Issued in February 2015, this Statement requires that state and local governments measure certain assets or liabilities at fair value. The new standard is effective for periods beginning after June 15, 2015. Application of this Statement is effective for the City’s fiscal year ended June 30, 2016. This Statement provides guidance for determining a fair value measurement for financial reporting purposes. The Statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value investments. There is no impact on net position as a result of implementation of this statement.
This Statement requires fair value measurements for certain investments not previously measured at fair value.
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Also, prior to the effective date or implementation of GASB 72, the following assets were required to be measured at fair value. When the City acquires the following assets during or after fiscal year 2016, it will now be required to measure these assets at acquisition value (market-based entry price):
Donated capital assets Donated works of art, historical treasures and similar assets Capital assets acquired through a non-exchange transaction Capital assets received in a service concession arrangement
This Statement also establishes a hierarchy of three levels of inputs to the valuation techniques that are used to measure fair value.
Level 1 inputs are directly observable, quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets in active markets or quoted prices for identical or similar assets in markets that are not active. Level 3 inputs are unobservable inputs, such as management’s assumption of the default rate among underlying mortgages of a mortgage-backed security. Level 3 is used only if Level 1 and Level 2 inputs are not available.
GASB Statement No. 73, Accounting and financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.
In June 2015, the GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.
This Statement establishes requirements for defined benefit pensions that are not within the scope of Statement No. 68, as well as for the assets accumulated for purposes of providing those pensions. GASB 68 applies to employers for pension plans that are administered through trusts in which contributions are irrevocable, trust assets are dedicated to providing pensions to plan members, and trust assets are legally protected from creditors. GASB 73 will apply for plans that either do not have any dedicated assets associated with them or have assets that are not in a trust meeting the requirements specified above.
The requirements of this Statement extend the approach to accounting and financial reporting established in Statement No. 68 to all pensions, with modifications as necessary to reflect that for accounting and financial reporting purposes, any assets accumulated for pensions that are provided through pension plans that are not administered through trusts that meet the criteria specified in Statement No. 68 should not be considered pension plan assets.
In addition, it establishes requirements for defined contribution pensions that are not within the scope of Statement No. 68.
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It also requires that information similar to that required by Statement No. 68 be included in notes to financial statements and required supplementary information by all similarly situated employers and nonemployer contributing entities.
It also amends certain provisions of Statement No. 67, Financial reporting for Pension Plans, and Statement No. 68 for pension plans and pensions that are within their respective scopes.
The provisions of this Statement are effective for the City’s fiscal year ending June 30, 2016. except those provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement No. 68, which are effective for the City’s fiscal year ending June 30, 2017. There is no impact on net position as a result of implementation of this statement.
GASB Statement No. 76, The Hierarchy of Generally accepted Accounting Principles for State and Local Governments In June 2015, the GASB issued Statement No. 76, The Hierarchy of Generally accepted Accounting Principles for State and Local Governments.
In the context of the current governmental financial reporting environment, this Statement identifies the hierarchy of generally accepted accounting principles (GAAP).
The “GAAP hierarchy” consists of the sources of accounting principles used to prepare financial statements of state and local governmental entities in conformity with GAAP and the framework for selecting those principles. This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and non-authoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP.
This Statement supercedes Statement No. 35, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments.
The City implemented this Statement in fiscal year 2016. There is no impact on net position as a result of implementation of this statement.
The City is currently evaluation the potential impact on its financial statements of the following Governmental Accounting Standard Board Statements:
GASB Statement No. 74 – In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. Statement No. 74 replaces Statements No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, as amended, and No.57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans. It also includes requirements for defined contribution OPEB plans that replace the requirements for those OPEB plans in Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, as amended, statement 43, and statement No. 50, Pension Disclosures. The provisions in statement 74 are effective for fiscal years beginning after June 15, 2016. The City has not yet determined its effect on the financial statements.
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GASB Statement No. 77 – In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. The objective of this statement is to provide financial statement users with essential information about the nature and magnitude of the reduction in tax revenues through tax abatement programs. This statement is effective for reporting periods beginning after December 15, 2015. The City has not yet determined its effect on the financial statements.
GASB Statement No. 78 – In December 2015, GASB issued Statement No. 78, Pension Provided through Certain Multiple-Employer Defined benefit Pension Plans. The objective of this statement is to address a practice issue regarding the scope and applicability of Statement No. 68, Accounting and Financial Reporting for Pensions. This issue is associated with pensions provided through certain multiple-employer defined benefit pension plans and to state or local government employers whose employees are provided with such pensions. The City has not yet determined its effect on the financial statements.
GASB Statement No. 80 – In January 2016, GASB issued Statement No. 80, Blending Requirements for Certain Component Units – an amendment of GASB Statement No.14. The objective of this statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units. This Statement amends the blending requirements established in paragraph 53 of Statement No. 14, The Financial Reporting Entity, as amended. The City has not yet determined its effect on the financial statements.
GASB Statement No. 82 – In March 2016, GASB issued Statement No. 82, Pension Issues – an amendment of GASB Statement No. 67, No, 68, and No. 73. The objective of this statement is to address certain issues that have been raised with respect to Statement No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for pensions and related assets that are not within the scope of GASB Statement 68, and amendments to certain provisions of GASB Statement 67 and 68.. The City has not yet determined its effect on the financial statements.
F. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position or Fund Balances 1. Cash and Cash Equivalents The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term instruments with original maturities of three months or less from the date acquisition.
2. Deposits and Investments State of California statutes authorize the City to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, State and Local agencies, certificates of deposits, commercial paper rated A-1/P-1, medium term corporate notes rated A or its equivalent or better by Moody’s or Standard & Poor’s, asset backed corporate notes, negotiable certificates of deposits, bankers’ acceptances, mutual funds, guaranteed investment contracts, repurchase agreements, reverse repurchase agreements when authorized by the City Council, and the State Treasurer’s investment pool (Local Agency Investment Fund).
The City does not utilize the Local Agency Investment Fund, as this fund is not in compliance with the City’s nuclear free ordinance.
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Investments for the City, as well as for its component units, are reported at fair value. The value is determined based upon quoted market closing prices. The fair value of mutual funds is stated at share value. Income from pooled investments is allocated to the individual funds based on the fund average monthly balance in relation to the total pooled investments.
3. Receivables and Payables Transactions between funds that are representative of long-term lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “advances to/advances from other funds”. All other outstanding balances between funds are reported as “due to/from other funds”. The latter transactions are typically loans from the General Fund to cover cash shortages in other funds that result from the pooled cash arrangement. The loans are short-term in nature and generally result from the time lag in receiving grant reimbursements. The amounts are repaid to the General Fund when the grant reimbursements are made. Any residual balances between the governmental activities and business type activities are reported in the government-wide financial statements as internal balances. All trade accounts receivable are presented net of allowance for doubtful accounts. No allowances for doubtful accounts have been provided for taxes or rental registration fees.
Property Taxes Receivable
They are levied as of July 1 on property assessed on the same date. Alameda County assesses properties, bills for, collects and distributes property taxes as follows:
Secured Unsecured Valuation/lien dates January 1 January 1 Levy dates July 1 July 1 Due dates 50% on Nov. 1 July 1 50% on Feb. 1 Delinquent as of Dec. 10 (for Nov.) August 31 Apr. 10 (for Feb)
The term “unsecured” refers to taxes on businesses’ machinery, furniture and equipment. Property taxes are secured by liens on the property being taxed.
Property taxes are recorded as revenue when they become both measurable and available to finance expenditures in the fiscal year. Deferred inflows of resources is recorded for the amount included in taxes receivable, which is not collected within 60 days after fiscal year-end.
4. Inventories All inventories are valued at the lower of cost or market on a first-in-first-out basis. Inventory in the Supplies Warehouse Fund consists of postage supplies held for consumption by all departments of the City. The cost is recorded as an expense in the appropriate fund at the time inventory items are withdrawn for use (consumption method).
5. Restricted Assets Certain proceeds of the City’s Off-Street Parking enterprise fund revenue bonds, Animal Shelter fund Certificates of Participation, and pension refunding bonds, as well as certain resources set
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aside for their repayment, are classified as restricted assets on the statement of net position because they are maintained in separate bank accounts and their use is limited by applicable bond covenants.
The debt service account is used to segregate resources accumulated for principal payments; the construction account is used to report those proceeds of the revenue bond issuance that are restricted for use in construction; the interest account is used to segregate resources accumulated for interest payments; the debt service reserve account is used to segregate resources set aside to make up potential future deficiencies in the interest account and the debt service account; and the cost of issuance account is used to segregate proceeds of the revenue bond issuance that are to be used to pay the cost of issuance.
6. Capital Assets Capital assets, which include land, buildings, machinery, construction in progress and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $1,000 for non-infrastructure assets and $100,000 for infrastructure assets, and an estimate useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, buildings, machinery and equipment, furniture and fixtures, vehicles and infrastructure of the primary government, as well as the component units, is depreciated using the straight-line method over the following estimated useful lives:
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Assets Years Buildings 30 Building improvements 30 Improvements other than building 15 Machinery and equipment 4-5 Furniture and fixtures 7 Infrastructure: Roadway/Street: Pavement 30 Sidewalk, curb and gutter 15 Traffic signals/devices 40 Street lights 10 Street trees 25 Guard rails 50 Retaining walls 50 Paths (Residential) 60 Sanitary sewer system: Pipelines 50 Structures 50 Storm drain system: Pipelines 50 Structures 50 Vehicles 5-10 Other 5
7. Compensated Absences - Other It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. Vacation pay is accrued when incurred in proprietary funds and is reported as a fund liability. In governmental funds, compensated absences are recorded as expenditures in the year paid, as it is the City’s policy to liquidate any unpaid compensated absences at June 30 from future resources, rather than currently available financial resources. The City has established an Internal Service Fund (Sick and Vacation Payout Fund) to pay for compensated absences when a worker leaves the City or retires. The City uses the vested method for calculating compensated absences.
The personnel policies of the City do not allow employees to accrue vacation in excess of eight weeks (320 hours). For example, when a miscellaneous employee (Police and Fire sworn employees have different formulas) is terminated or retires, with a vested pension with twenty years of service, an employee is entitled to be paid 38% of the accrued sick leave balance and 62% of the balance can be used for CALPERS credit. Employees with at least twenty-eight (28) years of benefited City service or an employee retiring on permanent disability arising out of and incurred in the course and scope of their employment with the City with at least twenty-eight (28) years of benefited service are entitled to receive payment in an amount equal to fifty percent (50%) of their accrued sick leave days up to a maximum of (200) unused sick leave days. The employee has the option of using the payout entitlement for retiree medical insurance premium payments. The liability for retirees who do not choose the payout option is paid from the medical sick leave entitlement trust fund.
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8. Compensated Absences-New Sick Leave Program for Police (PORAC) Effective December 23, 2012, Section 24.6 Maximum Sick Leave Accrual, of the Police MOU in its entirety has been abolished and the following New Sick Leave Program is in effect:
Initial Implementation with Existing Sick Leave Balances
If a sworn member of the Berkeley Police Department has an accrued sick leave balance on December 23, 2012, one half of those hours in excess of 200 has been converted and will be deposited into the employee’s retiree Peace Officers Research Association of California (PORAC) medical trust account and will be paid out over five successive years in installments commencing on January 1, 2013. The conversion rate is the employee’s rate of pay on December 23, 2012. The remaining fifty percent of the sick leave balance in excess of 200 hours was credited to the employee’s separate “catastrophic/service time” bank no later than February 1, 2013 up to a maximum of 500 hours.
After initial implementation and Going Forward
Beginning January 1, 2013, at the end of each calendar year, if an employee has an accrued sick leave balance of 200 hours or more, fifty percent of all hours accrued in excess of 200 hours is converted into a cash equivalent at the end of each calendar year. The annual cash conversation is calculated at the employee’s hourly rate including additional pay such as POST pay, Bilingual Pay and Longevity Pay then in effect at the end of the calendar year. The City pays the annual cash equivalent into an employee’s retiree PORAC medical trust account on behalf of the employee member. Upon retirement, any sick leave hours that have not been converted into an employee’s PORAC medical trust account, used for the purposes of additional retirement service credit as provided in PERL Section 20965, or “catastrophic/service time” bank is forfeited.
9. Deferred Outflows of Resources Deferred outflows of resources represent a consumption of net assets by the government that is applicable to a future reporting period. The government has only one type of item, which arises only under accrual basis of accounting that qualifies for reporting in this category. GASB Statement No.68 requires recognition of deferred outflows of resources for changes in the net pension liability of employers that arise from several types of events. Accordingly, the item, deferred outflows of resources, is reported only in the Statement of Net Position. Those requirements include recognition by an employer of a deferred outflow of resources for its contributions made to a defined benefit pension plan between the measurement date of the report and the end of the employers reporting period; and the net difference between projected and actual earnings on pension plan investments.
10. Deferred Inflows of Resources Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has two items, which arises only under modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental fund balance sheet. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. GASB Statement No.68 requires the recognition of differences between projected and actual earnings on pension plan investment, changes of assumptions, differences between expected and actual experiences, and
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deferred gain on refunding of debt, as an increase (decrease) in pension expense for current portion. For the future portion, it is to be amortized in future years. The City also includes the deferred amount that represents the difference between the carrying value of the refunded bonds and the reacquisition prices, which will be amortized over the remaining life of the refunded bonds.
11. Long-term Obligations In the government-wide financial statements, and 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 type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs with the exception of bond insurance are expensed at time of issuance.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
12. Fund Balances The City follows the provisions of GASB Statement No. 54 Fund Balance and Governmental Fund Type Definitions. GASB Statement No. 54 established Fund Balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of resources reported in governmental funds.
GASB Statement No.54 distinguishes fund balance between amounts that are considered non-spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative strength of the constraints that controls the purposes for which specific amounts can be spent. Beginning with the most binding constraints, fund balance amounts will be reported in the following classifications:
Nonspendable Fund Balance-includes amounts that are not in a spendable form, such as inventories, prepaid items, and long-term loans and notes receivable. It also includes amounts that are legally or contractually required to be maintained intact or required to be retained in perpetuity, such as the principal of an endowment fund.
Restricted Fund Balance-includes amounts reported as restricted when constraints placed on the use of resources are either (1) externally imposed by creditors (e.g., through debt covenants), grantors, contributors, or laws or regulations of other governments; or (2) imposed by law through constitutional provisions or enabling legislation.
Committed Fund Balance-includes amounts that have been limited to specific purposes as defined in the City Charter or through adoption of an ordinance by the City Council, the highest level of decision making authority in the City. These commitments may be changed or lifted, but only by the same formal action that was used to impose the constraint originally. City Council action to commit fund balance must occur within the fiscal reporting period, while the amount committed may be subsequently determined.
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Assigned Fund Balance-includes amounts that are intended to be used by the City for specific purposes that are neither restricted nor committed through City Council budgetary action, which includes the approval of appropriations and revenues pertaining to the next fiscal year’s budget.
Unassigned Fund Balance-includes amounts within the General Fund, the residual resources (either positive or negative), in excess of what can properly be classified in one of the other four fund balance categories. Unassigned amounts are technically available for any purpose. Other governmental funds may only report a negative unassigned balance that was created after classification in one of the other four fund balance categories. In circumstances where an expenditure is made for a purpose for which amounts are available in multiple fund balance categories, fund balance is depleted in the order of restricted, committed, assigned, and unassigned.
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Schedule of ending fund balances, June 30, 2016:
Capital Non‐Major Improvement Governmental General Fund Grants Funds Libray Fund Fund Funds Total Fund Balances:
Restricted for* Other purposes $6,718 $1,079,446 $1,992,773 $3,078,937
Operating reserved 4,025,359 4,025,359
Public Safety ‐(Emergemcy call network and police equipment) 15,045 5,213,990 5,229,035
Street maintenance ‐(Bolivar paving, Hearst streets and Measure M street and watershed improvement) 296,496 4,261,926 14,156,783 18,715,204
Health and welfare ‐(Youth engagement adovocacy housing, Berkeley food and housing project) 18,094,013 6,035,527 24,129,541 Park and recreation ‐ (library central planning and book fair, Echo Lake and Tulomne Camp planning) 106,400 $7,499,044 604,311 13,331,585 21,541,340
Community development and housing loan $3,595,304 26,706,901 1,511,920 23,202,657 55,016,781
Economic development ‐ (LED street light conversion) 994,453 299,787 3,108,550 4,402,790 Debt service reserve 14,108,873 14,108,873
Subtotal of Restricted for: 3,595,304 46,220,026 7,499,044 7,757,390 85,176,095 150,247,860
Assigned to* Operating reserved 2,806,017 2,806,017 Capital Projects 1,426,532 1,426,532 Public Safety ‐(Emergemcy call network and police equipment) 247,727 ‐ 247,727 Street maintenance ‐(Bolivar paving, Hearst streets and Measure M street and watershed improvement) 55,865 7,488,764 7,544,628
Health and welfare ‐(Youth engagement adovocacy housing, Berkeley food and housing project) 193,583 ‐ 193,583
Park and recreation ‐ (library central planning and book fair, Echo Lake and Tulomne Camp planning) 240,333 ‐ 1,173,688 1,414,021
Community development and housing loan 55,625 3,295,879 3,351,504 Economic development ‐ (LED street light conversion) 87,278 356,275 443,553
Subtotal of Assigned to: 3,686,427 ‐ ‐ 13,741,138 ‐ 17,427,565
Unassigned* 57,742,775 (3,511,583) ‐ ‐ (544,267) 53,686,924
Subtotal of Restricted for: 57,742,775 (3,511,583) ‐ ‐ (544,267) 53,686,924
TOTAL FUND BALANCE: $ 65,024,506 $ 42,708,443 $ 7,499,044 $ 21,498,528 $ 84,631,829 $ 221,362,351
* Please refer to the previous section. Fund balance for the definition and type of action needed in order to qualify such category.
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Schedule for the trend of fund balances for General Fund, June 30, 2016:
Beginning Ending Fund Fund Balances: (General Fund) Fund Balance Addition Deletion Balance
Restricted for Community development and housing loan $ 3,648,330 $ 12,487,936 $ (12,540,962) $ 3,595,304
Assigned to Operating reserved 2,862,047 9,796,552 (9,852,582) 2,806,017 Public Safety 609,788 2,087,254 (2,449,316) 247,727 Street maintenance 16,810 57,539 (18,485) 55,865 Health and welfare 47,517 162,647 (16,581) 193,583 Park and recreation 188,598 645,555 (593,821) 240,333 Community development and housing loan 51,821 177,379 (173,575) 55,625 Economic development 54,088 185,139 (151,949) 87,278
Unassigned 45,810,050 156,804,043 (144,871,318) 57,742,775
TOTAL FUND BALANCE: $ 53,289,050 $ 182,404,044 $ (170,668,588) $ 65,024,506
Schedule for the trend of fund balances for Grants Fund, June 30, 2016:
Beginning Fund Ending Fund Fund Balances: (Grants Fund) Balance Addition Deletion Balance
Restricted for Other purposes $ 6,717 $ 3,792 $ (3,791) $ 6,718 Public Safety 245,945 138,848 (369,748) 15,045 Street maintenance 178,908 117,588 0 296,496 Health and welfare 16,122,472 9,101,895 (7,130,353) 18,094,013 Park and recreation 102,152 57,670 (53,422) 106,400 Community development and housing loan 25,746,861 14,535,316 (13,575,276) 26,706,901 Economic development 994,453 561,416 (561,416) 994,453
Unassigned (4,199,723) (2,370,941.44) 3,059,081 (3,511,583)
TOTAL FUND BALANCE: $ 39,197,787 $ 22,145,582 $ (18,634,923) $ 42,708,443
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Schedule for the trend of fund balances for Library Fund, June 30, 2016:
Beginning Fund Ending Fund Fund Balances: Library Fund Balance Addition Deletion Balance
Restricted for Park and recreation $ 6,073,880 $ 17,773,624 $ (16,348,459) $ 7,499,044
TOTAL FUND BALANCE: $ 6,073,880 17,773,624 (16,348,459) $ 7,499,044
Schedule for the trend of fund balances for Capital Improvement Fund, June 30, 2016:
Beginning Fund Ending Fund Balance Addition Deletion Balance
Fund Balances: (Capital Improvement)
Restricted for Other purposes $ 549,213 $ 262,867 $ 267,366 $ 1,079,446 Street maintenance 5,599,160 2,679,900 (4,017,134) 4,261,926 Park and recreation 717,779 343,547 (457,015) 604,311 Community development and housing loan 1,046,886 501,066 (36,032) 1,511,920 Economic development 42,813 2,193 254,781 299,787
Assigned to Capital projects 808,965 617,567 (0) 1,426,532 Street maintenance 9,196,102 4,624,132 (6,331,470) 7,488,764 Park and recreation 1,026,089 541,883 (394,284) 1,173,688 Community development and housing loan 1,051,326 503,191 1,741,362 3,295,879 Economic development 58,328 37,017 260,930 356,275
Unassigned ‐ ‐ ‐ ‐
TOTAL FUND BALANCE: $ 20,096,661 10,113,365 (8,711,497) $ 21,498,528
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Schedules for the trend of fund balances for Other Governmental Funds, June 30, 2016:
Beginning Ending Fund Fund Balance Addition Deletion Balance
Fund Balances: (Other Governmental Funds)
Nonspendable Noncurrent receivables $ 3,024,783 $ 3,952,289 $ (6,977,072) $ ‐
Restricted for Other purposes 56,861 1,935,913 (1.00) 1,992,773 Operating reserved 3,957,094 5,170,480 (5,102,215) 4,025,359 Public Safety 5,623,656 7,348,069 (7,757,735) 5,213,990 Street maintenance 20,295,471 26,518,784 (32,657,473) 14,156,783 Health and welfare 5,357,510 7,000,313 (6,322,296) 6,035,527 Park and recreation 11,646,147 15,217,270 (13,531,832) 13,331,585 Community development and housing loan 17,623,965 23,028,100 (17,449,408) 23,202,657 Economic development 3,351,959 4,379,789 (4,623,198) 3,108,550 Debt service reserve 10,252,532 13,396,323 (9,539,982) 14,108,873
Committed for Other purposes ‐ ‐ ‐ ‐
Unassigned (912,245) 798,618 (430,640) (544,267)
TOTAL FUND BALANCE: $ 80,277,733 $ 108,745,948 $ (104,391,852) $ 84,631,829
13. Spending Policy The City’s policy is to spend restricted fund balances first, before spending unrestricted fund balances, for expenditures incurred for purposes for which both restricted and unrestricted fund balances are available, except for instances wherein a City’s ordinance or resolution specifies the fund balance.
The City’s policy is that committed and assigned fund balances are considered to have been spent first before unassigned fund balances have been spent, when expenditure are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used, except for instances where in a City ordinance specifies the fund balance. For committed fund balance, the City Council is the highest level of decision making authority. Commitments may be changed or lifted only by the City adopting a resolution that imposed the constraint originally. For assigned fund balance, it comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by the City Council or City manager, to which the City Council has delegated the authority, to assign amounts to be used for specific purposes.
14. Net Position Net position of the government-wide and proprietary funds is categorized as net investment in capital assets; restricted or unrestricted. Net investment in capital assets is that portion of net position that relates to the City’s capital assets reduced by accumulated depreciation and by any outstanding debt incurred to acquire, construct or improve those assets, excluding unexpended proceeds.
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Restricted net position is that portion of net position that has been restricted for general use by external parties (creditors, grantors, contributors, or laws or regulations of other governments) or imposed by law through constitutional provisions or enabling legislation. Unrestricted net position consists of all net position that does not meet the definition of either of the other two components.
II. Stewardship, Compliances, and Accountability a) Excess of Expenditures / Over Appropriations The following non-major governmental funds expenditures exceeded appropriations at the legal level of budgetary control (the fund level):
Amount Special Disabled Tax (1,154) (1) Workforce Investment Act (1,665) (1) Condo Conversion Program (832) (1) Section 108 HUD GTY Assistance (141,180) (2) Measure B Local Street & Roads (58,987) (1) Measure B Paratransit (12,236) (1) Measure GG Fire Preparation Tax (300,955) (1) (a) Park Acquisition Development (116) (1) Pension Refunding Bonds (86) (1) 09 Measure FF Library (259) (1) GO 2007 Refunding Bonds (3,488,857) (1) (b) GO 2002 Refunding Bonds (641,365) (1) (b) GO 2007 Refunding Bonds Series A (178,565) (1) (b) GO 2008 Animal Shelter Measure I (224,325) (1) (b) (1) 2010 COP Animal Shelter (35)
(1) An amendment to the appropriations ordinance was not prepared due to the timing issue. Therefore, the fund balance was used to cover the excess. (a) It was due to usually high overtime costs as a result of vacancies in the Fire Department. (b) The appropriate additional funds to cover the costs were done but were not enough, due to FY 2015 GO Refunding Bonds.
(2) Grantee returned the unused amount of a loan, which the department did not anticipate. As a result, the department returned exactly same amount to the grantor. In fact, both revenue and expenditure exceeded budget to the same extent during the fiscal year.
83 II. Stewardship, Compliance, and Accountability, continued
b) Deficit Fund Balances/Net Position The following funds had deficit fund balances / net position on June 30, 2016:
(1) Special Revenue Funds
Amount Solano Avenue B.I.D $(11,682)(1) North Shattuck B.I.D (3,827)(1) UC Settlement (394,768)(1) (1) Fund balance deficit will be eliminated by reducing expenditures in FY 2017
(2) Debt Service Funds
Amount Berkeley Repertory Theatre $(763)(1) (1) Fund balance deficit will be eliminated by a transfer from the Capital Improvement Fund.
(3) Internal Service Funds
Amount Building maintenance Fund $(3,070,333)(1) Central Services (6,509)(2) UC Settlement (5,038,956)(3)
(1) Deficit net position will be eliminated by a revised allocation of costs to City departments. (2) Deficit net position will be eliminated by reducing expenses in FY 2017 to not exceed revenues. (3) Deficit net position will be eliminated by reducing expenses.
84 III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments Cash and investments as of June 30, 2016 are classified in the accompanying financial statements at fair value as follows:
Unrestricted Restricted Total Primary Government (except Fiduciary funds) $ 261,522,399 $ 31,848,208 $ 293,370,607 Fiduciary Funds 9,121,300 34,854,962 43,976,262 Subtotal Primary Government 270,643,699 66,703,170 337,346,869 Component Units Rent Stabilization Board 4,874,986 4,874,986 Subtotal Component Units 4,874,986 - 4,874,986 Total cash and investments$ 275,518,685 $ 66,703,170 $ 342,221,855
Cash and investments as of June 30, 2016 consist of the following:
Cash and deposits: Cash on hand $ 23,019 Deposits with financial institutions 124,307,437 Deposits with fiscal agents 6,853,208 Total cash and deposits 131,183,663 Investments: Investments for City government, excluding trust funds 176,183,230 Investments held in trust and the Successor Agency 34,854,962 Total investments 211,038,192
Total cash, deposits and investments$ 342,221,855
Equity in pooled cash and investments held by treasury$ 291,392,385 Cash and investments held by fiscal agent 6,853,208 Cash and investments of retirement plans 38,729,862 Cash and investments of other trust funds 768,893 Cash and investments of Agency funds 4,477,508
Total cash, deposits and investments$ 342,221,855
85 III. DETAILED NOTES ON ALL FUNDS, continued
Pooled Cash and Investments - The City maintains a cash and investment pool that is available for use by all funds and component units. Each fund’s portion of this pool is displayed on the governmental fund balance sheets and proprietary fund statement of net assets as “cash and investments.”
Restricted Cash and Investments- The City has other investments, not held by the City Treasury, that are invested pursuant to governing bond covenants. These amounts are reflected as restricted cash in the financial statements.
Investments in Retirement Plans - The funds of the retirement plans and retiree medical plans are invested pursuant to City investment policies established specifically for those plans by the City Council., which are pursuant to Sections 2.44.040 and 2.44.060 of the Berkeley Municipal Code, Resolution No. 45,087-N.S., and Sections 53601, 53607, 53636 and 53648 of the State Government Code, the Director of Finance, the Treasurer of the City, is authorized to make investments of the City’s idle funds. The Code also directs the City to present an annual investment policy to the City Council for approval. The objective of the investment policies is to maximize the expected return of the plans at the acceptable level of risk.
1. Investments Investments Authorized by the California Government Code and the City of Berkeley Investment Policies: The table below identifies the investment types that are authorized for the City of Berkeley‘s pooled investment policies. The table also identifies certain provisions of the California Government Code and/or the City’s investment policies that address interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code.
Maximum Maximum Maximum Percentage/Dollar Investment Authorized Investment Type Maturity of Portfolio in one issuer Local Agency bonds 5 years 100% N/A U.S. Treasury Securities 5 years 100% N/A U.S. Agency Securities 5 years 100% N/A Banker's Acceptances 7 days 40% 30% Commercial Paper 180 days 25% $5M or 2% Negotiable Certificates of Deposit 5 years 30% N/A Repurchase Agreements 1 year 10% N/A Medium‐Term Notes 5 years 30% N/A Guaranteed Investment Contracts 5 years 25% N/A Money Market funds N/A 100% N/A Mortgage pass‐Through Securities 5 years 20% N/A County Pooled Investment Funds N/A N/A N/A JPA Pools (other investment pools) N/A N/A N/A
Investments Authorized by Debt Agreements
86 III. DETAILED NOTES ON ALL FUNDS, continued
Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policies. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, and concentration of credit risk.
Maximum Maximum Maximum Percentage/Dollar Investment Authorized Investment Type Maturity Of Portfolio In One Issuer U.S. Treasury Securities 5 years 100% N/A U.S. Agency Securities 5 years 100% N/A Money Market Mutual Funds N/A 100% N/A Guaranteed Investment Contracts 5 years 25% N/A
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 City 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 City has the intention of holding all investments to maturity. The average maturity of the City’s pooled investments governed by the Investment Policies was approximately 18.3 months as of June 30, 2016.
City’s Investments
Information about the sensitivity of the fair values of the City’s investments (excluding investments held in trust for retiree medical plans) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
Investment Maturities (in years) Total Less than 1 1 - 2 2 - 3 3 - 4 4 - 5
U.S. Agency Securities $ 155,739,150 $ 30,012,100 $ 35,212,300 $ 70,503,000 $ 10,005,550 $ 10,006,200 State and Local Agency Bonds 13,741,351 4,513,881 1,062,440 3,042,480 5,122,550 - Medium Term Notes 6,044,900 5,039,300 1,005,600 - - -
Other 657,829 657,829 - - - -
Total investments $ 176,183,230 $ 40,223,110 $ 37,280,340 $ 73,545,480 $ 15,128,100 $ 10,006,200
87 III. DETAILED NOTES ON ALL FUNDS, continued
Trust Fund Investments
In accordance with Government Code Sections 53620-53622, the assets of the City of Berkeley retiree medical plan trusts may be invested in any form or type of investments deemed prudent by the City Council. These plans are authorized by investment policies approved by the City Council to invest in various types of investments, up to a maturity of 30 years.
The issuer of commercial paper must have the highest rating from two nationally recognized rating agencies, not one (as required by the State).
Purchases of corporate notes is limited to securities rated “A” or higher by Moody’s or Standard and Poor’s.
Purchases of long-term (i.e., beyond five years) corporate bonds are limited to the Retiree Medical Plan Trust Fund and debt service reserve funds. Issuers must have a Moody’s credit rating of “A3” or higher and Standard and Poor’s rating of “A-“or higher.
These OPEB and pension investments are reported at fair value, as follows:
Investment Maturities (in years) Total Less than 1 1 - 2 2 - 3 4 -5 5 or more Medium Term Notes $ 17,057,005 $ 3,033,450 $ 2,155,000 $ 3,430,830 $ 5,700,750 $ 2,736,975 US Agency Securities 7,680,888 - - - 7,680,888 State and Local Agency Bonds 9,062,135 - - - 2,891,735 6,170,400 Savo Island Loan 392,000 - - 392,000 - - Guaranteed Investment Contract 662,934 - - 662,934 - -
Total investments$ 34,854,962 $ 3,033,450 $ 2,155,000 $ 4,485,764 $ 8,592,485 $ 16,588,263
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the California Government Code, the City’s investment policies, or debt agreements and the actual rating as of the year end for each investment type.
88 III. DETAILED NOTES ON ALL FUNDS, continued
City’s Investments
Minimum S&P Legal Amount Rating Investment Rating Held at June 30, 2016 U.S. Agency Securities AA+$ 155,739,150 AA+ Municipal Bonds A 13,741,351 NR to AA- Medium Term Notes A 6,044,900 BBB- to AA- Other N/A 657,829 Not rated Total Investments $ 176,183,230
Trust Fund Investments
Minimum S&P Legal Amount Rating Investment Rating Held at June 30, 2016 Medium Term Notes A$ 17,057,005 A- to A US Agency Securities AA+$ 7,680,888 AA+ State and Local Agency Bonds A 9,062,135 A to A+ Savo Island Loan N/A 392,000 Not rated Guaranteed Investment Contracts N/A 662,934 Not rated Total Investments $ 34,854,962
Concentration of Credit Risk
The investment policies of the City contain no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows:
Reported Percentage Issuer Investment Type Amount of holdings FNMA Federal Agency Securities$ 20,052,350 11% Federal Home Loan Bank Federal Agency Securities 80,591,300 46% Federal Home Loan Mortgage Corp. Federal Agency Securities 30,027,300 17% Federal Farm Credit Bonds Federal Agency Securities 25,068,200 14%
Total$ 155,739,150 88%
Custodial Credit Risk For an investment, custodial credit risk is the risk that the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party if the counter party fails. All of the City’s investments except money market mutual funds and guaranteed investment contracts are subject to custodial risk. However, the California Government Code and the City’s investment policies do not contain legal or policy requirements that would limit the exposure to custodial risk for investments. The City’s investments, OPEB trust fund investments and pension
89 III. DETAILED NOTES ON ALL FUNDS, continued
fund investments are held by Wells Fargo, in the Trust and Custody Department, which is separate from the operations of the bank. In addition, Wells Fargo maintains a Financial Institution Bond of at least $100 million which provides protection from losses sustained by employee dishonesty, burglary, robbery, check forgery, securities forgery, computer crime, safe deposit, etc.
Fair Value Measurements
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. These principles recognize a three-tiered hierarchy, as follows:
Level 1: Investments reflect prices quoted for identical assets in active markets; Level 2: Investments reflect prices quoted for similar assets in active markets or quoted prices for identical or similar assets in markets that are not active or inputs other than quoted prices that are observable for the asset; Level 3: Investments reflect prices based upon unobservable sources. Treasury securities categorized as Level 1 are valued based on prices quoted in active markets for those securities. Federal Farm Credit Bank Bonds, Federal Home Loan banks, Federal Home Loan Mortgage Corporate Notes, Federal national Mortgage Association Notes and Corporate Notes categorized as level 2 are value based on matrix pricing which use observable market inputs such as yield curves and market indices that are derived principally from or corroborated by observable market data by correlation to other means. Savo Island Loan and Guaranteed Investment Contracts are categorized as level 3.
The City has the following recurring fair value measurements as of June 30, 2016:
Fair Value Measurements Using
Quoted Prices in Quoted Prices in Significant Active Markets - Active Markets - Unobservable Identical Assets Similar Assets Inputs Investments by Fair Value Level Amount (Level 1) (Level 2) (Level 3) U.S. Agency Securities$ 155,739,150 $ 155,739,150 State and Local Agencies 13,741,351 13,741,351 Medium Term Notes 6,044,900 6,044,900 Other 657,829 $ 657,829 Total Investments- Fair Value$ 176,183,230 $ 175,525,401 $ 657,829
90 III. DETAILED NOTES ON ALL FUNDS, continued
The Trust Fund Investment has the following recurring fair value measurements as of June 30, 2016:
Fair Value Measurements Using Quoted Prices in Quoted Prices in Significant Active Markets - Active Markets - Unobservable Identical Assets Similar Assets Inputs Investments by Fair Value Level Amount (Level 1) (Level 2) (Level 3) U.S. Agency Securities$ 7,680,888 $ 7,680,888 State and Local Agencies 9,062,135 9,062,135 Medium Term Notes 17,057,005 17,057,005 Other 1,054,934 $ 1,054,934 Total Investments- Fair Value $ 34,854,962 $ 33,800,028 $ 1,054,934
2. Deposits Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover its deposits. Included as deposits are bank deposits. In accordance with the California Government Code, demand deposits that aren’t insured must be collateralized with governmental securities at 110 percent of all such deposits or pledging of first deed mortgage notes equal to 150% of the City’s deposits. The collateral must be held by the bank in the City’s name. The following chart presents bank deposit balances for the primary government, its component units, and fiduciary funds as of June 30, 2016. Deposits are listed in terms of whether they are exposed to custodial credit risk (i.e., the risk that in the event of a bank failure, the City’s deposits may not be returned). Deposits are exposed to custodial credit risk if they are either, (1) uninsured and collateralized with securities held by the pledging financial institution, or (2) uninsured and collateralized with securities held by the pledging financial institution’s trust department or agent, but not in the name of the City.
Bank Deposit Balances Deposits Exposed to Custodial Credit Risk Primary Component Units Fiduciary Funds Total Bank Description Government Rent Board OPEB Funds Others Balances Uninsured and collateralized with securities held by pledging institution's trust department or agent, but not in City's name $ 123,455,610 $ 1,728,180 $ 1,373,650 $ 272,572 $ 126,830,012 Total bank balance - all deposits $ 123,455,610 $ 1,728,180 $ 1,373,650 $ 272,572 $ 126,830,012
91 III. DETAILED NOTES ON ALL FUNDS, continued
The City applies the provision of GASB 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, which requires governments to present investments at fair value. For the fiscal year ended June 30, 2016, the City had a decrease in the fair value of investments based on quoted market prices for the securities held, which are included as investment income in the General Fund, as follows:
Interest income $ 2,493,151 Net increase in the fair value of investments 291,083 Total investment income $ 2,784,234
B. Receivables Receivables as of year-end for the City’s individual governmental major funds, non-major governmental funds, and internal service fund, including the applicable allowance for uncollectible accounts, are as follows:
S pecial Revenue Capital Project Other Internal Capital Governmental Service Receivables: General Grant Library Improvement Funds Fund Total
Accounts $40,228,325$ 156,082 $ 1,337 $ - 1,110,257 $ 153,449 $41,649,450
Interest 534,417 41,225 399,789 975,431
Taxes 7,839,079 192,474 1,317,534 9,349,087
Special assessments 205,850 205,850
Subventions/grants 6,626,044 544,223 7,170,268
Notes 3,595,304 27,689,143 7,757,390 16,785,926 55,827,762
Other 353,081 1 45,205 398,287
Gross receivables 52,550,205 34,471,270 $193,811 7,798,615 20,408,784 153,449 115,576,134
Less: allowance for
uncollectibles (31,573,896) (179,892) (31,753,788)
Net total receivables $ 20,976,310 $ 34,471,270 $ 193,811 $ 7,798,615 $ 20,228,891 $ 153,449 $ 83,822,347
92 III. DETAILED NOTES ON ALL FUNDS, continued
Details of Notes Receivable as of June 30, 2016 are as follows:
Capital Nonmajor Total General Grant Improvement Governmental Notes Notes Receivables : Fund Fund Fund Funds receivable Development Loans: $ 3,335,304 $ 26,327,989 $ 7,582,624 $ 14,570,765 $ 51,816,682 S. B. Rental Rehabilitation 260,000 414,208 674,208 CALHOME Senior Home Repair 1,175,921 174,765 981,522 2,332,208 Rehabilitation-Emergency Repair 5,233 31,748 36,981 Rehabilitation-Senior Disabled 76,000 76,000 1st Time Homebuyer home loans 180,000 180,000 OED-Citywide Loans 415,222 415,222 OED-Mortgage Loan 77,000 77,000 OED- Revolving Loan 219,462 219,462 Gross notes receivable 3,595,304 27,689,143 7,757,389 16,785,926 55,827,761 Less: allowance for uncollectibles (177,375) (177,375)
Total receivables, net $ 3,595,304 $ 27,689,143 $ 7,757,389 $ 16,608,551 $ 55,650,387
Receivables as of year-end for the City’s major enterprise funds, including the applicable allowance for uncollectible accounts, are as follows:
Permit Zero Marina Sanitary Clean Storm Service Off-Street Parking Bldg. Waste Operations Sewer Water Center Parking Meter Purchases Total Accounts Receivable $2,450,536 $766,558 $1,327,539 $28,194 $80,670 $226,702 - - $4,880,199 Less: allowance for uncollectibles (573,807) (147,135) (4,138) (7,220) (26,631) - ($758,931)
Total receivables $1,876,729 $619,424 $1,323,401 $28,194 $73,450 $200,071 $0 $0 $4,121,269
Development Loans
This loan program began in 1991, in which the City awards loans to developers every year. The first year of maturity for loans starts in 2046, but most of the loans may be forgiven. Development loans normally are charged 6% simple interest per annum, with a range of 3% to 6%. The agreements require the borrower to pay annual interest only, at the lesser of 50% of the property’s net cash flow or the amount of interest calculated at 6%. The loans may be forgiven after 55 years from the loan date, if the terms of the agreement are satisfied.
Senior Rehabilitation Loans
This loan program began in 1980. The City is unable to predict the maturity dates of the loans because most of them are only due upon sale of the property. 90% of these loans are deferred with no monthly payments required. Interest rates range between 0% and 6%.
93 III. DETAILED NOTES ON ALL FUNDS, continued
CALHOME Senior home repair loans
Cal Home funds are additional resources to existing Senior and Disabled Home Rehabilitation Loan Programs. Financial assistance from the Cal Home is in the form of a deferred payment loan that is due and payable upon sale or transfer of title to the property. The interest rate is zero. Cal Home has been in existence since 2002 and it targets seniors and disabled homeowners who are very low income and are unable to undertake rehabilitation of their homes because of limited income.
Rehabilitation – Emergency Repair
This loan program was done primarily in the 1980s and was a predecessor for the Senior and Disabled Rehabilitation Loan Programs. Funds are used for repairs to homes.
Rehabilitation – Senior Disabled
This loan program related to CDBG and CalHome funds, which are used for zero-interest loans to homeowners who are either 62 or older or disabled. Funds are used for health and safety repairs.
1st Time Homebuyer home loans
This loan program provides a second mortgage for low-income homeowners. It was implemented in approximately 1998 and 1999.
OED Citywide, Mortgage, and Revolving Loans
OED loans are revolving loans funds that can provide access to capital for businesses and entrepreneurs who seek to grow, retain or create jobs, but do not qualify for a traditional bank loan. The OED program serves all commercial areas in the City. The interest rate is based on Prime Rate plus 2 percent at the time of loan approval. Loan terms are up to 7 years.
C. Interfund Transactions Due Due Fund To From Primary Government: General Fund - $ 2,920,341 Grants Funds$ 4,168,086 Capital Improvement Funds - 2,278,768 Nonmajor Governmental Funds 1,031,023
TOTAL$ 5,199,109 $ 5,199,109
94 III. DETAILED NOTES ON ALL FUNDS, continued
The composition of Interfund Balances as of June 30, 2016, is as follows:
Capital Project Proprietary Fund Interfund transfers: Fund
Private Building Nonmajor Off Street Capital Parking Unified Sewer Clean Storm Purchases & Internal Service Total Transfer- General Fund Governmental Parking Improvement Meter Fund Program Lateral Water Manag ement Funds Out Fund Fund Fund Fund
General Fund $ 9,510,512 $ 4,230,738 $ 130,000 $ 3,697,044 $ 17,568,294
Capital Projects Fund: Capital Improvement 1,936,546 513,364$ 458,187 2,908,097
Enterprise Fund: Refuse Fund 110,870 110,870 Marina Operations/Maint 4,688 16,890 21,578 Sanitary Sewer Operation $ 90,501 102,522 193,023 Clean Storm Water 25,085 25,085 Off Street Parking Fund 7,920 7,920 Parking Meter Fund $ 1,026,809 900,000$ 8,650 1,935,459 Permit Service Fund $ 339,321 55,637 394,958 Internal Service Fund: Computer Replacement 287,570 287,570
Grant Fund: 59,500 $ 20,121 79,621
Nonmajor Governmental Fund: 3,489,170 38,217 311,671 69,262 3,908,321 Total Transfer-In $4,515,979 $9,510,512 $6,557,259 $900,000 $339,321 $20,121 $90,501 $955,034 $458,187 $4,093,880 $27,440,795
The $17,568,294 General Fund transfers out include (1) subsidy of $362,909 to Paramedic Fund; (2) $9,510,512 to pay for capital improvement projects; (3) transfer of $335,750 to pay debt service for the sales lease financing; (4) $1,695,888 to the Public Liability Fund and $1,133,535 to the Catastrophic Loss Fund; (5) $1,953,018 in matching funds for public health programs; (6) $514,529 subsidy to Street Lighting Assessment District; (7) $974,532 to the FUND$ and VOIP replacement fund; (8) $617,621 to the Equipment Replacement Fund and $250,000 to Sick and Vacation Payouts Fund. (9) $130,000 to Clean Storm Water fund and $90,000 to One-Time Funding Fund. Other significant transfers out from other funds included (1) Realignment Fund transfer to General Fund for public health programs, required by the State ($2,604,024); (2) Parking Meter Fund transfer to General Fund ($1,026,809); (3) UC Settlement Fund transfer to general Fund ($885,146).
The General Fund received transfers in of $2,604,024 from the Health State Realignment Fund as a result of State requirements on public health program, $1,026,809 from the Parking Meter Fund as a result of Council approval of 25 cents increase in parking meter rates to fund homeless programs, and $885,146 from the UC Settlement Fund as a result of fire services provided to UC Berkley by the City.
95 III. DETAILED NOTES ON ALL FUNDS, continued
D. Capital Assets
Capital asset activity for the year ended June 30, 2016 was as follows:
Primary Government Beginning Ending Balance Additions Deletions Transfer Balance Governmental activities: Capital assets, not being depreciated: Land$ 21,750,132 $ 21,750,132 Construction in progress 366,420 $ 3,069,606 $ - 3,436,026 Total capital assets, not being depreciated 22,116,552 3,069,606 - - 25,186,158
Capital assets, being depreciated: Buildings 163,305,732 865,579 164,171,311 Improvements other than buildings 13,752,945 756,015 14,508,960 Machinery and equipment 70,202,718 5,671,247 (2,916,726) 72,957,239 Infrastructure 190,719,560 10,270,288 200,989,848 Total capital assets being depreciated 437,980,955 17,563,129 (2,916,726) - 452,627,358
Less accumulated depreciation for: Buildings (77,341,518) (4,705,471) (82,046,989) Improvements other than buildings (3,377,089) (474,699) (3,851,788) Machinery and equipment (54,197,411) (4,214,367) 2,803,393 (55,608,385) Infrastructure (108,790,793) (5,225,446) (114,016,239) Total accumulated depreciation (243,706,811) (14,619,984) 2,803,393 - (255,523,400)
Total capital assets, being depreciated, net 194,274,145 2,943,145 (113,333) - 197,103,958
Governmental activities capital assets, net$ 216,390,697 $ 6,012,751 $ (113,333) $ - $ 222,290,115
Beginning Ending Balance Additions Deletions Transfer Balance Business-type activities: Capital assets, not being depreciated: Landpg $ 2,979,050 - -$ -$ $ 2,979,050 Construction in progress 1,085,103 $ 2,984,193 4,069,296 Total capital assets, not being depreciated 4,064,153 2,984,193 - - 7,048,346 Capital assets, being depreciated: Buildings 40,356,151 1,681,330 42,037,481 Improvements other than buildings 14,728,872 570,516 15,299,388 Machinery and equipment 9,081,318 2,125,165 (1,357,814) 9,848,669 Infrastructure 189,938,975 7,277,469 197,216,444 Total capital assets being depreciated 254,105,316 11,654,480 (1,357,814) - 264,401,982 Less accumulated depreciation for: Buildings (17,465,672) (1,294,020) (18,759,692) Improvements other than buildings (3,688,547) (526,451) (4,214,998) Machinery and equipment (7,537,284) (373,197) 1,357,814 (6,552,667) Infrastructure (57,239,537) (3,205,455) (60,444,992) Total accumulated depreciation (85,931,040) (5,399,125) 1,357,814 - (89,972,349)
Total capital assets, being depreciated, net 168,174,275 6,255,355 - 174,429,633
Business-type activities capital assets, net$ 172,238,428 $ 9,239,548 $ - -$ $ 181,477,979
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D. Capital Assets. Depreciation expense was charged to functions/programs of the primary government as follows:
Government activities: General government$ 1,389,123 Public safety 791,097 Highways and streets 5,285,346 Health and human services 99,556 Culture and recreation 2,538,748 Community development/housing economic development 1,665,677 Amount reported in the internal service funds 2,850,438
Total depreciation expense - governmental activities $ 14,619,984
Business-type activities: Parking-related 378,750 Marina operations and maintenance 454,749 Sewer services 2,863,558 Clean storm water 602,062 Refuse services 207,441 Permit service center 15,436 Building Purchases 877,127
Total depreciation expense - business-type activities $ 5,399,125
Discretely Presented Component Units Capital asset activity for the Rent Stabilization Board for the fiscal year ended June 30, 2016 was as follows:
Beginning balance Balance July 1, 2015 Additions Deletions June 30, 2016 Capital assets, being depreciated: Machinery and equipment $ 680,599 1,626$ -$ $ 682,225 Total capital assets being depreciated 680,599 1,626 - 682,225
Less accumulated depreciation for: Machinery and equipment (420,215) (83,553) - (503,768) Total capital accumulated depreciation (420,215) (83,553) - (503,768)
Rent Board activities capital assets, net $ 260,384 $ (81,927) $ - $ 178,457
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E. Leases
Operating Leases The government leases building and office facilities and other equipment under non-cancelable operating leases. Total costs for such leases were $985,871 for the year ended June 30, 2016. The future minimum lease payments for these leases are as follows:
Year Ending June 30 Amount 2017 $1,129,489 2018 467,724 * 2019 474,434 Total $2,071,646 *Lease for Permit Center will expire in FY2018 and the Permit Center will move to 1947 Center Street building.
98 III. DETAILED NOTES ON ALL FUNDS, continued
F. Bonds, Capital Leases, Notes, Loans and Other Long-Term Obligations Changes in Long-Term Liabilities
Long-term liability activity for the year ended June 30, 2016 was as follows:
Beginning Ending Due within Balance Additions Reductions Balance One Year Governmental Activities Bonds payable: General obligation bonds $ 83,900,000 $ 36,680,000 $ (39,455,000) $ 81,125,000 $ 9,660,000 GO bonds ‐ premium 707,912 4,144,029 (215,774) 4,636,167 Pension refunding bonds 815,000 (295,000) 520,000 270,000 2012 Lease Revenue bonds 5,237,126 ‐ (262,325) 4,974,801 271,693 2012 Lease Revenue bonds ‐ premium 507,635 ‐ (28,885) 478,750 Total bonds payable 91,167,673 40,824,029 (40,256,984) 91,734,718 10,201,693
Capital leases 2,009,352 2,789,241 (657,150) 4,141,443 870,401 Certificates of Participation 5,445,000 (100,000) 5,345,000 110,000 Premium on COP 377,692 (3,634) 374,058 Notes and loans payable 10,312,000 (528,000) 9,784,000 652,578 claims and judgements 31,154,666 4,119,161 (3,720,606) 31,553,221 4,132,222 PORAC 538,459 317,137 (711,068) 144,528 144,528 Compensated absences ‐ Other 10,728,605 9,157,163 (7,164,311) 12,721,457 965,139
Net pension liability: CalPERS Miscellaneous Plan* 145,455,972 28,093,664 (21,278,788) 152,270,848 CalPERS Fire Plan* 55,274,833 11,017,145 (8,727,216) 57,564,762 CalPERS Police Plan* 123,977,970 15,891,899 (9,424,043) 130,445,826 Police Retirement Income Benefit* 55,111,597 16,898,590 (2,139,497) 69,870,690 Safety Member Pension Fund* 3,574,170 797,433 (1,270,531) 3,101,072
Net OPEB obligation: Miscellaneous Employees Retiree Health Plan* 5,707,372 1,331,550 7,038,922 Police retiree Premium Assistance Plan* 11,158,502 5,779,291 (488,313) 16,449,480 Fire retiree Premium Assistance Plan* ‐ 851,365 (839,003) 12,362 Governmental Activties Long‐term Liabilities $ 551,993,859 $ 137,867,668 $ (97,309,143) $ 592,552,388 $ 17,076,561
Business‐type Activities Refunding lease revenue bonds $ 20,072,875 $ (857,675) $ 19,215,199 $ 888,307 Refunding lease revenue bonds ‐ premium 1,922,402 (109,387) 1,813,015 Notes Payable 7,575,861 (298,041) 7,277,820 310,682 Notes payable 972,924 (379,072) 593,855 392,455 Landfill liabilities 2,099,411 (326,029) 1,773,382 1,166,615 Compensated absences 2,426,158 $ 2,275,550 (2,155,233) 2,546,475 407,645 Net pension liability (Miscellaneous Employees)* 58,092,346 11,210,178 (8,498,342) 60,804,182 ‐ Net OPEB obligations (Miscellaneous Employees)* 1,622,674 320,266 1,942,940
Business‐type Activities Long‐term Liabilities $ 94,784,650 $ 13,805,994 $ (12,623,779) $ 95,966,866 $ 3,165,706
* General Fund and Enterprises Funds typically have been used in prior years to liquidate the net pension liability
99 III. DETAILED NOTES ON ALL FUNDS, continued
Long‐term liability activity for the year ended June 30, 2016 swa as follows:
Beginning Ending Due within Balance Additions Reductions Balance One Year Component Unit Compensated absences $ 302,269 $ 68,056 $ (11,838) $ 358,487 $ 27,197 Net pension liability (Miscellaneous Employees) 5,077,570 979,827 (742,799) 5,314,598 ‐ Net OPEB obligations (Miscellaneous Employees) ‐ 68,201 68,201
Component Unit Long‐term Liabilities $ 5,379,839 $ 1,116,084 $ (754,637) $ 5,741,286 $ 27,197
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The following is a summary of Long-term obligations of the City as of June 30, 2016:
Governmental Activities Long ‐Term Obligations Type of Obligation and Purpose: Final Maturity FY Interest Rates Principal Amount General Obligation Bonds: 2008 GO‐ Measure I 2037 2.80%‐4.30% $ 6,290,000 2009 Measure FF Library 2040 1.25%‐5.30% 9,170,000 2010 Measure FF Library and Premium of $.2 million 2040 3.00%‐5.00% 14,652,554 2014 Measure M and Premium of $.4 million 2044 3.00%‐5.00% 14,971,096 2015 GO Measure GIS Refunding and Premium of $4.0 million 2038 3.00%‐ 5.00% 40,677,517
General Obligation Bonds 85,761,167
Revenue Bonds: 1998 Pension Bonds 2018 3.80%‐5.25% 520,000 2012 Lease Revenue Bonds and Premium of $.5 million 2030 3.80%‐5.25% 5,453,551
Revenue Bonds 5,973,551
2010 COP‐ Animal Shelter 5,345,000 2010 COP‐ Animal Shelter ‐Premium 374,058 2010 COP‐Animal Shelter 5,719,058
Capital Lease Payable 2009 Fire Engine and Trucks 1,539,175 2016 Fire Engine and Trucks 2,602,268 Capital Lease Payable 4,141,443 Loans Payable: HUD 108‐ Adeline 188,000 HUD 108‐ UNA 596,000 HUD 108‐ Ed Roberts Campus 6,000,000 California Energy Resources Conservation 3,000,000 Loans Payable 9,784,000
Other Long‐Term Obligations: Accrued Vacation and Sick Leave 12,721,457 Accrued Police Sick Leave Program Liability 144,528 Accrued Workers' Compensation Claims and Judgments 30,921,000 Accrued Public Liability Claims and Judgments 632,221 Net Pension Liability‐CalPers Miscellaneous Plan 152,270,848 Net Pension Liability‐CalPers Police Plan 130,445,826 Net Pension Liability‐CalPers Fire Plan 57,564,762 Net Pension Liability‐Police Retirement Income Benefit 69,870,690 Net Pension Liability‐Safety Memebers Pension Fund 3,101,072 Net OPEB Liability‐Miscellaneous Employees Retiree Health Plan 7,038,922 Net OPEB Liability‐Police Retiree Premium Assistance Plan 16,449,480 Net OPEB Liability‐Fire Retiree Premium Assistance Plan 12,362 Other Payables 481,173,168
Total Governmental Activities Long Term Obligations $ 592,552,388
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Governmental-type Activities
General Obligation Bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for governmental activities. The original amount of general obligation bonds issued in prior years was $83,900,000. General obligation bonds are direct obligations and pledge the full faith and credit of the government. These bonds generally are issued as 25-30 year serial bonds with amounts of principal maturing each year. General obligation bonds currently outstanding are as follows:
Purpose Interest Rates Amount
Governmental Activities - Animal Shelter 2008 3.50%-4.30% 6,290,000 Governmental Activities - Neighborhood Branch Library 2009 1.25%-5.30% 9,170,000 Governmental Activities - Neighborhood Branch Library 2010 3.00%-5.00% 14,410,000 Governmental Activities - Measure M (2014) 3.00%-5.00% 14,575,000 Governmental Activities - 2015 GO Refunding Bonds 3.00%-5.50% 36,680,000 $ 81,125,000
Annual debt service requirements to maturity for general obligations bonds are as follows:
Year Ending June 30 Principal Interest
2017$ 9,660,000 $ 3,404,044 2018 3,760,000 3,085,738 2019 3,505,000 2,901,938 2020 3,675,000 2,725,469 2021 3,860,000 2,529,856 2022‐2026 17,695,000 10,066,338 2027‐2031 15,845,000 6,319,841 2032‐2036 10,500,000 3,997,738 2037‐2041 10,140,000 1,551,763 2042‐2044 2,485,000 171,113 $ 81,125,000 $ 36,753,835
2008 Animal Shelter Bonds
On January 9, 2008, the City of Berkeley issued $7,200,000 of General Obligation Bonds with interest rates ranging from 3.50% to 4.30%. Interest is payable semi-annually on March 1 and September 1, and principal is payable annually on September 1, with the 1st principal payment on September 1, 2010. The bonds were issued to finance a new Animal Shelter to replace the existing shelter in the City of Berkeley, and to pay for costs of issuing the bonds. The General Obligation bonds mature on September 1, 2037, but are callable on or after September 1, 2017. This bond has a rating of Aa2 from Moody’s and AA+ from S&P. The amount of outstanding balance was $6,290,000 of June 30, 2016. These bonds were refunded by the 2015 Refunding General Obligation Bonds on July 15, 2015.
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The 2008 Bonds (Measure I) were currently outstanding in the aggregate principal amount of $6,460,000. On July 15, 2015, a portion of the proceeds of the 2015 Refunding Bonds were issued by the City to refund the outstanding maturities of the 2008 Bonds in the amount of $6,460,000; the 2008 Bonds (Measure I) were redeemed on September 1, 2016.
On the date of delivery of the Bonds, a portion of the 2015 Refunding Bonds and cash in debt service fund ($6,842,961) were deposited with The Bank of New York Mellon Trust Company, N.A., San Francisco, California, as escrow agent for the refunded bonds, for deposit in an escrow fund which amount is sufficient to cause the payment and redemption of the principal on the remaining maturities of the refunded bonds in the redemption price of 100% of $6,460,000. The amount of $6,534,206 deposited was invested in U.S. government securities. Upon such deposit, all obligations of the City with respect to the Advance Refunded Bonds were legally defeased except for the City’s obligation to pay the principal and interest on the Advanced Refunded Bonds from such funds deposited with the Escrow Agent. Accordingly, the liability for the Refunded Bonds has been removed from the Statement of Net Position.
2009 Neighborhood Branch Library Improvement Project Bonds On April 14, 2009, the City of Berkeley issued the first series of bonds for $10,000,000 from an aggregate authorized amount of $26,000,000 of General Obligation Bonds duly approved by at least two-thirds of the voters voting on Measure FF at an election held on November 4, 2008, to provide funds to finance renovations, construction, seismic and access improvements, and expansion of program areas at four neighborhood branch libraries in the City. The interest rates on the bonds range from 1.25% to 5.30%. Interest is payable semi-annually on March 1 and September 1, and principal is payable annually on September 1. The General Obligation bonds mature on September 1, 2039, but are callable on or after September 1, 2019. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.
2010 Neighborhood Branch Library Improvement Project Bonds
On August 3, 2010, the City of Berkeley issued the second series of bonds for $16,000,000 from an aggregate authorized amount of $26,000,000 of general Obligation Bonds referenced above. The interest rates on the bonds range from 3.00% to 5.00%. Interest is payable semi-annually on March 1 and September 1, and principal is payable annually on September 1. The General Obligation bonds mature on September 1, 2039, but are callable on or after September 1, 2019. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.
2014 Street and Integrated Watershed Improvements Bonds
On November 19, 2013, the City of Berkeley issued the first series of bonds for $15,000,000 from an aggregate authorized amount of not to exceed $30,000,000 of General Obligation Bonds duly approved by at least two-thirds of the voters voting on Measure W at an election held on November 6, 2012, to provide funds to finance improvements to streets, with integrated watershed improvements within the City. The interest rates on the bonds range from 3.00% to 5.00%. Interest is payable semi-annually on March 1 and September 1, and the principal is payable annually on September 1. The General Obligation bonds mature on September 1, 2043. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.
103 III. DETAILED NOTES ON ALL FUNDS, continued
2015 General Obligation Refunding Bonds
On July 15, 2015, the City of Berkeley issued $36,680,000 of General Obligation Refunding Bonds and paid $6,275,000 of cash on hand to current refund the 2002, 2007A, and 2007B Bonds and advance refund the 2008 Bonds with interest rates ranging from 3.000% to 5.500% and a combined par value of $44,940,000. Interest is payable semi-annually on March 1 and September 1, and the principal is payable annually on September 1. The General Obligation bonds mature on September 1, 2037. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.
The 2015 Refunding Bonds were issued at a premium of $4,144,029 and, after paying issuance costs of $245,094 and underwriter’s discount of $140,961, the net proceeds were $40,437,973. The net carrying amount of the old debt exceeded the reacquisition price by $1.1 million. This amount is being amortized over the remaining life of the old debt.
Some of the net proceeds from the issuance of the 2015 Refunding Bonds were used to purchase U.S. government securities. A portion of those securities ($6,534,205) was deposited in an irrevocable trust with an escrow agent to provide debt service payments until the 2008 Bonds were called on September 1, 2016. The remaining amount ($33,903,767), combined with cash on hand, was deposited in an irrevocable trust with an escrow agent to redeem the refunded bonds on September 26, 2015 (2002 Bonds) and September 1, 2015 (2007A&B Bonds).
The advance and current refunding met the requirements of an in-substance defeasance and the term bonds were removed from the City’s government-wide financial statements.
As a result of the advance and current refunding, the City of Berkeley reduced its total debt service requirements by $7,137,075, which resulted in an economic gain (difference between the present value of the debt service payments on the old and new debt) of $3,808,919.
Revenue Bonds The government also issues bonds where the government pledges income derived from the acquired or constructed assets or tax increment or the General Fund to pay debt service.
Revenue bond debt service requirements to maturity for the Berkeley Repertory Theatre and Refunding Pension Bonds are as follows:
2012 Lease Revenue Bonds
Berkeley Repertory Theatre: On October 1, 1999, BJPFA issued $9,125,000 in lease revenue bonds, on behalf of the City, to acquire a new theatre facility and a 6.4 acre park and park facilities. Interest rates ranging from 4.1%-5.7% are payable semi-annually on April 1st. and October 1st. Principal is due annually on October 1st.
On October 24, 2012, the Berkeley Joint Powers Financing Authority issued $5,693,851 of Refunding Lease Revenue Bonds, to refund the 1999 BJPFA Lease Revenue Bonds, with interest rates ranging from 2.000% to 5.000% to current refund prior Lease Revenue Bonds with interest rates ranging from 5.200% to 5.700% and a par value of $6,770,000. The prior Lease Revenue Bonds mature annually on October 1 between 2013 and 2029. The prior Lease Revenue Bonds were called on November 9, 2012. The current Refunding Lease Revenue Bonds were issued at a premium of $542,791 and, after paying issuance costs of $58,095 and underwriter's discount of $18,247, the net
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proceeds were $6,160,299. The net proceeds from the issuance of the Refunding Lease Revenue Bonds were used to purchase U.S. government securities and those securities were deposited in an irrevocable trust with an escrow agent to provide debt service payments until the bonds were called on November 9, 2012. The current refunding met the requirements of an in-substance defeasance and the term bonds were removed from the City's government-wide financial statements. As a result of the current refunding, Berkeley Joint Powers Financing Authority reduced its total debt service requirements by $1,661,350, which resulted in an economic gain (difference between the present value of the debt service payments on the old and new debt) of $1,214,306. The revenue bonds has principal balance as of June 30, 2016 for $4,974,801.
Annual debt service requirements to maturity for general obligations bonds are as follows:
Year Ending June 30 Principal Interest
2017$ 271,693 $ 227,640 2018 283,404 216,538 2019 293,944 204,991 2020 306,826 192,976 2021 320,879 178,817 2022‐2026 1,847,984 643,805 2027‐2030 1,650,069 181,699
$ 4,974,801 $ 1,846,466
Pension Bonds
The City has an obligation pursuant to an ordinance to make payments, on behalf of the Safety Members Pension Board, to certain retired City police and fire personnel. On May 1, 1998, the City issued debenture bonds in the amount of $12,415,000 to refund certificates of participation, which were issued to purchase a funding and risk agreement that provides payments to the Safety Members Pension fund to assist in funding the City’s pension obligation. Interest rates range from 3.8%-5.25% and are payable semi-annually on June 1st. and December 1st. Principal is payable annually on June 1st. This revenue bonds has principal balance as of June 30, 2016 for $520,000.
Annual debt service requirements to maturity for general obligations bonds are as follows:
Year Ending June 30 Principal Interest
2017$ 270,000 $ 26,000 2018 250,000 12,500 $ 520,000 $ 38,500
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Capital Leases The City has entered into leases in FY2009 for financing the acquisition of fire equipment. These lease agreements qualify as capital leases for accounting purposes and therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases include four engines and two trucks which are allocated among four fire stations. The Acquisition amount for the equipment described in this schedule to be paid to the vendor is $4,439,584 (excluding sales tax of $386,276 payable to the State Board of Equalization) and the contract rate is 4.38%. The historical cost and accumulated depreciation of capital assets related to capital leases are as follows: Governmental Asset: Activities Machinery and Equipment $4,825,860 Less: Accumulated depreciation (4,311,676) Total $514,184
The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2016, were as follows:
Fiscal Year Interest Principal Total 2017 62,098 490,996 553,094 2018 40,357 512,737 553,094 2019 17,653 535,442 553,094
Totals $120,107 $1,539,175 $1,659,282
The City has also entered into another similar leases in FY2016 for financing the acquisition of fire equipment. These lease agreements qualify as capital leases for accounting purposes and therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases include three engines and one hazmat response vehicle which are allocated among four fire stations. The Acquisition amount for the equipment described in this schedule to be paid to the vendor is $2,789,241 (excluding sales tax of $135,829 to be payable to the State Board of Equalization) and the contract rate is 1.94%. The historical cost and accumulated depreciation of capital assets related to capital leases are as follows:
Governmental Asset Activities Machinery and Equipment $2,925,070 Less: Accumulated depreciation - Total $2,925,070
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The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2016, were as follows: Fiscal Year Interest Principal Total 2017 48,653 379,405 428,057 2018 41,257 386,801 428,057 2019 33,716 394,341 428,057 2020 26,029 402,028 428,057 2021 18,192 409,865 428,057 2022-2023 12,258 629,828 642,086 Totals $180,104 $2,602,268 $2,782,372
Certificates of Participation (COP)-Animal Shelter On May 19, 2010, the Berkeley Joint Powers Financing Authority issued $5,750,000 of Certificates of Participation to provide funds to the City to finance a portion of the acquisition and construction of an animal shelter. Annual principal payments on the debt will range from $100,000 in FY2013 to $385,000 in FY2041. Interest rates will range from 3.0% in FY2013 to 5.75% in FY2041. The Certificates of Participation will be repaid from a transfer from the Capital Improvement Fund. The face value of the Certificates of Participation was deposited into two separate funds: $4,896,625 was recorded in the Capital Projects – 2010 COP Animal Shelter Fund for project construction; and $853,375 was recorded in the Debt Service Funds – 2010 Animal Shelter for capitalized interest. This COP has a rating of Aa3 from Moody’s and AA from S&P.
COP debt service requirements to maturity are as follows:
Year Ending June 30 Principal Interest 2017$ 110,000 $ 297,638 2018 110,000 292,963 2019 115,000 287,913 2020 120,000 282,613 2021 125,000 276,800 2022‐2026 745,000 1,267,156 2027‐2031 985,000 1,020,769 2032‐2036 1,305,000 693,019 2037‐2041 1,730,000 259,613
$ 5,345,000 $ 4,678,481
Loans Payable CHFA On January 2002, the City of Berkeley received $500,000 from California Housing Finance Agency. Loan funds will be used exclusively to provide for a revolving source of funds from which to make loans to nonprofit developers for the purpose of financing the acquisition of sites
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for development, for existing single-family and multifamily properties. There is no amortization table available as it is simple interest at 3% per annum. This program is no longer active as of 6/30/2015, as a result, the loan amount was fully paid off at the end of September 2015 with interest.
HUD 108 – Adeline Street In August 7, 2003, the City of Berkeley borrowed $500,000 from the U.S. Housing and Urban Development (HUD) Section 108 Loan Guarantee Program to bridge a funding gap that resulted from a 30% increase in construction costs of 3222 Adeline Street Apartments and anticipated increases for monthly utility costs. The apartments consist of a 19-unit mixed-use project for persons with disabilities and their families. Though the City as the grantee is required to make the loan payments, the funds for the repayment are the obligation and responsibility of the project developer as with any conventional loan a developer may secure. The 108 Loan is secured by a first or second lien on the property and by a pledge of an income stream, such as monthly rents. The interest rate is 4.25%, and interest is payable semiannually on February 1 and August 1 of each year. This loan will mature on August 1, 2022.
Year Ending June 30 Principal Interest
2017 $ 26,000 $ 9,565 2018 26,000 8,202 2019 26,000 6,815 2020 26,000 5,406 2021 26,000 3,977 2022‐2023 58,000 3,434
$ 188,000 $ 37,398
HUD 108- University Avenue Neighborhood Apartments (UNA) As of June 30, 2012, the City of Berkeley made a total drawdown of $604,000 of the $705,000 loan commitment from the U.S. Housing and Urban Development (HUD) Section 108 Loan Guarantee Program. The purpose of this loan is to help finance the costs associated with the development of certain real property located at 1719 and 1725 University Avenue, Berkeley, California.
The interest rate is variable until the date HUD converts it into a permanent loan or the redemption date, whichever is earlier. These dates have not been determined. During the interim period, interest will be billed by HUD on the first day of February, May, August and November. The interest is payable semiannually on February 1 and August 1 of each year. This loan will mature on August 1, 2024.
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Year Ending June 30 Principal Interest
2017$ 2,000 $ 17,500 2018 2,000 17,472 2019 2,000 17,439 2020 2,000 17,401 2021 2,000 17,356 2022‐2025 586,000 60,340
$ 596,000 $ 147,508
HUD 108- Ed Roberts Campus In August 2009, the City of Berkeley accepted a $6,000,000 loan from the U.S. Department of Housing and Urban Development (HUD) Section 108 Loan Guarantee Program and executed a loan agreement with The Ed Roberts Campus, Inc. to construct a public facility that will operate primarily as a one-stop service center for people with disabilities. The interest rate is variable and is payable quarterly. The loan will mature on August 15, 2028.
This loan is currently interest only until the date HUD converts it into a permanent loan or the redemption date, whichever is earlier. These dates have not been determined. During the interim period, interest will be billed by HUD on the first day of February, May, August and November. A schedule of principal and interest will be provided by HUD after the conversion of the loan.
California Energy Resources Conservation and Development In February 2014, the City of Berkeley accepted a $3,000,000 loan from the California Energy Resources Conservation and Development Commission (the “Energy Commission) with loan number 005-13-ECD. This loan is made to the City for an energy savings project, which consists of retrofitting 7,975 street lights to LED technology to be installed. It is estimated that the annual energy cost savings to be $387,021 for the City with this implementation. This loan consists of 1.00% interest rate, and interest is payable semiannually on December 22 and June 22 of each year. This loan will mature on June 22, 2023.
Year Ending June 30 Principal Interest
2017$ 299,578 $ 70,873 2018 344,303 26,148 2019 347,754 22,697 2020 351,190 19,261 2021 354,761 15,690 2022‐2025 1,302,413 26,846
$ 3,000,000 $ 181,514
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Business-Type Activities Final Maturity Interest Principal Type of Obligation and Purpose: FY Rates Amount Business-Type Activities Long-Term Obligations Refunding Lease Revenue Bonds (includes premium of $1,813,015) 2032 2.00%-3.375%$ 19,215,200 Notes Payable - Harbor Construction 4 2016 4.50%-7.90% 153,784 Notes Payable - Harbor Construction 5 until paid 4.50% 7,124,036 Loan Payable - Recycling Carts 2017 3.50% 593,850 Landfill Liabilities 1,773,382 Compensated absences 2,546,475 Net pension liability (Miscellaneous Employee) 60,804,181 Net OPEB Obligation - MRHP 1,942,940 Busines-Type Activities, total Long-Term Obligations $ 94,153,848
Business-type Activities
Refunding of Certificates of Participation
On April 1, 2003, Berkeley Joint Powers Financing Authority issued $27,950,000 in Certificates of Participation on behalf of the City to purchase and renovate the building at 1947 Center Street. Annual principal payments on the debt will range from $265,000 in FY 2007 to $1,795,000 in FY 2033. Interest rates will range from 2.5% in FY 2005 to 5.00% in FY 2033. The Certificates of Participation were being repaid from the income derived from leasing floors in the acquired building and the leasing costs saved by housing some City departments’ staff in the building.
On October 24, 2012, the Berkeley Joint Powers Financing Authority issued $21,566,149 of Refunding Lease Revenue Bonds with interest rates ranging from 2.000% to 5.000% to current refund prior Certificates of Participation with interest rates ranging from 3.625% to 5.000% and a par value of $24,665,000. The prior Certificates of Participation mature annually on February 1 between 2013 and 2032. The prior Certificates of Participation were called on November 9, 2012. The current Refunding Lease Revenue Bonds were issued at a premium of $2,055,885 and, after paying issuance costs of $220,043 and underwriter's discount of $69,114, the net proceeds were $23,332,876. The net proceeds from the issuance of the Refunding Lease Revenue Bonds were used to purchase U.S. government securities and those securities were deposited in an irrevocable trust with an escrow agent to provide debt service payments until the bonds were called on November 9, 2012. The current refunding met the requirements of an in-substance defeasance and the term bonds were removed from the City's government-wide financial statements. As a result of the current refunding, Berkeley Joint Powers Financing Authority reduced its total debt service requirements by $6,627,294, which resulted in an economic gain (difference between the present value of the debt service payments on the old and new debt) of $4,818,892.
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2012 Lease Revenue Bonds debt service requirements to maturity are provided below:
Year Ending June 30 Principal Interest 2017$ 888,307 $ 744,273 2018 926,596 707,975 2019 961,056 670,222 2020 1,003,174 630,937 2021 1,049,121 584,645 2022‐2026 6,042,016 2,104,932 2027‐2031 6,844,931 717,132 2032 1,500,000 25,313 $ 19,215,199 $ 6,185,428
Notes Payable Harbor Construction 4
For the period October 30, 1986 to March 31, 1999, the City of Berkeley borrowed a total of $2 million from the California State Department of Boating and Waterways for the development of the Berkeley Marina Rehabilitation project. The loan is payable on August 1 of each year at an interest rate of 4.5%. This loan will mature on August 1, 2016.
Year Ending June 30 Principal Interest Total 2017$ 153,784 $ 6,920 $ 160,704 $ 153,784 $ 6,920 $ 160,704
Harbor Construction 5
The City of Berkeley borrowed a total of $7,124,036 of the $9.0 million maximum loan amount from the California State Department of Boating and Waterways. The purpose of this loan is financing for the demolition and replacement of wooden docks and wood piles into a new marina berthing system and concrete piles. New utilities, including electrical power and water are to be installed. The new docks and gangways were to be designed and built for barrier-free access. In addition, existing restroom buildings were to be replaced. The loan is payable on August 1 of each year with an interest of 4.50%. The amortization schedule will not be available until the final draw down reaches $9.0 million. Currently, the California State Department of Boating and Waterways provides an annual statement of the amount of interest the City is required to pay.
Loans Payable In FY2011, the City entered into an agreement for financing the acquisition of recycle carts. The assets acquired through agreement include 24,200 of 64-gallon split carts, 5,000 of 64 gallon standard carts, and 1,800 of 96 gallon standard carts. The acquisition amount for the carts to be paid to the
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vendor is $2,525,000 (including sales tax of $196,320 to be payable to the State Board of Equalization) with the contract rate is 3.50%. This loan will mature on July 8, 2017.
Year Ending June 30 Principal Interest Total 2017$ 392,455 $ 17,381 $ 409,836 2018 201,400 3,524 204,924
$ 593,855 $ 20,905 $ 614,760
Landfill Liabilities In July 13, 2010, the City council adopted an amendment with SCS Field Services for Cesar Chavez Park Landfill post-closure monitoring and maintenance under contract No.71988. The City began to record the landfill liabilities in FY2011 based on the requirements of GASB 18. This Statement is based on the October 9, 1991, U.S. Environmental Protection Agency (EPA) rule, "Solid Waste Disposal Facility Criteria," which establishes closure requirements for all municipal solid waste landfills (MSWLFs) that receive solid waste after October 9, 1991. The EPA rule also establishes thirty-year post closure care requirements for MSWLFs that accept solid waste after October 9, 1993. The effect of the EPA rule and similar state and local laws or regulations is to obligate MSWLF owners and operators to perform certain closing functions and post closure monitoring and maintenance functions as a condition of the right to operate the MSWLF in the current period. For MSWLFs that use proprietary fund accounting and reporting, a portion of the estimated total current cost of MSWLF closure and post closure care is required to be recognized as an expense and as a liability in each period that the MSWLF accepts solid waste. Recognition should begin on the date the MSWLF begins accepting solid waste, continue in each period that it accepts waste, and be completed by the time it stops accepting waste. Estimated total current cost should be assigned to periods based on MSWLF use rather than on the passage of time, using a formula provided in this Statement. MSWLF capital assets excluded from the calculation of the estimated total cost of MSWLF closure and post closure care should be fully depreciated by the date that the MSWLF stops accepting solid waste. Capital assets used for a single cell should be fully depreciated by the date that each cell is closed
In accordance with requirements established by the California Integrated Waste Management Board, the City has recognized a portion of the landfill's closure and post closure care (closure) costs. These cost estimates are based on the amount of landfill used to date. The estimated closure and corrective action costs are current estimates based on data provided by SCS Field Services, an independent consultant and are subject to changes in inflation, technological advancements, or regulatory changes. The total estimated costs are as follows:
Total estimated closure costs $ 0
Total estimated post-closure costs $1,773,382
The City last accepted waste in 1983 and closed the landfill in phases over the period 1981 through 1990 in accordance with closure regulations contained in California Code of Regulations Title 14, Chapter 15 and the San Francisco Regional Water Quality Control Board requirements which were
112 III. DETAILED NOTES ON ALL FUNDS, continued
then in effect. At June 30, 2016, the estimated landfill closure cost liabilities totaled $1,773,382 and estimated annual landfill closure cost adjustment of $326,029 was calculated as follows:
Total estimated closure and post‐closure costs $ 1,773,382 Percentage of used capacity to total capacity 100% 1,773,382 Revised estimated total closure and post‐closure costs liability 1,773,382 Previous closure costs accrued 2,099,411 FY2016 expense for closure and post‐closure costs $ 326,029
The landfill has an estimated remaining capacity of zero cubic yards and closure construction was completed in 1990.
Arbitrage The Tax Reform Act of 1986 instituted arbitrage restrictions related to the issuance of tax-exempt bonds issued after August 31, 1986. Those regulations relate to the investment of tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. An independent firm performs arbitrage rebate calculations to determine the applicability of federal arbitrage regulations. There were no bond issues with a positive arbitrage rebate liability during the fiscal year.
Compensated Absences It is the policy of the City to record the cost of vested vacation and sick leave as earned. Earned vacation and sick leave that is taken during the year is payable from the fund(s) the employee’s salary or wage is chargeable to. The vested compensated absences balances for employees who retire or otherwise leave the City are paid from the Sick Leave and Vacation Payouts Internal Service Fund at the time of departure. Please refer to Section IF7 and IF8 under Notes to the Basic Financial Statements for details.
Internal Service Funds These funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the totals above for governmental activities. At June 30, 2016, $397,652 in compensated absences, $31,553,222 in claims and judgments payables, $383,730 in Net OPEB Obligation, and $11,511,593 in Net Pension Liability are included in the above amounts. The liabilities for workers’ compensation are paid from the Workers’ Compensation Internal Service Fund and the liabilities for public liability claims are paid from the Public Liability Internal Service Fund.
Special Assessment Debt without City Commitment
On September 2, 2004, the City issued $1,490,000 in Thousand Oaks Heights Applicant Funded Utility Undergrounding Assessment District Limited Obligation Improvement Bonds pursuant to the provision of the Improvement Bond Act of 1915 (Division 10 of the California Streets and Highways Code) for the purpose of financing the construction and acquisition of certain public improvement within the City’s Thousand Oaks Heights Applicant Funded Utility Undergrounding Assessment District. Interest on the Bonds is payable March 2, 2005, and thereafter semiannually on September 2 and March 2 of each year. The bonds were issued to improve to 105 parcel district are briefly summarized as the undergrounding of existing overhead utility facilities, removal of existing poles
113 III. DETAILED NOTES ON ALL FUNDS, continued
and related above ground facilities, replacement of street lighting, with appurtenant work and improvements and including incidental costs and expenses of project design and construction supervision, legal proceedings, and bond financing. The Bonds were issued upon and secured by the unpaid special assessment levied on parcels within the Districts. The Bonds are special limited obligations of the City and are not payable from the City’s general fund and is not obligated in any way to repay the debt in the event of a default. The Bonds are due in annual installments ranging from $50,525 to $100,255, and have an interest rate ranging between 4.6 to 5.25%. The total principal outstanding as of June 30, 2016 was $1,170,000.
On June 1, 2002, the City issued $9,750,000 in Community Facilities District No. 1 bonds (for disaster fire protection), pursuant to the Mello-Roos Community Facilities Act of 1982 (being section 53311 et seq. of the California Government Code and City Council Resolution #66,615-N.S). The bonds were issued to finance a mobile disaster fire protection system for the delivery of auxiliary firefighting water, including transportation pumping units, ultra large diameter hose, transport and support vehicles, portable hydrants, accessory fittings, hose bridges, and a storage site or sites, together with incidental expenses related thereto. These bonds will be repaid from amounts levied against property owners benefited by the disaster fire protection system. The amounts levied against property owners to repay the bonds are accounted for in an agency fund. The faith and credit or taxing power of the City is not pledged to the payment of the bonds. Accordingly, the debt has not been included in the basic financial statements. The bonds are due in annual installments ranging from $270,000 to $760,000, and have an interest rate ranging between 3.0% and 4.75%. The City is not obligated in any way to repay the debt in the event of a default. The total principal outstanding as of June 30, 2016 was $3,940,000. This bond has had a rating of Aa3 from Moody’s since April 16, 2010 and A (Stable) from S&P since March 8, 2011.
Conduit Bond Issues On June 1, 1993, the City issued variable rate revenue bonds on behalf of the Berkeley Young Men’s Christian Association in the amount of $10,755,000. The bonds were re-offered on June 1, 1998. The amount outstanding at June 30, 2008 totaled $8,515,000 but it was fully paid in July 2008 by a re-offering of bonds in July 2008. The amount outstanding at June 30, 2014 totaled $11, 500,000 and was fully paid on November 2014. These bonds are not included in the accompanying financial statements as neither the faith and credit nor the taxing power of the City of Berkeley have been pledged to the payment of these obligations. No outstanding amount as of June 30, 2016.
Tax Revenue Anticipation Notes Payable The beginning Tax Revenue Anticipation Notes payable included the outstanding balance of $24,995,000 for 2014-2015, which was paid off on July 31, 2015. In FY 2016, the City issued $24,995,000 of tax revenue anticipation notes for 2015-16 with a coupon rate of 1.25% and a yield of 0.298% in July 8 2015, in order to alleviate the strain on working capital prior to the receipt of property tax revenues in December. The notes are recorded in the General Fund. Interest and principal on these notes are payable on July 21, 2016 by the General Fund. The City has maintained a MIG-1 rating on its short-term issues. A schedule of changes in the Tax Revenue Anticipation Note follows:
July 1, 2015 Increases Decreases June 30, 2016 $ 24,995,000 $ 24,995,000 $ (24,995,000) $ 24,995,000
114 III. DETAILED NOTES ON ALL FUNDS, continued
Pledged Revenue
City Pledge to The Bank of New York Trust Company: On October 6, 1999, the City of Berkeley issued $9,125,000 of bonds called the Berkeley Joint Powers Financing Authority Lease Revenue Bonds, Series 1999. The bonds were issued for the acquisition of a theatre and park facilities. All of the revenues and fund balance are pledged in their entirety to the payment of principal and interest on the bonds. The City has pledged and assigned to Berkeley Joint Powers Financing Authority approximately 100 percent of the City’s rights to the revenues and 100% of the fund balance of the Berkeley Repertory Theatre Fund. On October 2012, The Berkeley Joint Powers Financing Authority issued its 2012 Refunding Lease Revenue Bonds (1999 and 2003 Refinancing). The Bonds were being issued to provide funds to (i) refinance three outstanding lease obligations of the City and related outstanding 1999 Lease Revenue Bonds of the Authority and 2003 Certificates of Participation of the City and (ii) pay the costs of issuing the Bonds. As a result of the refinancing of the Original Theater Lease and the Original Park Lease, the Authority will concurrently defease and provide for redemption of the Authority’s outstanding $9,125,000 Berkeley Joint Powers Financing Authority Lease Revenue Bonds, Series 1999, which the Authority issued pursuant to a Trust Indenture, dated as of October 1, 1999, by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee. The total original principal of 2012 Refunding Lease Revenue Bonds as of October 24, 2012 was $5,693,852. For FY2016, the pledged revenues were the fund transfer of $500,645 from Capital Project, compared with debt service of $500,645.
City Pledge to Depository Trust Company (DTC): On July 8, 2015, the City of Berkeley issued $24,995,000 of FY2016 Tax and Revenue Anticipation Notes. The Notes were issued to provide moneys to meet the City’s General Fund cash flow requirements during the 2015-16 fiscal year commencing July 1, 2015 and ending June 30, 2016, including current expenditures and capital expenditures. The City pledges to deposit in a special fund (a) an amount equal to 50% of the principal amount of the Notes in January 2016; (b) an amount equal to 50% of the principal amount of the Notes in the month of May 2016; and (c) an amount sufficient to pay interest as due on the Notes at their maturity, in the month of July 2016. The City pledges $24,995,000 in General Fund taxes and other revenue received in 2015-16. Pledged City payments are scheduled from fiscal years 2016 to 2017. The City has pledged and assigned to DTC (on behalf of the note holders) approximately $24,995,000 plus interest of $311,570 or 15.4 percent of the City’s rights to the General Fund annual revenues.
115 III. DETAILED NOTES ON ALL FUNDS, continued
Restricted assets
The balance of the restricted asset accounts in the governmental funds are as follows:
Governmental Funds:
2015-16 Tax and Revenue Anticipation Notes $ 24,995,000 COP 2010 Reserve fund account (2010 COP Animal shelter Lease payment fund) 41 COP 2010 Reserve fund account (2010 COP Animal shelter debt service fund) 412,991 GO 2015 Refunding Bonds for Go 2008 Animal Shelter Measure I 6,439,372 Berkeley Repertory Theatre 10 Pension Refunding Bond regular account 762
Total Governmental Funds: $ 31,848,176
116 IV. OTHER INFORMATION
A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters.
1. Public Liability The City has excess coverage for Public Liability claims between $350,000 and $1,000,000 through Bay Cities Joint Powers Insurance Authority (BCJPIA). The California Affiliated Risk Management Authority (CARMA) provides additional coverage to BCJPIA and its member entities from claims in excess of $1 million to $29 million. The program is administered through the Public Liability Internal Service Fund which is funded through transfers from the General Fund totaling $1,695,888 in FY2016. Disbursements from the Public Liability Internal Service Fund are restricted to the payment of liability claims, personnel and other investigation costs.
The City is a member of the Bay Cities Joint Powers Insurance Authority (BCJPIA) for its liability coverage. BCJPIA was created in 1986 to develop effective risk management programs to reduce the amount and frequency of losses; to provide for pooled self-insurance among member agencies, to share the risk of self-insured losses; and to jointly purchase and provide administrative and other services including, but not limited to claims adjusting, data processing, risk management, loss prevention, accounting services, actuarial services, and legal services in connection with the program. BCJPIA consists of 14 cities, three towns, and one police authority all located within the metropolitan Bay Area.
BCJPIA provides General Liability, Auto Liability, and Errors & Omissions coverage for its members in excess of the member’s retained limit, or Self-Insured Retention (SIR), up to $1,000,000 per occurrence.
Each Member retains the portion of every loss that falls within their SIR, ranging from $5,000 to $500,000. The City’s SIR is $350,000. BCJPIA is also a member of the California Affiliated Risk Management Authorities (CARMA), a risk-sharing joint powers authority. When losses exceed the $1,000,000 per occurrence limit, CARMA provides coverage up to $29,000,000. BCJPIA is governed by a Board of Directors, which is comprised of appointed officials from the member entities. To the extent that allocated losses and administrative expenses exceed contributions previously paid and other income, the BCJPIA may assess its members’ additional premiums. Complete financial statements of BCJPIA can be obtained from: Bay Cities Joint Powers Insurance Authority, 6371 Auburn Blvd., Suite B, Citrus Heights, CA 95621-0488.
117 IV. OTHER INFORMATION, continued
Condensed unaudited accrual basis financial information of BCJPIA as of and for the year ended June 30, 2016 is as follows (amounts expressed in thousands):
Total assets $ 33,546 Total liabilties (22,778) Net position $ 10,768
Total revenues $ 12,334 Total expenses 10,031 Net income/(loss) $ 2,303
2. Workers' Compensation The City is self-insured for workers’ compensation. Payments are made to the Workers’ Compensation Self-Insurance Internal Service Fund by transfers from all City funds. Funds are available to pay claims and administrative costs of the program.
At June 30, 2016, $632,222 and $30,921,000 have been accrued for public liability, and workers' compensation claims, respectively. These accruals represent estimates of amounts to ultimately be paid for reported claims and, upon past experience, recent claim settlement trends and other information. It is the City's practice to obtain an actuarial study on an annual basis. Although the amount of actual losses incurred through June 30, 2016 are dependent on future developments, based upon information from the administrators and others involved with the administration of the programs, the City's management believes that the aggregate accrual is adequate to cover such losses.
Changes in the balance of claim liabilities during the fiscal year for all self-insurance funds are as follows:
Public Worker's Liability Compensation Total Balance, July 1, 2014$ 828,732 $ 29,604,000 $ 30,432,732 Incurred claims and changes in estimates (272,342) 5,080,904 4,808,562 Claims paid (293,724) (3,792,904) (4,086,628) Balance, June, 30,2015 262,666 30,892,000 31,154,666 Incurred claims and changes in estimates 717,962 3,401,200 4,119,162 Claims paid (348,406) (3,372,200) (3,720,606) Balance, June, 30, 2016$ 632,222 $ 30,921,000 $ 31,553,222
There were no significant reductions in insurance coverage from the prior year in public liability and there were no settlements exceeding the limits of the City's excess coverage for the past three years.
3. a. Construction Commitments
As June 30, 2016, of the $26 million Measure FF Branch Libraries Improvement Program remaining unspent funds total $1,142,773. All major construction activities have been completed.
118 IV. OTHER INFORMATION, continued
b. Encumbrances
The City establishes encumbrances to record the amount of purchase orders, contracts, and other obligations, which have not yet been fulfilled, cancelled or discharged, at June 30, 2016, total governmental funds encumbrance balances for the City were:
General Fund $ 3,686,427 Grant Fund 4,406,401 Library Fund 455,387 CIP Fund 4,762,994 Non-major govenmental Funds 9,870,637 Total governmental Funds $ 23,181,846
B. Contingent Liabilities Grants Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although City management expects such amounts, if any, to be immaterial.
Lawsuits and Claims There are a number of lawsuits and claims pending against the City. Included in these are a number of property damage, civil suits, and personal injury seeking damages in excess of the City's insurance limits. The aggregate amount of the uninsured liabilities of the City which may result from all suits and claims will not, in the opinion of City management, materially affect the City's finances, or impair its ability to otherwise meet its obligations.
119 IV. OTHER INFORMATION, continued
C. Defined Benefit Pension Plans
Pension related balances presented on the Statement of Net Position as of June 30, 2016 are described in the following table:
(a) By individual plan Deferred Inflows due Deferred Outflows due Deferred Inflows due Deferred to the difference to the difference Deferred Inflows to the difference Net Employer between projected between projected due to change between expected Pension Contribution and actual earnings and actual earnings of assumptions and actual experience Liability
CALPERS Miscellaneous Plan$ 25,846,746 $ 5,914,213 $ 8,873,269 $ 9,466,891 $ 218,701,152 CALPERS Public Safety ‐ Fire Plan 5,959,034 1,814,400 3,062,322 3,635,308 57,564,762 CALPERS Public Safety ‐ Police Plan 10,777,338 2,062,104 4,477,023 2,175,243 130,445,826 Berkeley Retirement Income Benefit Plan ‐ ‐ 241,159 69,870,690 Safety members Pension Plan ‐ 65,189 3,101,072 Total$ 42,583,118 $ 9,855,906 $ 241,159 $ 16,412,614 $ 15,277,442 $ 479,683,502
(b) By individual fund Deferred Inflows due Deferred Outflows due Deferred Inflows due Deferred to the difference to the difference Deferred Inflows to the difference Net Employer between projected between projected due to change between expected Pension Contribution and actual earnings and actual earnings of assumptions and actual experience Liability
Governmental Fund $ 33,371,544 $ 7,752,808 $ 241,159 $ 13,249,305 $ 11,902,508 $ 401,741,605 Internal Service Fund 1,360,474 311,302 467,055 498,301 11,511,593 Subtotal Governmental Activities 34,732,018 8,064,110 241,159 13,716,360 12,400,809 413,253,198
Enterprise Fund 7,186,017 1,644,293 2,466,982 2,632,023 60,804,181
Rent Stabilization Board fund 628,095 143,720 215,627 230,052 5,314,598
Trust fund ‐ the Successor Agency 36,988 3,783 13,645 14,558 311,524
Total$ 42,583,118 $ 9,855,906 $ 241,159 $ 16,412,614 $ 15,277,442 $ 479,683,502
C.1 California Public Employees’ Retirement System (CALPERS) 1. General Information about the Pension Plans
Plan Description All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit.
120 IV. OTHER INFORMATION, continued
The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plan’s provisions and benefits in effect at June 30, 2016, are summarized as follows:
Public Safety‐ Public Safety‐ Miscellaneous Fire Police
Vesting Period 5 years service 5 years service 5 years service Benefit payment monthly for life monthly for life monthly for life Earliest retirement age 55 50 50 Benefit factor for each year of service, as a % of annual salary 2.7% at age 55 3% at age 50 3% at age 50 Required employee contribution rates 8% 9% 9% Required employer contribution rates 24.030% 36.584% 48.585%
On January 1, 2013, the Public Employee Pension Reform Act (PEPRA) went into effect. This State law applies to employees hired after January 1, 2013 who are new to PERS. These employees are termed PEPRA members and employees that were enrolled in PERS (without significant separation) prior to January 1, 2013 are now referred to as classic members. PEPRA miscellaneous members will be enrolled in a 2% at 62 plan and PEPRA safety members (Fire and Police) will be enrolled in a 2.7% at 57 plan. PEPRA members will be required to pay half the normal cost of their plans.
Employees Covered
At June 30, 2016, the following employees were covered by the benefit terms for each plan:
Public Safety Miscellaneous Fire Police Inactive employees or beneficiaries currently 1,375 206 293 receiving benefits Inactive employees entitled to but not yet 950 30 57 receiving benefits (transferred and terminated) Active employees 1,008 122 166 Total 3,333 358 516
Contribution Description
Section 20814(C) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The Total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the measurement period ended June 30, 2015 (the measurement date), the average active employee contribution rate is 8.0 percent of annual pay for the
121 IV. OTHER INFORMATION, continued
Miscellaneous Plan and 9.0 percent of annual pay for the Safety Plan (Fire and Police), and the employer contribution rate is 23.91 percent of annual payroll for the Miscellaneous Plan, 36.47 percent of annual payroll for the Public Safety Fire Plan, and 48.45 percent of annual payroll for the Public Safety Police Plan.
Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2015, using an annual actuarial valuation as of June 30, 2014 rolled forward to June 30, 2015 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.
Actuarial methods and assumptions used to determine Total Pension Liability
The total pension liabilities in the June 30, 2014 and the June 30, 2015 actuarial valuations were determined using the following assumptions:
Public Safety Miscellaneous Fire Police Valuation Date June 30, 2014 June 30, 2014 June 30, 2014 Measurement Date June 30, 2015 June 30, 2015 June 30, 2015 Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions: Discount Rate 7.65% 7.65% 7.65% Inflation 2.75% 2.75% 2.75% Salary Increases Varies by Entry Age and Service Investment Rate of Return (1) 7.65% 7.65% 7.65% Mortality (2) Derived using CalPERS' Membership Data for all Funds Post Retirement Benefit Increase Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter
(1) Net of pension plan investment expenses, including inflation (2) The mortality table used was developed based on CalPERS' specific data. The table includes 5 years of mortality improvements using Society of Actuaries Scale AA.
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2014 valuation were based on the 2010 CalPERS Experience study for the period 1997 to 2007. Further details of the Experience Study can found on the CalPERS website.
Discount Rate
The discount rate used to measure the total pension liability was 7.65% for each Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans will run out of assets. Therefore, the current 7.65 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
122 IV. OTHER INFORMATION, continued
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses.
New Strategic Real Return Real Return Asset Class Allocation Years 1 - 10(a) Years 11+(b) Global Equity 51.00% 5.25% 5.71% Global Fixed Income 19.00% 0.99% 2.43% Inflation Sensitive 6.00% 0.45% 3.36% Private Equity 10.00% 6.83% 6.95% Real Estate 10.00% 4.50% 5.13% Infrastructure and Forestland 2.00% 4.50% 5.09% Liquidity 2.00% -0.55% -1.05% Total 100%
(a) An expected inflation of 2.5% used for this period. (b) An expected inflation of 3.0% used for this period.
123 IV. OTHER INFORMATION, continued
Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan follow:
Miscellaneous Plan: Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Asset)
Balance at June 30, 2014 $ 863,980,146 $ 655,032,952 $ 208,947,194 Changes Recognized for the Measurement Period: Service cost 16,872,462 16,872,462 Interest on the total pension liability 62,911,744 62,911,744 Differences between Expected and Actual experience (15,778,151) (15,778,151) Changes in assumptions (14,788,782) (14,788,782) Plan to Plan Resource Movement 284,821 (284,821) Contribution - employer 18,303,639 (18,303,639) Contribution - employee 6,752,797 (6,752,797) Net investment income 14,859,667 (14,859,667) Benefit payments , including refunds of employee contributions (38,947,389) (38,947,389) - Administrative Expense - (737,609) 737,609 Net changes during 2014-15 10,269,884 515,926 9,753,958
Balance at June 30, 2015 $ 874,250,030 $ 655,548,878 $ 218,701,152
124 IV. OTHER INFORMATION, continued
Public Safety - Fire Plan Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Asset)
Balance at June 30, 2014 $ 241,186,083 $ 185,810,226 $ 55,375,857 Changes Recognized for the Measurement Period: Service cost 4,154,748 4,154,748 Interest on the total pension liability 17,400,087 17,400,087 Differences between Expected and Actual experience (4,736,917) (4,736,917) Changes in assumptions (3,990,299) (3,990,299) Plan to Plan Resources Movement (70) 70 Contribution - employer 5,237,775 (5,237,775) Contribution - employee 1,489,005 (1,489,005) Net investment income 4,117,374 (4,117,374) Benefit payments , including refunds of employee contributions (14,168,237) (14,168,237) - Administrative Expense - (205,370) 205,370 Net changes during 2014-15 (1,340,618) (3,529,523) 2,188,905
Balance at June 30, 2015 $ 239,845,465 $ 182,280,703 $ 57,564,762
Public Safety - Police Plan Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Asset)
Balance at June 30, 2014 $ 357,374,497 $ 233,396,527 $ 123,977,970 Changes Recognized for the Measurement Period: Service cost 6,687,437 6,687,437 Interest on the total pension liability 26,160,351 26,160,351 Differences between Expected and Actual experience (3,081,594) (3,081,594) Changes in assumptions (6,342,449) (6,342,449) Plan to Plan Resource Movement (42) 42 Contribution - employer 10,108,019 (10,108,019) Contribution - employee 1,988,892 (1,988,892) Net investment income 5,119,789 (5,119,789) Benefit payments , including refunds of employee contributions (18,657,601) (18,657,601) - Administrative Expense - (260,769) 260,769 Net changes during 2014-15 4,766,144 (1,701,712) 6,467,856
Balance at June 30, 2015 $ 362,140,641 $ 231,694,815 $ 130,445,826
125 IV. OTHER INFORMATION, continued
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current rate:
Public Safety Public Safety Miscellaneous Fire Police
1% Decrease 6.65% 6.65% 6.65% Net Pension Liability $ 330,882,833 $ 87,376,476 $ 178,427,537
Current Discount Rate 7.65% 7.65% 7.65% Net Pension Liability $ 218,701,152 $ 57,564,762 $ 130,445,826 1% Increase 8.65% 8.65% 8.65% Net Pension Liability $ 125,443,710 $ 32,843,544 $ 90,983,990 Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
2. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
Miscellaneous Plan
For the year ended June 30, 2016, the City recognized pension expense of $13,747,051.
At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of Resources Resources Pension contributions subsequent to measurement date $ 25,846,746 Differences between Expected and Actual experience $ (9,466,891) Changes in assumptions (8,873,269) Net differences between projected and actual earnings on plan investments (5,914,213)
Total $ 25,846,746 $ (24,254,373)
$25,846,746 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
126 IV. OTHER INFORMATION, continued
Deferred Measurement Period Outflows/(Inflows) Ended June 30: of Resources 2016 $ (16,504,314) 2017 (10,390,928) 2018 (4,277,539) 2019 6,918,408 Public Safety - Fire Plan
For the year ended June 30, 2016, the City recognized pension expense of $3,119,821.
At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of Resources Resources Pension contributions subsequent to measurement date $ 5,959,034 Differences between Expected and Actual experience $ (3,635,308) Changes in assumptions (3,062,322) Net differences between projected and actual earnings on plan investments (1,814,400) Total $ 5,959,034 $ (8,512,030)
$5,959,034 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred Measurement Period Outflows/(Inflows) Ended June 30: of Resources 2016 $ (3,284,366) 2017 (3,284,366) 2018 (3,284,367) 2019 1,341,069
Public Safety – Police Plan
For the year ended June 30, 2016, the City recognized pension expense of $9,272,679.
At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
127 IV. OTHER INFORMATION, continued
Deferred Outflows of Deferred Inflows of Resources Resources Pension contributions subsequent to measurement date $ 10,777,338 Differences between Expected and Actual experience $ (2,175,243) Changes in assumptions (4,477,023) Net differences between projected and actual earnings on plan investments (2,062,104) Total $ 10,777,338 $ (8,714,370)
$10,777,338 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred Measurement Period Outflows/(Inflows) Ended June 30: of Resources 2016 $ (4,288,400) 2017 (4,288,400) 2018 (2,625,337) 2019 2,487,767
Recognition of Gains and Losses
Under GASB Statement 68, deferred inflows and deferred outflows of resources related to pensions are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources to be recognized in future pension expense.
The amortization differs depending on the source of the gain or loss:
Difference between projected and actual earnings 5 year straight‐line amortization
All other amounts Straight‐line amortization over the remaining lives of all members that are provided benefits (active, inactive, and retired) as of the beginning of the measurement periods.
128 IV. OTHER INFORMATION, continued
C.2 City Sponsored Defined Benefit Pension Plan
1. Berkeley Police Retirement Income Benefit Plan
Plan Description The City sponsors a Retiree Income Benefit Plan for its Police retirees. To be eligible for benefits, Police employees must retire from the City on or after July 1, 1989 and before September 19, 2012, be vested in a CalPERS pension, have ten years of service with the Berkeley Police department, and retire from the City on or after age 50 or with a disability benefit. Benefits commence 10 years after retirement for retirements before July 6, 1997, 5 years after retirement for retirements before July 1, 2007, and 2 years after retirement for retirements on or after July 1, 2007.
Benefit Provided Benefits are payable for the retiree’s lifetime and continue for the life of the surviving spouse. For employees retiring before September 19, 2012, the City pays a monthly income benefit equal to the City’s Active 2-party Kaiser premium regardless of marital status. The monthly benefit is pro-rated by service according to the schedule shown in Appendix A, if the employee has less than 20 years of service with the City at retirement. Appendix A provides a more detailed summary of benefits. Benefits are paid from a Section 401(a) trust; therefore, benefits are taxable to the retiree when paid.
Berkeley Police Retirement Income Benefit Plan 30-Jun-16 30-Jun-15 Retirees 151 151 Active employees 0 0 Total 151 151
Contribution
The City (employer) contributed $1,943,978 in FY2016 and $1,467,997 in FY2015, which correspond to 10.006% and 7.34% of covered employee payroll, respectively. The police employee payroll for the plan year ending on the measurement date was $19,428,123 as of June 30, 2016 and $20,002,000 as of June 30, 2015.
Net Pension Liability
Actuarial Assumptions:
Investment Rate of Return. An investment rate of return of 5.5%, net of investment expenses was assumed.
Discount Rate. 2.949% that produces a total actuarial present value equal to the sum of the actuarial present value of projected “funded” (discounted using the Investment Rate of Return of 4.00%) and “unfunded” (discounted using the 20 year Municipal Bond Rate of 2.85%) benefit payments.
Total Payroll Growth. It was assumed that total payroll for all plan participants will increase 3.0% per year, which includes assumed inflation of 2.75%.
Inflation. It was assumed that future inflation will be 2.75% per year.
129 IV. OTHER INFORMATION, continued
Mortality. Mortality Rates adopted by California PERS board from the 2014 experience study. Rates included a projection to year 2022 with Scale MP-2014 to reflect the anticipation of improvement in future mortality. For the prior valuation, mortality rates were based on the previous CalPERS pension experience study and projected to year 2028 with scale BB.
The Total Pension Liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions listed below and shown in “Required Supplementary Information section, and was then projected forward to the measurement date taking into account any significant changes between the valuation date and the fiscal year end as prescribed by GASB 67. The liabilities are calculated using a discount rate that is a blend of the expected investment rate of return and a high quality bond index rate. The expected investment rate of return applies for as long as the plan assets (including future contributions) are projected to be sufficient to make the projected benefit payments. If plan assets are projected to be depleted at some point in the future, the rate of return of a high quality bond index is used for the period after the depletion date.
Berkeley Police Retirement Income Benefit Plan Schedule of Changes in Net Pension Liability/ (Asset) and Related Ratios
For the Fiscal Year Ending June 30, 2016 June 30, 2015
Total Pension Liability $ 76,422,898 $ 61,611,058 Fiduciary Net Position 6,552,208 6,499,461 Net Pension Liability $ 69,870,690 $ 55,111,597 Fiduciary Net Position as a % of Total Pension Liability 8.57% 10.55% Police Employee Payroll $ 19,428,123 $ 20,002,000 Net Pension Liability as a % of Police Employee payroll 359.64% 275.53% Covered employee Payroll $ - $ - Valuation Date 6/30/2016 6/30/2014 Measurement date 6/30/2016 6/30/2015 GASB Statement No.67 and No.68 Reporting date 6/30/2016 6/30/2015 Depletion date 7/1/2028 7/1/2028 Discount rate 2.95% 4.03% Expected rate of return, net of investment expenses 4.00% 4.50% Muncipal bond rate 2.85% 3.85%
130 IV. OTHER INFORMATION, continued
The changes in the Net Pension Liability are as follow:
Berkeley Police Retirement Income Benefit Plan Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Asset)
Balance at June 30, 2015 $ 61,611,058 $ 6,499,461 $ 55,111,597 Changes in the year: Service cost - - - Interest on the total pension liability 2,441,727 - 2,441,727 Differences between actual and expected experience 7,453,545 - 7,453,545 Changes in assumptions 5,961,164 - 5,961,164 Changes in benefit terms - - - Contribution - employer - 1,943,978 (1,943,978) Contribution - employee - - - Net investment income - 195,519 (195,519) Administrative expense (42,154) 42,154 Benefit payments , including refunds of employee contributions (2,044,596) (2,044,596) - Net changes 13,811,840 52,747 13,759,093
Balance at June 30, 2016 $ 75,422,898 $ 6,552,208 $ 68,870,690
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1percentage point lower or 1percentage point higher than the current rate:
1% Decrease 1.95% Net Pension Liability $ 84,207,547
Current Discount Rate 2.95% Net Pension Liability $ 69,870,690 1% Increase 3.95% Net Pension Liability $ 58,603,951
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2016, the City recognized pension expense of $16,614,898.
131 IV. OTHER INFORMATION, continued
At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of Resources Resources Net differences between projected and actual earnings $ 241,159 $ - Total $ 241,159 $ -
$241,159 reported as deferred outflows of resources related to the net difference between projected and actual earnings will be recognized as an addition to the net pension liability in the year ended June 30, 2016. These deferred outflows of resources related to pensions will be recognized as pension expense as follows:
Deferred Measurement Period Outflows/(Inflows) Ended June 30: of Resources 2017 $ 69,852 2018 69,852 2019 69,850 2020 31,605
Plan Description
The City sponsors a Retiree Income Benefit Plan for its Police retirees.
Plan Membership
At July 1, 2016, pension plan membership consisted of the 151 retirees.
The pension plan is not open to new entrants.
Eligibility Retirees are eligible if they:
Retired directly from the City of Berkeley on or after July 1, 1989 and before September 19, 2012 are vested in CalPERS; and Retired on or after age 50, with 10 years of sworn service with the Berkeley Police Department; or Retire disabled with 10 or more years of sworn service with the Berkeley Police Department
Benefits Period
Retirees who retired between January 1, 1989 and July 5, 1997, receive benefits beginning 10 years after retirement. Retirees who retire between July 6, 1997 and June 30, 2007, receive benefits beginning 5 years after retirement. Retirees who retired on or after July 1, 2007 receive benefits beginning 2 years after retirement. The benefit is payable for the life of the retiree. Upon death, the benefit is payable until the death of the surviving spouse. Effective July 1, 2007, the City’s portion of the benefit is based on the years of service of the retiree as shown in the table below. Prior to July 1, 2007, the vesting schedule was the same as before, except the City percentage was 75% for 20-24 years of service, and 100% for 25 or more years of service.
132 IV. OTHER INFORMATION, continued
For retirees retiring before September 19, 2012, the City pays a monthly income benefit equal to the City’s Active 2-party Kaiser Rate ($1,241.08 for 2016 and $1,153.34 for 2015) regardless of marital status. The income benefit is pro-rated by service according to the schedule shown above, if the employee has less than 20 years of service with the City at retirement. Benefits are payable for the retiree’s lifetime, and continue to the retiree’s surviving spouse for his or her lifetime.
Employee contributions
No employee contributions are required or permitted
Employer Contributions
For fiscal year ended June 30, 2016, the contribution was $1,943,978 which was computed by the contribution rate of 10.006% times the total police employee payroll of $19,428,123.
Pension Plan Investments
As of June 30, 2016, the composition of the plan investment is shown as follows: Cash equivalents of $602,474 and investments in corporate notes of $5,896,987. The total plan assets is $6,499,461
Investment policy and other investment disclosure
The funds of the retirement plans and retiree medical plans are invested pursuant to City investment policies established specifically for those plans by the City Council. The objective of the investment policies is to maximize the expected return of the plans at the acceptable level of risk. Please refer to Notes under section III A1 for more details on the investment policy and other investment disclosures.
2. Safety Members Pension Fund
Plan Description The City maintains the Safety Members Pension Fund (SMPF). This plan is a single-employer defined benefit pension plan for fire and police officers that retired before March 1973. In March 1973, all active fire and police officers were transferred from SMPF to CalPERS. The Safety Members Pension Board administers the plan. The authority under which benefit provisions are established or may be amended is the Berkeley Municipal Code chapters 4.20, 4.24, 4.28 and 4.32.
133 IV. OTHER INFORMATION, continued
Benefit Provided At July 1, 2016, the date of the most recent actuarial valuation, there were 14 retired members and surviving spouses. Service and disability retirement benefits are based on a percentage of salary at retirement, multiplied by years of service. Benefits are adjusted annually by either:
(a) Current active salary increases (based on the same rank at retirement) or
(b) The increase in the California Consumer Price Index (with a 1% minimum and a 3% cap). SMPF also provides surviving spouse benefits.
Contribution
The City pays SMPF benefits on a pay-as-you-go basis. In February 1989, the Berkeley Civic Improvement Corporation (BCIC) purchased, on behalf of the City, a Guaranteed Income Contract (GIC) from Massachusetts Mutual. This contract provides annual payments through 2018 and an annual guaranteed 9.68% rate of return (net of expenses). The City pays the difference between actual benefit payments and contract provided annual payments, from the General Fund. Additional amounts may be paid, through 2017, under a Risk Agreement to compensate the City for the difference between the amounts paid by the City to its pensioners and the actuarially determined amounts.
Net Pension Liability
GASB 68 Net Pension Liability as of June 30, 2016:
1. Net Pension Liability at July 1, 2015 $3,574,170 2. Employer Contributions, FYE June 30, 2016 (1,104,309) 3. Annual Pension Expense, FYE June 30, 2016 1,577,407 4. Deferred Inflow of Resources 0 5. Deferred Outflow of Resources 0 6. Net Pension Liability at June 30, 2016 (1)+(2)+(3)+(4)+(5) $3,101,072
134 IV. OTHER INFORMATION, continued
Changes in the Net Pension Liability
Safety Members Pension Fund Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Asset)
Balance at June 30, 2015 $ 4,828,175 $ 1,254,005 $ 3,574,170 Changes in the year: Service cost - - - Interest on the total pension liability 185,544 - 185,544 Differences between actual and expected experience 480,045 - 480,045 Changes in assumptions 114,194 - 114,194 Changes in benefit terms - - - Contribution - employer - 1,104,309 (1,104,309) Contribution - employee - - - Net investment income - 166,222 (166,222) Benefit payments , including refunds of employee contributions (1,843,952) (1,843,952) - Administrative expense - (17,650) 17,650 Net changes (1,064,169) (591,071) (473,098)
Balance at June 30, 2016 $ 3,764,006 $ 662,934 $ 3,101,072
Sensitivity to Discount Rate
The following presents the net pension liability of the City, calculated using the discount rate of 3.311% as of June 30, 2016, as well as what the County’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.311%) or 1 percentage point higher (4.311%) than the current rate.
1% Decrease Current Rate 1% Increase (2.311%) (3.311%) (4.311%) Net Pension Liability $3,246,939 $3,101,072 $2.966.078
135 IV. OTHER INFORMATION, continued
Deferred Outflows and Inflows of Resources
For the year ended June 30, 2016, the City recognized pension expense of $696,400.
At June 30, 2016, the City reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources:
Deferred Deferred Outflows of Inflows of Resources Resources Net difference between projected and actual earnings on $0 $(65,189) pension plan investments Total $0 $(65,189)
Amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in pension expense as follows:
Year Ending June 30 2017 $(16,297) 2018 (16,297) 2019 (16,297) 2020 $(16,298)
Contributions
The City has plan assets in Guaranteed Income Contract (GIC). The City will pay any benefit payments not paid from the GIC.
Investment policy and other investment disclosure
The funds of the re
tirement plans and retiree medical plans are invested pursuant to City investment policies established specifically for those plans by the City Council. The objective of the investment policies is to maximize the expected return of the plans at the acceptable level of risk. Please refer to Notes under section III A1 for more details on investment policy and other investment disclosure.
Net Pension Liability The components of the net pension liability of the City at June 30, 2016, were as follows: Total Pension Liability $3,764,006 Plan Fiduciary Net Position (662,934) City’s Net Pension Liability 3,101,072 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 17.61%
Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of July 1, 2016, using the following actuarial assumptions, applied to all periods included in the measurement:
136 IV. OTHER INFORMATION, continued
General Inflation 2.75% Investment Rate of Return 3.311%, based on Crossover test results using assumptions below
Mortality assumptions based on the 2013 CalPERS experience study with projected improvement using scale MP-2014.
The benefit terms included ad hoc postemployment benefit changes. Cost-of-living adjustments (COLA) are provided at the discretion of the City – a 2.75% annual average increase is assumed in the valuation for retirees eligible for the Full Fluctuating COLA and 2.75% for other retirees.
The long-term expected rate of return on pension plan investments of 9.68% was determined based on the terms of the GIC from MassMutual.
Discount Rate The discount rate used to measure the total pension liability was 3.311%. The projection of cash flows used to determine the discount rate assumed that payments in excess of the income from the GIC will be made by the City. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2018. Therefore, the long-term expected rate of return on pension plan investments of 9.68% was applied to periods of projected benefit payments covered by annual income distributions from the GIC to determine the total pension liability through 2018. A municipal bond rate of 4.00% was applied to all projected cash flows not expected to be covered by the GIC. Municipal bond rates are based on rates provided by the Bond Buyer Index, general obligation, 20 years to maturity.
C.3 Other Post-Employment Benefits The City has adopted the provisions of GASB Statement No. 45 (GASB 45), Accounting and Financial Reporting for Post-employment Benefits Other Than Pensions. The Statement establishes standards for the measurement, recognition, and display of OPEB costs/contributions and related liabilities (assets), note disclosures, and if applicable, required supplementary information in the financial reports of state and local government employers. The City has also adopted GASB Statement No. 43 (GASB 43), Financial Reporting for Post-employment Benefit Plans Other Than Pension Plans. GASB 43 applies to the City’s post-employment healthcare plans and requires additional disclosures with respect to the healthcare plans.
1. Berkeley Fire Employees Retiree Health Plan Plan Description The City of Berkeley Fire Employees Retiree Health Plan (FRHF) is a single-employer defined benefit medical plan administered by The Lipman Company (TLC). It is reported in an Other Employee Benefit Trust Fund of the City. To be eligible for benefits, sworn Fire employees must retire from the City on or after July 1, 1997, be vested in a CalPERS pension, and retire from the City on or after age 50. Benefits commence immediately upon retirement. Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime
The amount the City contributes toward the Fire Employees Retiree Health Plan is increased by 4.5% per year regardless of the amount of increase in the underlying premium rate. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City Labor Negotiating Team, and are approved by the City Manager and City Council. The FRHF does
137 IV. OTHER INFORMATION, continued
not issue a publicly available financial report that includes financial statements and required supplementary information. The City’s portion of the benefit is based on the following years of service of the retiree:
Years of Service City Percentage Less than 10 0% 10 to 14 25% 15 to 19 50% 20 to 24 75% 25 or more 100%
The City makes a contribution towards the medical premium. For all Medicare eligible retirees of retirement age, the maximum payment is equal to the City’s percentage of the 2001 single or 2-party Health Net Senior Plus rate (depending on whether retiree has a covered dependent) increased by 4.5% per year.
The City’s maximum contribution for Fire retirees for FY 2016 is shown in the following table for employees who retired between July 1, 1997 to June 30, 2006:
City's Contribution For Non‐ City's Contribution For Medicare Eligible Retirees Medicare Eligible Retirees
Single Party Two Party Single Party Two Party
Retired $376 $750 $305 $610 before 7/1/06
The City’s maximum contribution for Fire retirees for FY 2016 is shown in the following table for employees who retired on or after July 1, 2006:
City's Contribution For Non‐ City's Contribution For Medicare Eligible Retirees Medicare Eligible Retirees
Single Party Two Party Single Party Two Party
Retired $509 $1,015 $305 $610 after 7/1/06
As of July 1, 2016, there were 125 active employees, 35 retirees deferred, and 62 retirees receiving benefits.
Summary of significant accounting policies – basis of accounting and valuation of investments
The financial statements of the Berkeley Fire Employees Retiree Health Plan are prepared using the accrual basis of accounting. The City’s contributions are recognized in the period in which the contributions are due. There are no plan member contributions. Benefits and refunds are recognized
138 IV. OTHER INFORMATION, continued
when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. The fair value of the investments is based on the market value on the date of the actuarial report.
Funding Policy FRHF plan members are not required to contribute to the plan. The City’s targeted funding policy is to provide an amount equal to the service cost for active employees plus an amount to amortize unfunded liabilities over 30 years (rolling 30 year amortization) as a level percentage of payrolls. The employer contribution rate for the year ended June 30, 2016 was 5.7 % of covered payroll for Fire employees. The City strives to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The current ARC rate is 5.8% of annual covered payroll as of July 1, 2016. For FY 2016 the City contributed $839,000, which was $15,000 less than the ARC of $854,000 for this plan. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City Labor Negotiating team, and approved by the City Manager and City Council.
Annual OPEB Cost and Net OPEB Obligation (Asset) The City’s annual OPEB cost (expense) is calculated based on the ARC of the City, an amount that was actuarially determined by using the Projected Unit Benefit Cost method (one of the actuarial cost methods in accordance with the parameters of GASB Statement No. 45). Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current active employees and retirees and is calculated based on certain assumptions and census data. The following tables show the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s net OPEB asset to FRHF:
Determination of Net OPEB Obligation (Asset) Annual Required Contribution $ 853,724 Interest on prior year Net OPEB Obligation (131) Adjustment to ARC 155 Annual OPEB Cost 853,748 Contributions Made (839,003) Decrease Net OPEB Asset 14,745 Net OPEB Asset - beginning of year (2,383) Net OPEB Obligation - end of year$ 12,362
The following table shows the calculation of the Annual Required Contributions and employers’ schedule of contributions for FY2016:
Amount Normal Cost at Year End$ 474,380 Amortization of UAAL 379,344 Annual Required Contribution (ARC)$ 853,724
139 IV. OTHER INFORMATION, continued
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for FY2016 and the two preceding years were as follows:
Annual PercentageNet Fiscal Year OPEB of Annual OPEB Ended Cost Contributed (Asset) / Obligation 6/30/2014 829,699 96% (4,948) 6/30/2015 864,975 100% (2,383) 6/30/2016 853,724 98% 12,362
Funded Status and Funding Progress As of July 1, 2016, the date of the most recent actuarial report, the plan was 37.2% funded. The actuarial accrued liability for benefits was $25.3 million, and the actuarial value of the assets was $9.4 million, resulting in an unfunded actuarial accrued liability (UAAL) of $15.87 million. The covered payroll (annual payroll of active employees covered by the plan) was approximately $14.7 million.
Funded Status of the Plan as of July 1, 2016 Actuarial Accrued Liability (AAL) $ 25,274,305 Actuarial Value of Plan Assets 9,409,766 Unfunded Actuarial Accrued Liability (UAAL) $ 15,864,539 Funded Ratio (Actuarial Value of Plan Assets/UAAL) 37.2% Covered payroll (Payroll of Active Plan Members) $ 14,714,000 UAAL as of Percentage of Covered Payroll 107.8%
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 trends. 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.
In the July 1, 2016 actuarial valuation, the actuarial cost method used for determining the benefit obligations is the Projected Unit Benefit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on certain assumptions and census data. The Actuarial Accrued Liability (AAL) is
140 IV. OTHER INFORMATION, continued
the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service-to-date over service at expected retirement. The Normal Cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution (ARC), the unfunded AAL is amortized as a level percentage of payrolls over 30 years on an open basis.
With any valuation of future benefits, assumptions of anticipated future events are required. If actual events differ from the assumptions made, the actual cost of the plan will vary as well. The following assumptions should be reviewed for appropriateness.
Discount Rate. To discount future benefit payments back to the present, an interest rate of 4.0% was used. This rate would be the expected rate of return on any investments set aside to pay for these benefits and should represent the long term expected return on assets held in the retiree health benefit trust.
Health Cost Trend. Since the City’s portion of retiree payments is capped below the current health premiums and health premiums are assumed to rise at least as fast as the City’s cap (4.5% per year), the health cost trend does not apply.
Increase to City Share of Retiree Premium. Increases to City maximums are assumed to be from 7.0% to 5.0% for non-Medicare and 7.2% to 5.0% for Medicare from year 2017 to 2021.
Retirement, Withdrawal, and Mortality Rates. Demographic assumptions regarding retirement and withdrawal are based on statistics taken from the latest California PERS Pension report for Fire employees. These assumptions were updated to reflect a margin for future improvement in mortality in accordance with actuarial standard of practice. The new assumption is based on the current mortality rates from the latest CalPERS 1997-2011 Experience Study. Mortality projected fully generational with Scale MP-14, modified to converge to ultimate improvement rates in 2022.
Spouse/Domestic Partner Coverage. It is assumed that 70% of future retirees will have a covered spouse or domestic partner.
Election Assumption. It is assumed that 80% of future retirees will elect coverage at retirement immediately.
Amortization of Unfunded Actuarial Liability. The ARC shown in this report is based on a “rolling” 30 year level dollar amortization.
2. Berkeley Miscellaneous Employees Retiree Health Plan
Plan Description The City of Berkeley Retiree Health Premium Assistance Plan (RHPAP) is a single-employer defined benefit medical plan administered by The Lipman Company (TLC). It is an Other Employee Benefit Trust Fund of the City, which provides retiree health benefits to eligible retirees and his/her spouse or domestic partner. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City, and are approved by the City Council. The RHPAP does not issue a publicly available financial report that includes financial statements and required supplementary information.
Employees are eligible for retiree health benefits if they satisfy the following requirements:
141 IV. OTHER INFORMATION, continued
Retirees who are at least age 50, with at least 8 years of service with the City at the time of separation from service are eligible to receive retiree health benefits commencing at age 55.
Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime. The City pays the monthly cost of the monthly premiums up to a participant’s applicable percentage of the base dollar amount and subject to annual 4.5% increases as specified in the Retiree Health Premium Assistance Plan document regardless of the amount of increase in the underlying premium rate. The base monthly dollar amount paid by the City for FY 2016 was as follows:
SEIU Local SEIU Local 1021 CSU 1021 CSU IBEW Local IBEW Local IBEW Local IBEW Local IBEW Local IBEW Local SEIU Local (Local 535) (Local 535) 1245 1245 1245 1245 1245 1245 1021 C&M Retired on or Retired Retired on or Retired on or Retired on or Retired on or Retired on or (Local 790 & Retired before after June 29, before June after June 28, after June 27, after June 26, after June 24, after June 23, R1) June 29, 2008 2008 28, 2009 2009 2010 2011 2012 2013 Less than Age 65 Single $336 $336 $467 $336 $467 $529 $559 $644 $696 Two Party 672 672 803 672 933 1,058 1,117 1,287 1,392
Age 65 and Over Single 33 131 131 33 33 33 33 30 30 Two Party 65 261 261 65 65 65 65 60 60
Unpresented in Unpresented in Unpresented in Unpresented in Units, Z‐1, Z‐5 and Z‐ Units, Z‐1, Z‐5 and Units, E‐1, Z‐2, Z‐3, Units, E‐1, Z‐2, Z‐3, Z‐ PEU Local One PEU Local One 7 Z‐7 Z‐6 and Z‐8 6 and Z‐8 Retired before Retired after July Retired before July Retired after July Retired before June Retired on or after July 1, 2008 1, 2008 1, 2008 1, 2008 29, 2008 June 29, 2008 Less than Age 65 Single $336 $573 $336 $403 $336 $467 Two Party 672 1,147 672 806 672 803
Age 65 and Over Single 33 481 173 240 173 173 Two Party 65 962 346 479 346 346
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The City’s portion of the benefit is based on the following years of service of the retiree:
Fully Completed Years of Service City Percentage 830% 940% 10 50% 11 58% 12 66% 13 74% 14 82% 15 90% 16 92% 17 94% 18 96% 19 98% 20+ 100%
As of July 1, 2016, there were 1,021 active employees.
Summary of significant accounting policies – basis of accounting and valuation of investments
The financial statements of the Berkeley Miscellaneous Employees Retiree Health Plan are prepared using the accrual basis of accounting. The City’s contributions are recognized in the period in which the contributions are due. There are no plan member contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. The fair value of the investments are based on the market value on the date of the actuarial report.
Funding Policy
RHPAP plan members are not required to contribute to the plan. The City’s targeted funding policy is equal to the normal cost for active employees plus an amount to amortize unfunded liabilities over 30 years as a level percentage of payrolls. The employer contribution rate for the year ended June 30, 2016 was 1.764% of covered payroll for IBEW Local 1245, 4.7% for Local 1, 2.0% for Unrepresented Units E-1, Z-2, Z-3, and Z-6, 2.0% for Unrepresented United Z1 and Z5, 1.00% for Miscellaneous Local 1021 Maintenance and Clerical employees and 2.00% for Miscellaneous Local 1021 Community Services and career benefited unrepresented employees. The City is required to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The current ARC rate is 5.1% of annual expected payroll. For FY2016, the City contributed $ 1,809,177 which was $1.803,593 less than the ARC of $3,612,770 for this plan. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City negotiating staff, and approved by the City Council.
143 IV. OTHER INFORMATION, continued
Annual OPEB Cost and Net OPEB Obligation
The City’s annual OPEB cost (expense) is calculated based on the ARC of the City, an amount that was actuarially determined by using the Projected Unit Benefit Cost method (one of the actuarial cost methods in accordance with the parameters of GASB Statement No. 45). Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current active employees and retirees and is calculated based on certain assumptions and census data.
The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s net OPEB obligation to RHPAP:
Determination of Net OPEB Obligation Annual Required Contribution $3,612,770 Interest on prior year Net OPEB Obligation 331,525 Adjustment to ARC (452,285) Annual OPEB Cost 3,492,010 Contributions Made (1,809,177) Increase in Net OPEB Obligation 1,682,833 Net OPEB Obligation - beginning of year 7,367,230 Net OPEB Obligation - end of year $9,050,063
The following shows the calculation of the Annual Required Contributions and schedule of employer contributions for FY2016:
Amount Normal Cost at Year End $ 2,029,038 Amortization of UAAL 1,583,732 Annual Required Contribution (ARC) $ 3,612,770
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for FY2016 and the two preceding years were as follows:
Percentage Fiscal Year Annual OPEB of Annual OPEB Net OPEB Ended Cost Contributed Obligation 6/30/2014 $3,574,421 51% $5,126,082 6/30/2015 3,785,359 41% 7,367,230 6/30/2016 3,492,010 52% 9,050,063
Funded Status and Funding Progress
As of July 1, 2016, the date of the most recent actuarial report, the plan was 37.8% funded. The actuarial accrued liability for benefits was $55.6 million, and the actuarial value of the assets was $21.0 million, resulting in an unfunded actuarial accrued liability (UAAL) of $34.6 million. The covered payroll (annual payroll of active employees covered by the plan) was approximately $90.2
million.
144 IV. OTHER INFORMATION, continued
Funded Status of the Plan as of July 1, 2016 Actuarial Accrued Liability (AAL) $ 55,629,654 Actuarial Value of Plan Assets 21,019,439 Unfunded Actuarial Accrued Liability (UAAL) $ 34,610,215 Funded Ratio (Actuarial Value of Plan Assets/AAL) 37.8% Covered payroll (Payroll of Active Plan Members) $ 90,188,000 UAAL as of Percentage of Covered Payroll 38.4%
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 trends. 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.
In the July 1, 2016 actuarial valuation, the actuarial cost method used for determining the benefit obligations is the Projected Unit Benefit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on certain assumptions and census data. The Actuarial Accrued Liability (AAL) is the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service-to-date over service at expected retirement. The Normal Cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution (ARC), the unfunded AAL is amortized as a level percentage of payrolls over 30 years on an open basis. With any valuation of future benefits, assumptions of anticipated future events are required. If actual events differ from the assumptions made, the actual cost of the plan will vary as well. The following assumptions should be reviewed for appropriateness.
Discount Rate. A discount rate of 3.87% was used to discount benefit payments back to the present. This rate represents a “blended” rate assuming the City’s budgeted contribution amount would partially fund the ARC each year. The City is currently funding the OPEB Trust based on a percentage of payroll which varies by bargaining unit. GASB 45 states that the discount rate used to calculate the present value of future benefits be derived based on the fund’s investment policy and includes a 2.50% long-term inflation assumption. An average return over the next 30 years is
145 IV. OTHER INFORMATION, continued
expected to be 3.87% which would be an appropriate discount rate if the City’s annual contribution is equal to the ARC. If the City were to elect not to fund any amount to a Trust, the discount rate would be based on the expected return of the City’s general fund (A long term return of 3.50% for the City’s general fund is assumed). Since the City is partially funding the Trust (approximately 50% of the ARC for 2015-2016), a blended discount rate of 3.87%. was used The discount rate used in the prior valuation as of July 1, 2015, was 4.5%.
Health Cost Trend. For most bargaining groups, the City’s portion of retiree payments is capped below the current health premiums and health premiums are assumed to rise at least as fast as the City’s cap (between 5% to 7% per year for non-Medicare and 5% to 7.2% for Medicare). Therefore the health cost trend does not apply.
Increase to City Share of Retiree Premium. Increases to City maximums are specified as 4.5% per year by the retiree health plan document.
Retirement, Withdrawal, and Mortality Rates. Demographic assumptions regarding retirement and withdrawal are based on statistics taken from the latest California PERS Pension Valuation for Miscellaneous employees. The mortality assumption was updated to reflect a margin for future improvement in mortality in accordance with actuarial standards of practice. The new assumption is based on the current mortality rates from the latest CalPERS 1997-2011 experience study. Mortality projected fully generational with Scale MP-14, modified to converge to ultimate improvement rates in 2002.
Spouse/Domestic Partner Coverage. It was assumed that 40% of future retirees will have a covered spouse or domestic partner.
Retirement Election. The assumption for future retirees who will elect coverage varies by age and bargaining unit, except retirement commencement timing is based on same retirement rates as used for active employees.
Amortization of Unfunded Actuarial Liability. The ARC shown in this report is based on a “rolling” 30 year level dollar amortization.
3. Police Retiree Premium Assistance Plan
Plan Description
Effective September 19, 2012, the City replaced the “Berkeley Police Retirement Income benefit Plan” with the “Retiree Health Premium Assistance Coverage Plan” for any police employees hired on or after that date, as well as any current employees who retire on or after such date. Under the newly established retiree health premium assistance plan, benefits will be the paid by the City directly to the provider who is providing retiree health coverage to the retiree or his or her surviving spouse. The maximum amount will be equal in value to the City sponsored health plan.
In order to be eligible for the Retiree health Premium Assistance Coverage a “Retiree” must meet all of the following criteria:
(a) A Person who is vested in CalPERS, and (b) Has reached the age of 50, and,
146 IV. OTHER INFORMATION, continued
(c) Has retired from the City at age 50 or thereafter, and (d) Has applied for and is receiving a pension from CalPERS at the time of retirement.
The maximum amount the City will contribute toward the payment of medical insurance premiums is based on the employee’s years of service as a sworn member of the Berkeley Police Department at time of retirement. The retiree must have at least 10 years of service as a sworn member of the Berkeley Police Department to qualify for this benefit.
Years of Service City Percentage 10 to 14 25% either the single party or two party amount 15 to 19 50% either the single party or two party amount 20 or more 100% either the single party or two party amount
Beginning September 19, 2012, each month after the employee retires, the City will pay the health care service provider an appropriate percentage based on years of service above an amount equal to $1,200 per month for two party coverage for the retiree and a qualifying spouse/domestic partner or $600 per month for single party coverage. Upon death of either the retiree or the retiree’s spouse, the City will only pay the appropriate percentage of the single party rate to the provider on behalf of the surviving retiree or spouse/domestic partner. If there is no spouse/domestic partner at the time of retirement, the City shall only pay the single party rate. The retiree and/or surviving spouse/domestic partner will be responsible for payment of the difference between the amount the City contributes toward payment of the premium and the actual premium cost. The funds for this difference will come from the retirees CalPERS retirement account and the retiree must authorize such withdrawal of funds.
Beginning July 1, 2013 and effective each July 1 thereafter, the base rates the City contributes toward payment of the premium amount described in the preceding paragraph will be increased by either the amount Kaiser increases the retiree medical premium for that year, or 6%, whichever is less. The retiree and/or surviving spouse/domestic partner shall pay the difference between the amount the City contributes toward payment of the premium and the actual premium cost. As of July 1, 2014, there were 165 active employees and 5 retirees. The base monthly dollar amount paid by the City for FY 2016 was as follows:
Berkeley Police Berkeley Police Association Association Retired on or after Retired on or after September 19, 2012 September 19, 2012
Less than Age 65 Age 65 and Over Single $679 Single $401 Two Party 1,358 Two Party 803
147 IV. OTHER INFORMATION, continued
Determination of Net OPEB Obligation FY 2016 Annual Required Contribution$ 5,964,081 Interest on prior year Net Pension Obligation 418,444 Adjustment to ARC (603,234) Annual Pension Cost 5,779,291 Contributions Made (488,313) Increase in Net Pension Obligation 5,290,978 Net OPEB Obligation - beginning of year 11,158,502 Net OPEB Obligation - end of year $ 16,449,480
Percentage of the annual contributions made 8.45%
The following shows the calculation of the Annual Required Contribution for FY 2016:
Amount Normal Cost at Year End$ 3,489,250 Amortization of UAAL 2,474,831 Annual Required Contribution (ARC)$ 5,964,081
The actuarial cost method used for determining the benefit obligations is the Projected Unit Credit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on the assumptions and census data described this report. The Actuarial Accrued Liability (AAL) is the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service to data over service at expected retirement. The Normal Cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. In determining the Annual Required Contribution, the Unfunded AAL is amortized as a level percentage of payrolls over 30 years.
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for FY 2016 and the two preceding years were as follows:
Annual PercentageNet Fiscal Year OPEB of Annual OPEB Ended Cost Contributed Obligation 6/30/2014 $3,802,282 17% $5,495,406 6/30/2015 6,038,996 6% 11,158,502 6/30/2016 5,779,291 8% 16,449,480
Funded Status and Funding Progress
As of July 1, 2016, the most recent actuarial valuation date, the plan was 3.2% funded. The actuarial accrued liability for benefit was $41.0 million, and the actuarial value of assets was $1.3 million, resulting in an unfunded accrued liability of $39.7 million. The fair value of the assets was determined using market values as of the date of the actuarial report. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is
148 IV. OTHER INFORMATION, continued
increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Funded stats of the plan as of July 1, 2016, the most recent actuarial valuation date is as follows:
Unfunded UAAL Acturial Actuarial as Actuarial Actuarial Accrued Accrued Percentage Valuation Asset Liability‐ Liability‐ Funded Covered of covered Date Value Entry Age UAAL Ratio Payroll Payroll
Berkeley Police Employees Retiree Premium Assistance Plan 7/1/2016$ 1,312,820 $ 41,027,517 $ 39,714,697 3.20%$ 20,610,000 192.70%
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.
In the July 1, 2016 actuarial valuation, the actuarial cost method used for determining the benefit obligations is the entry age normal cost method required for GASB 74 and 75.
With any valuation of future benefits, assumptions of anticipated future events are required. If actual events differ from the assumptions made, the actual cost of the plan will vary as well. The following assumptions should be reviewed for appropriateness. Discount Rate. To discount future benefit payments back to the present, the City has selected an interest rate of 4.0%. This rate should represent the long term expected return on assets held in the trust to pay for benefits if the City funds at least the ARC each year. A lower discount rate may be appropriate if the ARC is not funded each year or if the trust’s investment policy does not support a 4.0% investment return assumption. A lower discount rate would result in a higher liability and ARC due to a lesser portion of benefits being funded by expected future investment returns. Annual Benefit Increases. It was assumed that the City’s share of Medicare and non-Medicare premiums will increase by 5.0 to 7.2 percentage per year. Retirement, Withdrawal, and Mortality Rates. Demographic assumptions regarding retirement and withdrawal are based on statistics taken from the latest California PERS Pension Valuation for Police employees. The mortality assumption was updated to reflect a margin for future improvement in mortality in accordance with actuarial standards of practice. The new assumption is based on the current mortality rates from the latest CalPERS pension report projected to 2022. Amortization of Unfunded Actuarial Liability. The ARC shown in this report is based on a “rolling” 30 year level dollar amortization.
Financial Statements for OPEB Plans The Statement of OPEB Net Assets and Statement of Changes in OPEB Net Position as of and for the year ended June 30, 2016, using the accrual basis of accounting, are as follows:
149 IV. OTHER INFORMATION, continued
Statement of OPEB Net Position June 30, 2016
Miscellaneous Police Retiree Fire Retiree Retiree Premium Medical Plan Medical Plan Assistance Plan Assets Cash and cash equivalents $ 2,226,821 $ 677,755 $ 342,319 Investments, at fair value Corporate notes 18,570,057 8,632,135 1,011,150 Interest receivable 439,529 87,766 434 Total assets 21,236,407 9,397,656 1,353,903
Liabilities Other accounts payable Total liabilities - - -
Net Position Held in trust for OPEB benefits 21,236,407 9,397,656 1,353,903 Total net position $ 21,236,407 $ 9,397,656 $ 1,353,903
Statement of Changes in OPEB Net Position For the Fiscal Year Ended June 30, 2016
Miscellaneous Police Retiree Fire Retiree Retiree Premium Medical Plan Medical Plan Assistance Plan
ADDITIONS: Contributions: Employer $ 1,837,078 $ 839,003 $ 488,313 Investment income 1,586,033 510,748 53,754 Total Additions 3,423,111 1,349,751 542,067
DEDUCTIONS: Benefits: Service 726,098 469,989 116,452 Administrative expenses 88,665 47,997 3,192 Total Deductions 814,763 517,986 119,644
Change in net position 2,608,348 831,764 422,423 Net Position - beginning 18,629,059 8,565,892 931,478 Net Position- ending $ 21,237,407 $ 9,397,656 $ 1,353,903
150 IV. OTHER INFORMATION, continued
C.4. Defined Contribution Plans
1. Supplemental Retirement and Income Plans (SRIP) There are three separate Supplemental Retirement and Income Plans (SRIP) that were enacted by Ordinance at different times and are set forth in the Berkeley Municipal Code as follows:
1. Supplementary Retirement and Income Plan I – Berkeley Municipal Code Chapter 4.36.101 et seq.
2. Supplementary Retirement and Income Plan II – Berkeley Municipal Code Chapter 4.38.101 et seq.
3. Supplementary Retirement and Income Plan III – Berkeley Municipal Code Chapter 4.39.101 et seq.
4. SRIP I and SRIP II cover non-sworn employees. SRIP III covers sworn Police personnel except for the Police Chief who is included in SRIP II.
SRIP I
On January 1, 1983, Ordinance No. 5450-N.S., which was codified in the Berkeley Municipal Code under Chapter 4.36.101 et seq., established SRIP I. The SRIP I plan consists of two components: 1) a defined contribution money purchase pension plan adopted in accordance with Sections 401(a) and 501(a) of the Internal Revenue Code, and 2) an employer paid disability benefit. Money Purchase Pension Plan: The administrators of the money purchase pension plan are Hartford Life Insurance Company and Prudential Retirement Services. The plan is a defined contribution plan whereby the City contributes 5.7% of salary up to a salary of $32,400 into a tax deferred and self-directed investment account and 1% of salary up to a salary of $32,400 into a disability reserve account for each covered employee (all permanent City employees). The total assets of SRIP I available for benefits at June 30, 2016, was $7,930,890, which was comprised of participant accounts, in the amount of $7,930,890. These assets are the property of the individual account holders and not the property of the City. These assets cannot be used to pay disability benefits. Disability Benefit: Employees hired after January 1, 1983 but prior to July 22, 1988, who became disabled in their own occupation are entitled to receive a disability income benefit equal to 60% of their highest compensation, reduced by any disability payments they receive from Social Security, State Disability Insurance, or Workers’ Compensation. Employees hired after July 21, 1988 are not eligible for benefits under this plan which was closed to new enrollees. Benefits are payable for the disabled participant’s lifetime or until recovery from disability. The third party administrator is Cigna. Currently, the City pays the monthly cost of the monthly disability benefits on a pay-as-you-go basis. There were a total of 98 closed groups of participants, 25 active employees and 73 disabled participants receiving benefits. The unfunded liability for SRIP I at July 1, 2014, the date of the last actuarial study, was $13,244,000. For FY2015, the City paid total SRIP 1 disability payments of $1,628,734. With the inception of SRIP II, the City contracted with Standard Insurance Company of Oregon to provide a portion of disability benefits through a Long Term Disability plan for those active
151 IV. OTHER INFORMATION, continued
employees remaining in SRIP I on or after July 22, 1988. Subsequently, the City prospectively dropped the Long Term Disability plan provided by Standard Insurance Company of Oregon and purchased a Long Term Disability plan from Hartford Life Insurance Company. Later, the City dropped the Long Term Disability plan provided by Hartford Life and purchased a Long Term Disability Plan from UNUM Provident. Ultimately, the City chose to delete the Long Term Disability plan and self fund the benefit. The disability benefits of all those in SRIP I disabled prior to July 22, 1988 as well as the self-insured portion of SRIP I disability benefits arising on or after July 22, 1988 applicable to SRIP I coverage, are paid from City contributions. SRIP II
On July 22, 1988, Ordinance No. 5900-N.S., which was codified in the Berkeley Municipal Code under Chapter 4.38.101 et seq., established SRIP II, a defined contribution money purchase pension plan adopted in accordance with Sections 401(a) and 501(a) of the Internal Revenue Code. The plan is a defined contribution money purchase pension plan, whereby the City contributes 6.7% of salary up to a salary of $32,400 into a tax deferred and self-directed investment account for each eligible employee. Enrollment in the plan is mandatory for all eligible persons hired on or after July 22, 1988, and elective for those eligible and hired prior to July 22, 1988. SRIP III
Effective January 1, 1989, the City established SRIP III, which was codified in the Berkeley Municipal Code under Chapter 4.39.101 et seq., a defined contribution money purchase pension plan adopted in accordance with Sections 401(a) and 501(a) of the Internal Revenue Code. The plan is a defined contribution plan, whereby the City contributes 2% of salary up to a salary of $32,400 into a tax deferred and self-directed investment account for all sworn police officers except the Police Chief. The total assets of SRIP II and SRIP III available for benefits at June 30, 2016 were $62,514,729, and there were 2,146 participants. The City Council is responsible for establishing or amending (through changes in the Berkeley Municipal Code) retirement provisions and contribution requirement for all SRIP plans. These investments are held by trustees for the benefit of the participants and are not included in the City's basic financial statements. The City's contributions (required and actual) and covered payroll for the year ended June 30, 2016 were as follows:
City's City's Covered % of Covered Plan Contributions Payroll Payroll SRIP I $ 38,154 $ 669,363 5.7% SRIP II 2,330,465 34,782,893 6.7% SRIP III 111,220 5,560,972 2.0%
Public Agency Retirement System (PARS)
On September 14, 1993, the City Council adopted Resolution # 57,141- N.S. authorizing a contract with the Public Agency Retirement System (PARS) to administer a 401(a) retirement plan for the City’s hourly and daily employees, effective October 1, 1993. This retirement plan is an alternative to
152 IV. OTHER INFORMATION, continued
participation in Social Security. The plan is a defined contribution plan whereby the City and employee each contribute 3.75% of salary into a tax deferred savings account. These benefits are non-forfeitable at all times, meaning that the benefit may be distributed to the employee only upon retirement or separation from service or death (with certain restrictions). All temporary and hourly employees are eligible and enrolled in the plan. There were a total of 877 active and 1,061 inactive participants in this plan as of June 30, 2016. The total asset of PARS available for benefits at June 30, 2016 was $2,393,519, which was comprised of participant accounts. The City Council is responsible for establishing or amending (through changes in the Berkeley Municipal Code) retirement provisions and contribution requirements for the PARS plan. These investments are held by trustees for the benefit of the participants and are not included in the City's basic financial statements. The City’s contribution (required and actual) and covered payroll for the year ended June 30, 2016 were as follows: Contributions as Fiscal City's Covered a % of Covered Year Contributions Payroll Payroll
2016 $181,096 $4,829,207 3.75% E. Related Party Transaction
In June 2010, The City recruited a new Chief of Police. Included as part of the compensation package was a $500,000, 15 year or due- on- sale, 3% interest only housing assistance loan made to the Chief of Police. The loan is secured by a note signed by the Chief of Police and his spouse, and a deed of trust on the residence that was purchased. The payments may be deferred and there is no prepayment penalty. The loan and accrued interest must be repaid in full within 12 months of the Chief of Police’s separation with the City, which was October 28, 2016.
F. Subsequent Events
FY2016 Tax and Revenue Anticipation Notes (TRANS)
On July 28, 2016, the City issued $17,000,000 of tax revenue anticipation notes in order to alleviate the strain on working capital prior to the receipt of property tax revenues in December. The notes were issued with a coupon rate of 2.0% and a yield of .1619164%., and are recorded in the General Fund. Interest and principal on these notes are payable on July 27, 2017 by the General Fund. The City has maintained a MIG-1 rating on this short-term issue.
2016 General Obligation Bonds (Street and Integrated Watershed Improvements)
On July 6, 2016, the City of Berkeley issued the second series of bonds for $15,000,000 from an aggregate authorized amount of not to exceed $30,000,000 of General Obligation Bonds duly approved by at least two-thirds of the voters voting on Measure W at an election held on November 6, 2012, to provide funds to finance improvements to streets, with integrated watershed improvements within the City. The interest rates on the bonds range from 2.00% to 5.00%, with an average yield of 2.7145%. Interest is payable semi-annually on March 1 and September 1, and the principal is payable annually on September 1. The General Obligation bonds mature on September 1, 2046. The first series of these bonds was issued in the amount of $15,000,000 on November 19, 2013.
153 IV. OTHER INFORMATION, continued
Berkeley Joint Powers Financing Authority Parking Revenue Bonds, Series 2016
On August 1, 2016, the Berkeley Joint Powers Financing Authority issued Parking Revenue Bonds, series 2016, in the principal amount of $33,970,000. The bonds were special obligations of the Authority payable from revenues consisting primarily of installment payments payable by the City of Berkeley.
The bonds are being issued to provide funds to finance (1) the demolition of the current Center Street Garage; (2) the construction of a new downtown Center Street Garage and related work; (3) purchase of a reserve fund insurance policy for the bonds; (4) payment of capitalized interest through June 1, 2019; and (5) payment of costs of issuing the bonds.
The coupon rates on $17,655,000 of the bonds range from 3% to 4% for serial bonds maturing between June 1, 2020 to June 1, 2036, and term bonds totaling $7,555,000 maturing June 1, 2041 and term bonds of $8,760,000 maturing June 1, 2046, with coupon rates of 3%.
These bonds have an insured rating of AA by S&P and an underlying rating of A.
154 CITY OF BERKELEY
Notes to the Private Trust Funds of the Successor Agency June 30, 2016
A. Description of the Reporting Entity.
The Redevelopment Agency of the City of Berkeley was established to eliminate blight and provide construction financing for affordable housing. There were two Redevelopment Project Areas: Savo Island and West Berkeley Project Areas.
On June 29, 2011, Governor Brown signed Assembly Bill 1X 26 (AB 1X 26) eliminating redevelopment agencies throughout the State in order to protect funding for core public services at the local level.
Pursuant to City Council action taken on January 17, 2012, the City elected to serve as the Successor Agency to the Berkeley Redevelopment Agency of the City of Berkeley (Successor Agency). The Successor Agency is a separate legal entity, which serves as a custodian for the assets and liabilities of the dissolved Redevelopment Agency pending distribution to the appropriate taxing entities after the payment of enforceable obligations. The activity of the Successor Agency is overseen by an Oversight Board comprised of individuals appointed by various government agencies and the City of Berkeley as Successor Agency of the former Redevelopment Agency.
B. Assets, Liabilities, and Net Assets or Equity All the Notes Receivable and capital assets were transferred to Housing Trust Funds of the City and therefore no more outstanding items as of June 30, 2016.Long-term Obligations
Long-Term Obligations
In the government-wide financial statements, and 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 type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditure.
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Notes to the Private Trust Funds of the Successor Agency June 30, 2016
The following is a summary of Long-term obligations of the Successor Agency as of June 30, 2016:
Original Issue Balance Balance Due Within Amount July 1, 2015 Additions Deletions June 30, 2016 One Year
Loan payable, Savo Island 600,000$ 417,000$ $ - $ (25,000) $ 392,000 27,000$ 1997 Bonds, WBRP 1,000,000 657,829 657,829 635,635 Net Pension Liability 296,525 14,999 311,524 Compensated absences - 8,293 (605) 7,688 1,231 - Total $ 1,600,000 $ 1,379,647 $ 14,999 $ (25,605) $ 1,369,041 $ 663,866
C. Subsequent Event There is no subsequent event to be disclosed.
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REQUIRED SUPPLEMENTARY INFORMATION (Other than MD&A)
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REQUIRED SUPPLEMENTARY INFORMATION, continued
CITY OF BERKELEY Required Supplementary Informaiton Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund - Budgetary Basis For the Fiscal Year Ended June 30, 2016
Variance with Final Budget Original Final Actual Positive Budget Budget Amount (Negative) Revenues: Taxes$ 118,720,813 $ 118,720,813 $ 130,156,523 $ 11,435,710 Licenses and permits 529,560 529,560 322,630 (206,930) Intergovernmental 10,694,882 10,694,882 11,208,736 513,854 Charges for service 8,407,079 8,407,079 9,439,100 1,032,021 Fines and penalties 7,583,722 7,583,722 6,414,329 (1,169,393) Rents and royalties 133,334 133,334 214,945 81,611 Franchise 1,826,892 1,826,892 1,916,975 90,083 Private contributions and donation 15,000 15,000 1,910 (13,090) Indirect cost reimbursement 4,507,996 4,507,996 5,183,603 675,607 Investment income 2,470,000 2,470,000 2,465,654 (4,346) Miscellaneous 152,000 227,000 101,044 (125,956) Total revenues 155,041,278 155,116,278 167,425,449 12,309,171 Expenditures: Current: General government 36,644,473 37,501,755 32,549,579 4,952,176 Public safety 86,134,598 86,891,500 89,733,761 (2,842,261) Highway and streets 1,410,850 1,318,605 1,337,218 (18,613) Health and welfare 7,460,306 7,694,996 7,403,796 291,200 Culture-recreation 5,544,597 5,962,599 5,818,693 143,906 Community development/housing 6,405,040 7,159,587 6,056,836 1,102,751 Economic development 2,039,208 2,387,538 2,346,260 41,278 Debt service: Principal repayment Interest and fiscal charges 200,000 200,000 311,570 (111,570) Cost of issuance 60,250 (60,250) Total expenditures 145,839,072 149,116,580 145,617,963 3,498,617 Excess (deficiency) of revenues over (under) expenditures 9,202,206 5,999,698 21,807,486 15,807,788 Other financing sources (uses): Transfers in 4,413,697 4,515,979 6,936,521 (2,420,542) Transfers out (14,022,937) (24,258,458) (18,319,541) (5,938,917)
Total other financing inflows (outflows) (9,609,240) (19,742,479) (11,383,020) (8,359,459) Net change in fund balance (407,034) (13,742,781) 10,424,466 24,167,247 Fund balance, beginning of year 36,685,885 36,685,885 36,685,885 Fund balance, end of year$ 36,278,851 $ 22,943,104 $ 47,110,351 $ 24,167,247
Explanation of differences between budgetary basis to modified accrual basis:
Net change in fund balances - budgetary basis 10,424,466 Receivable accruals 3,158,284 Due to/from repayments (1,669,295) Liability accruals (177,999) Net change in fund balances - GAAP basis$ 11,735,456
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CITY OF BERKELEY Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Special Revenue Funds Grant Fund - Budgetary Basis For the Year Ended June 30, 2016 Variance with Final Budget Original Budget Final Budget Actual Positive (Negative) ------Revenues: Taxes$ - $ - $ - $ - Intergovernmental Revenue 18,178,436 19,255,945 21,041,696 1,785,751 Charge for service 40,000 40,000 283,450 243,450 Interest 17,000 17,000 217,425 200,425 Miscellaneous revenue 3,000 3,000 265,703 262,703 Total revenues 18,238,436 19,315,945 21,808,274 2,492,329
Expenditures: Current: General government 196,754 372,734 214,485 158,249 Public Safety 224,054 425,602 264,389 161,213 Highway and Streets 380,951 4,706,410 1,426,113 3,280,297 Health and Welfare 16,650,899 13,947,294 10,500,380 3,446,914 Culture-Recreation 115,000 3,458,114 923,002 2,535,112 Urban Redevelopment and Housing 5,480,018 8,504,656 6,320,514 2,184,142 Economic Development and Assistance 551,769 661,818 611,817 50,001 Total expenditures 23,599,445 32,076,628 20,260,700 11,815,928
Excess (deficiency) of revenues over (under) expenditures (5,361,009) (12,760,683) 1,547,574 14,308,257
Other financing sources(uses): Operating transfers in 2,296,626 - - - Operating transfers out - (79,621) (79,621) - Sale of Capital Assets - - 4,065 4,065 Total other financing sources 2,296,626 (79,621) (75,556) 4,065
Net change in fund balances (3,064,383) (12,840,304) 1,472,018 14,312,322
Fund Balance (Deficit), July 1, 2015 1,620,902 (12,406,721) 12,220,947
Fund Balance (Deficit), June 30, 2016 $ (1,443,481) $ (25,247,025) $ 13,692,965 $ 14,312,322
See notes to general purpose financial statements.
Explanation of differences between budgetary basis to modified accrual basis:
Net change in fund balances - budgetary basis Receivable accrual $ 1,472,018 Notes receivable accrual 640,765 Investment income accrual (324,110) Payable accural 1,721,985 Net change in fund balances - GAAP basis $ 3,510,658
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CITY OF BERKELEY Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Special Revenue Funds Library Fund - Budgetary Basis-Fund 301-307 For the Fiscal Year Ended June 30, 2016
Variance with Final Budget Original Final Actual Positive Budget Budget Amount (Negative) Revenues: Taxes $ 16,913,793 $ 16,913,793 $ 17,286,659 $ 372,866 Intergovernmental 30,000 59,167 74,167 15,000 Fines and penalties 273,000 273,000 207,262 (65,738) Investment income - - 881 881 Private contributions and donation 93,500 93,500 137,944 44,444 Miscellaneous 32,000 32,000 34,575 2,575 Total revenues 17,342,293 17,371,460 17,741,488 370,028
Expenditures: Current: General government 14,101 14,101 18,533 (4,432) Culture-recreation 18,867,807 18,622,814 16,320,252 2,302,562 Total expenditures 18,881,908 18,636,915 16,338,786 2,298,129 Excess (deficiency) of revenues over (under) expenditures (1,539,615) (1,265,455) 1,402,703 2,668,158
Net Change in fund balance (1,539,615) (1,265,455) 1,402,703 2,668,158
Fund balances, beginning of year, 5,957,436 5,957,436 5,957,436 -
Fund balance, end of year $ 2,878,206 $ 3,426,526 $ 7,360,139 $ 5,336,315
Explanation of differences between budgetary basis to modified accrual basis: Net change in fund balances - budgetary basis$ 1,402,703 Receivable accruals 32,135 Liability Accruals (9,674)
Net change in fund balances - GAAP basis $ 1,425,164
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REQUIRED SUPPLEMENTARY INFORMATION
1. Defined Pension Benefit Plans – (a) CALPERS PLANS
Schedule of Changes in Net Pension Liability and Related Ratios during the Measurement Period
Miscellaneous Plan
Measurement Period 2013-14 1 2014-15 TOTAL PENSION LIABILITY Service Cost $ 17,671,893 $ 16,872,462 Interest 60,962,710 62,911,744 Changes of Benefit Terms - - Difference Between Expected and Actual Experience - (15,778,151) Changes of Assumptions - (14,788,782) Benefit Payments, Including Refunds of Employee Contributions (37,309,302) (38,947,389) Net Change in Total Pension Liability 41,325,301 10,269,884 Total Pension Liability - Beginning 822,654,845 863,980,146 Total Pension Liability - Ending (a) $ 863,980,146 $ 874,250,030
PLAN FIDUCIARY NET POSITION Contributions - Employer $ 17,742,374 $ 18,303,639 Contributions - Employee 9,202,333 6,752,797 Net Investment Income 98,032,089 14,859,667 Benefit Payments, Including Refunds of Employee Contributions (37,309,302) (38,947,389) Administrative Expense - (737,609) Plan to Plan Resource Movement - 284,821 Net Change in Fiduciary Net Position 87,667,494 515,926 Plan Fiduciary Net Position - Beginning 567,365,458 655,032,952 Plan Fiduciary Net Position - Ending (b) $ 655,032,952 $ 655,548,878
Plan Net Position Liability/(Asset) - Ending (a) - (b) $ 208,947,194 $ 218,701,152 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 75.82% 74.98% Covered-Employee Payroll $ 87,614,737 $ 87,918,618 Plan Net Pension Liability/(Asset) as a Percentage of Covered-Employee Payroll 238.48% 248.75%
1 – Historical information is required only for measurement periods for which GASB 68 is applicable.
*Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of two years additional service credit (a.k.a. Golden Handshakes).
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Schedule of Changes in Net Pension Liability and Related Ratios during the Measurement Period, Continued
Public Safety - Fire Plan
Measurement Period 2013-14 1 2014-15 TOTAL PENSION LIABILITY Service Cost $ 4,183,753 $ 4,154,748 Interest 17,150,102 17,400,087 Changes of Benefit Terms - - Difference Between Expected and Actual Experience - (4,736,917) Changes of Assumptions - (3,990,299) Benefit Payments, Including Refunds of Employee Contributions (13,447,853) (14,168,237) Net Change in Total Pension Liability 7,886,002 (1,340,618) Total Pension Liability - Beginning 233,300,081 241,186,083 Total Pension Liability - Ending (a) $ 241,186,083 $ 239,845,465
PLAN FIDUCIARY NET POSITION Contributions - Employer $ 4,754,912 $ 5,237,775 Contributions - Employee 1,410,383 1,489,005 Net Investment Income 28,071,245 4,117,374 Benefit Payments, Including Refunds of Employee Contributions (13,447,853) (14,168,237) Plan to Plan Resource Movement - (70) Administrative Expense - (205,370) Net Change in Fiduciary Net Position 20,788,687 (3,529,523) Plan Fiduciary Net Position - Beginning 165,021,539 185,810,226 Plan Fiduciary Net Position - Ending (b) $ 185,810,226 $ 182,280,703
Plan Net Position Liability/(Asset) - Ending (a) - (b) $ 55,375,857 $ 57,564,762 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 77.04% 76.00% Covered-Employee Payroll $ 14,907,370 $ 15,467,011 Plan Net Pension Liability/(Asset) as a Percentage of Covered-Employee Payroll 371.47% 372.18%
1 – Historical information is required only for measurement periods for which GASB 68 is applicable.
*Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of two years additional service credit (a.k.a. Golden Handshakes).
Schedule of Changes in Net Pension Liability and Related Ratios during the Measurement Period, Continued
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Public Safety - Police Plan
Measurement Period 2013-14 1 2014-15 TOTAL PENSION LIABILITY Service Cost$ 6,933,491 $ 6,687,437 Interest 25,322,913 26,160,351 Changes of Benefit Terms - - Difference Between Expected and Actual Experience - (3,081,594) Changes of Assumptions - (6,342,449) Benefit Payments, Including Refunds of Employee Contributions (18,107,995) (18,657,601) Net Change in Total Pension Liability 14,148,409 4,766,144 Total Pension Liability - Beginning 343,226,088 357,374,497 Total Pension Liability - Ending (a) $ 357,374,497 $ 362,140,641
PLAN FIDUCIARY NET POSITION Contributions - Employer $ 10,060,801 $ 10,108,019 Contributions - Employee 2,037,428 1,988,892 Net Investment Income 35,084,789 5,119,789 Benefit Payments, Including Refunds of Employee Contributions (18,107,995) (18,657,601) Plan to Plan Resource Movement - (42) Administrative Expense - (260,769) Net Change in Fiduciary Net Position 29,075,023 (1,701,712) Plan Fiduciary Net Position - Beginning 204,321,504 233,396,527 Plan Fiduciary Net Position - Ending (b) $ 233,396,527 $ 231,694,815
Plan Net Position Liability/(Asset) - Ending (a) - (b) $ 123,977,970 $ 130,445,826 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 65.31% 63.98% Covered-Employee Payroll $ 22,471,207 $ 22,490,875
Plan Net Pension Liability/(Asset) as a Percentage of Covered-Employee Payroll 551.72% 579.99% 1 – Historical information is required only for measurement periods for which GASB 68 is applicable.
*Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of two years additional service credit (a.k.a. Golden Handshakes).
Schedule of Plan Contributions for CALPERS Pension Plans
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REQUIRED SUPPLEMENTARY INFORMATION, continued
Miscellaneous Plan
Fiscal Year 2015* Fiscal Year 2016*
Actuarially determined contribution$ 18,303,639 $ 25,846,746 Contribution in relation to the actuarially determined contributions (18,303,639) (25,846,746) Contribtion deficiency (excess)$ - $ -
Covered-emplyee payroll$ 87,918,618 $ 83,893,321
Contributions as a percentage of covered-employee payroll 20.82% 30.81%
* - Historical information is required only for measurement periods for which GASB 68 is applicable
Public Safety - Fire Plan
Fiscal Year 2015* Fiscal Year 2016*
Actuarially determined contribution$ 5,237,775 $ 5,959,034 Contribution in relation to the actuarially determined contributions (5,237,775) (5,959,034) Contribtion deficiency (excess)$ - $ -
Covered-emplyee payroll$ 15,467,011 $ 16,340,415
Contributions as a percentage of covered-employee payroll 33.86% 36.47%
* - Historical information is required only for measurement periods for which GASB 68 is applicable
Schedule of Plan Contributions for CALPERS Pension Plans, Continued
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Public Safety - Police Plan
Fiscal Year 2015* Fiscal Year 2016*
Actuarially determined contribution$ 10,108,019 $ 10,777,338 Contribution in relation to the actuarially determined contributions (10,108,019) (10,777,338) Contribtion deficiency (excess)$ - $ -
Covered-emplyee payroll$ 22,490,875 $ 22,246,526
Contributions as a percentage of covered-employee payroll 44.94% 48.45%
* - Historical information is required only for measurement periods for which GASB 68 is applicable
Notes to Schedules for all plans (miscellaneous, fire and police) above:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2015-16 were from the June 30, 2013 public agency valuations.
Single and Agent Employers Example Entry age Amortization method Level percentage of payroll, closed Remaining amortization period 15 years Asset valuation method 5-year smoothed market Inflation 2.75% Salary increases Varies by Entry Age and Service Payroll Growth 3.00% Investment rate of return 7.5%, net of pension plan investment expense, including inflation Retirement age The probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007.
Mortality The probabilities of mortality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. Pre-retirement and Post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries.
(b). Berkeley Retirement Income Benefit Plan
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REQUIRED SUPPLEMENTARY INFORMATION, continued
Schedule of Changes in Net Pension Liability and Related Ratios for Berkeley Public Retirement Income Benefit Plan under GASB68
Measurement Period 2014-15 1 2015-16 TOTAL PENSION LIABILITY Service Cost $ - $ - Interest 2,503,642 2,441,727 Changes of Benefit Terms - - Difference Between Expected and Actual Experience with regard to economic or demographic factors 1,501,596 7,453,545 Changes of Assumptions 4,403,685 6,961,164 Benefit Payments, Including Refunds of Employee Contributions (1,678,949) (2,044,596) Net Change in Total Pension Liability 6,729,974 14,811,840 Total Pension Liability - Beginning 54,881,084 61,611,058 Total Pension Liability - Ending (a)$ 61,611,058 $ 76,422,898
PLAN FIDUCIARY NET POSITION Contributions - Employer$ 1,467,997 $ 1,943,978 Contributions - Employee - - Net Investment Income 164,247 195,519 Benefit Payments, Including Refunds of Employee Contributions (1,678,949) (2,044,596) Other Changes in Fiduciary Net Position (41,773) (42,154) Net Change in Fiduciary Net Position (88,478) 52,747 Plan Fiduciary Net Position - Beginning 6,587,939 6,499,461 Plan Fiduciary Net Position - Ending (b)$ 6,499,461 $ 6,552,208
Plan Net Position Liability/(Asset) - Ending (a) - (b)$ 55,111,597 $ 69,870,690 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 10.55% 8.57% Covered-Employee Payroll$ 20,002,000 N/A Plan Net Pension Liability/(Asset) as a Percentage of Covered-Employee Payroll 275.53% N/A
Schedule of Plan Contributions for Berkeley Retirement Income Benefit Plan
Contribution Plan Year Actuarially Actual Contribution as a % of Ending Determined Employer Deficiency Covered Covered 30‐Jun Contribution Contribution (Excess) Payroll Payroll
2014$ 2,766,138 $ 1,489,304 $ 1,276,834 $ 19,920,000 7.48% 2015 2,977,443 1,467,997 1,509,446 20,002,000 7.34% 2016 Not Calculated N/A N/A N/A N/A
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Notes to Schedules for Berkeley Retirement Income Benefit Plan
In order to calculate the Actuarially Determined Contribution (shown in Exhibit 7), the Unfunded Actuarial Accrued Liability (UAAL) as of July 1, 2014, is being amortized as a level dollar over a 30-year closed (i.e., decreasing each year) period commencing on July 1, 2013 and the number of years remaining as of 6/30/2016 is 28 years. Actuarial gains and losses for each subsequent year are also amortized over same amortization schedule following the year of the actuarial gain or loss. Measurement Date June 30, 2015 Valuation Date June 30, 2016 Actuarial Cost Method Entry Age Normal Cost Method 28 year amortization of unfunded liability (closed period) as a level dollar Investment Rate of Return 4.00% net of investment expenses and including inflation of 2.5% Municipal Bond Rate 2.85% (Bond Buyer-20 rate as of 6/30/16) Discount Rate 2.949% Based on Crossover test results using assumptions below Salary Scale N/A Total Payroll Growth 3.0% including inflation of 2.5% Inflation Rate 2.5% Administrative Expenses Increase with inflation after 2016 ACA Excise Tax Estimated as 2% increase in benefits Mortality Mortality Rates adopted by California PERS board from the 2014 experience study. Rates included a projection to year 2028 with Scale BB. Asset Valuation Method Market value
Medical Inflation (Cost of Living Increases)
Benefit increases for retirees retiring before September 19, 2012 are tied to the actual increases to the City’s 2-party Kaiser premium. Medical trend is estimated to be increased various from 6.0% in 2017 to 4.5% in 2081 and beyond.
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(c). Safety Members Pension Fund
(i) Schedule of Changes in Net Pension Liability and Related Ratios for Safety Members Pension Fund under GASB68
Notes to Schedule:
Measurement Period 2014-15 1 2015-16 TOTAL PENSION LIABILITY Service Cost $ - $ - Interest 218,441 185,544 Changes of Benefit Terms - - Difference Between Expected and Actual Experience with regard to economic or demographic factors - 480,045 Changes of Assumptions 518,607 114,194 Benefit Payments, Including Refunds of Employee Contributions (1,003,620) (1,843,952) Net Change in Total Pension Liability (266,572) (1,064,169) Total Pension Liability - Beginning 5,094,747 4,828,175 Total Pension Liability - Ending (a)$ 4,828,175 $ 3,764,006
PLAN FIDUCIARY NET POSITION Contributions - Employer$ 568,620 $ 1,104,309 Contributions - Employee - - Net Investment Income 124,010 166,222 Benefit Payments, Including Refunds of Employee Contributions (1,003,620) (1,843,952) Other Changes in Fiduciary Net Position - (17,650) Net Change in Fiduciary Net Position (310,990) (591,071) Plan Fiduciary Net Position - Beginning 1,564,995 1,254,005 Plan Fiduciary Net Position - Ending (b)$ 1,254,005 $ 662,934
Plan Net Position Liability/(Asset) - Ending (a) - (b)$ 3,574,170 $ 3,101,072
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 25.97% 17.61%
Covered-Employee Payroll N/A N/A
Plan Net Pension Liability/(Asset) as a Percentage of Covered-Employee Payroll N/A N/A
No changes have been made since GASB 68 has become effective.
(ii) Schedule of Plan Contributions for Safety Members Pension Fund under GASB68
Historically, the plan has been funded based on contributions necessary to pay benefits not provide by the MassMutual GIC. Funding is not based on actuarially determined contributions and contributions are neither statutorily nor contractually established.
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Notes to Schedules for Safety Members Pension Fund under GASB68
A. Actuarial Methods
Actuarial Accrued Liability: Actuarial accrued liability was determined by multiplying pension benefits accrued at the valuation date by present value cost factors, based on applicable actuarial assumptions shown below. Note that future cost of living increases are included in this calculation.
Actuarial Present Value of Benefits Being Paid: Actuarial present value of benefits being paid was determined by multiplying current pension benefit amounts at the valuation date by present value cost factors, based on applicable actuarial assumptions below. Future cost of living increases are not included in this calculation.
B. Actuarial Assumptions
Interest rate 3.311% a year based on Crossover test results using assumptions below
Cost of living increases: Full Fluctuating 2.75% a year CPI 2.75% a year
Mortality 1997-2011 CalPERS Experience Study with projected improvement using scale MP-2014 modified to converge to ultimate mortality rates in 2022
C. Changes in Actuarial Assumptions
The following assumptions were changed from the prior valuation:
Interest Rate: 3.311% as of 06/30/2016 4.50% as of 06/30/2015 4.75% as of 06/30/2014
The interest rate was updated to reflect the most recent expected return on plan assets with an allowance for the MassMutual GIC fund to cease in November 2018.
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2. (a) Schedule of Required Supplementary Information for Berkeley Police Retirement Income Benefit Plan (GASB 67) i. Net Pension Liability The components of the net pension liability of the City, were as follows:
June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability $ 76,422,898 $ 61,611,058 $ 54,881,084 Plan Fiduciary Net Position 6,552,208 6,499,461 6,587,939 City's Net Pension Liability $ 69,870,690 $ 55,111,597 $ 48,293,145 Plan Fiduciary Net Position as a Percentage of the 8.57% 10.55% 12.00% Total Pension Liability
ii.. Schedule of Contributions for Berkeley Police Retirement Income Benefit Plan
Contribution Plan Year Actuarially Actual Contribution as a % of Ending Determined Employer Deficiency Covered Covered 30‐Jun Contribution Contribution (Excess) Payroll Payroll
2014$ 2,766,138 $ 1,489,304 $ 1,276,834 $ 19,920,000 7.48% 2015 2,977,443 1,467,997 1,509,446 20,002,000 7.34% 2016 Not Calculated N/A N/A N/A N/A
iii. Schedule of Investment Returns
Last 10 Fiscal Years
Year Ending June 30, 2014 2015 2016 Annual Money‐Weighted Rate of Return, Net of Investment Expense 6.53% 2.55% 3.94%
These schedules are presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is complied, pension plans should present information for those years for which information is available.
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2(b) Schedule of Required Supplementary Information for Safety Member Pension Fund (GASB 67) i. Net Pension Liability Last 10 Fiscal Years
The components of the net pension liability of the City, were as follows:
June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability$ 3,764,006 $ 4,828,175 $ 5,094,747 Plan Fiduciary Net Position 662,934 1,254,005 1,564,995 City's Net Pension Liability $ 3,101,072 $ 3,574,170 $ 3,529,752 Plan Fiduciary Net Position as a Percentage of the 17.61% 25.97% 30.72% Total Pension Liability
Notes to Schedule:
No changes have been made over the 10 year history since GASB 67 has become effective.
ii. Schedule of Contributions Historically, the plan has been funded based on contributions necessary to pay benefits not provided by the MassMutual GIC. Funding is not based on actuarially determined contributions and contributions are neither statutorily nor contractually established.
iii. Schedule of Investment Returns for Safety Member Pension Fund (GASB 67) Last 10 Fiscal Years
Year Ending June 30, 2014 2015 2016 Annual Money‐Weighted Rate of Return, Net of Investment Expense 9.68% 9.68% 9.68%
These schedules are presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is complied, pension plans should present information for those years for which information is available.
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3. Defined Other-Post Employment Benefits Plans-Schedules of Funding Progress and Schedules of Employer Contributions SCHEDULES OF FUNDING PROGRESS
Unfunded UAAL Acturial Actuarial as Actuarial Actuarial Accrued Accrued Percentage Valuation Asset Liability‐ Liability‐ Funded Covered of covered Date Value Entry Age UAAL Ratio Payroll Payroll
Berkeley Police Employees Retiree Premium Assistance Plan 7/1/2014$ 599,676 $ 45,288,424 $ 44,688,748 1.32%$ 20,002,000 223.42% 7/1/2015 931,478 45,055,750 44,124,272 2.07% 20,036,000 220.22% 7/1/2016 1,312,820 41,027,517 39,714,697 3.20% 20,610,000 192.70%
Fire Employees Retiree Health Premium
7/1/2014$ 7,977,731 $ 13,870,802 $ 5,893,071 57.5%$ 13,460,000 43.8% 7/1/2015 8,565,891 14,079,184 5,513,293 60.8% 13,431,000 41.0% 7/1/2016 9,409,766 25,274,305 15,864,539 37.2% 14,714,000 107.8%
Miscellaneous Employees Retiree Health Premium Assistance Plan
7/1/2014 $ 16,572,443 $ 44,160,386 $ 27,587,943 37.5%$ 87,604,000 31.5% 7/1/2015 18,500,730 44,297,981 25,797,251 41.8% 84,859,000 30.4% 7/1/2016 21,019,439 55,629,654 34,610,215 37.8% 90,188,000 38.4%
172
172
Budgetary Information
Prior to June 1, the City Manager submits to the City Council a proposed operating budget for the upcoming fiscal year. The proposed budget includes a summary of the proposed expenditures and forecasted revenues, and available cash balances (i.e. budget basis fund balance/net assets for the City's General Fund, Special Revenue Funds; Capital Project Funds; all Enterprise Funds, and all Internal Service Funds. The City of Berkeley adopts an annual appropriated budget for its General fund, special revenue funds, capital project funds, and debt service funds.
The City Council adopts an annual budget by resolution prior to July 1 of each fiscal year. The annual budget indicates appropriations by fund. The Council may adopt supplemental appropriations during the year. At the fund level, expenditures may not legally exceed appropriations. The City Manager is authorized to transfer budgeted amounts between departments or programs within any fund. Any revisions or transfers that alter the total appropriations of any fund must be approved by the City Council. The City utilizes a five-year capital plan, which is updated annually. Capital Project Funds are appropriated annually as part of the regular budget process. Any unused funds are re-appropriated to the following fiscal year until the project is completed.
The City Council approved an original annual appropriation ordinance of $339,095,640 and made supplementary budget appropriations totaling $120,473,653 during the year. The supplementary budget appropriations consisted of the following: (1) FY2015 outstanding encumbrances of $25,986,214; (2) unencumbered carryovers of $13,721,074; and (3) other budget adjustments of $80,766,365. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of money are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in governmental fund types.
Encumbrances outstanding at year-end are reported in assigned fund balance unless the purchase order relates to restricted or committed resources. They do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year.
Budgetary Results Reconciled to Results in Accordance with GAAP
The adopted budget and actual results reported in the governmental funds’ budgetary schedules are on a modified cash basis, which is inconsistent with generally accepted accounting principles (GAAP). Under this budget basis, revenues are recorded when received, and interfund loans and repayments are recorded as other financing sources/uses, instead of increases and decreases in the due to/due from accounts.
173 THIS PAGE LEFT INTENTIONALLY BLANK
174 Combining and Individual Fund Statements and Schedules
175 CITY OF BERKELEY Budgetary Comparison Schedule Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2016
Variance with Final Budget Original Final Actual Positive Budget Budget Amount (Negative} Revenues: Charges for services $ $ $ 44,494 $ 44,494 Investment income 43,076 43,076 Miscellaneous 39,785 39,785 Total revenues 127,355 127,355 Expenditures: Current: General government 945,172 1,663,901 810,159 853,742 Culture-recreation 392,499 461,259 453,555 7,704 Economic development 15,115 25,963 11,953 14,010 Capital outlay: Highway and streets 3,007,452 4,042,604 2,670,637 1,371,967 Community development and housing 2,446,589 4,042,604 1,082,165 2,960,439 Total expenditures 6,806,827 10,236,331 5,028,469 5,207,862 Excess (deficiency) ofrevenues over (under) expenditures (6,806,827) (10,236,331) (4,901,114} 5,335,217 Other financing sources (uses): Transfers in 5,501,269 9,510,512 9,688,693 178,181 Transfers out (1,594,733) (2,394,733) (3,284, I 06) (889,373) Sale of fixed assets 500 500 Total other financing inflows (outflows) 3,906,536 7,115,779 6,405,087 {710,692) Net change in fund balance (2,900,291) (3,120,552) 1,503,973 4,624,525 Fund balances, beginning of year 12,703,145 12,703,145 12,703,145 Fund balance, end of year $ 9,802,854 $ 9,582,593 $ 14,207,118 $ 4,624,525
Explanation of differences between budgetary basis to modified accrual basis: Net change in fund balances - budgetary basis $ 1,503,973 Liability Accruals 95,671 Receivable Accrual (197,778) Other a4justment Net change in fund balances - GAAP basis $ 1,401,866
176 Nonmajor Governmental Funds
SPECIAL REVENUE FUNDS
Special Revenue funds are used to account for proceeds of specific revenue sources (other than capital projects) that are legally restricted to expenditure for specific purposes. The use of special revenue funds is required if legally or otherwise mandated.
Asset Forfeiture Fund established to account for monies received from the seizure and forfeiture of assets acquired by the City as a result of narcotics related law enforcement.
Special Tax for Disabled Fund established to account for special tax, which is solely for providing emergency services and incidental case management for severely physically disabled persons.
Workforce Investment Act Fund established to account for funds provided by allocation of Workforce Investment Act grant funds
Community Workforce Fund Fund established to account for fund provided by allocation of adult employment workforce.
Sec 108 HUD Loan Grant Assistant Fund established to account for funds for Sec 108 HUD loan and its disbursement.
Fund Raising Activities Fund Fund established to account for funds donated for providing food meal program.
California Housing Finance Agency Fund established to account for funds for operating a local housing program.
Gilman Sports Field Fund established to account for funds for Gilman sports field.
Gilman Fields Reserve Fund established to reserve for funds for Gilman fields.
Animal Shelter Fund established to account for funds donated for providing animal shelter and related services.
Paramedic Assessment District Fund established to account for special tax assessed for paramedic service
California Energy Commission Fund established to account for street light maintenance and conversion to LED for energy savings.
177 Tieback Mitigation R-0-W Fund established for the collection of mitigation fees from developers for the future potential cost associated in removing tiebacks or any other cost associated in the Public right of way.
Domestic Violence Prevention Vital Statistics Fund established to account for the surcharge for birth and death certificates that are issued by the Berkeley Public Health Vital Statistics unit to be used in the administration and coordination of domestic violence and family violence prevention activities.
Affordable Housing Mitigation Fee Fund received from mitigation fee assessed on the construction of new rental units.
Affordable Child Care Fund established from fees collected from developers of large scale commercial development to assist low-income families with monthly child care payments. lnclusionary Housing Program Fund established to account for the administration of the lnclusionary Housing Program, whereby 20% of new units in apartment projects in the City of Berkeley must be offered at a rent or sale price that is affordable to low income households. The City charges fees for the administration and monitoring of this program.
Condo Conversion Program Fund established to account for the administration of the affordable housing. Housing department can charge 10% of the revenue for program delivery costs.
Playground Camp Fund received from registration and miscellaneous fees for the purpose of operating the City's vacation camp and day camps. Fund established to account for the money received under the state's SB300 program.
State Proposition 172 Fund established to receive monies from sales tax to be used for public safety.
State Transportation Tax Fund Fund established to consolidate Special Gas Tax Fund - Disc; State 2106; State 2107; and State Prop 111, which to receive monies from City's gasoline tax apportionment revenue per code sections, for the highway traffic congestion relief and spending.
CDBG Fund Established pursuant to Housing & Community Development Act of 1974 to consolidate monies for several Federal programs (Model Cities, Urban Renewal, Open Space & Water and Sewer) under a single block grant designed to allow the City to finance developmental activities (especially housing) on a minimally restricted basis.
178 Rental Housing Safety Program Fund established to receive monies by charging an annual per unit fee to the rental housing property owner, imposing fines to all related violations. The purpose of this fund is to provide and streamline the Rental Housing Safety Program (RHSP) while maintaining the overall goal of having owners, tenants, and the City work together to increase the safety of all residential rental units.
CA Endowment Foundation Fund established to receive monies from State to improve the health of Californians.
Measure B: Local Streets and Roads Fund established to account for the tax assessed for local streets and roads.
Measure B: Bike and Pedestrians Fund established to receive monies used for the maintenance of bike and pedestrian lanes.
Measure 8: Paratransit Fund established to account for the revenue assessed from property tax to be used for expenses related for paratransit services.
Measure F Alameda County VRF Street and road Fund established to account for the revenue assessed from vehicle registration fee to be used for expenses related for road and street services
Measure BB: Local Streets and Roads Fund established to account for the tax assessed for local streets and roads, which has to separate from any other funds it receives from Alameda CTC per funding agreement article 11.8.2.
Measure BB: Bike and Pedestrians Fund established to receive monies used for the maintenance of bike and pedestrian lanes, which has to separate from any other funds it receives from Alameda CTC per funding agreement article 11.8.2.
Measure BB: Paratransit Fund established to account for the revenue assessed from property tax to be used for expenses related for paratransit services, , which has to separate from any other funds it receives from Alameda CTC per funding agreement article 11.8.2.
One Time Funding Fund established to account for the revenue in relating to Ed Roberts Campus.
Park Tax Fund Fund established to account for the receipt and expenditure of the special tax approved by two thirds of the voters on May 6, 1997 and re-authorized in November 2000 and November 2008. It is used for the direct cost of acquisition and maintenance of improvements related to parks and landscape in the city.
179 Downtown Berkeley Property and Improvement District Fund established to account for the revenue assessed from the Downtown Berkeley's business district to be used for expenses related for cleaning, repairing and advertising improvement for the district in order to general aggressive sales benefit as a long term goal.
Street and Open Space Improvement Fund Fund established to account for the SOSIP impact fee assessed to be used for the comprehensive design of significant positive alternations and additions to Downtown's parks, plazas, and streetscape.
Measure GG Fire Preparation Tax Fund established to account for fire and disaster tax passed in Bond Measure GG in 2009. The monies collected are for emergency responses.
1st Response Advanced Life Support (ALSFR) Fund established to account for fund to set up a minimum requirements, conduct and competency in the operation of ALSFR services.
Street Lighting Fund established to receive special assessment district monies used for maintenance and or servicing of existing and future public lighting facilities, and the installation or construction of public lighting for the maintenance of servicing thereof, including grading, clearing, removal of debris, the installation of curbs and gutters, walls, sidewalks or paving or water, irrigation, drainage or electrical facilities.
Solano Avenue Bid Fund established to account for the revenue assessed from the Solano Avenue's business district to be used for expenses related for cleaning, repairing and advertising improvement for the district in order to general aggressive sales benefit as a long term goal.
Underground District Fund established to account for Fire District Underground property assessments.
Telegraph Business Improvement District Fund established to receive special real property assessments monies, which is used to improve the commercial business district of Telegraph area. The management district provides maintenance, revitalization and marketing services above and beyond those provided by the City of Berkeley.
North Shattuck Business Improvement District Fund established for the purpose of collecting and accounting for bid revenues.
Business Economic Development Fund established to receive monies from a federal grant (Economic Development Administration) for the purpose of providing loans to eligible South Berkeley establishments under a program approved by the City Council.
Citywide RLF (Revolving Loan Fund) Fund established to account for Citywide Commercial revolving loan fund for revitalization of business enterprises and job stimulation.
180 Employee Computer Loan Fund established to account for interest free loans made to employees to purchase computers, and for the repayment of those loans.
Miles Lab Fund established to provide job training for Berkeley residents.
Employee Training Fund established to provide training to city employees
UC Settlement Fund established to account for agreed upon expenses to be shared between City of Berkeley and University of California, Berkeley.
Private Party Sidewalks Fund established to account for reimbursements from private parties, which were previously passed through Landscape Assessment District Fund, now a parks tax, and all sidewalk funding is to be removed from this fund.
Public Art Fund established to set aside funds for the development of visual art in public places, including art developed in conjunction with city construction projects.
Lillie B. Wall Memorial Fund established to provide day nursing care to needy children in the City of Berkeley
Vital and Health Statistics Fund established to account for monies held in trust for vital and health statistic program.
East Bay Public Utilities Commission Fund initiated to oversee expenses involved in the construction of certain public improvements in Assessment District No. 1960-1 in the City of Berkeley.
PERS Savings Fund Fund established to account for monies saving due to different rates applied.
Other Special Deposits Fund established to receive monies left in trust with the City of Berkeley for specific purposes from various sources.
Health State Aid Realignment Fund established to receive monies (Assembly Bill 1491) from vehicle license fees and state sales tax to support public health activities within the City's health jurisdiction. This fund provides for the ongoing fiscal relief measure in response to the local funding dilemma created by Proposition 13. These funds replace the Assembly Bill 8 allocations normally received by the city for providing Public Health Services.
Tobacco Control Fund established to receive State monies from special tax on cigarettes to provide public health education and outreach on tobacco use prevention and cessation.
181 Mental Health State Aid Realignment Fund established to receive monies from State sales tax for the purpose of providing mental health services to the citizens of Berkeley and Albany.
City Opt. Public Safety Trust Fund established to receive monies from State as a result of Assembly Bill 3229 for the purpose of purchasing radio equipment for the Communications Center of the new public safety building.
Fund for Impounded and Unneutered Fund established to account for monies held in trust for impounded and unneutered animals.
Alameda County Abandoned Vehicle Abatement Authority Fund established to provide an interest bearing abandoned and inoperative vehicle fund in accordance with requirements mandated by the California Vehicle Code, section 22710.
182 CAPITAL PROJECT FUNDS
Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities ( other than those financed by proprietary funds and trust funds).
Measure FF Branch Renovation Fund established to account for the receipt and expenditure of the proceeds from the General Obligation bonds approved by over two thirds of the voters on November 4, 2008, to finance renovations, construction, seismic and access improvements, and expansion of program area at four neighborhood libraries in the City.
Public, Education & Government Access Facilities Fund established to account for monies received from the Cable Television Franchise. These monies are to be used for capital expenditure for PEG studios, video production equipment, mobile production van(s), internal wiring connections, and related capital items.
Measure G: Fire Seismic Projects Fund established to account for fire seismic projects.
Measure M: Street and watershed improvements Fund established to account for street and watershed improvements
Measure G: Public Safety Building Fund established to account for the retrofit of public safety building.
Street Improvement Fund Fund established by Resolution 26,971 to receive shared County Gas Tax revenues from the City of Berkeley and County of Alameda for use on specific street improvement projects. Contract is for five years, fiscal year 1988-89 through fiscal year 1992-93.
97 General Obligation Bonds Measure S Fund established to account for capital improvements in Berkeley's Main Library, Civil Center, and downtown Berkeley area.
Park Acquisition Development Monies provided by an annual tax levy of $.20 for each $100 of assessed valuation. This levy ended after FY 1979-80. A minimum of 75% of the revenues are used for the acquisition and development of real property which are used for recreation and open space purposes determined by the Recreation and Parks Commission and Planning Commission. The balance of the Fund (up to 25%) may be used for the renovation of existing City park properties and for associated administrative expenses.
Animal Shelter Land/Bldg Fund established to receive monies for acquisition of facilities for animal shelter.
2010 COP Animal Shelter Fund established to account for 2010 municipal bond measure solely for the purpose of building a new animal shelter.
183 Income Housing Fund - West Berkeley Improvement Project Fund established to account for non cash portion transferred from former West Berkeley Low and Moderate Housing Fund due to AB 1X 26.
Income Housing Fund - Savo Island Project Fund established to account for non cash portion transferred from former Savo Island Low and Moderate Housing Fund due to AB 1X 26.
184 DEBT SERVICE FUNDS
Funds established to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.
Sale Lease Financing Fund established to receive monies and to make interest and debt service payments for the 96 Refunding Lease Revenue Bonds (BJPFA).
09 Measure FF - Library Fund established to account for a bond measure FF in 2009- the library's retrofitting projects, part of the monies received are for furniture and fixture.
GO 2015 Refunding bonds for 2007 Refunding Bonds' portion Fund established to receive monies and to make interest and principal payment on the Berkeley 2015 General obligation refunding bonds replacing 2007 General obligation refunding bonds, which replaced the old Measure S series A, B, C.
Berkeley Repertory Theatre Fund established to receive monies and to make interest and principal payment on the Berkeley Joint Powers Financing Authority Lease Revenue Bonds, Series 1999. The proceeds of the bonds are used to acquire a new theater facility with a park to be constructed by the Berkeley Repertory Theatre or other public facilities.
GO 2015 Refunding bonds for 2002 Refunding Bonds' portion Fund established to receive monies and to make interest and principal payment on the Berkeley 2015 General Obligation refunding bonds replacing 2002 General Obligation bonds, which replaced the old Measure G series A and B.
GO 2015 Refunding bonds for 2007 Refunding Bonds Proceeds' portion Fund established to receive Proceeds on the Berkeley 2015 General Obligation refunding bonds replacing 2007 General Obligation Refunding bonds, which replaced the old Measure G series C.
GO 2015 Refunding bonds for 2008 Animal Shelter - Measure l's portion Fund established to receive monies and to make interest and principal payment on the Berkeley 2015 General Obligation bonds replacing 2008 General Obligation bonds, which replaced 2002 General Obligation bond for the animal shelter.
2010 COP Animal Shelter Fund established to receive funds to finance a portion of the acquisition and construction of an animal shelter
GO 2014 Measure M Street and Watershed Improvement Fund established to receive monies to make interest and principal payment on the Berkeley 2014 General Obligation bonds for improvements to street, with integrated watershed improvements.
185 8,094 1,830 6,264 62,039 53,945 g945 62!039 62,039 Animal Shelter (continued) $ $ $ -- 723,000 723,000 723,000 723,000 723,000 Fields Gilman Reserve $ $ $ 2,913 2,913 323,799 320,885 323,799 320,885 323,799 Field Sport Gilman $ $ $ 69,900 178,619 178!619 178,619 178,619 108,718 Housing Agency Finance $ Ca. $ $ 803 803 217!533 216,730 216,730 217,533 217,533 Fund Funds Raising Activities $ $ $ Revenue 85495 25,495 60,000 41,876 Asst. 108 Loan 828,602 7!288,411 7,202,916 7,202,916 7,288!411 6,417,933 Se_ecial Sec Hud Grant $ $ $ 10!074 10,074 10,074 10,074 10,074 Fund Workforce Community $ $ $ 1658 1,658 4,338 2,§80 2,680 4!338 4,338 Act Workforce Investment $ $ $ ___ 6 64 64 64 588 582 for 12,606 537!833 537,182 537,182 537,833 525,163 Tax Special Disabled $ $ $ 406 316,703 447,233 316,703 130,530 130,124 447!233 447,233 Asset Forfeiture $ $ $ for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments allowance deferred resale June of and of (deficits) fund for balances and Fund CITY funds (net revenue Liabilities assets Combining Deferred and held and revenue fund cash assessments Inflows payable investments held Nonmajor salaries applicable): receivable liabilities, other balances liabilities Total Total and Total Total to Interest Total Accounts Subventions/grants Other Property Notes Special Taxes where Fund Deferred Unavailable Deposits Due Unearned Other Liabilities Liabilities Accrued Accounts Receivables Restricted Cash Assets 186 9,667 21,637 172 21,637 13,690 125,748 102,390 147~384 147,384 147,384 State Proe (continued) $ $ $ 68,802 92,881 161,683 033,257 2 5,033,257 4,871,574 4,871,574 5 5,033,257 Came Playground $ $ $ 1,532 7074 5,543 576,186 1z763,439 1,756,364 1z763,439 1,756,364 1,187,253 Condo Pro!;!ram Conversion $ $ $ 743,633 743,633 187,873 743!633 743,633 555,760 Housing Program lnclusionary $ $ $ 97,279 97,279 97,279 97,279 97,279 Care Child Funds Affordable $ $ $ Revenue 1,860,000 1,860,000 1,860,000 1,860,000 1,860,000 S_eecial Housing Mitigation Affordable $ $ $ 698 698 23,858 23,159 23,159 23!858 23,858 Stat Vi DomVio Prevention $ $ $ 696,079 696,079 696!079 696!079 696,079 R-0-W Tieback Mitigation $ $ $ ------0 0 0 Calif. Energy Commission $ $ $ 159 159 159 3,010 96,184 93,175 31,566 204,595 204,595 300!938 300!938 269,214 District Paramedic Assessment $ $ $ for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments deferred allowance resale June of and of (deficits) fund for balances and Fund CITY funds (net revenue Liabilities assets Combining Deferred and held and revenue fund cash assessments Inflows payable investments held Nonmajor salaries liabilities, applicable): receivable other balances liabilities Total Total and Total Total to Interest Total Accounts Property Notes Special Subventions/grants Other Taxes where Fund Deferred Unavailable Due Unearned Other Deposits Liabilities Liabilities Accrued Accounts Receivables Cash Restricted Assets 187 BB 85,409 49,413 35,996 44,951 191,306 191,306 276?15 276,715 231,763 Bike& (continued) Pedestrian Measure $ $ $ BB St 4,936 18,803 13,867 419,936 Roads 3,031,790 3,012,987 3!031,790 3,012,987 2,611,854 Local & Measure $ $ $ F 724 6,870 7,593 VRF 93,447 Road 825,140 825,140 832z733 832,733 739,286 & Co. Measure ST Ala $ $ $ B 686 450 236 42,527 94,521 136,361 136,361 137,047 137,047 Measure Paratransit $ $ $ B 32,394 32,394 56,148 524,731 524,731 557,126 557,126 500,977 Funds Bike& Pedestrian Measure $ $ $ Revenue B 5,482 St 5,482 _§_,482 82,542 11,848 70,694 455,102 Se_ecial Roads 1,716,290 1,628,266 1,628,266 1?16,290 1,255,706 Local & Measure $ $ $ --- 4,241 4,241 4,241 4!241 4,241 CA Foundation Endownment $ $ $ 1,061 4,535 37,627 36,566 883,835 883,835 535,88__§___ 535,885 582,455 870,357 1,457,347 1,457,347 Rental Housing $ $ $ Safetl.!:.!:£9.ram 1,664 37,759 19,337 45,207 195,322 195,322 437,317 380,221 344,386 108,155 {133,226} 6,832,916 6,200,278 6,333,504 6!832!916 6,333,504 CDBG $ $ $ 69,993 69,993 84,471 41,994 69,993 126,465 3,862,580 3,666,121 3,666,121 3!862!580 3,792,587 State &Tax Transport $ $ $ for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments deferred allowance resale June of and of (deficits) fund for balances and Fund CITY funds (net revenue Liabilities assets Combining Deferred and held and revenue fund cash assessments Inflows investments payable held Nonmajor liabilities, salaries applicable): receivable other balances liabilities Total Total Total Total to Total Interest Accounts Property Notes Special Subventions/grants Other where Taxes Deferred Unavailable Fund Deposits Unearned Other Due Liabilities Accrued Liabilities Accounts Restricted Receivables Cash and Assets 188 Fund District (continuted) Underground $ $ $ __ Ave. 45,546 25,660 31,568 57,228 45,546 45,546 {11,682} {11,682} Bid __ Solano $ $ 19,990 19,990 45,706 21,725 23,981 17,583 19,789 1,827,528 1,761,832 1,761,832 1,790,156 Street Li9htin9 $ $~7.~$ $ 12,061 12,061 987,831 987,831 999!892 999,892 999,892 Support Response Advanced st __ Life $ 1 $ _$ 343 343 534 1 GG 17,507 48,464 175 158,028 Prep. 3,262,009 3,086,132 3,086,132 3,262,009 3,213,545 Tax Funds Fire Measure $ __ $ _$ Revenue Open 500,783 500,783 & 500,783 500,783 500,783 Seecial Fund Space $ Street $ $ 572 1 6,564 96,008 Prop. 102,573 102,573 102,573 102 District Downtown Improvement Improvement Berk. $ $ $ & 943 943 1 1 4,172 4,172 3,860 Tax 319,037 581,582 075 262,545 129,953 075 1 1 5 4,490,189 5 4,490,189 4,942,131 Park $ $ $ 758 1 1,276 64 63,482 Time 699,719 699,719 764,477 764!477 764,477 Funding One Non-Grant $ $ $ 171 979 BB 1 2,850 2,679 42,940 317,129 317,129 319!979 319 277,039 Paratransit Measure $ $ $ for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments deferred resale allowance June of and of (deficits) fund for and balances Fund CITY funds revenue (net Liabilities assets Combining Deferred and held and revenue fund cash assessments Inflows investments payable held Nonmajor salaries liabilities, applicable): receivable other balances liabilities Total Total and Total Total to Interest Total Accounts Property Other Notes Special Subventions/grants Taxes where Fund Deferred Unavailable Deposits Due Unearned Other Liabilities Liabilities Accrued Accounts Cash Receivables Restricted Assets 189 9,987 9,987 143,511 13~524 143!511 143,511 Art _ Fund Public (continued) $ $ $ -- 807 57,922 13,867 13,867 57,922 158,45_§_ 158,455 133,524 230!243 230,243 171,514 Party Private Sidewalks $ $ $ 769 20,000 12,567 20,000 20,000 20,000 20,000 57,922 394 382,202 {394,768} UC (394,768} Settlement $ $ 11,720 41,112 29,393 380,791 380,791 421,903 421,903 421,903 Fund Training Employee $ $ $ 217,264 217,264 217,264 217,264 217,264 Lab Miles Funds $ $ $ Revenue 31!059 31,059 31,059 31!059 31,059 Seecial Loan Employee Computer $ $ $ 795,699 795,699 795,699 795!699 492,222 303,478 RLF Citywide $ $ $ 27 27 689,258 689,258 689,285 689!285 219,462 469,823 Business Economic Develoement $ $ $ 2,178 6,005 6,005 2,178 2,178 {3,827} {3,827} No.Shatek Improvement $ $ $ 60 8,374 8,374 131,002 131,002 139!376 139,376 139,316 District District Business Business Telegraph Improvement $ $ $ for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments allowance deferred resale June of and of (deficits) fund for and balances Fund CITY funds (net revenue Liabilities assets Combining Deferred and held and revenue fund cash assessments Inflows investments payable held Nonmajor salaries receivable applicable): liabilities, other balances liabilities Total Total and Total Total to Interest Accounts Total Property Notes Special Subventions/grants Other where Taxes Fund Deferred Unavailable Due Deposits Unearned Other Liabilities Liabilities Accrued Accounts Receivables Restricted Cash Assets 190 2,300 2,300 2,300 2~300 2,300 for Fund Unneutered (continued) Impounded & $ $ $ 1,390 3,940 2,550 Opt. 487,742 487,742 491,682 491,682 491,682 Public Safet:t City $ $ $ 7,603 Aid Health 108,557 100,954 100,212 52071,320 5,0712320 4,962,763 4,962,763 4,971,108 State Reali9nment Mental $ $ $ 6,335 2,910 3,425 67,499 61,164 61,164 67,499 67,499 Control Tobacco $ $ $ 19 Aid 35655 35,636 26,653 584,883 584,883 620,539 6202539 593,886 Funds Health State $ $ $ ---- Revenue 76,396 76396 76,396 76,396 76,396 Other Seecial Special Deeosits $ $ $ ------Pers Fund 3,644,568 3,644,568 3,644,568 3,6442568 3,644,568 Savings $ $ $ ------32585 3,585 3,585 3,585 3,585 Bay Public Utilities East Commission $ $ $ 861 861 239,328 239,328 Health 240,190 240,190 240,190 Statistic Vital $ $ $ B. 10,117 10,117 102117 10,117 10,117 Wall Lillie Memorial $ $ $ for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments deferred allowance resale June of and of (deficits) fund for balances and Fund CITY funds (net revenue Liabilities Combining assets Deferred and held and fund revenue cash assessments Inflows payable investments held Nonmajor salaries liabilities, applicable): receivable other balances liabilities Total Total and Total Total to Interest Total Accounts Property Subventions/grants Other Notes Special Taxes where Fund Deferred Unavailable Other Due Deposits Unearned Liabilities Liabilities Accrued Accounts Receivables Restricted Cash Assets 191 {O (O} (O} S Bonds GO (continued) Measure 97 $ $ 234 234 82,865 82,631 82,631 82,865 82,865 Street Improvement $ $ $ G Safety 176,414 176,414 176,414 176,414 176,414 Bldg. Measure Public $ $ $ M 991,973 359,122 632,851 2,284,081 1,292,108 1,292,108 2,284,081 2,284,081 Watershed Measure Funds Improvement $ $ $ Project G 9,189 75,826 66,637 185,176 109,350 109,350 185,176 185,176 Capital Seismic Projects Measure Fire $ $ $ Fae. 46,687 46,687 52,926 1,422,703 1,376,016 1,422,703 1,369,777 Public Access Education/ $ $ $ 3ovt 36,154 36,154 1,930,221 1,894,067 1,376,016 1,894,067 1,930,221 1,930,221 $ $ Replacement Fund$ FF Renov 1,332,657 1,332,657 1,332,657 1,~32,657 1,332,657 Measure Branch $ $ $ 6,264 Funds 45,207 942,303 942,303 136,396 824,497 205,850 504,223 (543,504} 3,222,626 1,229,032 1,026,436 1,208,988 1,051,664 Total 65,179,722 61,014,795 61,558,299 65,179i722 14,297,080 47,866,709 Special $ $ Revenue $ 96 4,088 3,992 32,972 32,972 32,972 157,688 157,688 194,748 194,748 161,776 Ala.Cty. Abandoned $ $ $ Veh.Abate.Auth. for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments deferred allowance resale June of and of (deficits) fund for balances and Fund CITY funds (net revenue Liabilities assets Combining Deferred and held and fund cash assessments Inflows payable investments held Nonmajor salaries liabilities, applicable): receivable other balances liabilities Total Total and Total Total to Total Interest Accounts Property Subventions/grants Other Notes Special Taxes where Fund Deferred Unavailable Deposits Due Unearned revenue Other Liabilities Liabilities Accrued Accounts Receivables Restricted Cash Assets 192 10 10 10 773 773 {763} {763} Repertory Theatre (continued) Berk $ $ $ Bonds 2007 40,611 2015 2,416,107 2,416,107 2,416,107 2,416,107 2,375,496 GO Bonds Funds GO Refunding for $ $ $ Refunding Service Debt 20,055 FF 1,409,005 1,409,005 1,409,005 1,409,005 1,388,950 Measure Libra!)'. 09 $ $ $ 762 130,367 130,367 130,367 130,367 129,606 Bonds Pension Refunding $ $ $ (0) 40,000 56,076 335,509 335,509 Funds 152,637 303,511 368,545 782,329 713,313 399,789 9,508,927 9,508,927 1 2,311,470 7,627,301 11,147,947 11!147,947 Total Capital Project $ $ $ 582,967 582,967 582,967 582!967 441,140 141,827 Fund SAVO Income Housing $ $ $ 152,637 292,359 292,359 152,637 713,313 399,789 2,983,432 Fund 2,538,436 1,870,330 2,538,436 2,983,432 WBIP Income Housing Funds $ $ $ Project 40,000 40,000 40,000 COP 110,510 110,510 150,510 150,510 110,510 Caeital Animal Shelter 2010 $ $ $ 3,804 3,804 3,804 3,804 3,804 Shelter Animal Land/Bldg $ $ $ 9,968 9,968 3,150 3,150 3,150 9,968 13,118 13,118 Park Acquisition $ Development $ $ for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments deferred allowance resale June of and of (deficits) fund for balances and Fund CITY funds (net revenue Liabilities assets Combining Deferred and held and fund cash assessments Inflows payable investments held Nonmajor liabilities, salaries applicable): receivable other balances liabilities Total Total and Total Total to Total Interest Accounts Notes Property Special Subventions/grants Other Taxes where Fund Deferred Unavailable Deposits Unearned revenue Other Due Liabilities Accrued Liabilities Accounts Receivables Cash Restricted Assets 193 6,264 45,205 136,396 152,637 544,223 205,850 399,789 713,313 {544,267} 1,277,812 1,277,812 1,031,023 1,193,042 4,530,724 2,011,361 1,317,534 1,107,740 6,853,176 (concluded) 90,440,365 84,63_1_,829 85,176,095 16,608,551 90!440,365 Total 62,644,985 Funds Nonmajor Governmental $ $ {763} 4,587 4,587 108,546 Funds 6,853,176 7,150,975 14,108,110 14,108,873 14,112,697 14!112,697 Debt Total Service $ $ $ M 22,812 1,339,587 1,339,587 1,339,587 1!339,587 1,316,775 Measue Watershed lm_erovement $ $ $ 814 3 3,814 413,033 409,219 409,219 413!033 413,033 COP Animal Shelter 2010 Funds $ $ $ Service I 5,014 Bonds 2008 Debt 192,188 Shelter 6!636,574 6,636,574 6,636,574 2015 6!636,574 6,439,372 GO GO Measure for Animal $ Refunding $ $ 5,487 Bonds Bonds 2007 443,569 443,569 443,569 443,569 438,082 2015 GO Series A GO for $ $ $ Refunding Bonds 14,568 2002 1,324,446 1,324,446 2015 1,324!446 1,324!446 1,309,878 GO Bonds GO Refunding Refunding for $ $ $ Refunding for for for resources Restricted Committed Nonspendable Unassigned of Funds Sheet (deficits) (deficits) Resources inflows of 2016 (Deficits) treasury BERKELEY 30, Balance in balances Balances wages Inflows Resources OF Governmental investments allowance deferred resale June of and of (deficits) fund for and balances Fund CITY funds (net revenue Liabilities Combining assets Deferred and held and revenue fund cash assessments Inflows investments payable held Nonmajor salaries applicable): receivable liabilities, other balances liabilities Total Total and Total Total to Interest Accounts Total Notes Property Special Subventions/grants Other Taxes where Fund Deferred Unavailable Deposits Due Unearned Other Liabilities Liabilities Accounts Accrued Receivables Restricted Cash Assets 194 12,704 53,945 41,241 41,241 70,124 56,584 70,124 54,781 111,365 Shelter Animal (continued) $ $ 45,000 45,000 45,000 45,000 678,000 723,000 Fields Reserve $ $ 15,000 183,648 137,237 320,885 137,237 192,443 192,443 329,680 314,680 Field Sport Gilman Gilman $ $ 50,334 50,334 50,334 178,619 678,619 550,334 500,000 (500,000) (500,000) Housing Agenc}' Finance $ CA $ 4,021 19,582 19,582 28,624 24,604 48,206 48,206 197,149 216,730 Fund Raising Activities $ $ Funds 240 53,531 53,531 28,000 Asst. 108 Loan Revenue 129,483 157,723 211,254 211,254 7,202,916 7,149,385 SEC HUD ecial Grant $ $ S 8,555 1,519 1,519 1,519 1,519 10,074 Fund Workforce Community $ $ 2,680 5,003 (2,323) 47,668 47,668 42,665 42,665 (42,665) Act Workforce Investment $ $ 3,392 26,567 for 26,567 15,255 537,182 510,614 1,091,190 1,075,935 1,117,757 1,114,365 Tax Special Disabled $ $ 31,036 31,036 316,703 285,668 100,391 100,391 131,426 131,426 Asset Forfeiture $ $ (Deficits) expenditures Balances agent (under) 2015 2016 (uses) housing housing issued issued Fund over 30, 30, escrow bonds 2016 in and and donations bond sources bonds Funds 30, Revenues, June June bond (uses): and of revenues charges refunded June balances of Changes refunding on streets financing streets refunding fiscal sources (deficns), (deficns), development development permits refunded service of fund and income welfare development royalties penalties on repayment ended to out in in and and and for Statement Issuance government Capital Asset and other expenditures contributions Governmental revenues and safety outlay: and value of BERKELEY and of Premium year service: balances financing balances Total Total OF Total change Cost Principal Interest the Call Sale Premium Payment Face Community Highway Culture-recreation Community Economic Public Highway Health General Miscellaneous Investment Private Franchise Rents Fines Intergovernmental Transfers Transfers Charges License Taxes Capital Debt Current Fund Fund Net Other Excess(deficiency) Expenditures: Revenues: CITY Combining NonMajor Expenditures, For 195 Prop 21,637 216,978 833,999 833,999 (195,341) 172 (195,341) 1,029,340 1,029,340 (continued) State $ $ 770 3,938) 7,080 (3,938) 106,367 890,004 568,863 207,695 (629,642) (625,704) 5,501,216 Came 4,871,574 1,515,708 1,514,938 Playground $ $ 80,449 80,449 142,059 222,508 222,508 1,756,364 1,614,305 Condo Program $ $ Connversation 568,408 175,226 142,059 743,633 175,226 175,226 175,226 Housing Program $ $ lnclusionary 3,457 3,457 97,279 28,161 69,119 69,119 Funds 72,576 72,576 Care Child $ Affordable $ Revenue 1,860,000 1,860,000 1,860,000 Special 1,860,000 1,860,000 Housing Mmgation Affordable $ 3,013 3,013 Stat 23,159 20,146 24,845 24,845 27,858 27,858 Vi DomVio $ $ Prevention 696,079 696,079 R-0-W Tieback Mitigation $ $ 0 300,000 300,000 300,000 300,000 (300,000) Energy California $ Commission $ 15,255 (10,406) (10,712) 204,595 215,000 352,197 362,909 (362,603) 3,122,470 District 3,107,215 2,759,867 2,759,867 Paramedic $ Assessment $ (Deficits) expenditures Balances agent (under) 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds 2016 in and and donations bond bonds sources 30, Funds Revenues, June June bond (uses): and of revenues charges refunded June balances Changes of refunding on streets streets financing fiscal refunding sources (deficits), (deficits), development development permits service of and fund income welfare development royalties penalties on ended repayment to refunded out in in and and and for Statement Issuance government and Capital Asset other expenditures contributions Governmental revenues and safety outlay: and value of BERKELEY and of Premium year service: balances financing balances Total Total OF Total change Cost Principal Interest the Sale Call Premium Payment Face Community Highway Culture-recreation Community Economic Highway Health Public General Investment Private Miscellaneous Franchise Fines Rents Intergovernmental Charges License Taxes Transfers Transfers Capital Debt Current Fund Net Fund Other Excess(deficiency) Expenditures: Revenues: Expenditures, NonMajor For CITY Combining 196 BB 416 2,395 56,210 191,306 135,096 135,096 156,919 154,524 292,015 291,599 Bike& (continued) Pedestrian $ Measure $ BB St. 2,395 4,300 520,084 235,524 233,129 3,012,987 2,492,903 2,492,903 2,728,427 2,724,127 Local &Roads $ Measure $ F VRF 5,090 2,194 Road 825,140 & 751,105 516,337 746,015 514,143 Co. (234,768) (234,768) 1,059,908 Measure ST $ Ala $ 294 (38,891) (38,891) 175,252 136,361 309,644 309,644 270,753 270,459 $ Measures Paratransit B 1,158 42,779 42,779 42,884 524,731 481,952 315,469 272,586 358,248 357,090 Bike& Funds $ Pedestrian Measure $ B 415 Revenue St. 2,349 76,452 339,034 339,034 1,289,232 1,628,266 2,558,067 2,481,615 2,897,101 2,894,337 Local &Roads Measure Special $ $ 4,241 4,241 CA $ Foundation $ Endownment 68,609 50,609 591,768 883,835 292,067 292,067 936,290 Program 1,004,899 1,296,966 1,246,356 Rental Housing $ $ Safety 356,947 356,947 589,225 5,843,331 6,200,278 CDBG 2,134,267 2,134,267 1,901,989 $ $ 415 400 9,297 295,184 (178,550) (178,550) State &Tax 3,666,121 3,844,671 2,772,587 2,477,404 2,594,038 2,491,214 2,583,925 Transport $ $ (Deficits) expenditures Balances agent (under) 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds in 2016 and and donations bond 30, Funds sources bonds Revenues, June June bond (uses): and of revenues charges refunded June balances Changes of refunding on streets streets financing fiscal refunding sources (deficits), (deficits), development development permits refunded service of and fund income welfare royalties development penalties on ended repayment to out in in and and and Statement for Issuance government and Capital Asset other expenditures contributions Governmental revenues and safety outlay: and value of BERKELEY and of Premium year service: balances balances OF Total Total Total change Cost Principal Interest the Sale Call Premium Payment Face Community Highway Culture-recreation Community Economic Public Health Highway General Investment Private Miscellaneous Franchise Fines Rents Intergovernmental Charges License Transfers Transfers Taxes Capital Debt Current Fund Fund Net Otherfinancing Excess(deficiency) Expenditures: Revenues: Expenditures, For NonMajor CITY Combining 197 0 0 Fund District (continued) $ $ Underground Ave. 30,237 66,708 66,708 24,789 Bid (11,682) (41,919) 24,789 (41,919) $ $ Solano 0 3,370 6,732 (12,120) 502,409 717,662 514,529 215,253 118,783 Street 1,761,832 1,044,170 1,215,731 1,096,948 1,430,984 Lighting 1,420,882 $ $ (59,000) (59,000) 987,831 346,419 346,419 287,419 287,419 Support 1,046,831 Response Advanced Life $ 1st $ 200 46,376 Prep. 137,487 268,755 (124,539) (124,539) Tax 3,086,132 3,210,671 4,602,314 4,196,073 4,477,775 4,431,198 Funds Fire $ MeasureGG $ Revenue 500,783 200,000 300,783 300,783 300,783 300,783 Space Streets &Open $ Seecial lmerovement $ 175 7,522 95,051 95,051 102,573 Prop. 914,846 914,846 1,009,897 1,009,722 District Downtown Improvement Berk. $ & $ 9,043 Tax 11,009 10,751 39,921 (61,483) (72,492) 146,972 446,833 1,896,470 4,490,189 2,593,719 1,957,953 10,254,337 10,107,365 12,212,290 Park 11,705,742 $ $ 6,272 42,922 Time 63,535 149,500 656,797 699,719 149,500 273,860 111,646 155,942 167,282 103,747 (106,578) Funding One $ Non-Grant $ BB 470 58,141 20,035 20,035 317,129 258,988 258,988 279,023 278,553 $ Paratransit Measure $ (Deficits) expenditures Balances agent (under) 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds 2016 in and and donations bond sources bonds Funds 30, Revenues, June June bond (uses): and of revenues charges refunded balances of Changes refunding on streets financing streets refunding fiscal (deficits), sources (deficits), development development refunded permits service of fund and income welfare royalties development penalties on repayment to out in ended June in and and and statement for Issuance government Capital Asset and other expenditures contributions Governmental revenues and safety outlay: and value of BERKELEY and of Premium year service: balances financing balances Total Total OF Total change Interest Cost Principal the Call Sale Payment Premium Face Community Highway Economic Community Culture-recreation Health General Public Highway Private Miscellaneous Investment Transfers Rents Franchise Fines Intergovernmental Transfers Charges License Taxes Capital Debt Current Fund Fund Net Other Excess(deficiency) Expenditures: Revenues: Expenditures, For CITY Combining NonMajor 198 995 995 71,503 71,503 87,652 87,652 Art (15,154) (86,657) 148,678 133,524 Public $ (continued) $ 158,455 308,025 Party 295,194 145,624 295,194 145,624 (149,570) Private $ Sidewalks $ (97,368) UC 848,700 297,400 297,400 (394,768) (297,401) (149,570) 1,146,101 1,146,101 (1,146,101) Settlement $ $1,146,101 (81,090) (81,090) 380,791 461,881 581,090 581,090 500,000 500,000 Training $ Employee $ 9,800 9,800 8,845 Funds 74,045 74,045 83,845 75,000 Lab 143,219 217,264 Miles $ $ Revenue Fund 31,059 31,059 Seecial $ Computer Employee $ Loan 5,622 64,023 64,023 58,401 64,023 795,699 RLF 731,677 Citywide $ $ (2,488) (2,488) 13,607 13,607 11,119 11,119 689,258 691,745 $ Economic $ Develo~ment (590) (590) (3,827) (3,237) Shatek 164,653 164,653 164,063 164,063 District Business Business $ No. $ 8,374 206,684 455,674 455,674 257,364 (198,310) 257,364 (198,310) District $ Business Telegraph $ Improvement Improvement (Deficits) expenditures Balances agent (under} 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds 2016 in and and donations bond bonds sources Funds 30, Revenues, June June bond (uses): and of revenues charges refunded June balances of Changes Asset refunding on streets streets financing refunding fiscal (deficits), sources (deficits), development development refunded permits service of fund and income welfare development royalties penalties on to ended repayment out in in and and and for Statement Issuance government and Capital other expenditures contributions Governmental revenues and safety outlay: and of value BERKELEY and of Premium year service: balances financing balances Total OF Total Total change Interest Cost Principal the Sale Call Premium Payment Face Community Highway Economic Community Culture-recreation Public Health Highway General Miscellaneous Investment Private Rents Franchise Fines Charges Intergovernmental Transfers License Transfers Taxes Capital Debt Current Fund Fund Net Other Excess(deficiency} Expenditures: Revenues: Expenditures, For NonMajor CITY Combining 199 (1,391) (1,391) Cty. 159,079 157,688 124,171 124,171 122,780 122,780 Ala. (continued) Abandoned $ $ Veh.Abate.Auth. 680 680 680 for 680 1,620 2,300 Fund Unneutered $ $ Impounded & 1,054 66,040 66,040 Opt. 339,237 148,505 487,742 148,505 214,545 213,491 Public Safety $ $ City Aid Health 462,960 462,960 4,962,763 4,499,803 2,052,989 2,052,989 2,515,949 2,515,949 State $ Realignment $ Mental 143 2,389 2,389 61,164 58,775 Funds 147,754 147,754 150,143 150,000 Control Tobacco $ $ Revenue Aid 584,883 195,998 931,433 847,004 931,433 (651,006 Health 1,953,018 Sepcial 1,778,437 1,778,437 (2,604,024) State $ $ 149,355 149,355 149,355 Pers Fund 3,495,213 388,885 Savings $3,644,568 $ 9 9 9 9 3,585 3,576 Bay Utility Public East $ Health 14,368 16,249 14,368 16,249 30,617 30,617 239,328 224,961 Statistic $ Vital 594 594 594 594 B. 9,523 10,117 Wall Lillie Memorial $ $ $ $ (Deficits) expenditures Balances agent (under) 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds in 2016 and and donations bond 30, bonds Revenues, Funds sources June June bond (uses): and of revenues charges refunded June balances Changes of refunding on streets streets financing fiscal refunding sources development (deficits), (deficits), development permits refunded service and of fund income welfare royalties penalties ended on repayment out in to in and and Statement for and Issuance government and Capital Asset other expenditures contributions Governmental revenues and safety outlay: and BERKELEY of value and of Premium year service: financing balances balances OF Total Total Total change Cost Principal Interest the Sale Call Payment Premium Face Community Highway Economic development Culture-recreation Communijy Public Highway Health General Miscellaneous Investment Private License Franchise Fines Rents Intergovernmental Charges Taxes Transfers Transfers Capital Debt Current Net Fund Fund Other Excess(deficiency) Expenditures: Revenues: Expenditures, For NonMajor CITY Combining 200 25 116 116 9,968 8,397 1,571 1,571 1,687 1,662 Park $ (continued) $ Acquisition Development (0) 21 21 21 8,196 (8,217) (8,196) (8,217) Bonds 97GO Measure$ $ $ (22) (22) 234 234 212 212 82,631 82,653 Street $ $ Improvement 488 488 24,675 24,675 Safety (24,187) (24,187) 176,414 200,601 Bldg. MeasureG $ Public $ M Funds (50,716) (50,716) 1,292,108 9,511,526 9,511,526 (9,562,242) (9,511,526) 10,854,349 Watershed Measure Improvement $ Project $ 540 540 Capital 109,350 309,271 200,461 200,461 Seismic (199,921) (199,921) Project MeasureG $ Fire $ ac. F 46,687 46,687 161,418 161,418 208,105 208,105 1,376,016 1,214,598 Public Access Education/ $ $ Govt 168,035 168,035 (168,035) 1,894,067 1,894,067 2,062,102 2,062,102 $ Replacement Fund$ 910 910 2,500 2,500 3,410 3,410 FF Renov 1,332,657 1,331,747 $ Branch Measure Funds 11,009 55,880 179,817 528,000 312,426 (600,906) 182,211 807,670 8,234,709 3,248,482 8,824,607 1,703,380 4,630,162 8,845,477 8,210,757 3,550,593 1,710,012 1,324,557 Total 5,907,244 (3,849,388) 61,014,792 52,780,083 41,186,200 11,828,003 50,010,807 16,402,726 25,018,092 Special $ $ Revenue (Deficits) expenditures Balances agent (under) 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds 2016 in and and donations bond sources bonds 30, Revenues, Funds June June bond (uses): and of revenues charges refunded balances of Changes refunding on streets financing streets refunding fiscal (deficits), sources (deficits), development development permns service of fund and income welfare development royalties penalties on repayment to refunded out ended June in in and and and Statement for Issuance government Capital Asset and other expendnures contributions Governmental revenues and safety outlay: and value of BERKELEY and of Premium year service: balances financing balances Total Total OF Total change Cost Interest Principal the Sale Call Payment Premium Face Communny Highway Economic Culture-recreation Community General Public Health Highway Miscellaneous Investment Private Franchise Fines Rents Intergovernmental Transfers Transfers Charges License Taxes Capital Debt Current Fund Fund Net Other Excess(deficiency) Expenditures: Revenues: Expenditures, NonMajor For Combining CITY 201 13 Bonds 2002 45,505 2015 512,214 909,413 242,420 287,925 (529,615) GO 1,324,446 1,854,061 Bonds 4,533,758 1,197,338 1,197,325 (1,439,028) (6,485,000) GO Refunding (continued) tor $ $ Refunding 4 6 10 IT63) (397) (366) 500,645 500,645 501,021 262,325 238,696 (501,011) Berk. Theatre Repertory $ $ 9 Fund Bonds 8,217 2007 247,542 (541,600) 2,985,946 2,416,107 GO 1,159,773 2,786,313 2,712,470 Bonds 2,712,460 (1,729,612) 24,662,458 Service G02015 (28,645,000) Refunding for $ $ Refunding Debt FF 09 (234,573) (569,839) (234,573) 1,409,005 1,643,578 1,615,018 1,552,696 1,075,018 1,305,154 1,380,445 Libra!}'. 1,380,445 Measure $ $ 748 748 (1,971) 43,468 132,338 130,367 335,750 335,750 338,468 295,000 540,000 (337,721) Bonds Pension Refunding $ $ 4,069 2,500 8,775 1,662 Funds (58,933) 225,136 218,542 214,838 208,105 9,508,927 2,003,169 2,062,102 9,958,302 Total 9,511,759 (7,736,591) 19,739,760) 17,245,518 Capital $ $ Project 582,967 582,967 Fund SAVO Income $ $ Funds 4,069 4,069 4,069 4,069 Project 2,538,436 2,538,436 Fund WBIP Income Housing Housing $ $ Caeital COP 110,510 110,510 Shelter Animal 2010 $ $ 10 10 10 10 3,804 3,794 Shelter Animal Land/Bldg $ $ (Deficits) expenditures Balances agent (under) 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds in 2016 and and donations bond 30, bonds Funds Revenues, sources June June bond (uses): and of revenues charges refunded June balances Changes of Asset refunding on streets streets financing fiscal refunding sources (deficits), (deficits), development development permits refunded service and of fund income welfare royalties development penalties on ended repayment to out in in and and Statement and for Issuance government and Capital other expenditures Governmental contributions revenues and safety outlay: and BERKELEY of value and of Premium year service: financing balances balances OF Total Total Total change Interest Cost Principal the Sale Call Premium Payment Face Community Highway Economic Culture-recreation Community Public Highway Health General Miscellaneous Investment Private Franchise License Rents Fines Intergovernmental Charges Transfers Transfers Taxes Capital Debt Current Net Fund Fund Other Excess(deficiency) Expenditures: Revenues: CITY Combining Expenditures, NonMajor For 202 11,009 55,880 145,283) 225,136 368,167 362,156 182,211 208,105 809,332 (604,600) 4,354,093 4,399,377 4,144,029 6,557,259 2,160,325 1,703,380 4,634,230 4,581,550 8,845,477 3,550,593 1,924,850 1,324,563 5,907,244 (3,908,321) 80,277,736 84,631,829 36,680,000 Total 57,546,727 17,722,516 11,830,503 57,501,444 16,402,726 32,249,227 (38,480,000) Funds Nonmajor (concluded) Governmental $ $ 6 Funds 40,955 869,870 368,167 (604,600) 3,855,975 2,986,105 1,246,675 4,144,029 6,402,225 1,632,325 4,401,733 Total 7,272,095 Debt 7,231,134 10,252,135 14,108,110 36,680,000 (38,480,000) $ $ Service 958,443 381,144 898,825 381,144 265,000 633,825 1,339,587 1,279,969 1,279,969 Fund MeasueM Watershed Improvement $ $ Services 41 41 (1,878) Debt 409,219 411,097 402,063 303,983 100,000 403,983 402,063 (403,941) Animal Shelter 2010COP $ $ I Bonds 2008 57,979 Shelter 40,153 524,691 170,000 668,971 652,581 440,992 352,089 311,936 (316,882) GO 6,111,882 6,636,574 6,428,764 5,776,183 G02015 Measure for $ $ Animal Refunding (14) A Bonds Bonds 17,141 (63,000) 192,921 443,569 135,319 118,178 213,667 348,985 2015 348,999 1,742,380 1,707,601 (1,298,811) (1,512,478) (3,350,000) Series GO forG02007 $ $ Refunding Refunding (Deficits) expenditures Balances agent (under) 2016 2015 (uses) housing housing issued issued Fund over 30, 30, escrow bonds 2016 in and and donations bond 30, Funds Revenues, bonds sources June June bond (uses): and of revenues charges refunded balances Changes of Asset refunding on streets streets financing fiscal refunding sources (deficits), development (deficits), development permits refunded service and of fund income welfare royalties development penalties ended June on repayment out in to in and and Statement for and government Issuance and Capital other Governmental expenditures contributions revenues and safety and outlay: BERKELEY of value and of year Premium service: financing balances balances OF Total Total Total change the Interest Cost Principal Sale Payment Call Community Premium Highway Face Highway Health Economic Culture-recreation Communtty General Public Investment Private Miscellaneous Franchise Rents Intergovernmental Charges License Fines Taxes Transfers Transfers Capital Debt Current Fund Fund Net Other Excess(deficiency) Expenditures: Revenues: Expenditures, For NonMajor CITY Combining 203 (348) (2,013) (1,665) (1,665) (1,665) (1,665) $ Variance Pos/(Neg) (Continued) $ Act 2,680 5,003 (2,323) 47,668 47,668 42,665 42,665 (42,665) Investment Actual $ $ Workforce 4,693 6,668 (1,975) 47,668 47,668 41,000 41,000 (41,000) Final Budget $ $ (1,154) 34,883 (1,154) 10,750 24,133 24,133 25,287 21,895 3,392.48 Variance Pos/(Neg) $ $ Tax 3,392 24,133 24,133 15,255 500,442 524,575 1,091,191 1,075,936 1,115,324 1,111,932 Funds Disabled Actual $ $ Revenue Special Special 14,101 489,692 489,692 1,090,037 1,075,936 1,090,037 1,090,037 Final Budget $ $ 76,426 76,426 457,537 231,431 226,106 226,106 149,679 149,679 Variance Pos/(Neg) $ $ 31,035 31,035 285,669 316,704 100,392 100,392 131,426 131,426 Forfeiture Actual $ Asset $ 54,238 55,000 55,000 250,071 250,071 (195,071) (140,833) (195,071) Final Budget $ $ in Basis) Changes expenditures and (Budget 2015 2016 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, donations and and of of Expenditures Charges inflows as as (uses): and revenues June of balances Fiscal Budget loan - repayment streets financing sources loan and (deficits) (deficits) of permits fund development service Ended welfare Revenues, development royalties of in out penalties in and Governmental for government and of other expenditures contributions revenues and safety BERKELEY and and Year (deficiency) Principal Interest Balance service: financing balances balances OF Total Total Total Change Repayment Issuance the Transfers Transfers Economic Health Culture-recreation Community Public Highway General Miscellaneous Franchise Private Rents Charges License Fines Intergovernmental Interest Taxes Debt Current: Fund Net Fund Excess Fund Other Expenditures: Revenues: Nonmajor For Schedule CITY
204 12,833 12,833 12,833 512,833 512,833 500,000 500,000 Variance $ Posl(Neg) $ (Continued) Agency 12,500 96,218 50,333 62,833 62,833 108,718 500,000 500,000 500,000 550,333 Housing (487,500) Actual $ $ ======CA Finance 96,218 50,333 50,000 50,000 Final 500,000 550,333 (500,333) (500,333) Budget $(404,115) $ 12,469 84,476 72,006 48,206 48,206 171,191 303,872 132,682 132,682 Variance Posl(Neg) $ $ Activities 4,021 Funds 19,582 19,582 24,604 28,624 48,206 48,206 197,149 216,731 Actual $ Raising $ Revenue Fund 25,958 Special 16,490 96,610 (87,142) 113,100 (113,100) (113,100) Final Budget $ $ 1,760 (9,033) 43,209 (28,000) 377,205 386,238 343,029 343,029 184,388 184,388 (114,940) (141,180) Variance Posl(Neg) $ $ Asst. GTY 240 38,107 56,000 743,109 325,304 417,805 379,698 Loan 379,698 143,359 199,599 237,705 237,705 Actual $ HUD $ ======108 Sec 2,000 (5,102) 31,567 36,669 28,419 58,419 36,669 28,000 53,317 53,317 334,337 365,904 Final Budget $ $ in Basis) Changes expenditures and (Budget 2016 2015 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, donations and and of of Expenditures inflows as as (uses): and revenues June of balances Fiscal Charges Budget loan - repayment streets financing sources and loan (deficits) (deficits) of permits fund development service Ended welfare Revenues, development royalties of in out penalties and Governmental for government and of other expenditures contributions revenues and safety BERKELEY and and Year (deficiency) Principal Interest Balance service: financing balances balances OF Total Total Total Change in Repayment Issuance the Transfers Transfers Economic Culture-recreation Community Public Health Highway General Miscellaneous Private Fines Rents Franchise Interest License Intergovernmental Charges Taxes Debt Current: Net Fund Fund Fund Excess Other Expenditures: Revenues: Nonmajor For CITY Schedule
205 66,212 76,636 76,636 65,052 11,584 11,584 65,052 142,849 Variance Pos/(Neg) (Continued) $ $ Fund 60,210 73,749 70,124 56,584 56,584 70,124 (13,540) (13,540) Shelter Actual $ $ ======Animal 7,537 45,000 45,000 (82,639) (90,176) (90,176) 135,176 135,176 Final Budget $ $ ======90,000 45,000 45,000 45,000 45,000 45,000 Variance Pos/(Neg) $ $ ======Funds 45,000 Fields 45,000 Account 45,000 45,000 678,000 723,000 Actual Revenue $ $ Gilman Reserve Special 633,000 633,000 Final Budget $ $ 63 63 92,731 94,514 15,000 202,307 109,577 109,577 109,514 Variance Pos/(Neg) $ $ Oper) 15,000 320,885 137,237 183,648 137,237 192,443 192,443 329,680 314,680 (Vendor Actual $ ======$ Field Sport 27,660 90,918 27,660 118,578 192,506 192,506 220,166 220,166 Final Budget $ $ in Basis) Changes expenditures and (Budget 2015 2016 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, donations and and of of Expenditures Charges inflows as as (uses): and revenues June of balances Fiscal Budget loan - repayment streets financing sources loan and (deficits) (deficits) of permits fund service development Ended welfare Revenues, development royalties out of in penalties in and Governmental for government and of other expenditures contributions revenues and safety BERKELEY and Year Interest Principal Balance service: financing balances balances OF Total Total Total Change Repayment Issuance the Transfers Transfers Highway Health Economic Culture-recreation Community Public General Miscellaneous Private Franchise Rents and Interest License Fines Intergovernmental Charges Taxes Debt Current: Net Fund Fund Fund Excess (deficiency) Other Expenditures: Revenues: CITY Nonmajor For Schedule
206 4,214 5,618 4,736 4,736 (1,405) (1,405) (6,141) (6,141) Variance Pos/(Neg) (Continued) $ $ Stat 3,014 3,014 23,161 20,146 24,845 24,845 Prev-Vi 27,859 27,859 Actual $ $ Via Dom 4,419 4,419 14,528 18,947 29,581 29,581 34,000 34,000 Final Budget $ $ 300,000 3,000,000 2,700,000 Variance Pos/(Neg) $ $ 0 Funds Commission 300,000 300,000 300,000 300,000 (300,000) Actual $ $ Revenue Energy Calif. Special Final (3,000,000) (3,000,000) Budget $ $ (1,154) 87,261 73,027 17,466 73,027 18,620 55,561 55,561 160,289 Variance Pos/(Neg) $ $ District 15,255 (16,105) (10,712) 173,030 189,134 352,197 362,909 (368,302) 3,122,470 Actual 3,107,215 2,754,168 2,754,168 Assessment $ $ 12,741 Paramedic 14,101 (89,132) (10,712) 101,873 352,197 362,909 (441,329) Final 3,139,936 3,125,835 2,698,607 2,698,607 Budget $ $ in Basis) Changes expenditures and (Budget 2016 2015 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, donations and and of of Expenditures Charges inflows as as (uses): and revenues June balances Fiscal of Budget loan - repayment streets financing sources loan and (deficits) (deficits) of permits fund service development Ended welfare Revenues, development royalties of in out penalties in and Governmental for government and of other contributions expenditures revenues and safety BERKELEY and (deficiency) Year Principal Interest Balance service: financing balances balances OF Total Total Total Change Repayment Issuance the Transfers Transfers Economic Public Highway Health Culture-recreation Community General Miscellaneous Franchise Private Rents and Interest License Fines Intergovernmental Taxes Charges Debt Current: Fund Net Fund Fund Other Excess Expenditures: Revenues: Nonmajor For Schedule CITY
207 (832) (832) 25,676 25,676 26,508 26,508 1,314,253 1,288,577 Variance Pos/(Neg) (Continued) $ $ Program 80,448 576,186 656,634 222,508 222,508 (434,126) (434,126) 1,180,179 1,614,305 Actual $ $ Conversion Condo 79,616 325,727 576,186 655,802 196,000 (134,075) (459,802) (459,802) Final Budget $ $ (0) (0) (3,000) 169,226 172,226 172,226 172,226 Variance Pos/(Neg) $ $ Program Funds (12,647) (12,647) 568,408 555,761 187,873 187,873 175,226 175,226 172,226 196,000 Housing Actual Revenue $ $ Special lnclusionary 3,000 3,000 386,535 571,408 187,873 187,873 (184,873) Final (184,873) Budget $ $ (0) (0) 48,873 60,724 60,724 60,725 60,725 (11,851) $ Variance $ Pos/(Neg) Care 3,457 3,457 28,161 97,279 69,118 69,118 72,576 72,576 Child Actual $ Affordable $ 8,394 3,457 8,394 3,457 40,012 48,406 11,851 11,851 Final Budget $ $ in Basis) Changes expenditures and (Budget 2015 2016 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, and donations and of of Expenditures Charges inflows as as (uses): and June revenues of balances Fiscal Budget loan - repayment streets financing sources loan and (deficits) (deficits) of permits service development fund Ended welfare Revenues, development royalties out of penalties in in and Governmental for government and of other contributions expenditures revenues and safety BERKELEY and and Year (deficiency) Principal Interest Balance service: financing balances balances OF Total Total Total Change Issuance the Repayment Transfers Transfers Economic Community Public Highway Health Culture-recreation General Rents Private Miscellaneous Franchise Fines Intergovernmental Interest Taxes Charges License Debt Current: Fund Net Fund Fund Excess Other Expenditures: Revenues: For Nonmajor Schedule CITY
208 415 9,297 24,694 34,115 49,125 (34,144) 968,467 3,525,923 2,498,647 1,027,276 1,027,276 1,002,583 Variance Pos/(Neg) (Continued) $ $ Fund Tax 400 415 & 9,297 295,184 (178,550) (178,550) 3,666,121 3,844,671 2,477,404 2,772,587 2,594,038 2,583,925 Actual Transport $ $ State 34,544 140,198 329,299 1,346,024 3,445,871 3,775,170 2,569,344 2,534,800 (1,205,826) (1,205,826) Final Budget $ $ 4,950 452,076 839,654 387,578 387,578 566,076 571,026 (183,448) (183,448) Variance Pos/(Neg) $ Funds $ Safety Public Revenue 155,813 747,779 747,779 (125,748) (281,561) (281,561) 172 Actual 1,029,340 1,029,340 $ $ Special State-Prop 4,950 931,227 931,227 (965,402) (669,139) (296,263) (669,139) Final 1,595,416 1,600,366 Budget $ $ 3,386 3,386 7,080 36,474 33,088 (52,637) 260,721 260,721 110,863 (227,633) (292,938) 1,086,055 Variance Pos/{Neg) $1,122,529 $ Camp 770 7,080 (8,052) (4,114) (3,938) 894,118 110,481 207,695 568,863 (668,570) (660,518) 4,888,427 5,556,997 1,554,636 1,553,866 Actual $ $ Playground 770 (7,500) (3,938) (11,438) 260,332 458,000 403,419 (705,044) (693,606) 3,765,898 4,470,942 1,815,357 1,814,587 1,121,751 Final Budget $ $ in Basis) Changes expenditures and (Budget 2016 2015 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, donations and and of of Expenditures Charges inflows as as (uses): and revenues June Fiscal of balances Budget loan - repayment streets financing sources and loan (deficits) (deficits) of permits service development fund Ended welfare Revenues, development royalties of in out penalties in and Governmental for government and of other contributions expenditures revenues and safety BERKELEY and Year (deficiency) Principal Interest Balance service: financing balances balances OF Total Total Total Change Repayment Issuance the Transfers Transfers Economic Health Culture-recreation Community Public Highway General Miscellaneous Rents and Franchise Private Fines Interest License Intergovernmental Taxes Charges Debt Current: Fund Fund Net Fund Excess Other Expenditures: Revenues: Nonmajor For Schedule CITY
209 415 2,349 16,984 41,169 43,933 (15,053) (15,053) (75,971) (58,987) 117,196 102,143 Variance Pos/(Neg) $ $ (Continued) 415 B 2,349 Roads 76,452 841,718 331,447 331,447 & 1,173,165 2,481,615 2,558,067 2,889,513 2,886,749 St. Actual Measure $ $ Local 93,436 346,500 724,522 346,500 Final Budget 2,499,080 2,405,644 2,845,580 2,845,580 $1,071,022 (702) 25,609 (21,451) 328,150 349,601 349,601 129,666 128,964 220,637 195,027 $ Variance Pos/(Neg) $ $ Safety Funds 68,609 50,609 832,730 590,536 242,194 242,194 976,959 1,045,568 1,287,762 1,237,152 Actual Housing $ $ Revenue Rental Special 67,907 25,000 504,580 611,987 (107,407) (107,407) 1,106,625 1,174,532 1,067,125 1,042,125 Final Budget $ $ 41 56,133 56,133 833,617 833,576 468,307 587,224 (237,305) (118,917) 1,120,752 1,358,057 1,301,924 Variance Pos/(Neg) $ ======$ 931,358 114,133 114,133 817,225 589,224 (435,653) 2,274,861 2,274,861 3,092,086 2,502,862 (1,367,011) CDBG Actual $ ======$ 41 2,000 58,000 58,000 (426,699) (484,699) 3,108,478 3,108,437 2,623,779 (1,556,405) 2,621,779 (1,129,706) Final Budget $ ======$ in Basis) Changes expenditures and (Budget 2016 2015 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, donations and and of of Expenditures Charges inflows as as (uses): and revenues June Fiscal of balances Budget loan - repayment streets financing sources and loan (deficits) (deficits) of permits fund service development Ended welfare Revenues, development royalties out of in penalties in and Governmental for government and of other expenditures contributions revenues and safety BERKELEY and Year (deficiency) Interest Principal Balance service: financing balances balances OF Total Total Total Change Repayment Issuance the Transfers Transfers Economic Community Public Health Culture-recreation Highway General Miscellaneous Rents and Franchise Private Fines Interest Intergovernmental Charges License Taxes Debt Current: Fund Fund Net Excess Fund Other Expenditures: Revenues: Nonmajor For Schedule CITY
210 294 53,329 38,861 (2,233) {2,527) (14,469) (14,469) (12,236) (12,236) Variance Pos/(Neg) $ (Continued) $ B 294 93,835 (36,481) (36,481) 130,315 309,644 309,644 273,163 272,869 Actual $ Measure Paratransit $ 54,974 76,986 (22,012) (22,012) 297,408 297,408 275,396 Final 275,396 Budget $ $ 5,662 1,158 4,504 22,957 235,628 746,765 511,136 511,136 505,474 482,517 Variance $ Pos/(Neg) ======$ B 1,158 68,053 68,053 42,884 494,259 426,205 Pedestrian 289,793 246,909 357,846 356,688 Actual & $ ======$ Measure Bike 65,841 190,577 795,267 729,426 352,184 (252,506) 352,184 (443,083) (443,083) Final Budget $ ======$ in Basis) Changes expenditures and (Budget 2016 2015 30, 30, (outflows) Actual 2016 housing over(under) June June Funds 30, donations and and of of Expenditures Charges inflows as as (uses): and revenues June balances of Fiscal Budget loan - repayment streets financing sources loan and (deficits) (deficits) of permits fund service development Ended welfare Revenues, development royalties of in out penalties in and Governmental for government and of other expenditures contributions revenues and safety BERKELEY and and Year Principal Interest Balance service: financing balances balances OF Total Total Total Change Repayment Issuance the Transfers Transfers Public Highway Health Economic Culture-recreation Community General Miscellaneous Franchise Private Rents Interest License Fines Intergovernmental Taxes Charges Debt Current: Fund Net Fund Excess (deficiency) Fund Other Expenditures: Revenues: Nonmajor For Schedule CITY
211 416 1,584 1,168 14,968 195,295 180,327 162,485 160,901 160,901 Variance Pos/(Neg) (continued) $ $ BB 416 14,968 195,295 180,327 180,327 107,979 107,979 288,306 287,890 Pedestrians Actual & $ $ Measure Bike 17,842 268,880 268,880 286,722 286,722 Final Budget $ $ 4,300 7,222 (2,395) 11,522 138,488 375,714 387,236 378,109 2,597,167 2,458,680 Variance Pos/(Neg) $ $ Rd Funds BB 2,395 4,300 138,488 231,408 229,013 Street 2,597,167 2,458,680 2,458,680 Actual 2,690,088 2,685,788 $ $ Measure Local Special Revenue 607,122 607,122 Final 2,071,444 2,678,566 2,678,566 Budget $ $ (2,590) 34,921 38,890 36,696 610,711 575,790 536,900 575,790 539,490 Variance Pos/(Neg) $ $ VRF Co. 5,090 2,194 2,194 Ala 731,693 842,224 837,134 513,431 (328,793) 511,237 (328,793) F 1,060,486 Actual $ ======$ Measure 2,500 120,982 474,541 (904,583) 474,541 (904,583) 1,025,565 1,379,124 1,376,624 Final Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing over(under) June June and BERKELEY and of of Charges sources Ended OF as as Expenditures (uses): Governmental and donations revenues Budget Year balances of Fiscal - CITY loan repayment financing the sources and {deficits) (deficits) loan permits fund development of service welfare development royalties in out penalties Revenues, Nonmajor of in and streets For for government and other expenditures contributions revenues Balance and of safety and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Issuance Transfers Transfers Economic Health Highway Culture-recreation Community Public General Miscellaneous Private Franchise Rents Fines Interest License Intergovernmental Taxes Charges Debt Current: Fund Net Fund Other Excess Expenditures: Revenues: Schedule
212 3,400 7,543 (4,365) (9,217) (21,079) 605,172 181,092 443,433 3,861,802 1,358,906 2,502,896 2,489,884 1,884,712 1,889,077 Variance Pos/(Neg) (continued) $ $ ======------· ------····------· Tax 9,043 3,400 11,009 10,751 39,921 (72,492) (61,483) 146,972 443,433 4,377,425 1,843,213 2,534,212 1,904,696 Actual 10,274,440 10,127,468 12,179,136 11,672,588 Parks $ $ -·------···· --·····------1,500 19,968 61,000 (74,495) (74,495) 515,623 142,607 (659,683) (585,188) Final 1,175,306 Budget 12,159,152 12,016,545 11,573,964 11,491,496 $ $ ======------·······----- (1) 17,802 91,740 77,130 63,535 799,656 186,671 612,985 109,541 186,671 13,594.76 Variance Pos/(Neg) Funds $ $ ======------...... Grant Non 6,272 50,751 63,535 (45,683) 760,614 103,817 656,797 149,500 149,500 212,965 167,282 155,942 103,747 Actual $ ======$ ------...... Funding: Special Revenue Time 1 43,812 24,074 90,152 90,152 (39,042) (82,854) 149,500 149,500 322,506 155,941 142,491 (232,354) Final Budget $ $ ------470 4,848 4,378 258,707 274,188 195,965 200,813 195,965 Variance Pos/(Neg) $ ======$ ...... ------BB 470 15,482 15,482 20,035 20,035 274,188 258,707 258,707 278,742 278,272 Actual $ Paratransit $ ------...... Measure ·---- .. 57,894 216,000 216,000 273,894 273,894 Final Budget $ $ ======------·----·- in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing over(under) June June and BERKELEY donations and of of Charges sources Ended OF as Expenditures as Governmental (uses): and revenues Budget Year Fiscal of balances - CITY loan repayment streets financing the sources and (deficits) (deficits) permits loan of development fund service welfare development royalties out in penalties Nonmajor Revenues, of In and For for government and other expenditures contributions revenues Balance of and safety and and Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Issuance Transfers Transfers Economic Community Health Culture-recreation Public Highway General Miscellaneous Fines Rents Franchise Private Interest Charges License Intergovernmental Taxes Debt Current: Fund Net Fund Excess (deficiency) Other Expenditures: Revenues: Schedule
213 9,346 67,965 67,102 21,588 46,376 238,770 404,644 (165,874) (232,990) (300,955) (377,404) (continued) Variance Pos/(Neg) $ $ Tax Prep. 200 Fire 46,376 137,487 268,755 (134,982) (134,982) 3,038,011 3,172,993 Actual 4,602,314 4,467,332 4,196,073 4,420,756 GG $ $ Measure 30,892 30,892 278,101 204,589 Final 2,799,241 2,768,349 4,301,359 3,818,669 4,332,251 4,332,251 Budget $ $ 11,518 334,519 134,519 134,519 134,519 134,519 Variance Pos/(Neg) Dis $ $ Funds 500,783 200,000 300,783 300,783 300,783 300,783 Revenue Prop&lmprov Actual $ $ Berk Special Dwtn 166,264 166,264 166,264 166,264 166,264 Final Budget $ $ 175 57,906 11,518 46,388 46,388 35,534 35,534 10,855 10,680 Variance Pos/(Neg) Dis $ $ 0 175 96,008 96,009 96,008 914,846 914,846 1,010,855 1,010,680 Prop&lmprov Actual $ $ Berk Dwtn 38,103 49,620 49,620 (11,517) 950,380 950,380 Final 1,000,000 1,000,000 Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing over(under) June June and BERKELEY donations and of of Charges Ended sources OF Expenditures Governmental as (uses): as and revenues Budget Year Fiscal of balances - CITY loan repayment the streets financing sources and (deficits) (deficits) permits loan service development fund of welfare development royalties in out penalties Revenues, Nonmajor of In and For for government and other contributions expenditures revenues Balance of and safety and Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Issuance Transfers Transfers Economic Community Public Highway Health Culture-recreation General Miscellaneous Fines Rents and Franchise Private Interest License Intergovernmental Charges Taxes Debt Current: Fund Fund Net Excess (deficiency) Other Expenditures: Revenues: Schedule
214 3,370 6,732 (1,054) 68,160 58,058 596,041 752,216 684,057 685,110 1,721,515 1,125,473 (continued) Variance Pos/(Neg) $ $ 6,732 3,370 (12,120) 707,269 514,529 502,409 204,860 118,784 1,744,450 1,037,180 1,215,731 Lighting 1,420,592 1,096,948 1,410,490 Actual Street $ $ 22,935 (12,120) 441,139 502,409 514,529 117,730 373,257 (418,204) (920,613) 2,273,045 1,782,058 1,352,432 1,352,432 Final Budget Funds $ $ Revenue 11,617 33,205 11,617 21,588 21,588 299,036 404,644 Special 1,345,867 Variance Pos/(Neg) $ $ Supp Life (58,999) (58,999) 987,832 346,418 346,418 287,419 287,419 1,046,831 Adv Actual $ Response 1st 358,035 358,035 (358,035) (358,035) (358,035) Final Budget $ in Basis) Changes expenditures 2016 (Budget Funds 30, 2016 2015 30, 30, (uses) Actual June housing over(under) June June and BERKELEY donations and of of Charges Ended sources OF Expenditures and as Governmental as (uses): and revenues Budget Year balances Fiscal of - CITY loan repayment the financing sources and (deficits) (deficits) permits loan development fund service of welfare development royalties out in penalties Nonmajor Revenues, of in and streets For for government and other expenditures contributions revenues Balance of and safety and and Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Issuance Transfers Economic Transfers Culture-recreation Community Public Highway Health General Miscellaneous Private Franchise License Rents Fines Intergovernmental Interest Charges Taxes Debt Current: Net Fund Fund Other Excess (deficiency) Expenditures: Revenues: Schedule
215 (6,665) (6,665) (6,665) (6,665) (156,004) (149,339) (continued) Variance Pos/(Neg) $ $ ------District (6,004) (3,237) (2,768) (2,768) Shatuck 164,653 164,653 161,885 Actual $ $ ------Improvement No. 3,897 3,897 Business 149,999 146,102 164,653 164,653 168,550 168,550 161,885 Final Budget $ $ ------(0) (0) 2,039 2,039 2,039 2,039 26,519 24,480 Variance Pos/(Neg) $ $ ------Funds District Business 8,315 198,949 455,674 455,674 265,039 265,039 (190,635) (190,635) Actual $ Revenue $ ------Telegraph Improvement Special (18,205) 174,469 455,674 455,674 263,000 263,000 (192,674) (192,674) Final Budget $ $ ------·------(470) 5,780 5,780 (4,902) (4,431) (4,431) (10,211) (10,211) Variance $ Pos/(Neg) $ Bid 13,978 30,237 41,048 41,048 24,789 24,789 (16,259) (16,259) Avenue Actual $ $ Solano 18,880 30,708 46,828 46,828 35,000 35,000 (11,828) (11,828) Final Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing over(under) June June and BERKELEY donations and of of Charges Ended sources OF Expenditures Governmental as (uses): as and revenues Budget Year of balances Fiscal - CITY loan repayment streets the financing sources and (deficits) (deficits) permits loan development service fund of welfare development royalties out in penalties Revenues, Nonmajor of In and For for government and other expenditures contributions revenues Balance of and safety and and Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Issuance Transfers Transfers Economic Culture-recreation Community General Public Highway Health Miscellaneous Fines Rents Franchise Private Interest License Intergovernmental Taxes Charges Debt Current: Net Fund Fund Excess (deficiency) Other Expenditures: Revenues: Schedule
216 5,621 5,621 5,621 60,249 80,700 54,628 54,628 140,949 (continued) Variance Pos/(Neg) $ $ ------RLF 5,621 5,621 5,621 60,249 54,628 54,628 303,477 243,228 Actual $ $ ------Citywide ---- 162,528 162,528 Final Budget Funds $ $ ------Revenue 14,661 52,043 11,120 11,120 (37,382) 150,075 161,195 150,075 (109,152) (109,152) Special Variance Pos/(Neg) $ $ ------(3,780) 37,068 40,848 40,848 14,900 14,900 Development 11,120 11,120 469,796 432,728 Actual $ $ ------Business --- Economic (14,975) 470,110 455,135 150,000 150,000 164,975 164,975 (164,975) Final ---- Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing over(under) June June and BERKELEY donations and of of Charges sources Ended OF as Expenditures as (uses): Governmental and revenues Budget Year balances Fiscal of - CITY loan repayment streets financing the sources and (deficits) (deficits) loan permits fund service development of welfare development royalties out in penalties Revenues, of Nonmajor in and For for government and other expenditures contributions revenues Balance and of safety and {deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Issuance Transfers Transfers Economic Community Public Highway Health Culture-recreation General Miscellaneous Fines Rents and Franchise Private Interest Taxes Charges License Intergovernmental Debt Current: Net Fund Fund Excess Other Expenditures: Revenues: Schedule
217 24 (116) (116) (192) 2,898 1,379 1,519 1,379 1,663 1,495 Variance Pos/(Neg) $ $ (Continued) 0 24 116 116 9,969 1,571 8,398 1,571 Development 1,687 1,663 Park Actual $ $ 192 192 192 192 Acquisition 7,071 6,879 Final Budget $ $ 13 13 13 13 (8,470) (8,457) Variance $ Pos/(Neg) $ Area 13 13 13 13 BDS 5,026 5,039 (D'town Actual $ $ 97G.O. Meas S 13,496 13,496 Final Budget $ $ 8 8 Funds 349 341 349 341 2,618 2,967 Project Variance Pos/(Neg) $ $ Capital 8 8 8 8 CivicCtr 3,170 3,178 S Actual $ $ 97G.0.BDS Measure 211 552 341 341 (341) (341) Final Budget $ $ 212 212 73,314 73,446 73,102 73,314 73,102 146,760 Variance Pos/(Neg) $ $ Fund (21) (21) 233 233 212 212 82,632 82,653 Street Actual $ $ Improvement 9,207 73,335 73,335 (64,128) (73,335) (73,335) Final Budget $ $ $ in Basis) expenditures Changes 2016 (Budget Funds and JO, 2015 2016 30, 30, (uses) Actual June housing housing over(under) June June and BERKELEY and and donations of of Charges sources Ended as as (uses): Expenditures Governmental OF and revenues Budget Year of Fiscal balances CITY loan repayment financing streets streets sources the and (deficits) (deficits) permits loan development of fund development service welfare development royalties out in penalties Nonmajor of in Revenues, and and For for government and other expenditures contributions revenues Balance· and safety of outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Issuance Repayment Transfers Transfers Highway Economic Community Culture-recreation Community Public Health Highway General Fines Franchise Miscellaneous Private Rents Interest License Charges Intergovernmental Taxes Debt Capital Current: Net Fund Fund Other Excess Expenditures: Revenues: Schedule 218 216,253 371,476 587,728 216,253 216,253 216,253 (Continued) Variance Pos/(Neg) $ $ FD (82,083) (82,083) 380,791 462,874 582,083 500,000 582,083 500,000 Training Actual $ $ Employee 91,398 798,335 798,335 500,000 500,000 (206,937) (298,335) (298,335) Final Budget $ $ 215 150,215 150,000 Funds Variance Pos/(Neg) $ $ Revenue Lab 9,800 9,800 8,845 74,045 83,845 75,000 217,264 143,219 Special Actual $ Miles $ -~74~·~04~5~ 9,800 8,845 8,845 67,049 84,800 75,000 (75,955) (75,955) 143,004 Final Budget $ $ 43,000 43,000 43,000 43,000 43,000 Variance Pos/(Neg) $ $ Fund Loan 31,059 31,059 Actual $ $ Employee Computer 31,059 31,059 43,000 43,000 43,000 43,000 (43,000) Final Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 2016 30, 2015 30, 30, (uses) Actual June housing housing over(under) June June and BERKELEY and donations and of of Charges sources Ended as as (uses): Expenditures OF Governmental and revenues Budget of Fiscal Year balances - CITY loan repayment streets financing streets sources the and (deficits) (deficits) permits loan development of development fund service welfare development royalties out in penalties Nonmajor of in Revenues, and and For for government and other expenditures revenues contributions Balance and safety of outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Transfers Issuance Repayment Highway Transfers Community Economic Culture-recreation Community Public Health Highway General Fines Franchise Private Miscellaneous Rents Interest License Intergovernmental Taxes Charges Capital Debt Current: Fund Net Fund Excess Other Expenditures: Revenues: Schedule 219 995 995 33,319 153,115 119,796 118,801 118,801 118,801 (conitnued) Variance Pos/(Neg) $ $ Art 72,498 87,652 72,498 87,652 (15,154) (87,652) 133,524 148,678 Actual $ Public $ 71,503 71,503 (19,591) 115,359 206,453 206,453 Final (134,950) (206,453) Budget $ $ 65,038 46,900 20,221 65,038 20,221 44,817 44,817 111,938 Variance Pos/(Neg) $ $ 157,647 308,025 295,195 Funds 295,195 144,817 144,817 (150,378) (150,378) Sidewalks Actual Private $ $ Party Revenue Special 45,709 261,125 315,416 315,416 100,000 100,000 (215,416) (215,416) Final Budget $ $ 909,479 605,188 304,290 605,188 502,907 502,907 102,282 102,282 Variance Pos/(Neg) $ $ I (97,3681 284,833 861,267 284,833 (382,202) (284,8341 1,146,101 1,146,101 (1,146,101) 11,146,101 Actual Settlement $ UC $ 256,079 787,740 787,740 (890,022) (401,658) Final 1,043,819 1,043,819 (1,291,680) (1,146,101) (1,146,101) Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2015 2016 30, 30, (uses) Actual June housing housing over(under) June June and BERKELEY donations and and of of Charges sources Ended as as Expenditures (uses): Governmental OF and revenues Budget Year Fiscal of balances - CITY loan repayment streets streets financing the sources and (deficits) (deficits) permits loan development service development of fund welfare development royalties out in penalties Nonmajor Revenues, of in and and For for government and other expenditures contributions Balance and safety of outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total revenues Change Fund Issuance Repayment Highway Transfers Community Transfers Public Health Highway Economic Culture-recreation Community General Private Miscellaneous License Fines Franchise Rents Interest Charges Intergovernmental Taxes Capital Debt Current: Fund Fund Net Excess Other Expenditures: Revenues: Schedule
220 28,973 28,973 350,396 595,580 245,184 216,212 245,184 216,212 (continued) Variance Pos/(Neg) $ $ Aid 558,230 196,533 361,697 847,539 931,433 931,433 (651,006) State 1,953,018 1,778,973 1,778,973 (2,604,024) Actual $ $ Health 11,301 (37,350) (48,651) 602,355 (651,006) 1,953,018 Final 1,147,645 1,147,645 1,750,000 1,750,000 (2,604,024) Budget $ $ Variance Pos/(Neg) $ $ Funds 149,355 149,355 149,355 Savings 3,644,568 3,495,213 Fund Actual Revenue $ $ Pers Special 149,355 149,355 149,355 Final 3,644,568 3,495,213 Budget $ $ 618 618 31,172 14,369 16,803 13,751 14,369 13,751 Variance Pos/(Neg) $ $ 14,369 16,249 14,369 16,249 30,618 30,618 239,329 224,960 Statistic Vital Actual $ $ Health 30,000 30,000 30,000 30,000 208,157 208,157 Final Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing housing over(under) June June and BERKELEY and donations and of of Charges sources Ended as as (uses): Expenditures Governmental OF and revenues Budget Year of Fiscal balances - CITY loan repayment streets financing streets the sources and (deficits) (deficits) permits loan development of fund development service welfare development royalties out in penalties Nonmajor of Revenues, in and and For for and other expenditures contributions revenues Balance and safety of outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Transfers Repayment Issuance Transfers Highway Community Culture-recreation Community Public Health Economic Highway General government Miscellaneous License Fines Private Rents Franchise Interest Intergovernmental Taxes Charges Capital Debt Current: Fund Net Fund Excess Other Expenditures: Revenues: Schedule 221 19,826 19,826 19,826 4,054,487 1,274,819 2,296,626 2,779,667 2,296,626 (continued) Variance Pos/(Neg) $ $ 462,960 462,960 Health 4,862,552 4,399,592 2,052,989 2,052,989 2,515,949 2,515,949 Realignment Actual Aid Mental $ $ State (20,081) 808,065 3,124,772 2,516,204 2,516,204 2,496,123 2,496,123 (2,296,626) (2,296,626) (2,316,707) Funds Final Budget $ $ Revenue 621 143 143 16,485 15,863 15,720 15,863 Special 15,720 Variance Pos/(Neg) $ $ 143 2,388 2,388 61,164 58,776 Control 147,755 147,755 150,143 150,000 Actual $ $ Tobacco 44,680 58,155 (13,475) (13,475) 163,475 150,000 163,475 150,000 Final Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing housing over(under) June June and BERKELEY donations and and of of Charges sources Ended as as Expenditures (uses): Governmental OF and revenues Budget Year of Fiscal balances - CITY loan repayment streets financing streets the sources and (deficits) (deficits) permits loan of development service development fund welfare development royalties out in penalties Nonmajor Revenues, of in and and For for government and other expenditures contributions revenues Balance and safety of outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Issuance Repayment Transfers Transfers Highway Culture-recreation Community Community Public Health Economic Highway General Rents Private Miscellaneous Fines Franchise License Interest Intergovernmental Taxes Charges Debt Capital Current: Net Fund Fund Other Excess Expenditures: Revenues: Schedule 222 17,261 69,023 51,762 38,982 51,762 38,982 12,780 12,780 (continued) Variance Pos/(Neg) $ $ Abatement City (1,391) (1,391) 159,078 157,687 124,171 124,171 122,780 122,780 Actual Vehicle Alameda $ $ Funds Abandoned 88,664 Revenue (53,153) (53,153) 141,817 163,153 163,153 110,000 110,000 Final Budget $ $ Special 1,054 35,183 35,183 319,527 149,728 169,799 149,728 114,545 113,491 Variance Pos/(Neg) $ $ 1,054 Safety Opt. 66,040 66,040 339,237 148,505 487,742 148,505 214,545 213,491 Actual City $ $ Public (1,223) (1,223) 169,438 168,215 101,223 101,223 100,000 100,000 Final Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2015 2016 30, 30, (uses) Actual June housing housing over(under') June June and BERKELEY donations and and of of Charges sources Ended as as Expenditures Governmental OF (uses): and revenues Budget Year of Fiscal balances - CITY loan repayment streets streets financing the sources and (deficits) (deficits) permits loan development service development of fund welfare development royalties out in penalties Nonmajor Revenues, of in and and For for government and other expenditures contributions revenues Balance and of safety outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Transfers Transfers Issuance Economic Highway Community Public Health Highway Community Culturewrecreation General Franchise Miscellaneous Private Rents Fines Interest License Intergovernmental Taxes Charges Debt Capital Current: Fund Net Fund Excess Other Expenditures: Revenues: Schedule
223 510,381 201,952 308,429 308,429 100,000 208,429 100,000 208,429 Variance Pos/(Neg) (Continued) $ $ Gov't 208,429 208,429 208,429 208,429 & 1,369,776 1,161,348 Actual PEG-Public, Educ. $ $ 859,396 959,396 100,000 100,000 (100,000) (100,000) Final Budget $ $ 13,204 13,204 13,204 13,204 13,204 201,952 Variance Pos/(Neg) $ $ funds 140,376 140,376 (140,376) 1,921,726 1,921,726 2,062,102 2,062,102 Project Fund$ Actual Replacement $ $ Capital 153,580 153,580 (153,580) 1,908,522 1,908,522 2,062,102 2,062,102 Final Budget $ $ 8,458 5,048 8,458 3,410 5,048 3,410 1,324,272 1,315,814 Variance Pos/(Neg) $ $ FF 910 910 2,500 2,500 3,410 3,410 Renov 1,332,657 1,331,747 Measure Actual $ Branch $ 2010 8,385 7,548 7,548 (7,548) (7,548) 15,933 Final Budget $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing housing over(under) June June and BERKELEY donations and and of of Charges sources Ended as as Expenditures Governmental (uses): OF and revenues Budget Year of Fiscal balances - CITY loan repayment streets streets financing the sources and (deficits) (deficits) permits loan development service development of fund welfare development royalties out in penalties Nonmajor Revenues, of in and and For for government and other expenditures contributions revenues Balance and of safety outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Transfers Issuance Highway Repayment Transfers Community Economic Public Highway Health Culture-recreation Community General Miscellaneous Private Franchise Rents Interest Taxes Charges License Fines Intergovernmental Capital Debt Current: Net Fund Fund Other Excess Expenditures: Revenues: Schedule
224 488 488 251,653 127,823 123,830 127,335 127,823 127,335 Variance Pos/(Neg) (Continued) $ $ Bldg. G 488 488 24,675 24,675 (24,187) (24,187) 176,413 200,600 Safety Actual Measure $ $ Public 76,770 (75,240) 152,010 152,010 (152,010) Final (152,010) Budget $ $ $ 483,050 533,767 533,767 533,767 2,870,338 2,387,288 Variance Pos/(Neg) $ $ Funds Imp. MGO (50,716) (50,716) 1,857,584 9,171,406 9,171,406 (9,222,122) Water (9,171,406) 11,079,706 Actual Project & Meas. $ $ St. Capital Final 8,692,418 9,705,172 9,705,172 (1,012,754) (9,705,172) Budget (9,705,172) $ $ $ 540 540 64,953 64,413 64,953 64,413 374,225 309,272 Variance Pos/(Neg) $ $ 540 540 G: Bond 174,728 309,272 135,083 135,083 (134,543) (134,543) Actual Seis. Measure $ $ Fire (1) 199,496 199,496 (199,497) (199,496) Final (199,496) Budget $ $ $ in Basis) Changes expenditures 2016 (Budget Funds and 30, 2016 2015 30, 30, (uses) Actual June housing housing over(under) June June and BERKELEY and donations and of of Charges sources Ended as as (uses): Expenditures Governmental OF and revenues Budget Year of Fiscal balances • CITY loan repayment streets financing streets the sources and (deficits) (deficits) permits loan development of fund service development welfare development royalties out in penalties Nonmajor of in Revenues, and and For for government and expenditures other revenues contributions Balance and safety of outlay: and and (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Repayment Issuance Transfers Highway Transfers Community Public Economic Health Highway Culture-recreation Community General Miscellaneous Private Franchise Rents Interest Fines Charges License Intergovernmental Taxes Capital Debt Current: Fund Net Fund Other Excess Expenditures: Revenues: Schedule 225 0 0 Variance Pos/(Neg) (Continued) $ $ Shelter) 110,511 110,511 (Animal Actual $ $ COP 2010 110,510 110,510 Final Budget Funds $ $ 8 18 10 10 10 10 Project Variance $ Pos/(Neg) Capital $ 10 10 10 10 3,793 3,803 Shelter Actual Land/Bldg $ $ Animal 3,785 3,785 Final Budget $ $ in Basis) 2016 Changes (Budget Funds 30, expenditures and Actual 2016 2015 June 30, 30, (uses) and BERKELEY housing housing over(under) Ended June June OF Governmental and donations and of of Expenditures Charges sources Budget as as (uses): Year and - CITY revenues balances Fiscal of the loan repayment streets streets financing sources Nonmajor and (deficits) (deficits) loan permits For development fund of service development welfare Revenues, development royalties out in Balance penalties of in and and for government and of other expenditures contributions revenues and safety outlay: and and (deficiency) Interest Principal service: financing balances Fund balances Total Total Total Change Repayment Issuance Transfers Transfers Community Highway Economic Health Public Highway Culture-recreation Community General Private Miscellaneous Franchise Rents Fines Interest Intergovernmental Taxes Charges License Capital Debt Current: Fund Fund Net Other Excess Expenditures: Revenues: Schedule
226 (377,930) (541,600) (595,601) (595,601) 2,219,165 (4,084,459) (2,569,327) (3,488,857) 23,372,539 25,591,704 Variance Pos/(Neg) $ $ (continued) 9 8,217 Bonds 541,600 (568,036) 2,943,533 2,375,497 2,786,313 1,552,696 2,714,272 2,714,263 2007 27,456,988 24,662,458 28,645,000 30,739,296 (28,025,024) Actual GO $ Refunding $ 724,368 1,174,766 3,309,864 3,309,864 26,075,673 27,250,439 (23,216,207) (23,940,575) (23,940,575) Final Budget $ $ (259) (259) (62,206) (284,722) (222,516) 1,382,453 1,382,712 1,382,712 (1,604,969) (1,604,969) Variance Pos/(Neg) $ $ Funds FF 540,000 (232,306) (232,306) 1,388,949 1,621,255 1,615,018 1,075,018 1,382,712 1,382,712 Actual Library Debt Service Debt Measure $ $ 09 (9,790) 540,000 1,683,461 1,673,671 1,604,969 1,604,969 Final 1,614,759 1,074,759 (1,614,759) Budget $ $ (84) (86) (86) 577 661 661 748 748 Variance Pos/(Neg) $ $ 748 748 Bonds (1,971) 43,468 132,338 130,367 335,750 335,750 338,468 295,000 (337,721) Actual Pension $ $ Refunding (2,632) 43,382 132,422 129,790 335,750 335,750 338,382 295,000 (338,382) Final Budget $ $ in Basis) Changes 2016 (Budget Funds expenditures and 30, 2015 2016 agent Actual June 30, 30, (uses) housing over(under) and BERKELEY June June escrow Ended donations and of of OF Expenditures Governmental sources charges as as (uses): bond and Budget revenues Year - Premium CITY of fiscal balances the repayment streets financing sources and bonds (deficits) (deficits) permits loan service development refunded fund welfare Nonmajor Revenues, development royalties out in For penalties of on in to and for government and of other expenditures revenues contributions and safety and and Redemption (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Balance Payment Premium Transfers Transfers Economic Issuance Community Public Highway Health Culture-recreation General Rents Miscellaneous Private Franchise License Fines Interest Charges Intergovernmental Taxes Debt Current: Fund Fund Net Excess Other Expenditures: Revenues: Schedule 227 97 91,668 91,668 (86,897) (178,662) (178,565) 1,697,597 3,448,208 1,750,611 Variance Pos/(Neg) $ $ (continued) A (14) Series 63,000 438,082 192,921 135,319 348,641 348,655 1,737,238 1,900,522 1,707,601 3,548,319 3,350,000 (1,299,156) (3,199,678) Bonds Actual G02007 $ $ $ Refunding 39,641 135,416 256,987 256,987 Final 3,171,338 3,306,754 Budget (3,010,126) (3,049,767) (3,049,767) $ $ (31,317) (899,170) (610,048) (641,365) (257,805) (257,805) 1,710,143 4,146,816 Variance Pos/(Neg) $5,856,959 $ Funds 13 Bonds 512,214 287,925 (521,423) 1,309,878 1,831,301 5,045,972 4,533,758 6,485,000 6,772,925 Actual 1,205,529 1,205,516 (5,567,396) G02002 $ $ Debt Service Debt Refunding 121,158 256,608 Final 6,131,560 5,874,952 1,463,321 1,463,321 (4,547,081) (4,668,239) (4,668,239) Budget $ $ 5 5 0 4 4 2,202 4,436 2,234 2,228 2,224 2,224 Variance Pos/(Neg) $ $ 5 4 4 (398) (764) (366) Repertory 500,650 501,021 500,645 262,325 238,696 (501,017) Actual Theatre $ $ Berkeley (2,600) (2,600) (5,200) 500,645 503,245 500,645 262,325 240,920 (503,245) Final Budget $ $ in Basis) Changes 2016 (Budget expenditures Funds and 30, 2015 2016 agent Actual June 30, 30, (uses) housing over(under) and BERKELEY June June escrow donations and Ended of of OF Expenditures Governmental sources charges as as (uses): bond and Budget revenues Year - Premium CITY of balances fiscal the repayment financing streets sources and bonds (deficits) (deficits) permits loan service development refunded fund welfare Nonmajor Revenues, development royalties out in For penalties on of in to and for government Balance and of other expenditures revenues contributions and safety and and Redemption (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Payment Premium Transfers Issuance Economic Transfers Community Public Highway Health Culture.recreation General Miscellaneous Franchise Private Rents Fines License Interest Charges Intergovernmental Taxes Debt Current: Fund Fund Net Excess Other Expenditures: Revenues: Schedule
228 (O) (0) 2,351,404 1,078,621 1,272,782 1~·=2~72~·~78~2~ 1,272,782 1,272,782 $ $ Pos/(Neg) Variance (concluded) ___ Imp. 373,957 942,817 265,000 633,825 898,825 1,316,775 1,272,782 1,272,782 Water Actual & MEASMGO $ $ St. $ ---~37~3~,9~5~7- 265,000 633,825 898,825 (898,825) (135,804) (898,825) Final Budget $(1,034,629) $ 7 7 7 14 41 41 (35) (35) $ $ Pos/(Neg) Variance ) 41 41 Funds (3,756) (1,878) (1,878) COP Shelter 402,063 402,063 303,983 100,000 403,983 (403,941) Actual Service 2010 $ $ (Animal Debt (1,885) (1,885) (3,770) 402,063 100,000 402,063 303,948 403,948 (403,948) Final Budget $ $ 5,734 5,734 477,527 (224,325) (224,325) (218,591) 6,727,854 6,250,327 I $ $ Pos/(Neg) Variance measure 40,153 520,227 652,581 170,000 668,970 498,970 351,539 311,386 (317,431) 6,631,560 6,111,333 6,428,764 5,776,183 Actual G02008 Shelter $ $ $ Animal 42,700 (96,294) 274,646 170,000 444,646 305,652 305,652 (138,994) (138,994) Final Budget $ $ in Basis) Changes 2016 (Budget expenditures Funds 30, 2016 2015 agent Actual June 30, 30, (uses) housing over(under) and BERKELEY June June escrow donations Ended and of of OF Expenditures and Governmental sources charges as as (uses): bond and revenues Budget Year Premium CITY of balances fiscal the repayment financing streets sources and bonds (deficits) (deficits) permits loan development refunded fund service welfare Nonmajor Revenues, development royalties in For penalties of on in to and for government Balance - and of other expenditures revenues contributions and and and Redemption (deficiency) Principal Interest service: financing balances balances Total Total Total Change Fund Premium Issuance Payment Transfers out Transfers Economic Community Public safety Public Health Highway Culture-recreation General Private Rents Miscellaneous Franchise Fines Interest License Intergovernmental Taxes Charges Debt Current: Fund Net Fund Excess Other Expenditures: Revenues: Schedule 229 INTERNAL SERVICE FUNDS
Internal service funds used to account for the financing of goods or services provided by one department to other departments of the City, on a cost reimbursement basis.
Equipment Maintenance and Replacement Fund derived from rental rates are used to maintain and replace equipments for the Corporation yard.
Building Maintenance Fund established to account for charges for service by the Public Works Building Maintenance Division for the maintenance of City buildings.
Supply Warehouse Fund Fund established for maintaining an inventory of office materials and supplies in the City's warehouse facility. Departmental budgets are charged for this service.
Computer Replacement Fund established to systematically modernize our Citywide PC infrastructure and safeguard the efficiency of our network operations, each department is required to contribute based on annual budget times a fraction, which is the number of existing PCs within the department to the whole city. One twelfth of the annual budgeted amount was charged each month.
Workers' Compensation Self-Insurance Fund established to pay for expenditures made solely for the purpose of paying workers' compensation insurance claims costs, legal fees attendant thereto, disability benefits, related medical benefits, payment of any settled disability claims or judgments, administrative costs and all matters relating thereto; which departmental budgets are charged.
Sick Leave & Vacation Payouts Fund established as the sick leave and vacation leave accrual fund for the purpose of accounting for payouts of unused and terminal sick and vacation benefits.
Public Liability Each fiscal year monies from the General Fund are deposited in this fund to restore the balance of at least $175,000. Expenditures from this fund are made solely for the purpose of paying public liability claims investigation and adjustment costs, legal defense costs, and payment of any settled public liability claim or adjustment. The General Fund reimburses expenditures for this fund.
Catastrophic Loss Fund established to protect the City from severe financial hardship and disruption of ongoing service occasioned by the award of public liability judgment in excess of $250,000.
230 I 30,169 39,643 70,586 211,172 367,483 383,728 870,401 197,339 307,908 311,302 498,301 467,055 153,449 (431,321) 1,276,658 3,271,042 1,136,993 6,714,674 1,360,474 4,132,222 1,360,474 11,709,165 12,140,486 11,511,593 43,166,018 49,880,693 27,421,000 Tota 16,281,929 16,281,929 61,506,041 16,179,325 45,224,112 28,820,752 $ $ ------70,829 70,829 70,829 767,871 429,498 Loss 1,126,540 1,126,540 1,197,369 1,197,369 $ Catastrophic $ ------544 1,047 6,631 1,047 1,047 14,809 23,705 22,219 60,733 22,255 20,178 68,386 64,720 64,720 576,514 547,628 721,329 632,222 1,892,870 1,891,823 Public 1,297,843 3,186,725 Liability 1,142,709 3,185,678 2,042,970 $ $ ------& 7,513 7,513 7,513 858,754 Leave 2,386,547 2,386,547 2,394,060 1,535,306 2,394,060 Payouts Vacation $ Sick $ ------963 6,021 1,345 4,779 6,021 6,021 35,870 58,216 45,807 57,418 53,817 40,571 49,191 147,105 156,763 156,763 1,326,442 3,500,000 3,547,657 (5,038,956) (5,044,976) 9,828,558 32,399,123 27,421,000 28,851,466 27,350,510 17,466,739 27,344,489 Workers' $ $ Compensation ------14,265 14,265 14,265 706,397 468,527 237,870 237,870 237,870 720,662 309,614 173,179 482,793 Computer $ $ Replacement ------182 3,100 2,219 5,501 7,363 3,376 3,805 4,962 4,651 (6,509) 8,225 28,942 12,713 13,548 13,548 28,942 28,942 (35,451) 14,622 93,433 70,586 129,719 122,356 114,635 122,375 Central Services $ $ ------1,849 27,180 98,350 10,383 68,741 27,180 27,180 157,429 147,557 403,336 189,069 126,470 128,877 109,945 429,816 429,816 984,471 612,723 342,719 957,291 4,081,284 3,636,869 3,892,216 (3,070,333) (3,097,513) Building Maintenance $ $ ------14,281 39,643 159,172 254,787 652,771 238,811 173,947 181,288 196,376 211,172 870,401 126,325 909,623 695,627 695,627 102,409 1,873,182 3,271,042 5,886,018 9,723,467 2,156,649 9,568,999 3,395,683 6,070,907 13,712,609 11,839,426 11,880,117 15,980,870 15,980,870 25,549,869 Equipment Maintenance Replacement $ $ ------and and contributic projected projected earning Position depreciation employer investments Funds investments Net assumptions actual between plan of between of 2016 plan plan vs resources resources assets BERKELEY 30, Service of of payable payable accumulated wages pension OF Resources change assets pension Resources of liabilities pension June capital Statement on Of Expected on and payable liablities in on Of Internal assets liabilities on net current equivalents CITY outflows absences absences outflows - inflows/outflows Funds inflows/outflows All liabilities judgments judgments term obligation position payable inflows inflows cash liabilities receivable outflows Interest assets: salaries noncurrent current current noncurrent lease Inflows assets, lease and and other Combining assets: Outflows net earnings liabilities Jong earnings liabilities deferred liabilities deferred assets and assets: to investment deferred pension OPEB deferred Total Total Total position Total Fixed Total Total Net Unrestricted Net Deferred Deferred Total actual Net Net Claims Other Claims Capital Capital Other Compensated Due Compensated Accrued Accrued Accounts Total Net Deferred actual Total Capital Investments Inventory Cash Accounts Net Deferred Noncurrent Current Liabilities Deferred Noncurrent Current Assets
231 I 37,151 86,181 64,361 17,886 58,289 699,641 236,472 (287,570) (113,391) 7,896,855 3,812,310 4,093,880 4,090,545 1,297,281 1,297,740 1,250,603 4,053,394 2,825,355 4,259,464 3,064,048 2,850,438 4,001,973 2,691,549 9,175,684 6,302,439 11,709,165 23,087,517 10,199,564 27,140,911 Tota $ $ ------2,496 2,496 886,796 239,745 Loss 1,126,540 1,530,371 1,293,122 1,293,122 (1,293,122) $ Catastrophic $ ------6,674 6,674 26,732 387,234 871,473 284,538 Public 1,892,870 1,505,636 1,695,888 1,315,329 Liability (1,308,654) (1,290,626) (1,315,329) $ $ ------5,308 5,308 789,436 250,000 539,436 534,127 Leave& 173,318 132,585 1,597,111 2,386,547 2,205,267 2,739,394 2,031,949 2,739,394 Payouts Vacation $ $ Sick ------1,358 4,194 7,119 51,820 51,820 20,393 333,881 799,703 605,978 4,066,888 4,066,888 4,015,069 5,160,616 3,387,991 9,175,684 9,175,684 (5,038,956) (9,105,844) Workers' $ $ ------368 368 6,226 5,858 95,864 25,713 987,741 706,397 393,950 298,086 374,095 (281,344) (287,570) Computer $ Replacement Compensation $ ------88 5,882 5,394 (6,509) 37,693 37,693 37,693 39,500 26,097 52,132 (44,202) 287,853 158,761 325,546 399,808 325,546 Central Services $ $ ------0 2,583 2,583 5,917 8,856 2,796 12,509 80,665 677,307 677,307 674,724 179,164 261,765 484,045 899,450 3,330,045 1,397,676 4,004,769 4,001,973 (3,070,333) (3,747,640) Building $ Maintenance $ ------3,932 4,618 16,932 64,361 49,433 (32,098) 617,621 122,904 150,413 800,236 296,144 (113,391) 1,979,897 1,362,276 1,394,373 9,101,335 2,744,463 1,126,219 2,168,951 1,930,166 13,712,609 11,732,712 10,495,708 10,199,564 Equipment Maintenance $ Replacement $ ------assets Expenses (expenses) 2016 services 30, capital Funds Position (Restated) charge of fees June revenues Net (expenses) Revenues, charge in of expenses BERKELEY revenues Service transfers service operations ending disposal professional Ended claims - -beginning OF position supplies on service maintenance from revenues earnings and before and rentals Year Internal Changes services net benefits CITY and expense Statement in out operating maintenance non-operating and operating in expenses: revenues: store All position position the /(Loss) (loss) revenues And (loss) net net For Total Total Total Investment Interest Gain Judgments Specialized Communication Repairs Utilities Depreciation Insurance Materials Employee Personnel Transportation Other Building Equipment Central Workers' compensation Change Transfers Transfers Total Total Income Income Non-operating Operating Combining Operating
232 I 80,018 (82,372) (27,784) (657,150) (109,973) (287,570) 1,106,128 8,269,862 8,187,490 (continued) 3,778,526 7,352,432 4,093,880 (3,558,148) (4,245,252) 16,179,325 15,073,196 (6,375,006) (9,590,527) (3,826,891) 27,144,857 Tota $ $ ------26,737 122,266 429,498 122,266 402,761 loss 1,530,371 1,530,371 (1,249,876) (1,249,876) Catastrophic $ ------70,628 308,418 (38,409) 308,418 (932,226) (439,127) (454,690) 1,142,709 1,072,080 1,695,888 1,695,888 Public Liability $ $ ------& 48,785 89,544 89,544 858,754 809,969 250,000 250,000 470,425 2,739,394 Leave (2,268,970) Payouts Vacation Sick $ $ ------674,732 (974,790) (860,601) 9,828,558 5,185,734 9,153,827 5,185,734 3,968,093 9,175,684 (3,372,201) Workers' Compensation $ $ ------20,142 (33,085) (33,085) 173,179 153,036 359,436 359,436 114,255 399,808 (287,570) (287,570) (285,553) Computer Replacement $ $ ------8,225 8,225 50,631 (14,622) (14,622) (27,784) (27,784) (83,629) 325,546 (191,287) Central Services $ $ ------12,655 (13,383) (13,383) 342,719 330,064 533,462 (190,016) (190,016) 4,008,678 (1,038,596) (2,436,620) Building $ Maintenance $ ------80,018 252,448 617,621 617,621 (657,150) (109,973) 3,143,235 3,395,683 2,326,730 2,326,730 4,397,669 (4,198,785) (3,511,681) (3,387,392) (2,710,685) 10,495,746 Equipment Maintenance Replacement $ $ ------assets 2016 activities activities 2015 2016 activities: Flows and 30, 30, 30, for capital capital Funds Cash of of investing capital non June June June operating related financing funds cash services services activities activities: by by by paid in BERKELEY and Service and assets other (used) disposal capital Ended OF activities by (used) (used) (used) Statement the from investing capital non operating goods employee equivalents, equivalents, Internal services capital Year CITY judgments (decrease) purchases sales for for from of equivalents in All out activities from advances loan from from and from received paid cash the cash financing provided and provided activities: provided provided paid paid repayment received cash Combining and and For flows flows flows sales flows increase cash cash cash cash and Interest related Purchase Debt Proceeds Interest lnterfund lnterfund financing Grants Transfers Transfers Cash Cash Claims Cash Investment Investment Cash Cash Net Net Cash Net Cash financing Net Cash Net Cash
233 I 17,248 21,805 26,302 59,087 (10,559) 699,958 513,411 376,044 445,783 (107,290) 7,352,432 4,053,394 2,850,438 (1,593,188) (concluded) Tota $ $ =$=====86='=18=1= 2,496 43,246 loss (1,249,876) (1,293,122) Catastrophic $ $ $ 6,674 9,085 4,101 (1,712) 17,889 24,424 (11,677) (75,791) 416,783 (932,226) (1,315,329) Public Liability $ $ $ & (63,703) 470,425 Payouts 534,127 Leave Sick $ Vacation $ =$======5,""30=8= 8,178 4,194 51,820 19,030 18,949 29,000 59,159 43,330 (32,028) (13,210) (183,578) 3,968,093 4,015,069 Worke~s Compensation $ $ 368 12,533 95,864 114,255 Computer Replacement $ $ $ 5,858 $ (3) 748 863 1,090 5,113 3,745 50,631 17,248 37,693 (15,865) Central Services $ $ =$======2,583 5,917 3,908 18,711 26,712 37,414 (11,593) 162,202 533,462 674,724 (503,338) Building Maintenance $ $ $ (1,257) 16,932 19,115 27,349 (17,644) 192,276 118,804 262,513 698,387 (107,290) (814,617) 4,397,669 1,394,373 2,744,463 Equipment Maintenance Replacement $ $ $ activities: activities 2015 investments Flows retiree of 30, (loss) (loss) Funds Cash financing misc operating value - of operating June payables provided by and income by fair income BERKELEY Service in cash absences Ended (used) OF Liability activities: capital, operations (used) Obligation Statement net Judgment payable receivable Inflow operating Outflow salaries to Internal reconcile Year CITY of and liabilities from in: to All (decrease) OPEB provided the operating provided investing, (loss) Other Claim Compensated Net Pension Deferred Net Inventory Deferred Accrued Accounts Accounts Combining by For cash operations Change Depreciation cash activities net Increase/ Net Noncash (used) Income Adjustments from Reconciliation to
234 Fiduciary Funds
Pension and Other Employee Benefit Trust Funds
Safety Member Pension Fund/Pension Annuity Fund This fund is used to account for the single-employer defined benefit pension plan for fire and police officers that retired before March 1973.
Police Retirement fund This fund is used to account for the single-employer income benefits pension plan for Berkeley police officers that retired on or after July 1, 1989 but before September 19, 2012.
Miscellaneous Retiree Medical This fund is used to account for the single-employer defined benefit medical plan for retirees and his/her spouse or domestic partner.
Fire Medical This fund is used to account for the single-employer defined benefit medical plan for sworn fire officers that retire on or after July 1, 1997.
Police Medical This fund is used to account for the single-employer defined benefit medical plan for sworn fire officers that retire on or after September 19, 2012
Successor Agency for former RDA This fund is used to account for the activities of the former Berkeley Redevelopment Agency in Private Trust Funds per AB 1X 26.
235 3,783 1,681 7,688 14,558 13,645 31,986 45,201 36,988 51,536 36,988 311,524 662,934 607,352 392,000 (648,365) 7,304,048 1,467,460 1,049,829 9,062,135 7,680,888 4,643,792 38,643,649 31,987,966 40,106,107 Total 17,057,005 $ $ 0 of 3,783 1,681 7,688 RDA Trust 14,558 13,645 31,986 51,536 36,988 36,988 648,365 311,524 768,892 768,892 1648,365! Funds 1,422,259 1,049,829 Agency Successor $ $ Private Former Health 87,766 677,755 Plan Empoyees 9,397,656 9,397,656 9,397,656 2,453,617 6,178,518 $ $ Retiree Fire Benefit 434 Plan Premiun 342,319 Funds 1,353,903 1,353,903 1,353,903 1,011,150 Police Trust $ Retiree Assistance $ Post-Employment Plan Other Heath 439,529 392,000 2,773,654 9,062,135 6,342,268 2,226,821 21,236,407 21,236,407 21,236,407 Premium Retiree $ Miscellaneous $ Assistance Income 79,624 Plan 582,805 6,641,114 6,641,114 2,453,617 3,525,069 6,641,114 Police Benefit $ $ Retirement Funds Pension Trust 45,201 45,201 Fund 45,201 662,934 662,934 708,135 662,934 Members Annui!}'. $ Safety $ Pension/Pension assets contribution Position plan Agency projected Net Plan) investments earning Trust employer Trust in pension Misc plan in assumptions actual of between Successor plan resources of Held 2016 resources vs Fiduciary Held of For: Contracts Funds of of 30, BERKELEY pension (Calpers Resources Resources pension OF on change of Berkeley value: benefits Trust of June of benefits payable of Expected on Inflows Outflows Notes fair equivalents CITY Restricted Investment actual) Loan inflows/outflows at inflows/outflows Liabilities Securities City Statement Bonds earnings OPEB pension vs cash position Inflows payable cash Outflows Term inflows inflows outflows benefits payable receivable trust payable Island net liabilities Deffered Deferred assets liabilities and in Agency Position actual Pension deferred deferred Savo Guaranteed Medium Municipal US Total Combining Employee Held Deferred Employee Total (projected Deferred Net Bonds Deferred Pension Net Net Interest Total Other Net Deferred Liabilities Accounts Total Total and Deferred Interest Investments, Restricted Cash Assets
236 1,892 31,551 82,889 182,008 383,471 404,871 Total 1,028,132 4,919,990 4,220,743 3,833,309 2,504,676 5,607,926 9,140,734 38,643,649 34,422,906 $ ------2 of RDA 1,892 31,551 82,889 521,202 506,932 404,871 (648,365) 1,028,134 (1,155,297) Agency Successor $ $1,028,132 ------· Former Health 47,997 517,986 831,765 469,989 839,003 510,748 9,397,656 8,565,892 1,349,751 Empoyees $ ------Retiree $ ------· Fire Plan Plan Funds 3,192 53,754 119,644 931,478 116,452 422,423 542,067 Premium 488,313 1,353,903 Trust Police Post-Employment ------$ $ ------Assistance Retiree Benefit Other Plan Heath 88,665 814,763 726,098 2,608,348 1,837,078 1,586,033 3,423,111 18,628,059 21,236,407 Premium Retiree $ Miscellaneous $ $ ------Assistance Income 42,154 Plan 141,654 284,426 6,499,462 6,641,114 2,086,750 2,044,596 1,943,978 2,228,404 Police Benefit $ $ Retirement Funds Pension Trust Fund 69,713 662,934 953,312 859,645 383,471 476,174 569,267 499,554 (290,378) Members Annuity $ Safety $ Pension/Pension ------Position Net 2016 30, Fiduciary in June Funds BERKELEY ended Changes OF Trust of service disability year beginning ending CITY - - for for position COB the expenses income Employer net to streets For development in income Assets Assets Statement and payment payment government payment Deductions Additions Adjustment Net Net through increment Change Total Total Pass Interest Benefits Benefits Community DEDUCTIONS: Highway Administrative General Investment Contributions: Tax ADDITIONS: Combining
237 THIS PAGE LEFT INTENTIONALLY BLANK
238 Agency Funds
District 47 Underground/Miller This fund is used to account for property tax collected and bond proceeds for the District 47 residents for the underground utility.
Sustainable Energy This fund is used to account for property tax collected and bond proceeds for the renewable solar system for the Berkeley citizens.
Thousand Oaks Undergrounding This fund is used to account for property tax collected and bond proceeds for the Thousand Oaks District residents for the underground utility.
Measure H School Tax This fund is used to account for property tax collected under Measure H for the Berkeley Unified School District.
CFD No. 1 Disaster Fire Protection Mello-Roos This fund is used to account for property tax collected and bond proceeds for the Community Fire District Mello-Roos.
Sick Leave Entitlement This fund is used to account for unused sick leave balances for retirees.
Berkeley Tourism BID This fund is used to account for BID taxes collect for the purpose of business and economic development in the city.
Elmwood Business Improvement District This fund is used to account for assessment fee collected for the Elmwood Business District for the improvement purpose.
239 12,313 16,421 52,190 20,563 (12,313) 351,951 445,162 404,141 (449,304) Total 4,898,070 4,898,070 3,296,689 4,734,500 4,898,070 4,477,508 4,349,673 2,799,337 (3,133,119) (2,671,502) $ $ $ $ $ $ ------· 613 613 613 Dist 613 25,915 23,201 25,915 23,201 (48,504) \48,504) Imp. Elmwood $ $ $ Bus. $ ------BID 86,359 86,359 86,359 86,359 204,623 633,182 204,623 633,182 (751,446) (751,446) Berkeley $ Tourism $ $ $ ------· 52,190 Leave 404,141 351,951 404,141 503,691 404,141 351,951 404,141 451,501 (451,501) \451,501) Sick Entitlement $ $ $ $ ------12,313 11,870 10,250 20,213 (12,313) (18,593) Protection \958,663) (927,757) Liabilities 2016 3,895,949 3,895,949 3,729,167 No.1 3,895,949 1,105,233 3,706,604 3,884,079 Fire 1,125,445.66 30, and CFO Mello-Roos $ $ $ June $ $ $ ------Disaster Assets Funds in BERKELEY H ended Tax OF 2,440 7,233 4,796 12,028 124,529 124,529 Agency year 850,844 124,529 122,089 426,271 424,573 (738,343) (431,063) (307,279) Changes CITY $ $ Measure School $ $ the ------of For 892 892 866 (866) Oaks Statement 114,990 230,773 230,773 254,587 230,773 229,881 114,098 253,721 (138,804) \137,938) $ $ $ $ Undergrounding Thousand ------1,218 1,218 2,214 (2,214) 31,394 31,394 34,632 42,621 31,394 30,176 32,418 44,835 (45,859) \47,077) Energy Sustainable $ $ $ ------124,312 124,312 124,312 124,312 124,312 124,312 District47 $ $ $ $ ------Underground/Miller 2016 2015 30, 1, 2016 June July 2016 2015 2016 2015 30, 2015 30, 1, 1, 30, Misc) Misc) 1, 2016 July June 2016 June July June July 2015 2016 2016 30, 30, 1, 2015 30, 30, 1, June (CALPERS (CALPERS June July June July June Receivable, Receivable, equivalents, equivalents, obligations, obligations, Outflow/ Outflow/ cash cash Liabilities, Assets, Receivable, Receivable, agency agency liabilities, liabilities, Accounts Accounts and and Deletions Deletions Total Additions Deletions Additions Additions Total Deletions Deletions Additions AdditiOns Deletions Additions Other Other Other Other Defefered Liabilities Defefered Other Other Cash Taxes Taxes Cash Assets
240 I. STATISTICAL
241 THIS PAGE LEFT INTENTIONALLY BLANK
242 Index to Statistical Section
This part of the comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.
Contents
Financial Trends 244-250 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.
Revenue Capacity 251-254 These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property tax.
Debt Capacity 255-258 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 259-261 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.
Operating Information 262-265 These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial report for the relevant year.
243 2016 I 43,569,766 14,108,873 (16,664,516) (99,106,291) 300,930,041 142,676,057 159,340,573 141,589,468 115,277,370 (399,920,192) (383,255,676) $ $ $ $ $ $ Schedule 2015 121,755 5,860,663 10,252,532 11,955,810 13,173,675 (25,344,187) 125,326,454 142,559,917 123,491,705 148,835,892 292,957,647 103,118,112 144, (412,423,438) (117,631,042) (387,079,250) $ $ $ $ $ $ Q)(k) (k) (k) 2014 3,564,661 9,879,916 (8,289,731) 14,927,978 98,125,716 (37,326,378) 126,498,271 107,340,009 141,101,726 294,422,754 153,321,028 (429,210,756) (391,884,379) $ $ $(115,629,741) $ $ $ (i) (i) 2013 8,586,832 (7,839,453) 11,604,457 19,443,910 19,015,248 79,924,244 107,526,325 $415,996,098 $296,865,316 $163,976,229 $252,019,869 $144,532,319 $152,332,997 (i) (i) 2012 9,320,347 14,466,271 24,796,734 74,074,662 27,810,334 (10,330,463) 111,205,343 163,470,366 404,563,677 278,892,063 138,673,632 140,218,431 241,093,311 $ $ $ $ $ $ (f) (f) (f) 2011 (IM). 1,134,546 27,616,182 11,599,189 44,913,484 74,138,620 categories: (26,481,637) 130,651,294 163,176,655 135,560,473 403,179,893 271,394,055 135,833,582 240,003,238 Government do 5 method $ $ $ $ $ $ parties into (g) (f) (f) (f) assets Primary interest down net the to external of all by of (SL) 2,634,900 2010 broken fund 28,271,364 11,260,187 64,496,637 34,156,310 use 109,913,134 162,792,980 137,156,516 402,841,193 264,656,695 127,500,179 240,048,214 line assets be $ $ $ $ $ $ to consist fixed general (c) (c) (b) (e) (c) straight for Enterprise assets for an balances from net FY2010 Pension was (v). fund it 2009 and 9,723,843 (9,236,278) 19,928,717 for adjustment 29,164,995 25,636,464 34,096,612 restricted 66,471,646 110,292,101 405,516,213 275,295,395 167,277,449 138,112,455 137,182,940 238,238,762 and premium that $ $ $ $ $ $ to (iv) been requires period Unrestrticted FY2009 bond (d (a) (a] (iii), in has Reporting of prior Unassigned prior a (v) that GAS854 FY08, equals and and legislation. in 2008 Financial 4,675,040 17,261,874 12,586,834 22,860,569 categories assets 124,925,028 403,716,126 261,529,224 168,748,767 133,301,364 102,064.459 234,967,359 128,227,860 amortization unit assets and $ $ FY2010. $ $ $ $ net FY2013 the of enabling net in Assigned; different adjustment or 65 (iv) restated into components. back portion Component Accounting and changing and two restated) 68 restated) 63 that 62 look unrestricted provisions restated) assets" & is (as (as other Discrete and Committed; (as GASB FY2011 GASB GASB (ii) the adjustment of (iii) in of of assets Department of position liabilities position 54 and net became "Restricted back position net (i) net constitutional assets assets assets either net look landfill GASS Finance purpose of project project to to 2008 services services equals restricted Authority separate capital capital capital (ii).Restricted; through activities implementation activities implementation implementation due due in to and in in to Debt Accounting) Capital Special Capital O Debt to law to Years Berkeley, Component, definition of assets activities activities government by for for for for for 201 2010 2009 due 2007 of housing due by due began GASB54, the net Fiscal to Basis City government city City implemented Investment Investment Investment Berkeley primary meet business-type governmental imposed non-spendable; Nine of Position Restated Berkeley Restated Restated Restated Restated Prior The Net Restricted Unrestricted Unrestricted Unrestricted Restricted Net Restricted The Restricted Restricted Net Restated Restricted Restated or not (i). Sou,ce: G) (f) (g) (kl (h) (i) Restricted (d) (b) (a) (e) (c) Total Primary Business-type Total Total Governmental (Accrual Last Net City
244 II 629,397 2,194.454 Continued 1,666,472 1,633,130 5,226,574 2,298,241 2,440,891 3,915,028 5,075,974 8,482,161 4,183,775 4,778,074 2016 35,167,186 67,266,152 14,535,669 17,593,646 30,939,532 19,734,011 34,749,031 31,344,033 320,889,622 114,150,343 244,144,163 $ $ $ $ Schedule 691,350 2,000,063 1,582,411 2,319,125 2,320,608 7,440,233 2,182,771 2,902,288 2,857,423 2,749,275 3,584,077 5,067,986 8,915,668 3,850,278 3,886,382 2015 55,499,824 13,545,934 12,069,245 12,061,833 14,887,645 17,752,712 32,611,968 19,422,959 35,475,983 31,486,649 316,285,333 106,809,311 $ $ $ $ (c) (c) 639,700 2,421,781 3,049,266 1,612,417 2,268,394 2,932,886 3,794,993 3,081,135 5,648,254 8,420,892 2014 3,112,661 5,458,242 63,652,229 14,294,277 33,064,026 33,379,186 10,247,574 14,732,355 19,738,696 17,611,249 17,793,785 20,035,232 30,139,123 299,096,566 $ $ $ $ 518,561 1,471,882 3.413,791 2,015,313 2,507,375 3,319,845 3,774,777 5,648,421 8,468,678 2013 18,684,450 29,551,902 64,927.464 12,400,758 13,223,132 16,040,026 13,460,624 94,011,336 95,581,595 36,489,886 36,753,573 30,692,445 293,438,278 $ $ $ $ (b) (b) (b) (b) 1,472,907 1,505,706 4,191,566 2,129.425 2,176,943 2,965,332 2,165,995 3,122.421 3,259,428 3,392,344 2,390,350 2,447,033 9,152,576 9,581,029 7,360,188 3,646,479 3,506,704 2012 16,271.404 31,483,965 65,308,721 32,417,995 33,142,494 31,936,126 19,665,018 19,546,406 19,700,947 13,890,897 29,929,909 93,967,743 35,885,547 293,868,082 220,620,266 218,357,520 223,606,567 238,422,970 $ $ $ $ 736,560 3,360,193 3,013,989 3,100,961 2,363,869 9,371,901 6,984,781 2,745,171 4,898,759 4,088,267 4,455,553 2011 13,808,972 35,975,381 35,014,849 19,136,705 13,405,466 21,671,819 34,033,319 92,302,278 32,723,124 294,540,150 220,916,641 $ $ $ $ 480,068 1,367,591 1,401,541 2,292,171 2,095,751 2,974,062 2,414,877 8,102,721 2,584,744 2,880,513 9,581,085 7,403,385 5,027,085 5,099,639 5,854,093 5,151,053 5,209,064 2010 32,693,031 13,628,575 23,998,513 23,717,544 34,126,643 32,157,308 293,050,533 221,073,960 $ $ $ $ 771,563 1,525.429 3,027,156 3,037,335 3,387,609 5,798,539 4,054,674 2,882,256 2,987,585 2,875,534 7,579,581 4,561,291 3,412,478 4,333,851 2009 31,338,593 31,772,355 11,024,519 11,403,889 10,723,985 11,687,510 12,813,186 72,787,222 71,976,573 73,623,510 73,247,816 75,080,757 75,489,999 77,862,363 76,745,459 33,140,056 19,774,724 13,103,246 32,637,740 29,266,165 30,156,828 83,172,996 83,085,260 288,645,250 215,858,028 $ $ $ $ 714,769 1,510,382 1,007,647 1,505,087 1,142,896 2,878,087 2,451,135 9,223,690 2,894,176 2,919,162 2,703,970 6,741,263 4,157,414 4,380,468 3,208,496 2008 15,301,222 15,514,920 15,341,433 32,694,861 68,675,969 64,678,856 67,952,482 66,194,873 10,351,107 10,407,986 29,816,972 67,097,874 15,433,912 15,755,378 28,952,978 32,870,746 27,163,852 81,244,204 276.107,910 209,010,035 $ $ $ $ revenues program expenses maintenance management activities activities debt contributions and and contributions activities and center streets streets Accounting) and Years water recreation Position development/housing recreation development/housing activities: welfare activities: of services: activities: long-term welfare development government and development and grants government purchase Net government related on and for services business-type and governmental operations and service services safety Revenues and grants Fiscal storm safety in Berkeley governmental primary Total Total Nine of Community Highways Health Culture Economic Public General Permit Building Refuse Sewer Clean Parking Marina Interest Community Highways Health Economic Culture Public General Operating Capital Charges Total Governmental Program Total Business-type Governmental Expenses Changes (Accrual Basis Last City
245 II 99,845 Continued 2,256,349 2,087,827 6,709,274 2016 18,941,727 14,880,418 15,774,949 13,349,457 95,687,186 40,529,067 162_,953,338 (157,936,284) (176,878,011) $ $ $ Schedule 383,930 2,216,349 2,068,847 6,242,357 2015 16,038,085 13,090,534 17,911,716 13,062,773 93,900,448 38,923,942 149,400,_272 {166,885,061} (182,923,146) $ $ __j__ 41,575 8,516,934 2,212,217 2014 2,067,572 5,477,565 13,394,617 14,848,940 11,717,962 84,006,933 147,659,162 (151,437,404) (159,954,338) $ $ $ 109,224 1,861,681 2,632,538 2013 2,070,413 9,995,079 5,242,568 13,271,175 76,942,438 10,274,629 33,346,812 34,246,485 141,869,903 (151,568,375} (153,430,056) $ $ $ 29,831 786,268 2,984,924 2,065,087 8,968,166 5,299,039 9,817,873 2012 12,166,250 74,034,084 139,342,805 (154,525,277) (155,311,545) $ $ $ 289,023 139,323 3,011,690 2,070,815 8,487,701 9,047,693 4,736,825 2011 12,677,638 73,912,533 33,740,848 32,702,914 140,107,406 (154,432,745) (154,721,768) $ $ _!_ 14,963 2,921,485 7,908,608 2010 8,231,201 4,787,137 (1,385,459} 70,591,114 12,352,405 32,313,189 138,543,t;gs {154,506,937) (153,121,478) $ $ $ 20,297 2,923,964 2,026,307 2,062,126 5,343,851 7,491,363 {1,686,609} 2009 13,864,952 10,137,535 29,292,344 135,779,4~ {153,865,781) (152,179,172) $ $ $ 5,402,822 1,950,637 2,634,594 7,228,080 4,708,412 2008 72,500,696 71,100,613 15,119,555 11,268,021 29,591,397 {134,931,245) (140,334,066) ____1i1._176,665 $ $ $ revenues expense program net revenues maintenance management contributions and and activities and center Accounting) Years Position water activities of activities activities: services: government government grants Net purchase related services for operations service services Fiscal storm in Basis Berkeley primary primary business-type Nine (Expense)/Revenue of Building Refuse Permit Sewer Clean Parking Marina Operating Charges Business-type Total Governmental Net Total Total Business-type Changes Last City (Accrual
246 332 74,271 71,608 II (74,271) 168,021 195,733 242,625 389,424 2,169,816 3,582,337 7,879,633 3,415,952 4,431,198 2,759,600 7,231,134 Concluded 2016 19,184,352 18,524,751 37,709,102 18,773,158 14,186,649 17,316,575 11,704,798 20,577,996 80,791,426 195&15,390 $ j__ Schedule 85,691 27,918 90,971 {85,691) 113,610 221,637 988,313 389,343 3,445,882 3,860,198 2,506,398 7,131,568 2,665,478 4,201,668 9,951,462 7,822,325 2015 (2,001,301) 16,151,695 14,150,393 16,102,328 16,454,651 180,921,848 195,402,766 181,035,458 $ _j_ _ _ 3,293 387,021 400,987 {858,917) 7,658,016 1,249,232 1,156,367 1,226,855 6,924,698 4,125,873 3,135,412 2014 2,586,719 6,245,833 4,119,965 9,652,446 7,684,617 {1,249,232} 21,216,848 28,874,864 15,370,377 15,971,859 70,348,949 73,726,035 180,312,271 _____1__El_Ll_71,188 $ _$ _ ~ 2,006 74,922 505,863 126,400 751,041 397,143 1,484,222 1,448,935 2,273,001 3,995,492 2013 2,537,917 3,926,460 5,555,601 9,483,390 6,479,721 {1,484,222} {1,355,816} 11,432,421 10,926,558 15,925,900 14,363,898 16,583,124 14,387,874 17,111,938 14,337,343 15,266,649 15,273,714 163,000,799 $ $ _____1§_4,356,61 (b) 2,068 293,715 176,551 671,173 464,093 399,476 {492,554) (671,173} (259,613) 1,383,788 1,090,074 1,972,376 1,036,535 2,760,171 2,853,421 4,609,048 2,454,762 9,186,260 3,741,157 7,115,652 2012 14,844,945 14,091,347 15,645,975 14,581,791 60,233,049 65,118,610 155,909,065 156,401.~ $ $ (IM). 5,324 94,652 method 21,820 (44,966) 383,675 338,709 394,257 304,928 547,171 388,380 {304,929} 1,186,207 4,735,256 3,180,380 8,739,449 4,698,045 2,377,898 3,629,617 8,915,445 8,049,862 2011 13,954,587 14,420,383 14,411,756 14,159,245 50,956,374 154,!71,456 interest _154,676,803 $ $ . to (a) (a) (SL) line 10,742 664,192 240,196 837,018 665,255 386,461 {837,018} 1,809,453 1,066,472 1,507,229 5,960,103 3,440,025 8,543,643 3,673,023 2,335,060 5,220,824 2010 8,753,907 8,549,702 {1,145,262) 13,505,958 12,733,983 14,418,851 13,911,751 50,488,138 155,171,12_1!_ 154,930,9~ straight $ _Ji_ from 2,109 215,292 264,520 920,612 707,429 194,860 372,325 {707,429) premium (594,577) 1,871,221 9,433,566 3,318,326 8,453,191 3,671,362 2,286,603 8,568,098 8,625,163 {1,206,797) (1,471,317) 2009 13,388,429 13,907,221 14,669,480 13,624,572 49,946,421 152,658,982 bond $ L _152,443,690 of 1,882 11,171 amortization 369,556 565,457 FY2013 1,193,932 7,948,874 1,340,949 2,546,052 2,868,810 7,385,655 2,999,006 8,040,640 3,588,753 2,212,258 8,294,518 7,240,292 (1,193,932} 2008 18,381,593 10,432,720 in 13,562,868 15,310,010 15,310,895 13,025,265 51,184,853 the 153,312,8~7 15_0,766,7~ 65 $ $ and Position FY2011 changing 63 in Net in programs GASB purposes of GASB 62 Department service specific adjustments" Changes assets fees to purposes: general debt earnings assets subventions Finance earnings back for for Other taxes capital vehicle (Loss) special activities activities of state implementation "look implementation and restricted capital levied levied for to to to Accounting) of Years Position Gain/ motor sale Berkeley, not Position activities investment taxes activities activities government of investment activities: government due due of due occupancy license tax on taxes taxes, taxes, sale Net Net and and Fiscal taxes taxes users in in City on Revenues Basis unrestricted business-type primary Berkeley governmental primary Parks Paramedic Fire Library Nine of Restated Restated Restated Transfers Gain Business Other Utility Sales Unrestricted Transient Property Property Property Interest Extraordinary Gain/Loss Miscellaneous Interest Transfers Other Contributions Taxes Business-type Total Total Total Source: (b) (c) Notes: (a) Business-type Change Governmental Total General Changes Governmental (Accrual Last City
247 Ill 2016 3,595,304 3,686,427 (4,055,850) 13,741,138 57,742,775 65,024,506 156,337,845 146,652,555 $ $ $ Schedule 2015 3,024,783 3,648,330 3,830,670 (5,111,970) 12,140,810 53,289,050 45,810,050 145,646,063 135,592,436 $ $ j 2014 1,991,263 3,648,330 2,829,511 (7,689,049) 10,524,900 39,213,698 ~5,691,539 137,830,132 142,657,2j_6 $ $ $ (d) (d) _ Funds. categories: 5 2013 1,991,263 2,761,737 8,449,018 3,648,330 2,002,369 (6,737,953) 35,261,429 40,912,129 into 105,535,062 $ $ Governmental _j_j_11,999,_128 in down I Sheet broken be 2012 ~.346,61 2,114,083 definition 11,431,620 to 32,286,557 38,068,859 11 109,091,260 Balance $ $ $ the (c) (a) (c) (a) balances on balances fund fund Unassigned funds new (v) 2011 1,702,626 2,638,276 2009 2,271,366 2,343,500 3,357,980 3,438,803 36,020,731 41,650,076 17,442,566 26,001,665 12,745,878 66,847,870 32,245,545 Resources" 44,991,423 for 129,270,827 128,013,017 110,292,101 and requires of Project $ $ $ $ $ $ $ 54 (b) (b) (a) (a) FY2011 Inflows Capital in GASS Assigned; in (iv) 130,355 2010 1,272,791 2008 2,762,840 2,721,715 3,313,193 (2,403,731) (3,083,091) (7,290,346) 37,211,689 43,287,722 16,158,919 15,319,622 99, 16,153,120 67,651,814 31,664,729 47,817,849 "Deferred GASB54 111,973,322 113,564,098 FY2011. $ $ $ of $ $ $ in receivables 54 in adding Committed; 65 (iii) GASS and Funds 63 adjustment funds funds implementation Accounting) an to in: Funds Funds of implement GASS funds due due (ii).Restricted; funds of to Basis Years reported 2010 2008 Governmental governmental governmental fund fund in in revenue project began Fiscal Governmental Accrual Governmental other Fund other Fund City Berkeley all general all Balance, general Special Capital non-spendable; Nine of Implementation Restated Restated The Unassigned Restricted Committed Nonspendable Restricted Unassigned Nonspendable Assigned Other Assigned Reserved Unreserved, Other Unreserved Reserved (i). (d) (c) (b) (a) Total General Total All Total All Total General Last Fund (Modified City
248 IV 428,417 195,733 322,629 continued 2016 4,893,120 4,252,971 2,160,325 1,445,540 1,024,276 1,880,847 3,329,771 6,761,750 14,020,367 16,626,123 12,762,905 98,101,003 34,226,586 29,742,445 21,140,809 15,763,295 49,367,193 238,355,071 $182,816,853 Schedule 57,500 221,637 790,282 747,408 2015 3,845,172 8,370,956 7,027,752 2,546,848 2,655,600 1,820,785 6,458,690 19,390,326 14,417,722 32,825,401 92,726,601 43,545,804 $167,926,924 55,750 318,261 815,336 2014 3,125,734 4,204,770 1,226,855 9,460,612 3,638,309 6,606,437 10,740,356 16,151,191 16,204,711 19,727,071 28,157,099 29,951,904 90,210,207 45,047,739 160,511,002 $ 126,959 751,041 647,812 2013 3,469,891 4,090,000 1,086,747 8,212,026 2,024,116 8,614,439 8,946,415 19,047,781 19,393,251 28,716,311 12,979,187 12,920,362 13,462,066 43,322,094 $152,544,937 57,941 358,434 362,188 881,108 2012 4,560,657 4,154,700 4,294,180 4,461,272 3,595,178 3,780,000 1,359,323 9,755,984 1,036,535 2,904,618 1,539,773 1,810,323 1,833,646 9,851,317 18,099,040 14,461,464 19,443,351 23,678,415 32,914,456 34,240,614 34,221,596 28,623,928 11,929,921 45,798,782 232,898,267 223,359,213 220,348,566 229,279,318 220,519,856 224,142,883 241,864,362 240,176,045 262,907,888 $144,860,044 154 190,606 547,171 755,903 971,120 4,755,777 2011 2,743,700 4,369,000 8,510,135 1,771,895 4,759,669 14,195,181 17,753,578 21,757,796 28,566,008 86,910,102 88,389,316 87,446,217 10,561,972 12,043,388 49,755,227 222,180,467 222,782, $141,205,937 206,387 665,255 460,743 409,872 5,136,033 4,983,688 2010 4,399,000 1,032,941 1,914,871 5,868,959 1,067,931 12,316,245 19,572,531 23,717,437 27,966,597 79,717,900 11,158,371 10,933,508 222,583,121 221,671,249 139,569,452 $ 74,702 194,860 411,413 887,535 4,302,026 5,476,657 2009 8,308,257 8,812,452 1,459,808 9,433,566 1,848,246 12,993,361 18,338,303 29,616,973 27,736,082 10,885,461 11,616,513 45,681,080 48,999,218 219,445,636 218,067,519 135,649,038 $ 41,601 565,457 332,279 580,144 3,121,599 9,794,468 3,360,442 4,380,468 2008 6,148,777 2,536,531 1,731,548 7,385,655 13,963,017 30,713,797 30,347,460 35,754,850 32,428,584 28,520,889 11,113,003 25,761,628 77,487,988 78,891,374 10,921,168 10,474,180 50,298,070 211,047,235 220,438,130 135,613,099 $ Funds Governmental donations Accounting) of and charges Basis Balances, permits Years streets reimbursements fiscal development/housing Service income welfare royalties development Penalties repayment and and Fund for government expenditures and revenues issuance outlay cost contributions Fiscal and Accrual safety in and and of service Berkeley Total Total Nine of Interest Economic Principal Capital Cost Health Culture-recreation Community Highway Public General Miscellaneous Private Investment Indirect Rents Fines Franchise Licenses Intergovernmental Charges Taxes Debt Current Expenditures: Revenues: (Modified Last Changes City
249 IV 3.15% 15,574 (604,600) concluded 2016 4,144,029 (2,125,579) 22,427,238 36,680,000 20,583,750 24,§_§2,817 (38,480,000) $ Schedule 5.78% 45,000 988,313 2015 2,700,000 (1,298,712) 10,586,328 18,483,505 10,896,727 (22,527,217) (24,464,333) $ __ 4.06% 445,272 2014 1,149,000 13,921,733 35,437,529 15,000,000 20,541,117 21,515,796 (23,213,656) $ 4.04% 8,007 542,791 783,670 (504,219) 2013 5,693,852 (1,287,889) (6,770,000) 19,331,429 (20,093,967) $ 140 3.99% 509,636 (721,526) 2012 (4,405,488) 20,022,143 (17,505,425) (21,253,445) $ _(12,378,411) 168) 4.39% 2,548 428,536 601,687 2011 13,467,398 14,069,085 16,000,000 19,268,482 (22,232, $ 4.47% 1,452 403,977 (911,872) 2010 9,459,300 5,750,000 6,000,000 10,371,172 14,552,263 (16,336,520) $ 4.74% 2,490 2009 8,335,322 9,713,440 (1,378,116) 11,894,000 22,634,032 (24,817,082) $ 5.23% 1,882 2008 4,542,779 9,394,000 9,390,895 13,933,676 22,152,164 (27,005,267) $ Funds agent Department issued noncapital escrow of bonds participation participation Governmental bonds Accounting) sources(uses) of loans of Finance loans bonds bonds of expenditures revenues and and balances refunding of (loss) assets percentage Basis Balances, on refunding financing a Years (under) sources(uses): Berkeley, refunded certificate notes fund notes bonds certificates refunded of gain/ as of in out of of in on on on of to Fund capital expenditures other over Fiscal Accrual in of City value (deficiency) Premium Berkeley financing service Total change Nine of Payment Premium Premium Face Sales Call Proceeds Premium Proceeds Issuance Transfers Transfers Net Debt Source: Extraordinary Other Excess (Modified Last Changes City
250 V Taxable Value 14,233,967 12,526,485 12,835,482 13,686,815 15,342,524 11,161,856 11,918,885 12,086,053 12,148,131 11,353,292 Estimated Actual $ Schedule the At Direct Rate 10.51 10.43 10.47 10.47 10.54 10.51 10.48 10.45 10.55 10.53 upon factor" Tax owner. Total based new % a 1 "inflation to of an by sold rate Taxable Value is 14,233,967 15,342,524 12,086,053 12,526,485 12,835,482 13,686,815 12,148,131 11,161,856 11,918,885 11,353,292 it Assessed Total $ - that increased maximum a be time to the may sold. at (775,326) (675,233) (669,934) (686,387) (794,624) (640,481) (538,391) (570,449) (669,646) (486,955) Less: taxes Exemptions $ property property limited of the reassessed of is which value 13 305,922 328,366 297,649 280,230 275,155 269,634 230,899 228,115 269,072 212,847 price Institutional $ property assessed purchase the Property Proposition the year exceptions, at Industrial 2,788,276 2,912,034 2,969,778 2,662,165 2,600,510 2,574,960 2,570,430 passed 2,353,222 2,498,734 Taxable few Office Commercial $2,235,743 Each and of With reassessed taxed. California Values 389 556 556 631 556 556 474 474 is of 2%). 1,325 2,335 Controller's - of Utility being Property Property Property Actual value $ State the Auditor increase property of Estimated assessed the County of voters Dollars) and new 9,762,011 9,915,723 9,943,462 9,114,801 8,415,411 Years Property of 12,776,968 11,914,464 11,213,456 10,578,918 10,320,198 maximum Residential the $ the a value Value to Fiscal Alameda 1978, Berkeley point, In Ten of 2016 2015 2013 2014 2012 2008 2009 2010 2011 2007 Thousands 1. (limited that assessed Year Fiscal Source: Note: Last (In City Assessed
251 VI 12.56 12.72 12.45 12.22 12.35 12.30 12.67 12.56 12.47 12.62 Rate Total Schedule 0.05 0.08 0.03 0.06 0.03 0.04 0.09 0.08 0.04 0.05 Area fixed value) Rapid Transit Bay other 1.00% and the assessed 0.05 0.03 0.11 0.05 0.08 0.08 0.07 0.08 0.09 0.10 Bay Dist. to of school, East Regional Park City, $1,000 addition of In per 1 Rates 0.09 0.07 0.07 0.07 0.07 0.07 0.07 0.06 0.07 0.07 $10 Bay Dist payment within. (or East Municipal the Utility for Overlapping 1.00% resides a at 0.41 0.34 0.42 0.43 0.43 0.43 0.44 0.36 0.22 0.27 values rate property Peralta College tax Community property subject the property 1.32 1.54 1.35 1.50 1.41 1.46 1.48 1.45 1.41 1.35 the assessed School Unified which Berkeley of sets for which 10.54 10.51 10.43 10.51 10.48 10.47 10.47 10.55 10.53 10.45 13 percentage Rate agencies Direct Total a as taxing Inc. all taxes Rates Proposition 0.43 0.51 0.54 0.51 0.48 0.47 0.47 0.55 0.53 0.45 Rates, by Service Tax Direct General Obligation Value) passed charged Statistics, Debt shared City is are Property voters i.:!.L 1.00% Assessed Municipal 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 owners of Basic Rate Years This California Overlapping $1,000 California bonds. Fiscal property Berkeley 1978, and Per 2016 2014 2015 2012 2013 2011 2010 2008 2009 2007 amount. Ten In of Year Fiscal Source: Districts' Notes: (1) amount, fixed Last Direct (Rate City
252 VII City Value 5.38% 1.86% 0.32% 0.33% 0.24% 0.24% 0.31% 0.45% 0.46% 0.25% 0.93% Total Taxable Assessed Percentage of Schedule 2016 36,900 36,732 50,550 37,660 48,447 47,784 68,869 69,859 825,341 142,492 286,048 Value Taxable Assessed $15,342,524 $ City Value 0.12% 0.16% 0.14% 0.17% 0.40% 0.22% 5.08% 0.36% 7.85% 2.46% 16.97% Total Taxable Percentage of 2006 10,686 14,227 11,927 14,708 19,408 35,005 31,224 20,466 31,662 403,143 $213,830 8,690,985 Value Taxable Assessed Assessed $ $ - 1) ( City TRS Inc. properties. the J by real Trs L LLC Trs only Statistics, Ago H LLC LP 11 Janis assessed Hanumandla LP Payers Years LP INC includes Esther R & Associates Street Center Municipal & Tax Mitchell LLC Ten Dollars) taxpayers 4th Associates & Properties A. Gardens of properties Street LLC LLC value Street K LLC and NAME Berkeley LLC Campus Berkeley, LLC real John Business Property Street California John Library ACQ Year Principal Potter All Hanumandla Berkeley Berkeley Healthcare - - Seventh MLK University Fulton Action Shattuck & of Assessed Hillside Roberts Thousands Source: (1) Berkeley BVP Podlesak First Total Gordon Ed Fifth Total GBC 1950 Seventh Essex Reddy 2929 SC Bayer EQR Granite CVBAF Principle Current (In City ASSESSEE
253 736 799 611 658 VIII 1,129 1,083 1,308 1,780 1,896 1,361 Total $ Schedule Years(2) 191 166 134 128 139 139 118 100 269 210 end and not year Subsequent Unsecured $ in are fiscal penalties year subsequent 607 815 589 491 478 938 the 1,757 1,222 1,189 1,680 the levy for Collection include of Secured each $ types County much for tax the how both from for collections specifies total received that collections Levy 97.47% 98.57% 98.73% 98.58% 98.16% 96.33% 95.35% 96.71% 97.27% 95.34% result, Levy the of a County revenue Percentage the As on the of within Subsequent from Year based Agency Property. amounts. Collected 51,028 45,464 47,523 34,335 38,891 39,951 41,699 42,724 36,422 40,280 year. Fiscal Amount reported $ unpaid fiscal Controller information is - Unsecured each years ( 1 ) 1 ( to and receive Auditor previously Collections, 51,764 46,122 48,135 42,783 43,522 35,643 38,202 41,409 40,787 41,312 Levied not the Year the and for belongs County Secured on Dollars) does Taxes subsequent $ Fiscal Years of in Levies City include received Fiscal Alameda Tax The assessed Berkeley 30, 2014 2015 2016 2012 2013 2009 2010 2011 2007 2008 Ten of Levies Collection Thousands Year Fiscal Ended June Source: presented. Note: (1) interest (2) shown. collection (In Last Property City
254 IX 88,732 99,596 84,420 109,312 111,379 115,230 106,986 118,642 109,531 104,442 Total Activities $ Governmental Schedule t 9,784 5,584 6,816 3,530 10,312 11,340 12,631 12,438 11,751 11,551 Payable $ Notes/Loans 5,719 5,823 5,940 6,153 6,139 6,126 6,012 of Total Certificates $ Particieation 390 378 374 389 376 362 403 of {eremiums) $ e e e e e e e e (1) 1,170 1,175 1,264 1,281 1,394 1,291 1,281 1,177 1,131 1,220 5,550 5,445 5,345 5,750 5,750 5,650 5,750 of Per eremiums) of Capita Certificates Certificates Participation Participation $ only~ (Net (1) 920 473 3.16% 3.21% 2.82% 3.19% 3.56% 3.61% 3.93% 3.64% 3.14% 3.07% 2,460 2,009 3,304 4,141 2,891 3,699 4,440 4,077 Lease Personal Capital instruments Income Percentage of $ debt - C 5,970 5,210 4,425 6,705 7,420 150,361 139,856 140,279 135,571 144,257 159,033 148,274 141,154 120,247 125,354 Total were Primary {long-term $ $ Government Redevelopment only) debts year, _ Activities the 5,974 6,560 9,520 8,875 7,155 7,698 35,131 30,544 35,975 28,900 36,712 35,827 36,622 37,271 38,743 40,391 10,940 10,215 12,550 11,715 Total Total instruments Activities Revenue outstanding $ $ during statements ____ Business-Type the debt - d COP Governmental All 530 508 479 519 year financial 26. of 2003 eremiums) 26,755 26,080 25,385 24,665 27,685 27,410 the the 1X of Oong-term Revenue to Certificates and {eremiums) Participation AB b $ (Net during d $ per notes Bonds Activities the Bonds 2012 8,549 9,200 7,872 9,826 6,956 3,102 4,432 5,495 6,625 6,052 9,520 8,875 7,179 in 11,056 10,428 10,940 10,215 11,715 12,550 eremiums) Lease Lease Bonds Bonds Bonds Bonds 31, Payable of Revenue Revenue $ $ Notes/Loans Funds. found ----- Bond. (Net be Business-tyee Trust January Lease can on 3,950 5,040 3,650 4,510 4,235 4,710 4,780 Revenue 21,995 25,931 21,028 26,886 85,761 88,336 84,608 68,700 82,421 76,290 79,475 71,430 1999 60,000 64,255 Total G.O. General Obligation Total Bonds debt Private Revenue $ $ in Lease dissolved are defease defease 708 385 771 416 400 to to was and 1,922 1,813 1,975 2,006 4,636 outstanding Department Capita) Lease Bonds Bonds Bonds General Refunding Revenue million (eremiums) Per Type (eremiums} $ million city's Agency Agency, d by new Finance $27 the a $45.5 Except Debt over from 3,950 3,650 5,040 4,510 4,235 4,780 over 19,215 20,073 23,925 24,911 87,565 81,125 83,900 68,700 82,005 75,905 79,075 71,430 64,255 60,000 eremiums) Successor eremiums) Berkeley, regarding Years Lease Bonds Bonds of of of General Revenue the Obligation Obligation amount Amount Redevelopment refunded issued $ $ Thousands, to proceeds City Outstanding Fiscal (Net (Net Details in a City City of Berkeley the Ten of Restated Restated moved The The Berkeley 2015 2014 2009 2010 2011 2012 2016 2013 2008 2007 2014 2015 2016 with 2013 2010 2011 2012 2009 2008 2007 Year Year Fiscal Fiscal Source: e. b Notes: a c. d. (Dollars Last Ratios City
255 767 813 701 736 762 (b) X Per Debt Capita Outstanding Schedule a of as (a) 0.70% 0.60% 0.69% 0.70% funds. of Taxable 2012. Debt General Trust Value 31, Property Net Percentage Actual Bonds Private January statements. as on 92,000 Total Agency financial the dissolved to was Successor notes 5,719 of the which the to Certificates in Participation Agency, Outstanding found 2015 be transferred to Debt can Tax Bonds were Allocation debt FY2005 14. Bonded Redevelopment for amounts data Berkeley General schedule Berkeley outstanding of Capita) on Bonds Pension value to Outstanding Refunding Per City city's outstanding found Debt the belong the be property Except All for can V Bonded Bonds 26. Bonds Department, General Years Obligation regarding data 1X AB Thousands, General Fiscal Finance - to in Schedule Details allocation of Berkeley Ten of due Population See Year )Tax Fiscal Source: (c (b) (a) Notes: Last Ratios (Dollars City
256 Schedule XI City of Berkeley Direct and Overlapping Governmental Activities Debt As of June 30, 2016 {In Thousands of Dollars, except assessed valuation)
2015-16 Assessed Valuation: $ 15,342,523,921
Estimated Estimated Share of Direct Debt Outstanding Percentage and Overlapping DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2016 AQQlicable Debt 6/30/16 Bay Area Rapid Transit District $527,065 2.66% $ 14,041 East Bay Municipal Utility District, Special District No. 1 7,345 17.60% 1,293 Peralta Community College District 410,715 18.86% 77,453 Berkeley Unified School District 263,690 100.00% 263,682 City of Berkeley (GO bonds net of premium) 81,125 100.00% 81,125 City of Berkeley (GO bonds premium) 639 100.00% 639 City of Berkeley Community Facilities District No. 1 3,940 100.00% 3,940 East Bay Regional Park District 149,945 4.08% 6,121 City of Berkeley Thousand Oaks Heights AFUU Assessment District 1,170 100.00% 1,170
Subtotal overlapping tax and assessment debt 449,463
DIRECT AND OVERLAPPING GENERAL FUND DEBT: Alameda County and Coliseum Obligations $893,097 6.75% $ 60,320 Alameda County Pension Obligations 47,111 6.75% 3,182 Alameda-Contra Costa Transit District Certificates of Participation 21,285 8.00% 1,703 Peralta Community College District Pension Obligations 163,954 18.86% 30,918 City of Berkeley Revenue bonds (Governmental activities) 4,975 100.00% 4,975 (1) City of Berkeley Revenue bonds premium (Governmental activities) 508 100.00% 479 (1) City of Berkeley Certificates of Participation (Governmental activities) 5,345 100.00% 5,345 (1) City of Berkeley Certificates of Participation premium (Governmental activities) 378 100.00% 374 (1) City of Berkeley Capital Leases (Governmental activities) 2,460 100.00% 4,141 (1) City of Berkeley Notes and Loans Payable (Governmental activities) 10,312 100.00% 9,784 (1) City of Berkeley Pension Obligations (Governmental activities) 520 100.00% 520 (1)
Subtotal overlapping General Fund debt $ 121,741
Overlapping tax increment debt: 100.00%
TOTAL DIRECT DEBT 107,382 TOTAL OVERLAPPING DEBT 463,822
COMBINED TOTAL DIRECT AND OVERLAPPING DEBT $ 571,204 (2)
For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.
(1) Excludes issue to be sold. (2) Excludes tax and revenue anticipation notes, and business-type activities.
Source: California Municipal Statistics, Inc.
257 2016 XII 3.87% 85,761 85,761 2016 Year 2,301,379 2,215,617 2,215,617 2,301,379 15,342,524 $ $ $ $ Schedule Fiscal for 4.13% 84,608 2015 2,050,487 2,135,095 $ ___j_ Margin Calculation 4.50% 88,336 2014 2,053,022 Debt limit: $ to __1____1,964,686 Legal Margin Value 4.13% 76,290 Debt limit applicable 2013 $1,849,032 $1,925,322 Legal Debt Debt Assessed 3.80% 6B,7_go 2012 $1,810,273 $1,878,973 4.74% 82,421 limit 2011 $1,739,799 $1,822,220 city. debt the law 3.94% 68,700 2010 general 1,744,208 1,812,908 a However, $ $ _ were limit. ,43_0 city 4.16% debt a 2009 the 1,716,403 1,787,833 ___Zj if $ $ have _ effect not in 3.99% be 64,255 does 1,610,023 1,674,278 $ $ would such, as that 4.01% limit 60,000 2007 2008 city and, 15% $1,556,907 $1,496,907 Department the charter a limit using the is Finance to debt of Information, limit Berkeley Dollars) calculated to of Berkeley, Years is of applicable of City Margin margin percentage debt Fiscal City a The Berkeley debt Debt net limit applicable as Ten of Thousands computation Source: limit Note: Legal Total Debt Debt Last Legal (In City
258 9.0% 5.8% 3.8% 7.0% 5.9% 4.0% 4.6% XIII 11.3% 10.3% 10.8% (7) City Rate Unemployment Schedule of (6) 35,843 35,838 36,142 35,899 36,204 37,581 38,204 34,953 34,183 34,953 California Enrollment University Division 9,324 9,385 9,410 9,785 8,988 9,248 9,410 8,954 8,856 9,088 (5) Public School Enrollment (8) (8) (8) (8) Information 1) 33.6 31.8 31.0 33.6 32.7 33.6 31.7 34.1 34.1 34.8 (4) Age market Median Census January Labor of - (8) (8) U.S. Education (as of Unit Capita (3) 36,498 35,482 38,896 41,656 35,482 35,482 40,546 36,884 36,884 35,482 dollars), Income Personal Department 88 Per htm Census Department Research Area constant Bay (in Development California (2) Population 4,950,941 4,376,658 3,994,564 4,074,079 4,500,890 4,758,965 3,922,503 3,935,412 3,806,083 4,046,580 dollars) - Income from Personal of (thousands Employment Finance District Governments, Governments, of Bureau Area Area School Dept. Bay (1) Bay California California 118,853 119,915 114,821 115,716 117,372 114,046 112,580 106,347 106,697 107,268 Economic Statistics, of of of Census Population of State Years Unified and U.S. State www.bayareacensus.ca.gov/cities/berkeley. Fiscal Berkeley From Berkeley University From From California Association Association 2015 2016 2012 2013 2014 2011 2010 2007 2008 2009 Ten of Year Fiscal (7) (8) (5) (2) (6) (4) (3) (1) Ended Source: Last Demographic City
259 City XIV 1.14% 0.94% 0.89% 3.15% 0.77% 2.18% 2.01% 2.50% 5.01% 40.89% 22.30% Total Percentage Employment Of Schedule 7 8 9 1 5 3 6 4 2 10 2016 Rank 765 629 514 597 1,353 1,462 1,682 2,117 3,363 27,464 14,983 Employees City 1.99% 1.66% 1.58% 0.45% 0.79% 0.45% 0.92% 2.72% 5.13% 33.63% 17.94% Percentage Employment OfTotal 7 8 9 1 3 5 4 6 2 10 Rank 2005* 600 340 342 700 1,200 1,262 1,516 2,065 3,900 25,560 13,635 Employees Development FY2006 Comp Economic in Health of Ago of Laboratory group Office Years district available Berkeley Management Company Medical National Department Eleven Total readily School Hotel Hospitals Berkeley, Produce and Casting of California Market Bay of Berkeley Bowl Corporation Unified Employers City California Year Steel Permanente Berkeley Berkeley East Corporation of Claremont information of of No * Source: Pacific State FHR Berkeley Kaiser Siemens Andronico's Berkeley Bayer Sutter City Lawrence Employer University Principal Current City
260 5.85 XV 20.60 96.50 71.50 43.55 107.95 140.00 172.28 130.25 292.60 272.00 1,353.08 2016 Schedule 5.85 19.75 65.00 98.88 105.95 175.78 140.00 2015 1,335.91 Services". 5.85 21.95 61.30 98.88 101.33 139.00 285.60 289.60 172.00 2014 1,322.91 Community & (3) 5.85 19.45 97.66 53.05 48.45 41.05 41.05 101.73 287.60 175.00 139.75 123.95 122.95 121.05 275.00 273.00 273.00 1,327.49 2013 Housing (3) 5.85 "Health, 19.45 58.55 85.64 109.70 157.33 139.75 142.35 296.25 182.30 289.20 1,486.37 2012 5.85 department: 19.85 59.05 96.26 year 113.78 161.33 301.00 139.75 191.30 294.70 2011 1,541.15 one full development/housing into one 7.85 18.30 65.55 96.76 115.53 165.33 139.75 194.54 158.28 326.00 301.20 203.30 2010 Office 1,634.11 totaling Community to consolidated Budget 9.85 19.30 74.05 30.63 positions moved 120.36 164.48 325.00 were 136.75 279.30 304.20 206.30 2009 Works. 1,670.22 from were Public budget employee 10.00 73.00 35.73 Department with 152.54 197.80 271.48 Planning 1,659.64 more biennal or Function/Program Services one by combined 9.50 services, 19.30 19.30 72.50 45.83 as 127.56 124.84 147.68 136.50 136.75 310.00 330.00 190.31 adpoted 267.73 308.20 308.20 2007 2008 1,635.11 been Health year. Health a 2013 has and in Employees (4) and calculated hours is (2), Office divisions 2,080 (1) FY2012 Department on Transportation Budget Governmental some - of employment City based Housing 2011, is Office (4) & Years (1) approximately O Manager or recreation FY12, development/housing equivalent Development City Fiscal Government and FY2006, FY201 services Works/Transportation Berkeley Board During In In Information service Ten of Full-time of (4) (1) (2) (3) Source: Notes: Rent Library Planning Public Total Economic Transportation Culture Community Police Health Fire Function/Program General Last Full-time-Equivalent City
261 Schedule XVI City of Berkeley Operating Indicators Current and last two fiscal years
Fiscal Year Fiscal Year Fiscal Year 2014 2015 2016 FUNCTION/PROGRAM
General government Building Permits Issued Residential Permits Issued 1,995 1,899 2,130 Residential Permits Value $ 95,615,783 $ 161,551,963 $ 63,338,441 Mixed Use Issued (h) 4 Mixed Use Value (h) $ 30,978,710 Commercial Permits Issued 368 340 296 Commercial Permits Value $ 56,376,980 $ 72,691,761 $ 93,563,007
Residential Parking Permits Number of Daily Permits Issued 36,868 41,287 39,946 Number of 14 Day Permits Issued 1,528 1,857 1,355 Number of Annual Permits Issued 15,182 15,802 15,557
City Clerk Number of Council Resolutions Passed 469 441 466 Number of Ordinances Passed 50 66 65 Number of Contracts Passed 563 445 476
General Services Number of Purchase Orders Issued 4,708 4,560 4,810
Police Physical Arrests 2,799 2,815 3,024 Parking Violations 159,067 144,237 136,991 Traffic (moving) Violations 6,758 5,647 5,291 DUI Arrests 157 306 385
Fire Structure Fires 95 82 83 Vehicle Fire 29 24 19 Other Fires 130 120 146 Medical Calls 10,016 9,888 10,042 Haz-mat Calls 130 105 117 Other Calls 3,942 4,139 4,628 Out of City 54 71 99
Department of Health Services (e) 1) Health Inspections and Permits 8,449 7,917 7,052 Public Health Services Encounters (e) 3) 60,000 60,415 54,177 Mobile Crisis Visits 1,134 1,422 1,476
Housing and Community Services Department (e) 1) Home Delivered Meal (e) 2) 46,514 53,276 49,632 Summer and year-round jobs provided for youth (e) 2) 395 327 308
Library Number of visits made to Library Branches 1,335,281 1,087,683 1,350,858 Number of people that are registered library card holders 109,078 120,058 115,376 Number of times materials from the library circulated (items checked out) 1,973,998 1,878,826 2,064,485
(Continued)
262 Schedule XVI
City of Berkeley Operating Indicators Current and last two fiscal years
Fiscal Year Fiscal Year Fiscal Year 2014 2015 2016
Solid Waste Management Diversion Rate (pending State Approval) (a) NA NA NA Transfer Station Customers (b) 111,855 118,300 116,489
Total incoming tons at transfer station Refuse and C&D 69,533 78,780 84,283 Organics 34,114 37,775 32,228 Total incoming tons 103,647 116,555 116,510
Landfilled Tons (c) 51,197 50,880 62,596 Recycled /Composted Tons (d) 55,740 65,069 54,454 Total tons exiting transfer station (c) 106,377 115,949 117,050
Recycling Method Recycled/Composted tons: Organics collection to compost facility 20,619 21,678 22,373 Organics - public to compost facility 16,966 16,097 9,855 Transfer Station Salvage 820 995 998 C&D Diverted at sorting facility 18,336 27,277 18,535 Add 'I TS Diversion Programs 852 1,244 1,902 TOTAL TRANSFER STATION DIVERSION 57,593 67,291 53,663
Buyback drop-off 3,602 3,524 3,518 Residential Curbside 8,160 8,904 8,832 Commercial recycling 2,580 2,916 3,404 TOTAL RECYLING COLLECTION at CCC (Not at transfer station) 14,342 15,344 15,754 TOTAL CITY CONTROLLED DIVERSION 71,935 82,635 69,417
Other Public Works Street Resurfacing/Overlay/Reconstruction (miles) 3.06 7.77 15.50 ADA Compliance: New Curb Ramps 150 195 245 Traffic Circles - Cumulative 55 55 55 Street Poles with Lights - Cumulative 7,860 7,860 8,008
Marina Number of Berths 1,021 1,021 1,021 Number of Occupied Berths 897 894 870 Number of new berthers 159 124 155 Number of paid launchers 2,900 4,123 4,024 Launch Ramp Total Revenue (f) $ 43,512 $ 61,844 $ 60,355
Parking Number of Pay and Display Meters Operating 220 227 229 Number of Single Space Meters Operating 2,383 2,168 2,176
Planning and Development Department Customers Served 19,475 25,073 Building & Safety Inspections Performed 27,602 29,305 Toxics: CUPA Inspections 266 249 232 Redevelopment: Number of active projects (g) 5
Sanitary Sewer Number of Customer Accounts Billed 32,876 33,305 32,669
(Concluded)
263 Schedule XVI
(a) California legislation SB1016 changed measurement requirements. 1)Adopting measurement requirements of pounds per person per day instead of diversion rates which are no longer in use. 2)Adopting measurement requirements of pounds per person per day instead of diversion rates which are no longer in use. (b) "Customers" are all paying customers regardless of the town they come from.
Landfilled and recycled tons are all tons going through the transfer station. It includes SWMD collection trucks, as well as paying customers.
(c) Outside tons not included in transfer station tons: 1) Tons collected by private haulers and taken to other landfills 2) Tons delivered by members of the public to other landfills or transfer stations 3) Berkeley tons recycled by the private sector ( d) Recycling Method new this year provides the detail of Total City-controlled Diversion (e) Departmental Reorganization: 1) Health and Human Services restructuring now named Department of Health Services, Housing Department renamed to Housing and Community Services Department. Public Health, Housing and Community Services along with Planning and Development Department all have changes in their department composition and functions in 2010. *Amending BERKELEY MUNICIPAL CODE SECTIONS 2.50.010, 2.50.020, 2.50.030, 2.50.040, 2.50.050, 2.50.060, 2.61.020, 2.62.010, 2.62.020, 2.62.030, and 2.60.040 To Reflect updated organizational changes 2) Program moved 2010 to Housing and Community Services Departments 3) Health Education and linkages to services indicator no longer measured as operating indicator 4) Operating indicator "Health Education and linkages to services" now referred to as "Public Health Services Encounters" (f) Launch Ramp Fees increased midway through each year from $5 FY2008, to $1 O FY2009, then to $15 FY201 O (g) In accordance with the timeline as set forth in the Bill AB 1X 26, all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. In FY2015, it was determined that the Excess Bond Proceeds were eligible for transfer to the City to fund the following projects: 1) Bicycle Crossing Improvement, 2) NW Berkeley sidewalk paving and 3) Conduct Gilman overcrossing preliminary study. Therefore, the Agency has no active projects. (h) Mixed Use previously categorized between residential and commercial based on dominate property use.
264 Schedule XVII City of Berkeley Capital Asset Statistics by Function/Program Current and last two fiscal years
Fiscal Year Fiscal Year Fiscal Year 2014 2015 2016 Function/Program
Police Number of Stations 1 2 2 Parking Enforcement Vehicles 32 42 47
Fire Number of Stations 7 7 7 Number of Fire Trucks 12 12 12 *
Library Central Library 1 1 1 Branch Libraries 4 4 4
Solid Waste Management Collection Vehicles 34 38 40 Support Vehicles 21 21 19 Transfer Tractors 8 8 7 Transfer Trailers 9 9 8
Other Public Works Streets (miles) 216 216 216 Streetlights 7,860 7,860 8,009 Traffic Signals 136 136 138 Sidewalks (miles) 300 300 300
Parks and Recreation Number of Parks 52 52 52 Public Swimming Pools 2 2 2 Over night Summer Camps 2 2 2 Number of Community Centers 4 4 4 Number of Club Houses 2 2 2 Community Gardens 6 6 6 Nature Center 1 1 1 Adventure Playground 1 1 1
Sanitary Sewer Public Sanitary Sewer Mains (miles) 254 254 254 Public Sewer Laterals (miles) 130 130 130
Parking Number of Parking Garages 3 3 3 Number of Parking Lots 2 2 3 Number of Off Street Parking Meter Spaces 143 143 143 Number of Off Street Parking Garage Spaces 969 969 969
Source: Operating indicators were provided by the various operating departments
* On March 2, 2015 as part of pilot program, Fire added a part-time "Truck", 10 hours a day; weekdays only. This addition affected a fraction of 85 days, which calculated out to be approximately 0.10. However, the fractional numbers did not show up towards the total for this report.
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266 CITY OF BERKELEY GENERAL OBLIGATION AND GENERAL FUND OBLIGATIONS CONTINUING DISCLOSURE ANNUAL REPORT INFORMATION
$10,000,000 City of Berkeley General Obligation Bonds, Series 2009 (Measure FF - Neighborhood Branch Library Improvements Project)
$16,000,000 City of Berkeley General Obligation Bonds, Series 2010 (Measure FF - Neighborhood Branch Library Improvements Project)
$15,000,000 CITY OF BERKELEY 2014 General Obligation Bonds (Street and Integrated Watershed Improvements)
$36,680,000 CITY OF BERKELEY 2015 General Obligation Refunding Bonds
$15,000,000 CITY OF BERKELEY 2016 General Obligation Bonds (Street and Integrated Watershed Improvements)
$5,750,000 $27,260,000 City of Berkeley Berkeley Joint Powers Financing Authority 2010 Certificates of Participation 2012 Refunding Lease Revenue Bonds (Animal Shelter Financing) (1999 and 2003 Refinancing)
Content of Annual Reports
(a) Audited financial statements:
This exhibit is attached to the City's audited financial statements.
267 (b) Summary of investments held in the City's investment portfolio for the most recently-completed fiscal year, including market value, book value and a description of any investments that do not comply with the City's investment policies:
City of Berkeley Investment Portfolio As of June 30, 2016
Security Type Market Value Book Value U.S. Agency Securities $155,739,150.00 $154,980,674.28 Municipal Bonds 13,741,351.45 13,547,454.69 Medium Term Notes 6,044,900.00 6,015,460.79 Others 121,920,403.27 121,920,403.27 Total $297,445,804.72 $296,463,993.03
All of the City's investments comply with its investment policies.
( c) General fund budget for the fiscal year during which the annual report is filed ( only required for the 2010 Certificates of Participation and 2012 Refunding Lease Revenue Bonds):
The City's current budget will be provided separately from this report.
( d) General fund balance sheet for the most recently-completed fiscal year:
Please see information in the audited financial statements.
( e) General fund summary of revenues and expenditures for the most recently-completed fiscal year:
Please see information in the audited financial statements.
(:f) General fund tax revenues by source for the most recently-completed fiscal year:
Please see information in the audited financial statements.
(g) Assessed valuation of property in the City for the most recently-completed fiscal year and, to the extent the City is no longer on the Teeter Plan ( or its equivalent) and such information is available from the County, information about property tax levies and collections for the most recently completed fiscal year:
Please see information in the audited financial statements.
(h) Summary of property tax rates for all taxing entities within the City expressed as a percentage of assessed valuation:
Please see information in the audited financial statements.
268 (i) Top ten property tax assessees for current fiscal year, taxable value and percentage of total assessed value:
Please see information in the audited financial statements.
(j) Taxable transactions in the City for the most recently-completed fiscal year ( only required for the 2010 Certificates of Participation and 2012 Refunding Lease Revenue Bonds):
The State of California's taxable transaction data generally lags by approximately one year, and therefore, is not available for the most recently completed fiscal year. The most currently available taxable transaction data for the City will be provided separately from this report.
(k) Description of the City's outstanding general fund debt and lease obligations as of the end of the most recently-completed fiscal year, including long-term general fund obligations:
Please see information in the audited financial statements.
(1) A schedule of aggregate annual debt service on tax-supported indebtedness of the City:
Please see information in the audited financial statements.
(m) Summary of outstanding and authorized but unissued tax-supported indebtedness of the City:
Outstanding Authorized (as of Election Amount Unissued Bond Issue 6/30/2016)
1992 $55,000,000 $0 2015 Bonds (Refunded 2002 Bonds, 1996 $49,000,000 $0 $36,680,000 2007 A Bonds, 2007 B Bonds, 2002 $7,200,000 $0 2008 Bonds) 2009 Bonds $9,170,000 2008 $26,000,000 $0 2010 Bonds $14,410,000 2014 Bonds $14,575,000 2012 $30,000,000 $0 2016 Bonds $15,000,000
Total $167,200,000 $0 $89,835,000
269 (n) Amount of all general obligation debt of the City outstanding, and total scheduled debt service on such general obligation debt.
Fiscal 2009 2010 2014 2015 2016 Year G.O. Bonds G.O. Bonds G.O. Bonds G.O. Bonds G.O. Bonds Total 2015-16 660,162.50 952,906.26 898,075.00 1,044,881.18 0.00 3,556,024.94 2016-17 664,462.50 948,506.26 900,850.00 4,124,837.50 318,074.13 6,956,730.39 2017-18 668,206.25 948,606.26 898,000.00 4,330,925.00 670,412.50 7,516,150.01 2018-19 670,843.75 946,131.26 898,125.00 3,891,837.50 757,962.50 7,164,900.01 2019-20 672,875.00 945,881.26 897,500.00 3,884,212.50 750,237.50 7,150,706.26 2020-21 676,137.50 944,631.26 896,125.00 3,872,962.50 745,737.50 7,135,593.76 2021-22 670,212.50 951,856.26 894,000.00 3,050,587.50 740,737.50 6,307,393.76 2022-23 668,475.00 947,906.26 896,000.00 3,049,837.50 740,112.50 6,302,331.26 2023-24 665,762.50 947,975.01 892,125.00 3,043,587.50 738,737.50 6,288,187.51 2024-25 662,075.00 945,093.76 896,425.00 3,036,712.50 736,612.50 6,276,918.76 2025-26 660,512.50 944,693.76 898,787.50 3,038,712.50 740,462.50 6,283,168.76 2026-27 665,906.25 948,393.76 895,237.50 3,066,687.50 740,362.50 6,316,587.51 2027-28 670,050.00 946,193.76 894,350.00 3,062,687.50 744,562.50 6,317,843.76 2028-29 668,156.25 943,193.76 896,150.00 2,110,687.50 747,962.50 5,366,150.01 2029-30 668,900.00 944,293.76 892,250.00 988,087.50 757,712.50 4,251,243.76 2030-31 672,037.50 943,996.88 892,650.00 394,931.25 763,912.50 3,667,528.13 2031-32 668,937.50 942,287.50 892,250.00 394,856.25 764,587.50 3,662,918.75 2032-33 670,737.50 944,443.75 890,712.50 394,253.13 764,812.50 3,664,959.38 2033-34 672,362.50 940,465.63 892,921.88 392,906.26 765,875.00 3,664,531.27 2034-35 672,737.50 940,353.13 894,100.01 391,006.26 767,812.50 3,666,009.40 2035-36 676,737.50 943,412.50 888,587.51 393,668.76 773,968.75 3,676,375.02 2036-37 678,531.25 939,625.00 891,243.76 390,662.51 779,268.75 3,679,331.27 2037-38 678,081.25 939,456.25 887,696.88 391,978.13 783,675.00 3,680,887.51 2038-39 676,056.25 937,800.00 887,946.88 787,175.00 3,288,978.13 2039-40 677,325.00 939,550.00 886,884.38 790,125.00 3,293,884.38 2040-41 888,925.00 797,456.25 1,686,381.25 2041-42 884,050.00 804,100.00 1,688,150.00 2042-43 887,600.00 809,175.00 1,696,775.00 2043-44 884,462.50 817,575.00 1,702,037.50 2044-45 825,075.00 825,075.00 2045-46 831,675.00 831,675.00 2046-47 837,375.00 837,375.00 Total $16,756,281.25 $23,617,653.29 $25,894,031.30 $48,741,506.23 $23,393,330.38 $138,402,802.45
(o) Additional material information:
The City is not aware of any additional material information.
270 Reporting of Significant Events
There were no Significant Events that occurred during the most recently completed fiscal year. According to the Continuing Disclosure Certificate, Significant Events include:
1) Principal and interest payment delinquencies. 2) Non-payment related defaults. 3) Unscheduled draws on debt service reserves reflecting financial difficulties. 4) Unscheduled draws on credit enhancements reflecting financial difficulties. 5) Substitution of credit or liquidity providers, or their failure to perform. 6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. 7) Modifications to rights of security holders. 8) Optional, contingent or unscheduled bond calls and tender offers. 9) Defeasances. 10) Release, substitution, or sale of property securing repayment of the securities. 11) Rating changes. 12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person. 13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person ( other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. 14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
$12,415,000 City of Berkeley Pension Obligation Bonds Series 1998
Content of Annual Reports
(a) Audited financial statements:
This exhibit is attached to the City's audited financial statements.
(b) A description ~f the Bonds issued by the Issuer and outstanding as of the date of such report:
Please see information in the audited financial statements.
(c) A statement of direct and overlapping debt:
Please see information in the audited financial statements.
(d) A schedule of Bond redemptions and the source of funds for such redemptions:
No Bond redemptions, with the exception of Mandatory Sinking Fund Redemptions, have occurred to date.
271 Reporting of Significant Events
There were no significant events that occurred during the most recently completed fiscal year. According to the Continuing Disclosure Certificates, significant events include:
1) Principal and interest payment delinquencies: 2) Nonpayment related defaults: 3) Modifications to rights of Holders: 4) Optional, contingent or unscheduled Bond calls: 5) Defeasances: 6) Rating changes: 7) Adverse tax opinions or events adversely affecting the tax-exempt status of the Bonds: 8) Unscheduled draws on the debt service reserves, if any, reflecting financial difficulties: 9) Unscheduled draws on any credit enhancement facility, if any, reflecting financial difficulties: 10) Substitution of the provider of any credit enhancement facility or any failure by said provider to perform on any credit enhancement facility: 11) Release, substitution or sale of property securing repayment of the Bonds:
CITY OF BERKELEY LAND-SECURED OBLIGATIONS CONTINUING DISCLOSURE ANNUAL REPORT INFORMATION
$1,490,000 City of Berkeley Thousand Oaks Heights Applicant Funded Utility Undergrounding Assessment District Limited Obligation Improvement Bonds
Content of Annual Reports
(a) Audited financial statements:
This exhibit is attached to the City's audited financial statements.
(b) The following information:
1. Principal amount of Bonds outstanding ( as of June 30, 2016): $1,170,000
2. Balance in the Acquisition and Improvement Account: $0
3. The amount of any advances made by the City pursuant to Section 8769(a) of the Improvement Bond Act of 1915, to cure any deficiency in the Redemption Account, or, if a reserve account has been established for the Bonds, the balance in reserve account and a statement of projected reserve fund draw, if any:
There are no deficiencies in the Redemption Account and no reserve account was established for the bonds.
272 4. The delinquency rate, total amount of delinquencies, number of parcels delinquent in payment of the Assessment:
Assessment Levy and Delinquency Information Fiscal Year 2015-16
Number of Amount Delinquent Delinquency Total Levy Delinquent Parcels Rate $114,885 $760.59 0.67%
Reporting of Significant Events
There were no significant events that occurred during the most recently completed fiscal year. According to the Continuing Disclosure Certificates, significant events include:
1) Principal and interest payment delinquencies. 2) Non-payment related defaults. 3) Modifications to rights of Bondholders. 4) Optional, contingent or unscheduled Bond calls. 5) Defeasances. 6) Rating changes. 7) Adverse tax opinions or events affecting the tax-exempt status of the Bonds. 8) Unscheduled draws on the debt service reserves, if any, reflecting financial difficulties. 9) Unscheduled draws on credit enhancements reflecting financial difficulties. 10) Substitution of credit or liquidity providers, or their failure to perform. 11) Release, substitution, or sale of property securing repayment of the Bonds.
$9,750,000 City of Berkeley Community Facilities District No. 1 (Disaster Fire Protection) Special Tax Bonds
Content of Annual Reports
(a) Audited financial statements:
This exhibit is attached to the City's audited financial statements.
273 (b) Operating data:
Total Building Square Footage by Use Type Fiscal Year 2015-16
Use TI~e Sguare Feet Residential 60,539,158 Commercial 18,650,891 Institutional 2,765,359 Governmental 302,077 TOTAL 82,257,485 Exemet Total 5,283,129 TAXABLE TOTAL 76,974,356
Levy and Coverage Data Fiscal Year 2015-16
Bond Year Total Tax Levy Debt Service Coverage Ratio $1,003,655.24 $754,817.50 l.33x
( c) Additional material information:
The City is not aware of any additional material information.
Reporting of Significant Events
There were no significant events that occurred during the most recently completed fiscal year. According to the Continuing Disclosure Certificates, significant events include:
1) Principal and interest payment delinquencies. 2) Non-payment related defaults. 3) Unscheduled draws on debt service reserves reflecting financial difficulties. 4) Unscheduled draws on credit enhancements reflecting financial difficulties. 5) Substitution of credit or liquidity providers, or their failure to perform. 6) Adverse tax opinions or events affecting the tax-exempt status of the security. 7) Modifications to rights of security holders. 8) Contingent or unscheduled bond calls. 9) Defeasances. 10) Release, substitution, or sale of property securing repayment of the securities. 11) Rating changes.
274 CITY OF BERKELEY PARKING ENTERPRISE OBLIGATIONS CONTINUING DISCLOSURE ANNUAL REPORT INFORMATION
$33,970,000 Berkeley Joint Powers Financing Authority Parking Revenue Bonds, Series 2016
Content of Annual Reports
( a) Audited financial statements:
This exhibit is attached to the City's audited financial statements.
(b) Other financial information and operating data:
(i) Principal amount of Bonds outstanding: $33,970,000
(ii) Balance in funds and accounts held by the Authority, the City or the Trustee relating to the Bonds (as of June 30, 2016):
The Bonds were issued on August 23, 2016. As a result, no funds or accounts had been established as of June 30, 2016.
(iii) A description of any event of default under the Installment Sale Agreement:
No events of default have occurred to date.
(iv) Changes, if any, to the rate structure of the Center Street Garage, Oxford Way Garage or Telegraph Channing Garage:
No changes have been made to the rate structure since the issuance of the bonds.
275 (v) Occupancy rates, in substantially the form provided in Table 1 of the Official Statement (to be provided within nine months of the close of the most recently completed fiscal year):
TABLE 1 CITY OF BERKELEY PARKING GARAGES HISTORICAL OCCUPANCY LEVELS (Weekday Peak Parking(l>)
Center Street Telegraph Channing Garage Oxford Street Garage Garage 3 Year Short-termC2> OveraUC3) Short-TermC2> Overa1IC3) Short-termC2) OveraUC ) 2013(4) NA 92% NA 74% NA 82% 2014(5) 85% 70% 47% 51% 77% 70% 2015(6) 96% 78% 89% 78% 77% 73% 2015(7) 105%(8) 78% 67% 67% 70% 63% 2016 107%(8) 75% 64% 58% 68% 75%
(I) Weekday peak parking - Tuesday through Thursday 10 a.m. to 2 p.m. <2) Represents hourly parkers. <3) Represents hourly parkers and monthly permit parkers. <4) September 2013 data (prior to implementation ofnew rates on December 2, 2013). <5) February 2014 data (prior to implementation ofnew rates on June 2, 2014). 6 < ) March 2015 data (prior to implementation ofnew rates on September 1, 2015). <7) October 2015 data (following implementation of new rates on September 1, 2015). <8) Occupancy exceeding 100% reflects use of City's fleet vehicle spaces for short-term parking when majority of City fleet vehicles are in use during daytime hours. Source: City's Garage Parking Access and Control System (PARCS) SKIDATA.
(vi) Revenues, expenses and changes in net position and statement of net position for each of the Off Street Parking Enterprise and the Parking Meter Enterprise, in substantially the form provided in Tables 2 through 5, respectively, of the Official Statement. (The City does not need to provide projected results for future years.):
276 TABLE2 CITY OF BERKELEY Off Street Parking Fund Statement of Net Position
Fiscal Year Ended June 30: 2011-12 2012-13 2013-14 2014-15 2015-16 ASSETS Current Assets: Cash and cash equivalents $217,290 $414,762 $362,415 $314,085 $3,694,570 Investments 7,293,484 8,270,021 9,209,907 10,426,953 6,605,266 Accounts receivables, net 58,937 6,471 96,983 158,798 200,071 Total current assets 7,569,712 8,691,254 9,669,305 10,899,836 10,499,907 Noncurrent Assets: Restricted cash and cash equivalentsO> 3,654,650 3,654,650 3,564,661 Capital Assets: Land 1,291,709 1,291,709 1,291,709 1,291,709 1,291,709 Construction in Progress 168,698 1,085,103 4,065,874 Buildings, property, equip. and infrastructures, net 4,859,458 4,672,753 4,358,779 4,055,024 3,753,428 Total capital assets, net 6,151,167 5,964,462 5,819,187 6,431,836 9,111,011 Total noncurrent assets 9,715,817 9,529,112 9,383,847 6,431,836 9,111,011 Total assets 17,285,529 18,220,366 19,053,153 17,331,672 19,610,918 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows on pension plan employer contrib. <2> 78,192 86,916 Total Deferred outflows of resources 78,912 86,916 LIABILITIES Current liabilities: Accounts payable 89,400 268,508 277,821 330,100 424,135 Accrued salaries and wages 7,424 5,125 11,438 7,189 19,505 Accrued interest payable 48,046 44,436 40,490 Compensated absences 2,264 1,788 5,441 553 984 Deposits held 9,866 9,866 5,866 5,566 5,566 Revenue bonds payable<3> 305,000 320,000 330,000 Total current liabilities 461,999 649,723 671,056 343,408 450,189 Noncurrent liabilities: Compensated absences 11,876 9,383 28,546 2,900 5,165 Revenue bonds payable3> 3,345,000 3,025,000 2,695,000 Net pension liability<2> 702,632 735,432 Net OPEB obligation 5,268 8,275 11,324 16,335 18,589 Total noncurrent liabilities: 3,362,144 3,042,658 2,734,870 721,867 759,186 Total liabilities 3,824,143 3,692,380 3,405,926 1,065,275 1,209,375 DEFERRED INFLOWS OF RESOURCES Deferred inflows on differences between projected and 150,596 19,888 actual earnings on pension plan investments<2> Deferred inflows on difference change of Assumptions 29,838 Deferred inflows between expected and actual earnings 31,835 Total Deferred inflows of resources 150,596 81,561 NET POSITION Net investment in capital assets 6,065,817 6,184,112 2,794,187 6,431,836 9,111,011 Unrestricted (deficit) 7,395,569 8,343,874 9,288,380 9,762,157 9,295,886 Total Net Position $13 461 386 $14,527,985 $15 647 225 $16 193 994 $18 406 898
<1>Revenue bonds retired in March 2015; restricted cash no longer required. <2> Reflects implementation of GASB 68 in FY 2014-15. <3>Revenue bonds retired in March 2015. Source: City of Berkeley, Department of Finance.
277 TABLE3 CITY OF BERKELEY Off Street Parking Fund Statement of Revenues, Expenses and Changes in Net Position
Fiscal Year Ended June 30: 2011-12 2012-13 2013-14 2014-15 2015-16 REVENUES: Center Street Garage $1,486,963 $1,637,148 $1,851,248 $1,876,598 $1,916,513 Oxford Garage 550,405 472,644 534,124 576,847 568,752 Telegraph Garage 1,538,689 1,668,500 1,510,906 1,457,968 1,299,923 Others 248,453 TOTAL REVENUES< 1) 3,575,057 3,778,292 3,896,278 3,911,413 4,033,641
OPERATING EXPENSES: Personnel services 215,967 200,376 202,551 197,815 162,510 Employee benefits 122,123 120,168 116,570 146,691 65,292 Transportation 4,669 2,856 4,753 Repairs and maintenance 119,730 41,161 195,906 211,376 315,068 Materials and supplies 628,911 730,391 488,075 451,635 254,890 Utilities<2) 151,435 155,469 180,708 200,361 208,545 3 Specialized and professional services< ) 1,166,835 991,788 1,176,113 1,185,770 1,390,363 Depreciation 209,573 294,273 306,851 303,756 301,596 Communication 21,409 22,505 23,177 22,942 25,536 TOTAL OPERATING EXPENSES 2,635,982 2,556,130 2,694,620 2,723,202 2,728,553 OPERATING INCOME (LOSS)(3) 939,074 1,222,162 1,201,658 1,188,211 1,305,088
NON-OPERATING REVENUES (EXPENSES) OTHER FINANCING SOURCES (USES): 4 Investment eamings< ) (38,414) (5,129) 63,822 (13,627) 15,736 5 Interest expense< ) (153,171) (142,514) (131,198) (82,654) Gain (loss) on disposal of capital assets (801) (7,123) TOTAL NON-OPERATING (192,386) (147,642) (74,449) (96,281) 15,736 REVENUES (EXPENSES) NET INCOME (LOSS) BEFORE 746,689 1,074,520 1,127,159 1,091,930 1,320,824 CONTRIBUTIONS AND TRANSFERS
TRANSFERS IN<6) 239,544 900,000 TRANSFERS OUT (7,920) (7,920) (7,920) (7,920) (7,920) CHANGE IN NET POSITION 738,769 1,066,600 1,119,239 1,323,554 2,212,904 TOTAL NET POSITION-Beginning 12,722,617 13,461,385 14,527,986 14,870,439 16,193,994 TOTAL NET POSITION-Ending $13 461 386 $14 527 985 $15 647225 $16 193 994 $18 406 898
0) Total revenues reflect audited figures prepared on a full accrual basis. Garage figures provided on a cash basis. 2 < > Increases in utilities in FY 2013-14 and FY 2014-15 due to utility rate increases <3> Increase in professional services in FY 2015-16 due in part to one-time expenses associated with the Center Street Garage Project. <4> GASB 31 requires the City to record the unrecognized loss of investments to reflect the fair market value. <5> Represents interest payable on prior parking revenue bonds, which were retired in March 2015. <6> Transfer in FY 2015-16 of $900,000 from Parking Meter Fund for City Center Garage Project financing. Source: City of Berkeley, Department of Finance.
278 TABLE4 CITY OF BERKELEY Parking Meter Fund Statement of Net Position
Fiscal Year Ended June 30: 2011-12 2012-13 2013-14 2014-15 2015-16 ASSETS Current Assets: Cash and cash equivalents $57,807 $91,747 $129,787 $162,233 $2,291,066 Investments 1,937,215 1,829,361 3,298,237 5,385,782 4,096,038 Accounts receivables, net 30,827 400 1,030 Total current assets 2,025,849 1,921,508 3,428,024 5,549,045 6,387,104 Noncurrent Assets: Capital Assets: Land Construction in Progress 684 3,421 Buildings, property, equip. & infrastructure, net 207,590 67,798 75,179 71,192 1,324,708 Total capital assets, net (I) 207,590 68,482 75,179 71,192 1,328,129 Total noncurrent assets 207,590 68,482 75,179 71,192 1,328,129 Total assets 2,233,439 1,989,991 3,503,203 5,620,237 7,715,233 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows on pension plan employer 629,484 699,716 contribution<2) Total Deferred outflows of resources 629,484 699,716 LIABILITIES Current liabilities: Accounts payable 40,825 73,420 71,756 177,859 819,263 Accrued salaries and wages 65,269 73,303 117,460 117,516 174,331 Compensated absences 26,227 26,241 38,806 29,587 32,519 Total current liabilities 132,321 172,964 228,022 324,962 1,026,113 Noncurrent liabilities: Compensated absences 137,608 137,684 203,605 155,237 170,622 Net pension liability<2) 5,656,560 5,920,616 Net OPEB obligation 43,124 68,489 99,099 140,745 173,130 Total noncurrent liabilities: 180,732 206,173 302,704 5,952,542 6,264,368 Total liabilities 313,053 379,137 530,726 6,277,504 7,290,481 DEFERRED INFLOWS OF RESOURCES Deferred inflows on differences between projected and 2 1,212,374 160,108 actual earnings on pension plan investments< ) Deferred inflows on change of Assumption 240,215 Deferred inflows on difference between Expected and 256,285 Actual earnings Total Deferred inflows of resources 1,212,374 656,608 NET POSITION Net investment in capital assets 207,590 68,482 75,179 71,192 1,328,129 Unrestricted ( deficit) 1,712,796 1,542,372 2,897,298 (1,311,349) (860,269) Total Net Position $1 920 386 $1,610 854 $2 972 476 $(1 240 157) $467 860
Ol Reduction of the net amount of capital assets in FY 2012-13 reflects disposal of fixed assets. <2> Reflects implementation of GASB 68 in FY 2014-15. Source: City of Berkeley, Department of Finance.
279 TABLES CITY OF BERKELEY Parking Meter Fund Statement of Revenues, Expenses and Changes in Net Position
Fiscal Year Ended June 30: 2011-12 2012-13 2013-14 2014-15 2015-16 Operating Revenues: Parking meter revenuesO) $6,242,816 $6,496,336 $7,821,684 $9,151,360 $9,315,816 Total Revenues 6,242,816 6,496,336 7,821,684 9,151,360 9,315,816 Operating Expenses: Personnel services<2) 1,882,202 1,892,700 2,236,430 2,197,247 2,380,949 Employee benefits 1,235,825 1,319,980 1,635,492 1,757,016 1,541,674 Transportation 445,865 417,255 399,194 400,771 301,133 3 Repairs and maintenance< ) 16,695 16,729 422,557 478,044 506,581 3 Materials and supplies< ) 226,918 1,225,611 22,058 734,000 493,710 Utilities 5,125 8,356 12,560 Specialized and professional services 590,731 779,097 706,569 653,239 698,959 Depreciation 142,610 139,792 62,606 27,366 77,154 Communication 4,026 4,072 4,309 4,968 10,915 Total Operating Expenses 4,544,871 5,795,236 5,694,340 6,261,027 6,023,635
Operating Income (Loss) 1,697,945 701,099 2,127,344 2,890,333 3,292,181 Non-operating Revenues (Expenses): 4 Investment earnings< ) (10,231) 3,018 18,920 (1,512) 11,976 Gain(loss) of dispos. capital assets 861 Total non-operating revenue (expenses) (10,231) 3,018 19,781 (1,512) 11,976 Net income (loss) before contributions 1,687,714 704,118 2,147,125 2,888,821 3,304,157 and transfers Transfers in<5) 228,147 406,970 339,321 Transfers out<6) (913,650) (1,013,650) (1,013,650) (1,254,871) (1,935,459) Change in net position 774,064 309,532 1,361,622 2,040,920 1,708,019
Total Net Position - Beginning 1,146,322 1,920,386 1,610,854 (3,281,079) (1,240, 157) 7 Total Net Position - Ending< ) $1 920 386 $1 610 854 $2 972 476 $(1 240 157) $467 860
1 < > Revenue increases reflect meter rate increases that went into effect in December 2, 2013, June 2, 2014 and September 1, 2015. 2 < > Increased personnel expenses in FY 2013-14 attributable to implementation of GASB 68; decreased personnel expenses in FY 2014-15 due to reduction in maintenance personnel from installation of new parking meters; Parking Meter Fund net pension liability and net OPEB obligation equals $5,797,305 in FY 2014-15 and $6,093,746 for FY 2015-16. <3> FY 2013-14 and 2014-15 increases in repairs and maintenance due to reclassification of expenses from materials and supplies to repairs and maintenance; FY 2014-15 and 2015-16 increases in materials and supplies due to purchases of parking meters. <4> GASB 31 requires the City to record the unrecognized loss of investments to reflect the fair market value. <5> Transfers in reflect public works engineering fees collected in the Permit Service Center Fund transferred to Parking Meter Fund in lieu of lost parking meter revenues. <6> FY 2015-16 transfers out include $900,000 to Off Street Parking Fund for Project and $1,026,000 to General Fund for Public Commons for Everyone Program and other homeless programs, as well as the City's portion of the Downtown Property Based Improvement District. 7 < > June 30, 2014 ending fund balance does not roll to July 1, 2014 beginning fund balance due to implementation of GASB 68. See "APPENDIX C - The City's Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015 - Notes to Financial Statements, Note (I)(D)." Source: City of Berkeley, Department of Finance.
280 (vii) Coverage ratio calculation for the Bonds, in substantially the form provided in Table 6 of the Official Statement. (The City does not need to provide projected results for future years.):
TABLE6 CITY OF BERKELEY Off Street Parking Fund and Parking Meter Fund Summary Statement of Revenues, Expenses and Debt Service Coverage
Fiscal Year Ended June 30: Off Street Parking Enterprise Operating Revenues Center Street Garage $1,916,513 Oxford Garage 568,752 Telegraph/Channing Garage 1,299,923 Telegraph/Channing Mall Rents 189,526 Other 58,927 Total Off Street Parking Enterprise Revenues 4,033,641 Off Street Parking Enterprise Operating Expenses Personnel 227,802 Non-personnel 2,500,751 Property and Business Interruption Insurance for Center Street Garage Parking Management Services Total Off Street Parking Enterprise Expenses 2,728,553 NET OFF STREET PARKING REVENUES FOR COVERAGE 1,305,088 Parking Meter Enterprise Operating Revenues Various Lots 9,315,816 PSC Transfer Total Parking Meter Enterprise Revenues 9,315,816 Parking Meter Enterprise Operating Expenses Personnel 3,922,623 Non-personnel 2,101,012 Total Parking Meter Enterprise Expenses 6,023,635 NET PARKING METER REVENUES FOR COVERAGE 3,292,181
TOTAL NET REVENUES FOR COVERAGE 2016 Revenue Bonds Debt Service<)) Coverage Ratio (Off Street Parking Fund Only)(l)(Z) NIA Coverage Ratio (Off Street Parking Fund and Parking Meter Fund)(l)(Z) NIA
(I) First debt service payment is due December I, 2016. (2) Net Revenue divided by Debt Service. Source: City of Berkeley.
(c) Additional material information:
None.
281 Reporting of Significant Events
There were no significant events that occurred during the most recently completed fiscal year. According to the Continuing Disclosure Certificate, significant events include:
1) Principal and interest payment delinquencies. 2) Non-payment related defaults, if material. 3) Unscheduled draws on debt service reserves reflecting financial difficulties. 4) Unscheduled draws on credit enhancements reflecting financial difficulties. 5) Substitution of credit or liquidity providers, or their failure to perform. 6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. 7) Modifications to rights of security holders, if material. 8) Bond calls, if material, and tender offers. 9) Defeasances. 10) Release, substitution, or sale of property securing repayment of the securities, if material. 11) Rating changes. 12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person. 13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person ( other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. 14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of City of Berkeley, California (City), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 27, 2016.
Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Address: 180 Grand Avenue, Suite 1500 Oakland, CA 94612 • Phone: 510.768.8251 • Fax: 510.768.8249
283 To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California Page 2
Compliance and Other Matters As part of obtaining reasonable assurance about whether City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Badawi and Associates Certified Public Accountants Oakland, California December 27, 2016
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APPENDIX C
FORM OF OPINION OF BOND COUNSEL
[LETTERHEAD OF JONES HALL]
_____, 2017
City Council City of Berkeley 2180 Milvia Street Berkeley, California 94704
OPINION: $______City of Berkeley, California 2017-18 Tax and Revenue Anticipation Notes
Members of the City Council:
We have acted as bond counsel in connection with the issuance by the City of Berkeley, California (the “City”), of $______City of Berkeley, California 2017-18 Tax and Revenue Anticipation Notes, dated the date hereof (the “Notes”), pursuant to Article 7.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code (the “Act”), and a resolution of the City, adopted on July 25, 2017 (the “Resolution”). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the City contained in the Resolution and in the certified proceedings of public officials and others furnished to us, without undertaking to verify such facts by independent investigation.
Based upon our examination, we are of the opinion, under existing law, as follows:
1. The City is a duly created and validly existing municipal corporation with the power to adopt the Resolution, to perform the agreements on its part contained therein and to issue the Notes.
2. The Resolution has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City.
3. Pursuant to the Act, the Resolution creates a first lien on funds pledged by the Resolution for the security of the Notes.
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4. The Notes have been duly authorized, executed and delivered by the City and are valid and binding general obligations of the City.
5. The interest on the Notes is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinion set forth in the preceding sentence is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986 (the “Code”), that must be satisfied subsequent to the issuance of the Notes in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Notes in gross income for federal income tax purposes to be retroactive to the date of issuance of the Notes. We express no opinion regarding other federal tax consequences arising with respect to the Notes.
6. The interest on the Notes is exempt from personal income taxation imposed by the State of California.
The rights of the owners of the Notes and the enforceability of the Notes and the Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases.
Respectfully submitted,
A Professional Law Corporation
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the City of Berkeley (the “City”) in connection with the issuance by the City, of the $______City of Berkeley 2017-18 Tax and Revenue Anticipation Notes (the “Notes”). The Notes are being issued pursuant to a resolution adopted by the City Council of the City on July 25, 2017 (the “Resolution”). The City covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Notes and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2- 12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Dissemination Agent” shall mean NHA Advisors, LLC, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” shall mean any of the events listed in Section 3(a) of this Disclosure Certificate.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule.
“Participating Underwriter” shall mean any of the original underwriters of the Notes required to comply with the Rule in connection with offering of the Notes.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
Section 3. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 3, the City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Notes:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
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(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform.
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security.
(7) Modifications to rights of security holders, if material.
(8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Notes under the Resolution.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), and (a)(14) of this Section 3 contain the qualifier “if material.” The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law.
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(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
Section 4. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Notes. If such termination occurs prior to the final maturity of the Notes, the City shall give notice of such termination in the same manner as for a Listed Event under Section 3(c).
Section 5. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be NHA Advisors, LLC.
Section 6. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Section 3(a) it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Notes, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Notes, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Notes, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Notes.
Section 7. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future notice of occurrence of a Listed Event.
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Section 8. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate any holder or beneficial owner of the Notes may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 9. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Notes.
Section 10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriters and holders and beneficial owners from time to time of the Notes, and shall create no rights in any other person or entity.
Date: ______, 2017
CITY OF BERKELEY
By City Manager
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APPENDIX E
DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Notes, payment of principal, interest and other payments on the Notes to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Notes and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Notes (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Notes (the “Agent”) take any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Notes, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Notes, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Notes, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and
E-1 dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
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7. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
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