ACFR FY 2013-2014CITY OF POWAY
CALIFORNIA
CITY OF POWAY
CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2014
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2014
‘The Seeing’ by Jonny Bear Contreras
City of Poway
Poway, California
Comprehensive Annual Financial Report
For the year ended June 30, 2014
Prepared by the
Administrative Services Department
of the
City of Poway
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City of Poway
Comprehensive Annual Financial Report
For the Year Ended June 30, 2014
i
Table of Contents
…….i
…..v
..xvii
.xviii
...xix
…...1
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters based on an Audit of
Financial Statements Performed in Accordance with
…….5
…..7
Basic Financial Statements:
Government - Wide Financial Statements:
…..20
…..22
Fund Financial Statements:
Governmental Fund Financial Statements:
...27
Reconciliation of the Balance Sheet - Governmental Funds
to the Government-Wide Statement of Net Position…………….………….…...………………….…………..28
Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds……………..….………………………………..……………………...………..29
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds to the Government-Wide Statement
of Activities …………………..……………...……………………………………………………....………………30
Proprietary Fund Financial Statements:
Statement of Net Position…………………………………………………….…………….……………..………..33
Statement of Revenues, Expenses and Changes in Net Position…………..…………………….…………..34
Statement of Cash Flows………………………..………..………………………………………….……………..35
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position…………………………………………………..………………..…………39
Statement of Changes in Fiduciary Net Position…………………………………...………………..…………40
…42
FINANCIAL SECTION
Table of Contents………………….………...…….....…….…………….…..…..….……………………………...…….…………
Letter of Transmittal………………….…….…………….…………..…….…......……………………………………….…...……
Principal Officers………………….……………...……………………..………………..……..………….………...…..…………
Organization Chart…………….….……..…………………………….….……………………..…………....…………...……...…
GFOA Certificate of Achievement for Excellence in Financial Reporting………………….….….…….……….…..…………
Independent Auditor's Report…………………….…………………...………………………………………………………..
Government Auditing Standards…….………..….…….…….....…………..…..……………...….………………………
Management's Discussion and Analysis (Unaudited)……...….……………………….…………………………………..
Statement of Net Position……………….....…….……..……………………….…………………………………………
Statement of Activities……………………………………………..……………….….…………….………………………
Balance Sheet - Governmental Funds...……………………………………..…..………………………..………
Notes to Basic Financial Statements……………………………………….………………………………….……..…………
City of Poway
Comprehensive Annual Financial Report
For the Year Ended June 30, 2014
ii
Table of Contents (Continued)
Required Supplementary Information (Unaudited):
…..94
…..95
….96
….97
Supplementary Information:
Non-Major Governmental Funds:
.104
.108
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Non-Major Special Revenue Funds:
Fire Protection……………..……………..……...…………………...………….………………………..…….112
800 MHz Communication System………….…..……………………………...………..…………….……….113
Gas Tax…………………………………….……………………………………….....…………………..…………114
Street Improvement………………………….……………………..………….………………….....……………115
Drainage Special………………………….……………………………...……….………..……………..........…116
Maintenance Districts……………………….……………………………………...……………….…………….117
Miscellaneous Grants……………………….……………………………………...…………..…………………118
AB 939 Integrated Waste Management…….………………………………..……………….….……….…….119
Community Development Block Grant………………………………………….………………...…...……….120
Transportation Development Act………………………………………………………………..……….…….121
Proposition A………………………………………………………….….…………….……………..………….122
SB 1186 Disabled Access Law…………………………………………………….………………..……………123
Excess SAFE Reserve……………………………………………………..……………………..………………124
Regional Arterial Traffic Mitigation…………………………………………….……………………..…...…….125
Fire Protection Impact Fees……………………………………………………….…………….………...…….126
BEGIN Program…………………………………………….………………………….……...…………...…….127
Housing In-lieu………………………………………………………………………….……………….…..…….128
Habitat In-lieu…………………………………………………………………………………..…...……...………129
Housing Special Programs…………………………………………………………………….…….………….130
Non Major Debt Service Fund:
City Debt Service……………………………..…..…………………….….…………………....……………….131
Non Major Permanent Fund:
Mary Patricia Ross Trust……………...………….………...…………..………………….…………………..…132
Non Major Capital Project Funds:
Park Improvement Capital Project Fund……………………....…….………….……………...……………….133
Municipal Improvement Capital Project Fund…………………..….……………..…...………..…………….134
Internal Service Fund
.137
…138
.139
Combining Balance Sheet…….………………………………………………………………………...………….………
Budgetary Information…………………………..……………....…….……………..…………………………..…………
Budgetary Comparison Schedule - General Fund………………..……………………...….………………..…………
Budgetary Comparison Schedule - Housing Authority Fund………………………………………..….……………...
Defined Benefit Pension Plans……………………………………...……………………….………………….…………
Combining Statement of Revenues, Expenditures and Changes in Fund Balances………………….……............
Statement of Net Position………………………………………………………………………..…………...……………
Statement of Revenues, Expenses and Changes in Net Position…………………………..…………..………………
Statement of Cash Flows………….……………………………………………………………….……..…...……………
City of Poway
Comprehensive Annual Financial Report
For the Year Ended June 30, 2014
iii
Table of Contents (Continued)
Fiduciary Funds:
.141
.142
.146
.147
.149
.151
…153
.154
.155
.156
.157
.158
.159
…161
.162
.163
.165
.166
…167
.168
.169
.170Capital Assets Statistics – Current and Prior Eight Years ………………………………………………………………………
Pledged Revenue Coverage – Last Ten Fiscal Years……………………………………………………………………………
Demographic and Economic Statistics – Last Ten Calendar Years ................................................................................
Principal Employers – Current Year and Eight Years Prior ..............................................................................................
Full-Time-Equivalent City Employees by Function – Last Ten Fiscal Years ....................................................................
Operating Indicators – Current and Prior Eight Years ………………………………………………………………………….
General Property Tax Levies and Collections – Last Ten Fiscal Years………………………………………………………
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years…………………………………………………………………
Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years…………………………………………………………
Direct and Overlapping Debt as of June 30, 2014………………………………………………………………………………
Legal Debt Margin Information – Last Ten Fiscal Years…………………………………………………………………………
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years…………………………………………………………
Principal Secured Property Tax Payers – Current and Nine Years Ago………………………………………………………
Assessed Value of Taxable Property Successor Agency and Redevelopment Tax Increment
Property Tax – Last Ten Fiscal Years…………………………………………………………………………………………
Redevelopment Property Tax Levies and Collections – Fiscal Years 2004-05 Through 2011-12…………………………
Net Position by Component – Current and Prior Eight Years……………………………………………………………………
Changes in Net Position – Current and Prior Eight Years………………………………………………………………………
Fund Balances, Governmental Funds – Last Ten Fiscal Years…………………………………………………………………
Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years…………………………………………………
Assessed Value of Taxable Property – Last Ten Fiscal Years …………………………………………………………………
STATISTICAL SECTION (Unaudited)
Combining Statement of Fiduciary Net Position - Agency Funds………..…………………...…………...……………
Combining Statement of Changes in Assets and Liabilities - Agency Funds………………..…...…………...………
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Introductory Section
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STEVE VAUS, Mayor
DAVE GROSCH, Deputy Mayor
JIM CUNNINGHAM, Councilmember
JOHN MULLIN, Councilmember
CITY OF POWAY
City Hall Located at 13325 Civic Center Drive
Mailing Address: P.O. Box 789, Poway, California 92074-0789
www.poway.org
January 26, 2015
Honorable Mayor and Members of the City Council
Poway, California
This Comprehensive Annual Financial Report (CAFR) is prepared to provide you and the
community with a report of the financial transactions of the City of Poway for the year ended June
30, 2014. Responsibility for the accuracy, completeness and fairness of the report rests with the
City.
We believe that the data, as presented, is accurate in all material aspects; that it is presented 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 fund types; and that all disclosures necessary to
enable the reader to gain the maximum understanding of the City's financial affairs have been
included.
The significant accounting policies of the City are described in the Notes to Financial Statements.
These accounting policies have been approved by the City's independent certified public
accountants, and are in conformance with the recommendations of the American Institute of
Certified Public Accountants and the Governmental Accounting Standards Board (GASB).
This report is prepared following the guidelines set forth by the Government Finance Officers
Association of the United States and Canada and the California Society of Municipal Finance
Officers.
In accordance with the above-mentioned guidelines, the report is divided into three sections:
1. Introductory Section - including this letter of transmittal, the City's organizational
chart, and the list of principal officers.
2. Financial Section - including the independent report from the City's certified public
accountants, management’s discussion and analysis, basic financial statements,
notes to financial statements, and required supplementary information.
3. Statistical Section - including other pertinent unaudited financial tables and
information that presents historical trends, demographics, and miscellaneous data
about the City.
Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s
report and provides a narrative introduction, overview and analysis of the basic financial
statements. MD&A complements this letter of transmittal and should be read in conjunction with it.
Annual Financial Report
January 26, 2015
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The Reporting Entity and Its Services
Included within the City's financial statements is the financial information of the former Poway
Redevelopment Agency, the Poway Housing Authority, and the Poway Public Financing Authority.
Although the entities are legally separate from the City, their financial operations are closely related.
Their activities are included with the activities of the City, because the City Council serves as the Board
of Directors and is able to impose its will on these entities. There is, therefore, a financial
benefit/burden relationship. This financial presentation is in accordance with GASB Codification,
Section 2100.
The City of Poway was incorporated December 1, 1980, under the general laws of the State of
California. The City operates under a Council-Manager form of government and provides the following
services: public safety (law enforcement, fire suppression/paramedics), community services,
development services, public works, general administrative services, and capital improvements.
The Poway Redevelopment Agency was established April 26, 1983, pursuant to the State of California
Health and Safety Codes, Section 33000, entitled "Community Redevelopment Law." Its purpose was
to eliminate blighted areas by encouraging the development of residential, commercial, industrial,
recreational, and public facilities.
The Redevelopment Agency was dissolved effective February 1, 2012, pursuant to the schedule set
forth by the California Supreme Court in California Redevelopment Association et al. v. Ana
Matosantos. Prior to its dissolution, on January 17, 2012, the Poway City Council elected to be
Successor Agency to the Redevelopment Agency, and continue to implement “enforceable obligations”
which were in place prior to dissolution. These include existing contracts, bonds, leases, etc.
The Poway Housing Authority was established by Resolution of the Poway City Council at a meeting on
March 1, 2011, in accordance with the State of California Health and Safety Codes, Section 34200,
entitled “Housing Authorities Law.” Its purpose is to monitor rent and income compliance at affordable
housing developments and partner with developers to construct and operate affordable housing in
Poway.
The Poway Public Financing Authority is a joint powers authority organized pursuant to the State of
California Government Code, Section 6500. The Authority exists under a Joint Exercise of Power
Agreement dated October 8, 1991, between the City of Poway and the former Poway Redevelopment
Agency. Its purpose is to assist in financing and refinancing projects for the benefit of the City and the
former Agency.
History
Poway, from Indian words meaning "where the waters meet," first gained prominence in the 1800s as
an important link in Southern California's stagecoach network. Today the City is a thriving, civic-spirited
community, located in the coastal foothills of San Diego County, just twenty miles north of downtown
San Diego and three miles east of Interstate 15.
The City of Poway flourishes with a family-oriented population of 48,979 and covers 39 square miles
with elevations ranging from 450 to 2,250 feet above sea level. The City absorbed existing special
districts on February 1, 1981. Poway is a full-service general-law city governed by a council of five
members-at-large serving staggered four-year terms. In 1990, the City had its first mayor directly
elected by the voters. The City provides water, sewage collection, street maintenance, fire, paramedic,
parks and recreation, and planning and building. Law enforcement services are contracted through the
San Diego County Sheriff’s Department, and wastewater treatment is provided by the City of San
Diego.
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January 26, 2015
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Poway has mostly single-family homes, employers with well-paying desirable jobs and the lowest crime
rate of any City in the County. The Poway Unified School District is a top performer in the State and
nation, and is a source of great pride for the City.
Poway has been popularly dubbed the "City in the Country." Poway has set aside over 30 percent of
total land use as open space, nearly 7,000 acres of preserved natural open space, 568 acres of
developed parkland featuring community parks and centers, and 55 miles of riding and hiking trails.
Poway boasts over 680 volunteers to support our services.
Economic Condition and Outlook
The national economy is recovering from the Great Recession and is in its sixth straight year of
economic growth. Poway’s economic condition has also modestly improved over the past year. Sales
and property taxes have continued to improve. In addition, Poway’s unemployment rate has continued
to fall. The City has maintained conservative budget policies and practices. This conservative
approach has allowed the City to maintain, and build, general and designated reserves throughout the
economic downturn.
Despite several years of recession, the City of Poway has continued to thrive as a community. This
past year, Poway was ranked as one of the “Top 100 Safest Cities in America” by Neighborhood Scout.
Poway was also named as the “Best City in Southern California to Raise a Family” by an independent
financial education website company. The study compared cities by education, work-life balance,
family-friendliness, the stability of the community and by the cost of living.
Notwithstanding the loss of redevelopment as a source of capital financing, the City enjoys a strong
economic base. New businesses continue to take up shop in the Poway Business Park and along
Poway Road, the City’s commercial corridor. This year’s sales tax revenue was 4.2% higher than last
year.
The City remains well positioned to address economic uncertainty. Perhaps more importantly, the City
is prepared for the future. Strong leadership from the City Council, combined with ample reserves, a
well-trained and equipped workforce, continued investment in infrastructure and public facilities, and
robust technology, will carry the City forward.
Economic Development
The City has a number of important resources that support the community’s high quality of life including
the City’s primary employment center - the Poway Business Park. The 900-acre Business Park has 9
million square feet of building space with a mix of commercial and industrial businesses, defense
contractors, retailers and sport facilities. The businesses generate over $400 million annually in sales
tax and create over 17,000 jobs. Several businesses in the park feature award-winning, cutting-edge
technologies including the development and manufacturing of alternative fuel vehicle and energy-
storage systems. Another critical resource to the City’s economy is retailers such as Costco, Target,
Kohls, The Home Depot, Smart & Final Extra and WalMart. Auto dealerships along the “Poway Road
of Cars” such as Toyota, Honda, Nissan, Ford and Mitsubishi are also a critical component of Poway’s
economy.
To remain current on issues impacting the City’s diverse economy, Economic Development staff has
conducted business outreach activities. These activities provide an opportunity to learn about Poway
businesses and solicit feedback on how to improve City services to better meet their business needs.
In FY 2013-14, business outreach meetings were held with a number of businesses including: General
Atomics, Quatro, TransPower, Aldila, Poway Auto Group, Toyota, Delkin Devices, Pure Forge, Chrome
Collision, Sportsplex USA, Fulex, Harbor Packaging and ICS Electronics Recycling.
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January 26, 2015
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Economic Development staff also assisted a number of businesses with their plans to open, or expand,
in Poway. This outreach included Quantum Energy Storage, Big 5, Smart & Final Extra and Digirad. In
addition, staff provided businesses with information on new business resources such as the State’s
Manufacturers Sales Tax Exemption, the California Competes program, the Property Assessed Clean
Energy program and the Small Business Association’s lending programs. Staff also arranged a tour of
the Poway Business Park for reporters from the San Diego Business Journal which resulted in four
articles about individual Poway businesses.
Poway’s economy has experienced moderate growth in sales primarily in general consumer goods,
automobile and transportation, and business and industry sectors. Auto sales have traditionally
outperformed other sales tax generators, but the development of the Business Park has diversified the
City’s sales tax base in sectors such as business and industry and general consumer goods. This
growth in sales includes electrical equipment, building materials, office supplies and furniture, food
products, and bulk sales items.
The City’s retail shopping center average vacancy rates has remained low at 4.5%. Poway’s
unemployment rate of 3.6% continues to be lower than the state’s rate of 7.4% and the national rate of
6.1%. These are all positive indications of Poway’s strengthening economic stability.
Another important economic indicator is Poway’s household income. Poway median household income
continues to grow and is the third highest in San Diego County, at $102,938. Housing prices have
increased over the past year as well. In June 2014, the median sales price of homes in Poway was
$570,500. This represents an 8.67% increase from the June 2013 median sales price of $525,000.
Regionally, the median sales price of homes in San Diego County rose by 7.91% to $450,000.
Major Accomplishments
Administrative Services:
Technology: The City successfully completed a number of Information Technology projects in FY
2013-14 including providing on-line access to live streaming Council meetings through the City’s
website. In addition, access to past meetings is now available with indexing that allows users to view
the meeting agenda and easily navigate to the items they are interested in viewing.
The City also implemented YourGOV, a mobile and web-based application providing residents the
ability to report issues such as graffiti, potholes or street light outages. The YourGOV application is
integrated with the City’s work order management system, Cartegraph, and each service request is
directly routed to appropriate employees.
The City also integrated its Geographic Information System (GIS) into Cartegraph and enhanced GIS
data. The integration allows work orders to be linked to City assets, resulting in improved work order
history and reporting. Furthermore, the City’s GIS was enhanced through the development of a City
Benchmarks layer, providing private sector surveyors with on-line access to locations, photos and
datasheet for each benchmark (i.e. major survey points) in the City.
Poway’s FY 2013-14 technology enhancements include the full implementation of NorthStar, the City’s
new utility billing system. The system has improved efficiencies and services for the City’s 14,000
water and sewer customers. The new software provides comprehensive billing, collections and
customer account management. In addition, customers can pay bills, manage their accounts and
access water use history through an on-line web portal.
Risk Management: The City is a member of the California Joint Power Insurance Authority, which is
one of the largest municipal self-insured pools in the state, with over 120 public agency members. As
part of this program, the City works continuously with its Regional Risk Manager to identify and correct
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January 26, 2015
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potential risks. For the past five combined years, the City’s claim costs were below the pool average
for both General Liability and Workers’ Compensation.
Cost Recovery: The City’s Finance division developed a model to account for costs associated with
medical transport of Medicare-qualified patients. The model provides the calculations and supporting
information needed for participation in the State’s new Ground Emergency Medical Transportation
Supplemental Reimbursement Program (GEMT). In FY 2013-14, the City received over $31,000 in
reimbursements, with annual reimbursements estimated between $10,000 and $15,000.
General Fund Surplus: General Fund operations in FY 2013-14 resulted in a $2.7 million operating
budget surplus on a budgetary accounting basis. This surplus was primarily the result of property tax
revenues, including Redevelopment Property Tax Trust Fund distributions, and increased development
fees. FY 2013-14 operating expenses included fully funding the City’s high quality road maintenance
standards, with over $1 million from the General Fund, and increased funding for improving City
facilities.
Planning and Development Services:
Construction to expand and remodel Walmart began in May 2013. The project included the demolition
of an existing auto service center and an adjacent 7,000 square foot vacant building. The expansion
added nearly 37,000 square feet of retail space, increasing the store’s size to almost 180,000 square
feet with a full-service grocery department. Construction was completed in November 2014.
In May 2013, Poway Weapons received permits to build a 40,000 square feet building on 2.8 acre with
indoor shooting ranges, meeting rooms and a small retail space. The project includes a 40,000 square
foot building on a 2.8 acre lot. Construction was completed in August 2014.
Remodeling of the Poway Plaza was completed in October 2013. The vacant Dixieline Lumber store
underwent façade improvements and was transformed into two retail spaces. The new spaces now
include a Grocery Outlet and a Michaels Crafts store. The Michaels Crafts relocated from the Poway
Promenade Center and this vacancy is now occupied by Smart & Final Extra. In addition, Five Guys
Burgers opened a new location in the Poway Plaza.
In November 2013, General Atomics began constructing an eight building, 395,000 square foot office
industrial complex on approximately 25 acres. The first phase of construction included a 100,000
square foot building and was completed in August 2014.
Construction began on a new Lowes home improvement store in February 2014. The project includes
construction of an 111,500 square foot building, with an attached 27,700 square foot garden center.
The Project also includes a 4,500 square foot development-ready pad for a future retail use.
Construction of the store is expected to be completed in December 2014.
In March 2014, the City issued building permits for the Poway Corporate Center. The project includes
two light industrial, warehouse and distribution buildings located on approximately 5.5 acres.
Construction of the 45,000 and 25,000 square foot buildings is expected to begin in October 2014.
Construction began at Perry Ford to expand and remodel the auto dealership in June of this year. The
project includes the demolition of office buildings and the construction of a two-story, 17,500 square
foot building. The existing 14,900 square foot auto repair facility will undergo minor enhancements.
Construction is expected to be completed in February 2015.
This past spring, the City issued a request for proposals seeking a consultant to conduct a multi-year
Poway Road Corridor Study. In September, a firm was selected to complete the study. The study will
evaluate Poway Road’s current land use and transportation and provide recommendations on future
Annual Financial Report
January 26, 2015
x
land use, transportation, economic development, design and aesthetics of the City’s main commercial
corridor. The analysis will also provide an implementation strategy and identify potential Municipal
Code and General Plan changes. Public workshops and community meetings will be held periodically
to gather community input. The project is anticipated to last 18-months.
Affordable Housing: In July 2014, staff helped resell two Meadows affordable ownership homes by
issuing new Supporting Home Ownership in Poway (SHOP) and Building Equity and Growth in
Neighborhoods (BEGIN) loans for each household. These first-time homebuyer loans allow low to
moderate-income individuals the opportunity to realize their homeownership dreams.
In the spring of 2014, Next Stage U approached the City with a concept to build affordable housing for
developmentally disabled adults on a site owned by the Poway Housing Authority. In order to
determine the project’s feasibility and negotiate the terms of a Disposition and Development
Agreement, the Housing Authority approved a one-year Exclusive Negotiating Rights Agreement in
November 2014.
Community Services: In FY 2013-14, the City set a goal to enhance communication and service
through the use of technology. The Community Services and Administrative Services departments
partnered to begin using Facebook and Twitter to promote recreation classes and events. The City
also began sharing information by sending out email newsletters to over 500 subscribers. Further, the
City streamlined the way sports organizations reserve fields by enabling them to do so online. In
addition, the City began using new on-line adaptive ticketing software that improves the ticket
purchasing process for shows at the Poway Center for the Performing Arts.
The City is proud of its rich history and community values, as demonstrated by its commitment to the
operation of cultural, educational and recreational facilities. Each major site provides unique
opportunities and experiences for residents and visitors alike. During FY 2013-14, the following
services were provided:
Over 55,650 people were entertained at 156 performances at the Center for the Performing Arts;
Approximately 21,400 visitors experienced the Old Fashioned Fourth of July, Christmas in the Park
and Rendezvous in Poway at Old Poway Park;
The annual Summer Concert Series drew 4,500 listeners to Old Poway Park, and 7,000 guests to
Lake Poway;
The Lake Poway Day Camp provided summer fun and teen counselor training for over 670 youth;
Over 11,000 fishing permits, 3,600 pedal boats and 29,000 parking permits were issued at Lake
Poway;
Nearly 300 families enjoyed the Adventure Family Campouts at Lake Poway;
The Blue Sky Ecological Reserve hosted 9 outdoor educational programs such as Insects at Night,
Hoot, Howl and Prowl, Solar Walk and Stargazing and Reptiles Rock;
Blue Sky offered 83 group hikes, interactive discovery tables and a Junior Nature Ranger program;
Over 500 people visited the Kumeyaay-Ipai Interpretive Center, operated by the Friends of the
Kumeyaay. The Friends led 40 school tours for over 1,000 students. The tours met the school
district curriculum standards;
More than 3,300 people participated in 160 recreation programs and approximately 4,300 people
were enriched by 549 class and camp offerings;
Annual Financial Report
January 26, 2015
xi
The Swim Center provided 189 swim classes and 169 private lessons to nearly 1,300 participants,
and hosted 7,000 swim meet competitors;
59,000 visitors enjoyed rides aboard the vintage 1907 Baldwin No. 3 steam locomotive and other
antique rolling stock at the Poway Midland Railroad;
Over 12,000 guests toured Old Poway Park’s Heritage Museum and historic Nelson House; and
Over 1,900 students experienced local history through a fun and interactive guided tour at Old
Poway Park.
In August 2013, the Poway Farmers Market was expanded and relocated onto Midland Road. The new
layout increased parking, created space for additional vendors, improved access to healthy food
choices, provided safe walkable spaces, enhanced the local business climate and increased the
program’s revenue. The relocation received an Award of Excellence from the California Parks and
Recreation Society for enhancing the community’s economic position and fostering a strong sense of
community.
Volunteers are a valuable resource to the Poway community. The community’s enrichment and
enjoyment at the programs and events offered by Poway could not be achieved without the
contributions of volunteers. The Community Services Department was aided by 4,449 volunteer hours
from teens at Community Park programs and events, nearly 3,450 volunteer hours from docents and
tour guides at the Blue Sky Ecological Reserve and Kumeyaay-Ipai Interpretive Center, and over
10,000 hours from the tour guides and railroad volunteers at Old Poway Park.
In FY 2013-14, the Community Services, Public Works and Development Services departments
coordinated efforts to complete projects at Old Poway Park including the removal and replacement of
BBQ’s and installation of new fencing throughout the Park. Improvements were made at Community
Park, including construction of a new rental gazebo, renovation of the baseball fields and bocce ball
courts, resurfacing of the tennis and basketball courts, painting at the Swim Center and installation of
new room dividers at the Senior Center. The Community Park improvements were funded by a grant
awarded by the Department of Housing and Community Development.
In May 2014, the City, San Diego County Library Services Department and the Poway Friends of the
Library partnered for a $1.5 million remodel of the Poway Branch Library. The improved interior space
will create more opportunities for the City to partner with the library to provide programs and activities
for teens and families. The building’s exterior will be enhanced with a patio cover and decorative
fencing to provide more programming and event space and added security.
Public Works: The City recognizes the need to invest in critical infrastructure. Focus has continued on
both short and long-term maintenance demands of streets, utility systems, parks and public facilities.
With severe drought conditions plaguing the State of California, the Public Works Department also
made great strides in calibrating and repairing irrigation throughout the City.
Public Works Administration Back-up Generator: In FY 2013-14, staff installed a back-up propane
generator at the Public Works administration building. The generator creates an extra source of power
that can seamlessly transition in the event of a large-scale emergency to operate a computer server
room, phones and building safety lights.
Utilities: Water Distribution Maintenance staff completed a three-year maintenance cycle that involved
exercising every valve and fire hydrant in the water distribution system totaling 8,248 assets. In FY
2013-14, staff exercised and inspected 1,866 assets that include 1,186 valves and 680 fire hydrants.
Annual Financial Report
January 26, 2015
xii
Wastewater collection maintenance video inspected almost 167,745 feet of the collection system,
cleaned over 246,000 feet of pipeline and had two reportable mainline sewer spills. Ten Fats, Oils and
Grease (FOG) permits were issued; 97 FOG inspections were performed; and one notice of violation
was issued with 100% compliance achieved. The Recycled Water Program completed 94 site
inspections and 26 shutdown tests. Nineteen violations were issued and 100% compliance was
achieved.
Operations: Operations divisions completed a Community Pool Needs Assessment in February 2014.
This comprehensive analysis of the pool buildings, swimming pools, pool deck and mechanical spaces
led to a short and long-term list of proposed improvements for rehabilitation. The first phase of
improvements included conversion of existing pool lights to energy efficient LED lights.
Operations’ crews filled over 197 potholes; performed 609,000 feet of crack sealing, approximately
231,000 square feet of skin patching and 120,000 square feet of asphalt repairs; replaced nearly 8,800
square feet of concrete sidewalks; cleaned almost 22,000 linear feet of concrete channel; mowed over
21 acres of earthen channel; and removed about 35,000 square feet of invasive plant material to
support re-establishment of native habitat and enhance flood control.
Public Safety: The City of Poway is the safest incorporated city in San Diego County. Poway’s FBI
crime index decreased 24% from last year to 10.9 crimes per 1,000 residents.
This low crime rate can be attributed, in part, to proactive law enforcement. The Poway Criminal
Apprehension Team (PCAT), comprised of four deputies and one sergeant, focuses on drug and gang-
related crimes. Over the past year, deputies partnered with the San Diego County Probation
Department and targeted criminals who violated conditions of probation or parole. Additionally, Sheriff’s
personnel held monthly Information Managed Policing Addressing Criminal Threats (IMPACT)
meetings, where the group focused on specific crimes, criminals and locations of criminal activity in
Poway. Department operations are also augmented by an active Senior Volunteer Patrol effort.
PCAT continues to be successful in arresting drug traffickers, dealers and users and seizing assets.
The team’s deputies work closely with crime analysts, the California Department of Alcohol and
Beverage Control and other law enforcement agencies to keep drugs and alcohol out of the hands of
minors and to reduce drug-related criminal activities. This past year, the PCAT began working with the
Human Trafficking Task Force to keep prostitution out of Poway hotels and local massage
establishments.
The Poway Sheriff’s Department provides additional community services that enhance safety through
its School Resource Officer (SRO) program, medication drop-off program and other outreach efforts.
The SRO partnered with school district staff to update Emergency Response Manuals as well as to
provide active-shooter, lock-down and campus evacuation training. Additionally, the Poway Station
provided a prescription drug drop-off box, giving the public an opportunity to safely dispose of expired
or unused medications. The Station also provided educational outreach about the City’s Social Host
ordinance.
In addition, the Sheriff’s Department provides traffic safety programs. In FY 2013-14, the Traffic
Division provided 13 Start Smart driver safety presentations to 460 new or soon-to-be-licensed drivers
and their parents. The Division also continued a Juvenile Diversion Program for first-time traffic
offenders. Participants of this program complete assignments and sign a pledge to be law abiding
citizens in exchange for the violation not going to court. Thanks to a California Office of Traffic Safety
grant, six Driving Under the Influence (DUI) checkpoints were held, during which motorists were given
information regarding the City’s Social Host ordinance and the costs associated with a DUI citation.
Several DUI saturation patrols were also conducted throughout the year.
Annual Financial Report
January 26, 2015
xiii
The Poway Sheriff's Crime Prevention Specialist provides additional crime prevention resources such
as Neighborhood Watch Programs, a fraud detection class and the Crime-Free, Multi-housing (CFMH)
program. As a result of the fraud prevention class, a class participant was able to help an elderly
woman avoid falling victim to a money scam. The CFMH program certified 14 apartment complexes
last year. The program holds apartment managers accountable to meet property standards and
ensures tenants are law abiding.
Fire: The Poway Fire Department provides emergency medical and fire suppression services. The
department responds to fires, traffic collisions, rescues, medical emergencies, hazardous materials
incidents and requests for aid from other jurisdictions. In 2013, the department responded to 3,989
emergency responses with 2,894 (approximately 73 percent) of the incidents related to emergency
medical services.
The department also conducts fire prevention and preparedness activities. In FY 2013-14, over 3,000
fire safety inspections were conducted, of which 1,150 were completed by on-duty firefighters as part
of the Fire Company Inspection Program. In addition, the department continues to update over 200
emergency preplans that are accessible by onboard computers in first-responder vehicles.
The Poway Fire Department conducts regular training activities to ensure emergency responders are
fully prepared to protect people and property during emergencies. This training is provided at the City’s
fire training tower facility, in classroom sessions and through computer-based trainings. The training
tower facility includes a burn room, roof props for ventilation practice, forcible entry props and wrecked
vehicles for extrication training.
In addition to well-trained staff, efficient and accurate emergency response relies on well-maintained
communication technology. The City maintains the latest in communication technology including two
separate radio systems and mobile data computers. Over the past year, several mobile and portable
radios were replaced. In addition, mobile data computers are regularly upgraded to equipment with
faster speeds. This enhanced technology increases emergency incident management, response
mapping and resource allocation capabilities. Two paramedic gurneys and EKG heart monitors were
upgraded in FY 2013-14 with the latest in advanced life-saving equipment.
Major Ongoing Initiatives
Disaster Preparedness: The City continues to improve emergency and disaster preparedness. These
improvements build upon the effectiveness of the City’s Emergency Operations Plan by maintaining
up-to-date information in the City’s Emergency Operations Center (EOC). The City maintains a care
and shelter program with three local faith-based organizations. When combined with the City’s care
and shelter facility at Community Park, the community can temporarily care for, and shelter, over
2,400 evacuees.
Emergency planning is heavily supported by local volunteers of the Community Emergency Response
Team (CERT) program and other neighborhood preparedness groups. This past year, the Fire
Department and Palomar College partnered to provide a 10-week CERT training course for 13
volunteers. The program now has 81 members working in four teams. Program participants received
bimonthly trainings, several community education events and a County-wide disaster drill.
City employees serve as Disaster Service Workers in the event of a community-wide disaster. To
maintain the readiness of Poway’s employees, the City provides annual Emergency Operations
Center training. In addition, the City coordinates with the Unified Disaster Council to maintain the
local Emergency Operations Plan, and is also in the process of developing a Continuity of
Operations Plan.
Annual Financial Report
January 26, 2015
xiv
Wildfire Defensible Space Program: In May 2014, 630 property owners were sent letters requesting
that they thin vegetation around their homes. In preparation for the annual fire season, property owners
are required to maintain 100 feet of defensible space around homes.
Capital Improvement Projects (CIP): Fifteen CIP projects were completed in FY 2013-14, including the
installation of an automatic transfer switch for an emergency generator at the Sheriff Station, annual
General Construction and Repair projects, a fire protection upgrade project, and an ADA Barrier
Removal project at Old Poway Park.
By June 2014, five CIP projects were under construction, three of which were substantially
complete. These projects included Rattlesnake Creek Stream bank Stabilization, Oak Knoll Siphon Air
Jumper and the annual sewer pipeline Reline and Replacement project.
At the close of FY 2013-14, three projects were in the planning phase including FY 2014-15 Street
Maintenance and Overlay Projects. These three projects have a combined total cost of over $2.2
million. Another 21 projects were in various stages of design including Midland Road improvements,
Espola Road utility undergrounding and safety improvements and the City Hall HVAC Retro-
Recommissioning project. It is expected that the construction of many of these projects will begin in FY
2014-15. The combined estimated cost of these projects is over $7 million.
Water and Wastewater: Several regional issues continued in FY 2013-14 in the areas of water and
wastewater that could result in noticeable rate impacts for Poway residents.
Water: In January, Governor Brown declared a drought state of emergency. Since then, state
reservoirs, rainfall totals and the snowpack remain critically low. In response to the ongoing severe
drought, the State Water Board approved an emergency regulation to ensure that water suppliers
implement conservation measures. Local water agencies can fine water customers up to $500 a day
for violating water conservation requirements. The State Water Board has the ability to take
enforcement actions against water agencies that do not comply. In response, Poway adopted
mandatory water restrictions.
The State Water Board also mandated monthly water use reporting by water suppliers. The month-
over-month comparison is reported with calendar year 2013 as the base year. In October, the State
Water Board added gallons per-capita per-day to the monthly reporting requirements.
Water use in Poway increased slightly at the beginning of the fiscal year, but was still under the peak
usage of 5 billion gallons in 2006 and 2007. In the first few months following the mandatory water use
restrictions, Poway water customers reduced consumption by 4-6%.
Although there is uncertainty about the region’s water supply, as well as the cost to ensure an adequate
water supply for the region, it is certain that Poway will face increasing water costs for the foreseeable
future.
Wastewater: The City of Poway’s wastewater is treated through Metro Wastewater and the City
serves on its steering committee. The committee is advocating spending $2 billion on a potable reuse
plan called Pure Water instead of spending that same amount towards an upgrade of the Point Loma
Wastewater Treatment Facility. This alternate approach would reduce daily water flow to the treatment
plant by 100 million gallons while creating 80 million gallons a day of fresh water to the region. Final
decisions in this area will undoubtedly impact Poway ratepayers. Work on these issues will continue
well into FY 2014-15.
Technology: A number of information technology projects are planned in the next fiscal year, including
an upgrade to the City’s website. The website will consist of a new homepage design to improve
Annual Financial Report
January 26, 2015
functionality and provide more community-focused web content. The City will also establish a wireless,
radio-based data network between City Hall and Public Works. The wireless network will provide more
robust services and reduce long-term costs for the City. Other planned technology projects include:
beginning a multi-year effort to replace the City's Enterprise Resource Planning system; replacing the
City's aging phone system; implementing an internal meeting management system to streamline the
Council agenda process; expanding GIS integration to the storm water and parks irrigation facilities;
and implementing an on-line employee benefits enrollment system.
Independent Audit
The Government Code of the State of California requires general law cities such as Poway to be
audited annually by independent certified public accountants selected by the City Council. This
requirement has been met and the auditors' independent report is included in this report. Also, please
refer to the Management Discussion and Analysis section for an in-depth review of this year's Financial
Statements.
GFOA Certificate of Achievement for
Excellence in Financial Reporting
The Government Finance Officers Association of the United States and Canada (GFOA) has awarded
a Certificate of Achievement for Excellence in Financial Reporting to the City of Poway, California, for
its comprehensive annual financial report for the fiscal year ended June 30, 2013. In order to be
awarded a Certificate of Achievement for Excellence in Financial Reporting, a government must publish
an easily readable, efficiently organized Comprehensive Annual Financial Report whose contents
conform to program standards. Such reports must satisfy 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 report conforms to the program requirements, and we are
submitting it to the GFOA to determine its eligibility for the certificate.
Acknowledgments
Preparation of the City's Comprehensive Annual Financial Report is an undertaking of the
Administrative Services Department. Special credit is due to Andrew White, Finance Manager; Maria
Weston, Senior Accountant; Debra Oestreich, Senior Accountant; and the entire Finance Division staff.
Their yearlong hard work and dedication have made this report possible.
I also thank the City Council for their continued interest and support in ensuring our City is fiscally
sound and responsive to its residents. Finally, I'd like to acknowledge the hard work and planning of all
City employees as evident by the long list of accomplishments and initiatives highlighted in this
transmittal letter.
Respectfully submitted,
~-~~ Dan Singer -""'
City Manager
XV
xvi
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xvii
City of Poway
Principal Officers
City Council
Mayor Don Higginson
Deputy Mayor Dave Grosch
Council: Jim Cunningham
John Mullin
Steve Vaus
Appointed Officials
City Manager Daniel Singer
City Attorney Morgan Foley
Administrative Personnel
Assistant City Manager Tina White
Director of Administrative Services/Treasurer Scott Edwards
Director of Development Services Robert Manis
Director of Public Works Leah Browder
Director Community Services Robin Bettin
Director of Safety Services Mark Sanchez
City Clerk Sheila Cobian
xviii
CITY ORGAN 1. 2. 3. 4. 5. 6. 7. Successor gency to the A Re development Agency City Clerk I ;trative ices Admin is Serv Human Resources Customer Services Finance Information Technology Support Services Risk Management Capital Management I Community Services 1. Leisure Services 2. Lake Operations 3. Aquatics Center 4. Performing Arts Center 5. Old Poway Park 6. Library 7. Interpretive Services 8. Community Park Citizens City Council Planning Commission Housing Authority City Manager Development Services 1. Planning 2. Building Inspection 3. Capital Projects 4. Land Development 5. Engineering Inspection 6. Traffic Engineering 7. Storm Water Management 8. Housing Programs 9. SA Administration I I City Council Attorney Committees Economic Development I I Public Safety Works Services 1. Utility System Operations 1. Fire Suppression 2. Water Supply 2. Fire Prevention 3. Sewer Pumping & 3. Paramedics Disposal 4. Law Enforcement 4. Water Distribution 5. Wastewater Collection 6. Reclaimed Water 7. Maintenance Operations 8. Street Maintenance 9. Storm Water & Flood Control 10. Vehicle & Equip. Maint. 11. Environmental Programs 12. Parks, Trails & Landscape Maintenance 13. Facilities Maintenance 14. Special Dist. & Contracts
xix
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Poway ·
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2013
Executive Director/CEO
xx
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Financial Section
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7 35 E C~rneg1e D r Suote I 00
Sun Bernar d .. ,o. C A 92.ol 08
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PARTNERS
Brenda L Odie CPA MST
Terry P Shea CPA
K11 k A Franks. CPA
Scot1 W Ma nno. C PA, CGMA
LeeM S h~nbh ~g . C PA. l"lST. CGMA
J~y H Zercher CPA (P•rtner Ementu$)
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MANAGERS I S T AFF
6oJdferd A Welebir. CPA, f·18A
jo11ny Loto, CP'-. MST
Scong-Hyealee, CPA, MBA
ChJrlcs De Soma ni. CPA
Yoan11 Fang, CPA
Nathan S~athaon, CPA. MBA
Brogou.a Bartl>a. CPA
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1'1EMBERS
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PCPS Tile AICPA Alloonc"
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Guvo:lllrrletHnl Aut/or
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C eo ufu!d Publ•c Accountants
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC A CCOUNTANTS, SINCE 1948
Independent Audito r 's Report
To the Honorable Mayor and Members of the City Council
City of Poway, California
Report on the financia l statements
We have audited the accompanying financial statements of the
governmental activities, the business-type activities, each major fund, and
the aggregate remaining fund information of the City of Poway, California
(the ''City"), as of and for the year ended June 30, 2014, 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 contro l 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 aud it. We conducted our audit in accordance with aud iting
standards generally accepted in the United States of America and the
standards applicable to financial audits contain ed in Government Auditing
Standards, issued by the Comptroller General of the United States . Those
standards require that we plan and perform the aud it to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
1
STAB ILITY ACCURACY. TRUST
2
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.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City, as of June 30, 2014, 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.
Emphasis of a matter
Implementation of new pronouncement
As discussed in Note 1 to the financial statements, in 2014 the City adopted new accounting
guidance, GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. Our
opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information and schedules of
funding progress on pages 7-16, 94-96 and 97, 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.
3
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, budgetary comparison schedules, and
statistical section are presented for purposes of additional analysis and are not a required part
of the financial statements.
The combining and individual nonmajor fund financial statements and the budgetary comparison
information 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 the basic financial statements themselves, and other additional
procedures in accordance with auditing standards general accepted in the United States of
America. In our opinion, the combining and individual nonmajor fund financial statements and
the nonmajor fund budgetary comparison information are fairly stated in all material respects in
relation to the financial statements as a whole.
The introductory section and statistical section 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 26, 2015, 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.
January 26, 2015
San Bernardino, California
4
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735 E Carnegoe Dr Suote 100
San Bern3rdlno. CA 92408
909 889 087 I T
909 889 5361 F
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PARTNERS
Bt cnda l Odie, CPA, MST
Terry P Shell. CPA
K1• k A Franks. CPA
Scotl W. Man no. CPA CGI1A
l"enJ Shanbt1og. CPA. MST. CGMA
Jay H Zercher. CPA (Paotnco Emcrotus)
Phd lip H Waller. CPA IPartnor Em"ntus)
MANAGERS STAFF
Bradlcrd A Welebor. CPA. MBA
jenny Ltll. CPA. MST
Scong·H ye~ lee, CPA. MBA
Ch~rles De Sm1oni. CPA
Yt~nn F~ng. CPA
Nath~n St:tth~m. CPA. MBA
8ngm:~ Bartha CPA
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JLt.111 Romero CPA
Ivan <.onzal es. CPA. MSA
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MH1BERS
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RO GERS. AN D ERS O N , MALODY & SC OTT, LL P
C ERTIFIE D PU BLI C ACCO UNT ANTS, SINCE 194 8
Inde pen den t Auditor's Report o n Internal Control Over ·Financial
Reporting and on Compliance and Other Matters ba sed on an Audit
of Financial Statements Pe rfo rmed in Accordan ce with Governm en t
Auditing Standards
To the Hono rable Mayor and Members of the City Counci l
City of Poway, California
We have audited, in accordance with the auditi ng standards generally
accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards issued by
the Comptro ller General of the United States, the accompanying financial
statements of the governmental activities , the business-type activities ,
each major fund , and the aggregate remaining fund information of the
City of Poway, California ("City"), as of and for the year ended June 30 ,
2014, and the related notes to the financial statements , which collectively
comprise the City's basic fin anci al statements, and have issued our report
thereon dated January 26, 201 5 .
In te rnal Control over Financi al Reporting
In planning and performing our audit of the financial statements , we
considered the City's internal control over fin ancial reportin g (internal
control) to determine the au dit procedures that are approp riate in the
circumstances for the purpose of expressing our opinions on the f inancial
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 ope ration of a
control does not allow management or employees, in the norm al 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 combi nat ion of
deficiencies , in internal control that is less severe than a material
weakness , yet important enough to merit attention by those charged with
governance .
5
STABILITY ACCURACY TRUST
6
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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the 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 City’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.
January 26, 2015
San Bernardino, California
7
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Poway (City), we offer readers of the City’s financial statements
this narrative overview and analysis of the financial activities of the City for the fiscal year ended
June 30, 2014. It should be read in conjunction with the accompanying transmittal letter
beginning on page i and the accompanying basic financial statements. All amounts, unless
otherwise indicated, are expressed in thousands of dollars.
FINANCIAL HIGHLIGHTS
The City’s net assets increased by 0.75% to $260.1 million primarily as a result of normal
operations. During the year, the City’s revenues including program revenues, taxes, and other
governmental revenues were greater than governmental and business activity expenses by
$1.9 million. The total revenues from all sources were $83.6 million. The total cost of all City programs was $81.6 million. Governmental net assets were $187.9 million. The General Fund reported excess revenues over expenditures and other financing uses of
$4.1 million. Actual revenues received in the General Fund were more than the final budget by $4.8
million while actual expenditures were $9.9 million less than final budget before other
financing sources and uses. The expenditure variance is caused by the Capital Outlay
category. At the end of the fiscal year, unassigned fund balance for the General Fund was $26.6
million or 69.0% of total General Fund expenditures (excluding other financing uses).
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The three components of the
financial statements are: (1) Government-wide financial statements, which include the
Statement of Net Assets and the Statement of Activities. These statements provide information
about the activities of the City as a whole. (2) Fund financial statements describe how City
services are financed in the short term as well as what resources are available for future
spending. Fund financial statements also report the City’s operations in more detail than the
government-wide statements by providing information about the City’s most significant funds.
(3) Notes to the financial statements.
Reporting the City as a Whole
The Statement of Net Assets and the Statement of Activities (Government-wide)
A frequently asked question regarding the City’s financial health is whether the year’s activities
contributed positively to the overall financial well-being. The Statement of Net Assets and the
Statement of Activities report information about the City as a whole and about its activities in a
way that helps answer this question. These statements include all assets and liabilities using
the accrual basis of accounting, which is similar to the accounting used by most private-sector
companies. All of the current year’s revenues and expenses are accounted for regardless of
when cash is received or paid.
These two statements report the City’s net assets and changes thereto. Net assets, the
difference between assets and liabilities, are one way to measure the City’s financial health, or
financial position. Over time, increases or decreases in net assets are an indicator of whether
the financial health is improving or deteriorating. However, it is important to consider other
nonfinancial factors such as changes in the City’s property tax base or condition of the City’s
roads to accurately assess the overall health of the City.
8
The Statement of Net Assets and the Statement of Activities present information about the
following:
` Governmental activities - All of the City’s basic services are considered to be governmental
activities, including general government, public safety, public works, and community
services. Property taxes, sales taxes, motor vehicle license fees and franchise fees finance
most of these activities. Proprietary activities/Business-type activities - The City charges a fee to customers to cover
all or most of the cost of the services provided. The City’s Water and Sewer systems are
reported in this category. Component units - The City’s governmental activities include the blending of two separate
legal entities: the Poway Housing Authority and the Poway Public Financing Authority.
Although legally separate, these “component units” are important because the City is
financially accountable for them.
Reporting the City’s Most Significant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds - not
the City as a whole. Some funds are required to be established by State law and by bond
covenants. However, management establishes many other funds that aid in the administration
of resources for particular purposes or to meet legal responsibilities associated with the usage
of certain taxes, grants, and other money. The City’s two kinds of funds, governmental and
proprietary, use different accounting approaches as explained below.
Governmental funds - Most of the City’s basic services are reported in governmental funds.
Governmental funds focus on how resources flow in and out with the balances remaining at
year-end that are available for spending. These funds are reported using an accounting
method called modified accrual, which measures cash and all other financial assets that can
readily be converted to cash. The governmental fund statements provide a detailed short-
term view of the City’s general government operations and the basic services it provides.
Governmental fund information shows whether there are more or fewer financial resources
that can be spent in the near future to finance the City’s programs. We describe the
relationship (or differences) between governmental activities (reported in the Statement of
Net Assets and the Statement of Activities) and governmental funds through reconciliation in
Note 1 in the Notes to Basic Financial Statements.
Proprietary funds - When the City charges customers for the services it provides, these
services are generally reported in proprietary funds. Proprietary funds are reported in the
same way that all activities are reported in the Statement of Net Assets and the Statement
of Activities.
These two statements report the City’s net assets and changes thereto. Net assets, the
difference between assets and liabilities, are one way to measure the City’s financial health, or
financial position. Over time, increases or decreases in net assets are an indicator of whether
the financial health is improving or deteriorating. However, it is important to consider other
nonfinancial factors such as changes in the City’s property tax base or condition of the City’s
roads to accurately assess the overall health of the City.
The City as Trustee
Reporting the City’s Fiduciary Responsibilities
The City is the trustee, or fiduciary, for certain amounts held on behalf of developers, property
owners, and others. These fiduciary activities are reported in separate Statements of Fiduciary
Net Assets and Changes in Fiduciary Net Assets. The City is responsible for ensuring that the
assets are used for their intended purposes. Therefore, fiduciary activities are excluded from the
City’s other financial statements because the assets cannot be used to finance operations.
9
The newly created Successor Agency to the Poway Redevelopment Agency is a Private
Purpose Trust Fund and is included in the Fiduciary Fund Financial Statements.
THE CITY AS A WHOLE
Our analysis focuses on the net assets (Table 1) and changes in net assets (Table 2) of the
City’s governmental and business activities, as well as a brief discussion of the private purpose
trust.
Table 1
City of Poway Net Assets
(in Thousands)
Assets:
Current and
other assets $103,057 $95,325 $36,799 $37,975 $139,856 $133,300 $31,818 $42,974
Capital assets 106,704 111,411 39,244 41,492 145,948 152,903 46,516 47,530
Total assets 209,761 206,736 76,043 79,467 285,804 286,203 78,334 90,504
Liabilities:
Long-term
debt outstanding 17,657 18,171 786 1,036 18,443 19,207 212,821 220,343
Other liabilities 4,193 4,750 3,101 4,114 7,294 8,864 15,343 15,465
Total liabilities 21,850 22,921 3,887 5,150 25,737 28,071 228,164 235,808
Net assets:
Invested in capital
assets, net of debt 90,442 94,657 38,732 40,746 129,174 135,403
Held in trust (149,830) (145,304)
Restricted 23,747 21,717 280 280 24,027 21,997
Unrestricted 73,722 67,441 33,144 33,291 106,866 100,732
Total net assets $ 187,911 $ 183,815 $ 72,156 $74,317 $ 260,067 $ 258,132 $ (149,830) $ (145,304)
Governmental Business
TotalActivities Activities
Private
Purpose
Trust
2013 201320142014 2013 2014 2013 2014
The City’s combined net assets for the fiscal year ended June 30, 2014, were $260.1 million.
The City has chosen to account for its water and sewer operations as enterprise funds, which is
shown as Business Activities on Table 1. Post dissolution the former Poway Redevelopment
Agency is now accounted for as a Private Purpose Trust Fund. The City’s net assets for
governmental activities increased 2.2% from $183.8 million to $187.9 million.
The following is an explanation of the governmental activity changes between fiscal years as
shown in Table 1:
Current and other assets increased $7.7 million or 8.1% principally due to increases in
Cash and Investments from normal operations as described below.
Capital assets decreased $4.7 million (net of depreciation and additions) as detailed in
Table 4. This decrease was caused by depreciation ($5.7) million net of additions that
include a fire pumper that is under construction.
Governmental long-term debt decreased $514. The decrease was attributable to
scheduled principal payments.
Governmental other liabilities decreased by $556, of which $551 of the reduction was
related to a fiscal year 2012-13 accrual for the California Joint Powers Insurance
Authority.
Invested in capital assets net of debt decreased $4.2 million primarily due to
depreciation.
10
Restricted net assets increased by $2.0 million, or 9.4%. The increase in restricted
funds for Housing purposes contributed $.9 million towards the total increase, while the
restricted funds for Street purposes increased $1.3 million. Both of these increases, as
well as the other changes in this category, were reflective of normal activity within the
restricted funds.
Unrestricted net assets, the part of net assets that can be used to finance day-to-day
operations without constraints established by debt covenants or other legal
requirements, increased by $6.3 million, or 9.3%, again primarily due to normal
operations. Any significant items will be discussed below in the Governmental Activities
section.
Governmental Activities
The cost of all Governmental activities this year was $48.9 million as shown on Table 2 and 2.1.
Of this cost, $8.9 million was paid for by those who directly benefited from the programs, $1.8
million was subsidized by grants received from other governmental organizations for both
capital and operating activities, and $41.9 million was financed through general City revenues.
Overall governmental program revenues, including intergovernmental aid and fees for services
were $10.7 million. Items of significance within Table 2 are described after the table:
Table 2
City of Poway Changes in Net Assets
(in Thousands)
Revenues:
Program Revenues:
Charges for services $8,893 $8,640 $30,730 $29,435 $39,623 $38,075 $- $-
Operating grants - -
and contributions 1,706 1,676 - - 1,706 1,676 - -
Capital grants - -
and contributions 66 100 - - 66 100 - -
General Revenues:- -
Property taxes 20,543 21,378 - - 20,543 21,378 40,907 39,512
Sales tax 12,048 11,565 - - 12,048 11,565 - -
Other taxes 5,856 6,076 - - 5,856 6,076 - -
Investment & misc. 3,420 4,375 300 72 3,720 4,447 1,925 4,354
Total revenues 52,532 53,810 31,030 29,507 83,562 83,317 42,832 43,866
Expenses:
General Government 5,228 5,357 - - 5,228 5,357 36,444 50,324
Public safety 20,907 20,214 - - 20,907 20,214 - -
Public works 11,864 12,284 - - 11,864 12,284 - -
Development services 3,815 3,745 - - 3,815 3,745 - -
Community services 6,115 5,063 - - 6,115 5,063 - -
Interest & charges 509 375 - - 509 375 10,914 11,218
Transfers to fid fund 440 444 - - 440 444 - -
Water - - 23,314 22,367 23,314 22,367 - -
Sewer - - 9,435 10,069 9,435 10,069 - -
Total expenses 48,878 47,482 32,749 32,436 81,627 79,918 47,358 61,542
Change in net assets
before transfers 3,654 6,328 (1,719) (2,929) 1,935 3,399 (4,526) (17,676)
Transfers 442 408 (442) (408) - - - -
Change in net assets
after transfers 4,096 6,736 (2,161) (3,337) 1,935 3,399 (4,526) (17,676)
Net assets - 7/1 183,815 177,079 74,317 77,654 258,132 254,733 (145,304) (127,628)
Net assets - 6/30 $ 187,911 $ 183,815 $ 72,156 $74,317 $ 260,067 $ 258,132 $ (149,830) $ (145,304)
Private
Purpose
Trust
2014 2013 2014 2013 2014 2013 2014 2013
Governmental Business TotalActivitiesActivities
11
Revenues:
Property taxes decreased by 3.9% primarily due to the reduction of one-time revenues
from the Redevelopment Property Tax Trust Fund (RPTTF). However, when
adjustments are made for the RPTTF revenue in fiscal years 2012-13 and 2013-14, the
remaining property taxes increased by 4.7%.
Sales taxes increased by 4.2%, with the automobile and transportation category having
the largest increases of all the major sales tax categories.
Other taxes, excluding sales tax, decreased by 1.4%. This category includes taxes that
are used for street purposes, franchise fees and transient occupancy tax. The City’s
distribution from the state for Highway Users Taxes increased by $447, but that was
offset by a decrease of $758 from Transnet Taxes that are collected by the San Diego
Association of Governments and then distributed for approved street projects, which
often results in large variances from year-to-year. Additionally, there were small
increases in both franchise fees and transient occupancy tax.
Investment earnings increased by 57.2% primarily due to proceeds from maturing
investments being reinvested at slightly higher interest rates and an increase in the
market value of the investment portfolio. The City continued to look for investment
opportunities outside of the low yielding investment pools, but still in accordance with its
approved investment policy.
The Miscellaneous revenue category decreased by $1.5 million, or 45.3%. The prior
year was unusually high and included several one-time items such as the sale of land,
reimbursements from non-profit housing partners and a refund from the County of San
Diego for prior year’s property tax administration fee over charges. The Current year had
no significant unusual items.
Charges for services increased by 2.9% with no unusual activity.
Operating Grants and contributions increased by 1.8% with no unusual activity.
(Certain prior year revenues have been reclassified from one category to another to be
consistent with the current year classifications. Total prior year revenues did not
change.)
Expenses:
General Government Expenses decreased 2.4%. There were no significant changes in
this category.
The Public Safety line increased by 3.4%. The law enforcement contract with the County
of San Diego accounted for nearly two-thirds of the increase, with fire suppression also
having a slight increase as compared to the prior year.
Public Works had a 3.4% decrease in expenses. Additional street maintenance was
performed in the prior year which is the primary cause of the current year decrease.
Current year street maintenance was performed in accordance with the overall street
maintenance plan.
The Development Services department increased by 1.9%. While the overall department
increase is not significant, there was some change in the composition of the
department’s expenditures. Plan check review and inspection increased which led to
increased revenues while Traffic Engineering decreased with retirement of the City’s full
time Traffic Engineer and the redistribution of many of those duties.
Community Services increased by $1.1 million or 20.8%. The majority of the increase is
related to $1.0 provided to the County of San Diego for non-capitalizable improvements
to the Poway Library, with the remaining increase due to greater utilization of the City’s
recreation programs, which was also reflected in higher revenues.
Interest and fiscal charges increased by $135, or 35.9%. The prior year included the
refunding of the 2003 Certificates of Participation, the timing of which caused this
balance to be lower.
12
General government $ 5,228 $ 5,357 $ 491 $ 559 $ (4,737) $ (4,798)
Public safety 20,907 20,214 2,148 2,485 (18,759) (17,729)
Public works 11,864 12,284 2,812 3,030 (9,052) (9,254)
Development services 3,815 3,745 2,360 1,796 (1,455) (1,949)
Community services 6,115 5,063 2,854 2,681 (3,261) (2,382)
Interest and fiscal chgs 509 375 - - (509) (375)
Transfer to fiduciary fund 440 444 - - (440) (444)
Totals $ 48,878 $ 47,482 $ 10,665 $ 10,551 $ (38,213) $ (36,931)
Table 2.1
Net Cost of Governmental Activities
(in Thousands)
20132013
Program
Revenues
Net Cost
of Services
Total Cost
2014
of Services
2014 2014 2013
Fiscal Year 2014
Governmental Activities
(Graphic representation of Table 2 in percentages)
Net Cost of Governmental Activities
The City’s programs include: General Government, Public Safety, Public Works, Development
Services and Community Services. Each program’s net cost (total cost less revenues generated
by the activities) is presented on Table 2.1. The net cost shows the extent to which the City’s
general taxes support each of the City’s programs.
Sources of Revenue Program Expenses
13
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
Water Sewer
Total Cost of Services
Program Revenues
Net Cost
Total resources available during the year to finance governmental operations were $236.8
million consisting of Net Assets at July 1, 2013, of $183.8 million, Program Revenues of $10.7
million, General Revenues of $41.9 million, and $442 of Transfers. Total Governmental
Activities during the year were $48.9 million; thus Net Assets increased by $4.1 million to $187.9
million. As noted elsewhere the dissolution of the former Poway Redevelopment Agency
continued to impact both revenues and expenses and therefore the increase in Net Assets.
Business-Type Activities
Net assets of the Proprietary Funds (Business-Type activities) at June 30, 2014, as reflected in
Table 1 were $72.2 million. As shown in Table 2.2, program revenues were $30.7 million, while
the cost of providing all Proprietary (Business-Type) Activities this year was $32.7 million
resulting in a decrease of $2.0 million. The net use of $142 from other revenues, non-operating
activity and transfers resulted in a Net Assets decrease of $2.2 million or 2.9%. The water
revenue increase was attributable to both rate and volume increases. The increased cost of
water services was primarily attributable to water purchases. Although the Sewer fund
experienced higher sewage transportation and treatment costs, revenues remained stable and
its net position decreased due to the planned use of accumulated reserves.
Fiscal Year 2014
Total Cost of Services, Program Revenues & Net Cost – Business Activities (in thousands)
Water $ 23,314 $ 22,367 $ 23,382 $ 22,207 $ 68 $ (160)
Sewer 9,435 10,069 7,348 7,228 (2,087) (2,841)
Totals $ 32,749 $ 32,436 $ 30,730 $ 29,435 $ (2,019) $ (3,001)
2014 2013
of Servicesof Services Revenue
Table 2.2
Net Cost of Business Activities
(in Thousands)
Total Cost Program
2014 2013
Net Cost
2014 2013
Fiscal Year 2014
Total Cost of Services, Program Revenues & Net Cost –Governmental Activities (in thousands)
($20,000)
($15,000)
($10,000)
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
Total Cost of Services Program Revenues Net Cost
General
Govt
Public
Safety
Public
Works
Community
Services
Interest &
Transfer
Development
Services
14
Major Funds Budgetary Highlights
General Fund:
Actual revenues compared favorably to the final budget resulting in a $4.8 million positive variance
(excluding other financing sources). The major variances were in Taxes, Charges for Services and
Use of Money and Property. Actual Taxes revenue was higher than budgeted distributions from the
Redevelopment Property Tax Trust Fund which accounted for $3.8 million of the variance. Charges
for Services exceeded its budget primarily because of higher than expected Developer and
Community Service Fees. Use of Money and Property was higher because of slightly higher
interest rates and the continued focus on the allocation of investments between investment pools
and securities. The final appropriations for the City’s General Fund at year-end were $9.9 million
more than actual expenditures prior to other financing uses. The largest component of the budget
to actual variance was in the Capital outlay category. The variance in the Capital outlay category is
attributable to delays in several projects that are only just starting or are partially complete. The
savings in the remaining expenditure categories is reflective of the City’s ongoing efforts to manage
costs. There were no unusual items that contributed to the savings in any of these categories.
During the fiscal year the City produced quarterly budget updates in addition to its traditional
midyear budget update, which enhanced focus on the City’s financial position and the current
factors affecting that position.
Housing Authority Special Revenue Fund:
The City of Poway created its Housing Authority during fiscal year 2010-11 and transferred all of
the Poway Redevelopment Agency’s housing assets to the Housing Authority. As a result of
ABX1 26 the Housing Authority was able to retain its capital assets, and any related income, but
was required to transfer its liquid assets to the Successor Agency effective February 1, 2012.
With the passage of subsequent legislation, AB 1484, twenty-percent of the City’s advances to
the former Poway Redevelopment Agency were transferred to the Housing Authority. The
Housing Authority’s revenues and other financing sources exceeded its expenditures by $167.
Revenues were primarily made up of lease payments from properties owned by the Housing
Authority and residual payments from its non-profit partners that own and operate affordable
housing projects. Expenditures continue to be minimal as the Housing Authority is exploring
how best to use these funds to improve the quantity and quality of affordable housing in the
City.
Other Governmental Funds:
There was no unusual activity in the Other Governmental grouping of funds during the fiscal
year. The Street Improvement Fund and the Proposition A Fund both had increases in fund
balance. The increased fund balance for the Street Improvement Fund came from developer
fees that will be programmed in the future for eligible projects, and the increased fund balance
for the Proposition A Fund was related to funds received for a project that had been scheduled
in fiscal year 2013-14 but was delayed until fiscal year 2014-15. Also, as in the prior fiscal year,
the Housing Special Programs Fund fund balance increased due to there being no expenditure
activity. As further discussed in the Contingent Liability and Commitments note the disposition of
this fund is under dispute, and consequently the City continued to deem it prudent to not make
expenditures from the fund until its status is resolved.
Successor Agency to the City of Poway Redevelopment Agency:
The provisions of ABX1 26 include the creation of the Successor Agency to the City of Poway
Redevelopment Agency effective February 1, 2012. All balances previously associated with the
Poway Redevelopment Agency were transferred to the Successor Agency. A seven member
Oversight Board was created to oversee the Successor Agency. The Successor Agency is
accounted for as a Private Purpose Trust Fund and therefore both capital assets and long term
liabilities are included in the fund. The Successor Agency must prepare Recognized Obligation
Payment Schedules (ROPS) for review and approval by its Oversight Board, as well as the
State Controller’s Office, the State Department of Finance, and the County of San Diego.
Through this process the Successor Agency is to receive sufficient funding (formerly the Poway
15
Redevelopment Agency’s tax increment revenue) to pay the approved items on the ROPS. Any
funds in excess of ROPS requirements are distributed to the appropriate taxing agencies based
on each agency’s pro rata share of the one-percent property tax. The Successor Agency’s net
position decreased by $4.5 million during the fiscal year which was primarily due to the use of
funds that were on hand as of June 30, 2013 to pay for approved fiscal year 2013-14 ROPS
expenditures.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets:
The capital assets of the City are those assets that are used in the performance of City
functions. Capital Assets include land, buildings, facility improvements, infrastructure,
equipment and vehicles. Construction in Progress increased by $700 mainly due to the
purchase of a new fire pumper that is in the process of being built, as well as ongoing water and
sewer pipeline projects. Total capital assets decreased by $8.0 million due to current year
depreciation of $9.4 million offset by net vehicle and equipment purchases and disposals of $1.4
million. Depreciation on capital assets is recognized in the Government-Wide financial
statements. (See Table 3 & Note 4 to the financial statements)
Fiduciary
2014 2013 2014 2013 2014 2013 2014 2013
Land $ 29,971 $ 29,971 $ 77 $ 77 $ 24,732 $ 24,732 $ 54,780 $ 54,780
Buildings 30,100 31,512 4,143 4,610 5,863 6,522 40,106 42,644
Improvements 2,065 2,204 32,918 34,964 - - 34,983 37,168
Infrastructure 38,574 41,447 - - 15,921 16,276 54,495 57,723
Equip & Vehicles 5,373 6,277 1,246 1,060 - - 6,619 7,337
Construction in Prog 621 - 860 781 - - 1,481 781
$ 106,704 $ 111,411 $ 39,244 $ 41,492 $ 46,516 $ 47,530 $ 192,464 $ 200,433
Table 3
Total
City of Poway Capital Assets at Year-End
(Net of Depreciation)
(In Thousands)
Activities
Governmental Business
Activities
Debt:
At year-end, the City had $17.7 million in governmental-type debt and $786 in Proprietary debt
and $212.8 million in Fiduciary debt (Table 4). The overall decrease in bond balances was due
to scheduled principal payments and premium/discount amortizations. The increased Loans
Payable balance was attributable to accrued interest related to the operating covenant with AZ
Poway, LLC (dba Mossy Nissan) which exceeded the payment required under the covenant.
Finally, the Compensated Absences balances had minor changes, but again there was no
unusual activity. (See Table 4 & Note 5 to financial statements)
Fiduciary
2014 2013
Tax Allocation Bonds $ - $ - $ - $ - $ 208,316 $ 215,576 $ 208,316 $ 215,576
Certificates of Participation 16,261 16,986 - - 1,619 1,986 17,880 18,972
Revenue Bonds - - 513 746 - - 513 746
Loans Payable - - - - 2,886 2,781 2,886 2,781
Comp Absences 1,396 1,418 273 290 - - 1,669 1,708
Total $ 17,657 $ 18,404 $786 $ 1,036 $ 212,821 $ 220,343 $ 231,264 $ 239,783
2013
Table 4
City of Poway Outstanding Debt at Year-End
(In Thousands)
Governmental Business
TotalActivitiesActivities
2014 2013 2014 2013 2014
16
NEXT YEAR’S BUDGET AND ECONOMIC FACTORS
In considering the City Budget for fiscal year 2014-2015, the City Council and management
continue to be cautious but do expect a continued improvement in the local economy. Both
property tax and sales tax are expected to increase over the fiscal year 2013-14 actual
revenues. An increase Community Services, Development Services and Safety Services in the
budget for property taxes is the primary reason, with total General Fund revenue budget
projected to be 5.2% higher than Fiscal Year 2013-14. Property taxes are expected to continue
to rise, fueled by higher assessed values and the recovery of the real estate market. Sales
taxes are also expected to continue to increase, led by the automobile and retail segments.
General Fund expenditures are budgeted to grow by 6.6%, which was a result of increases in
most City functions, including facility maintenance as well as law enforcement services.
Increases in Community Services, Development Services and Safety Services are partially
offset by additional revenues in these areas. The City’s initial projections showed a moderate
operating surplus of $293.
Aside from the General Fund, the only other budget activity of note is the continued and planned
net use of the Sewer Fund’s reserves. The Sewer Fund had accumulated resources over
several years in anticipation of significant pass-through costs from San Diego Metro as part of
the planned upgrade of sewer treatment facilities at the Point Loma wastewater treatment plant.
Due to the deferral of these improvements, Poway has strategically drawn-down the excess
reserves by temporarily lowering sewer service fees. The fund is continually analyzed to ensure
its long term stability.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the City’s finances and to show the City’s fiduciary
responsibility for the funds it receives. If you have questions about this report or need additional
financial information, contact the City’s Administrative Services Department, at the City of
Poway, 13325 Civic Center Drive, Poway, California 92064 or online: http://www.poway.org.
17
BASIC FINANCIAL STATEMENTS
18
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19
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
City of Poway
Statement of Net Position
June 30, 2014
The accompanying notes are an integral part of these financial statements.
20
Governmental
Activities
Business-Type
Activities Total
ASSETS
Current assets:
Cash and investments 78,530,019$ 21,278,631$ 99,808,650$
Cash and investments with fiscal agents 647,131 279,579 926,710
Receivables:
Taxes 3,249,681 - 3,249,681
Accounts 413,696 5,399,917 5,813,613
Interest 772,092 - 772,092
Due from other governments 712,268 69,342 781,610
Prepaid items 4,606 - 4,606
Inventories 122,763 2,902,281 3,025,044
Total current assets 84,452,256 29,929,750 114,382,006
Noncurrent assets:
Notes receivable 10,006,638 - 10,006,638
Internal balances (214,500) 214,500 -
Loans to the Successor Agency to the
Poway Redevelopment Agency 8,592,552 6,283,981 14,876,533
Loans to the Business Park Fiduciary Fund - 370,000 370,000
Capital assets:
Nondepreciable assets 30,592,770 937,439 31,530,209
Depreciable assets, net 76,110,758 38,307,042 114,417,800
Total capital assets 106,703,528 39,244,481 145,948,009
Total noncurrent assets 125,088,218 46,112,962 171,201,180
Total assets 209,540,474 76,042,712 285,583,186
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding of debt 220,760 - 220,760
Total deferred outflows of resources 220,760$ -$ 220,760$
Primary Government
City of Poway
Statement of Net Position
June 30, 2014
The accompanying notes are an integral part of these financial statements.
21
Governmental
Activities
Business-Type
Activities Total
LIABILITIES
Current liabilities:
Accounts payable 3,255,314$ 2,895,386$ 6,150,700$
Accrued liabilities 539,079 93,677 632,756
Accrued interest payable 234,064 4,721 238,785
Deposits - 107,125 107,125
Unearned revenue 164,521 - 164,521
Long-term debt - due within one year 2,082,817 482,279 2,565,096
Total current liabilities 6,275,795 3,583,188 9,858,983
Noncurrent liabilities:
Long-term debt - due in more than one year 15,574,382 303,685 15,878,067
Total noncurrent liabilities 15,574,382 303,685 15,878,067
Total liabilities 21,850,177 3,886,873 25,737,050
NET POSITION
Net investment in capital assets 90,442,061 38,731,821 129,173,882
Restricted for:
Special revenue:
Streets 4,566,375 - 4,566,375
Drainage 2,572,810 - 2,572,810
Maintenance districts 7,304,202 - 7,304,202
Grants 76,569 - 76,569
Miscellaneous 2,810,124 - 2,810,124
Affordable housing 4,424,804 - 4,424,804
Debt service 1,509,186 279,579 1,788,765
Capital improvement projects 391,380 - 391,380
Permanent:
Expendable 91,069 - 91,069
Total restricted 23,746,519 279,579 24,026,098
Unrestricted 73,722,477 33,144,439 106,866,916
Total net position 187,911,057$ 72,155,839$ 260,066,896$
Primary Government
City of Poway
Statement of Activities
For the year ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
22
Operating Capital Total
Charges for Contributions Contributions Program
Functions/Programs Expenses Services and Grants and Grants Revenues
Primary government:
Governmental activities:
General government 5,227,809$ 260,802$ 230,046$ -$ 490,848$
Public safety 20,906,884 1,908,337 240,497 - 2,148,834
Public works 11,863,623 2,753,917 58,327 - 2,812,244
Development services 3,815,282 1,534,304 825,506 - 2,359,810
Community services 6,115,485 2,436,024 351,705 66,167 2,853,896
Interest and fiscal charges 509,206 - - - -
Transfers to fiduciary funds 440,300 - - - -
Total governmental activities 48,878,589 8,893,384 1,706,081 66,167 10,665,632
Business-type activities:
Water 23,314,233 23,381,953 - - 23,381,953
Sewer 9,434,739 7,347,502 - - 7,347,502
Total business-type activities 32,748,972 30,729,455 - - 30,729,455
Total primary government 81,627,561$ 39,622,839$ 1,706,081$ 66,167$ 41,395,087$
Program Revenues
City of Poway
Statement of Activities
For the year ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
23
Governmental Business-type
Functions/Programs Activities Activities Total
Primary government:
Governmental activities:
General government (4,736,961)$ -$ (4,736,961)$
Public safety (18,758,050) - (18,758,050)
Public works (9,051,379) - (9,051,379)
Development services (1,455,472) - (1,455,472)
Community services (3,261,589) - (3,261,589)
Interest and fiscal charges (509,206) - (509,206)
Transfers to fiduciary funds (440,300) - (440,300)
Total governmental activities (38,212,957) - (38,212,957)
Business-type activities:
Water - 67,720 67,720
Sewer - (2,087,237) (2,087,237)
Total business-type activities - (2,019,517) (2,019,517)
Total primary government (38,212,957) (2,019,517) (40,232,474)
General revenues:
Taxes:
Property taxes 20,543,111 - 20,543,111
Sales tax 12,047,687 - 12,047,687
Transient occupancy taxes 523,112 - 523,112
Franchise taxes 1,555,816 - 1,555,816
Other taxes 3,777,526 - 3,777,526
Total taxes 38,447,252 - 38,447,252
Investment earnings 1,573,545 217,194 1,790,739
Miscellaneous 1,846,762 82,930 1,929,692
Transfers 441,725 (441,725) -
Total general revenues and transfers 42,309,284 (141,601) 42,167,683
Change in net position 4,096,327 (2,161,118) 1,935,209
Net position, beginning of year, as
restated (Note 16)183,814,730 74,316,957 258,131,687
Net position, end of year 187,911,057$ 72,155,839$ 260,066,896$
Changes in Net Position
Net (Expense) Revenue and
24
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25
FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
26
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City of Poway
Balance Sheet
Governmental Funds
June 30, 2014
The accompanying notes are an integral part of these financial statements.
27
Housing Other Total
General Authority Governmental Governmental
Fund Fund Funds Funds
ASSETS
Cash and investments 47,131,234$ 1,413,347$ 21,537,536$ 70,082,117$
Receivables:
Taxes 3,238,667 - 11,014 3,249,681
Notes 10,006,638 - - 10,006,638
Accounts 340,627 - 72,558 413,185
Interest 772,028 - 64 772,092
Due from other funds 348,391 - - 348,391
Advances to other funds 798,299 - 17,576 815,875
Due from other governments 161,591 - 550,677 712,268
Prepaid items 4,606 - - 4,606
Inventories, at cost 122,763 - - 122,763
Advances to fiduciary funds 2,641,166 2,975,306 2,976,080 8,592,552
Restricted assets:
Cash and investments with fiscal agents - - 647,131 647,131
Total assets 65,566,010$ 4,388,653$ 25,812,636$ 95,767,299$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 2,896,118$ 6,261$ 317,537$ 3,219,916$
Accrued liabilities 496,974 - 34,040 531,014
Due to other funds - - 348,391 348,391
Advances from other funds - - 1,030,375 1,030,375
Unearned revenue 5,449 2,200 156,872 164,521
Total liabilities 3,398,541 8,461 1,887,215 5,294,217
Deferred inflow of resources:
Unavailable revenue - - 178,902 178,902
Total deferred inflows of resources - - 178,902 178,902
FUND BALANCES
Nonspendable 10,134,007 - - 10,134,007
Restricted - 4,380,192 23,746,519 28,126,711
Committed 10,026,079 - - 10,026,079
Assigned 15,383,344 - - 15,383,344
Unassigned 26,624,039 - - 26,624,039
Total fund balances 62,167,469 4,380,192 23,746,519 90,294,180
Total liabilities, deferred inflows
of resources and fund balances 65,566,010$ 4,388,653$ 25,812,636$ 95,767,299$
Major Funds
City of Poway
Reconciliation of the Balance Sheet - Governmental
Funds to the Government-wide Statement of Net Position
June 30, 2014
The accompanying notes are an integral part of these financial statements.
28
Total Fund Balances - Total Governmental Funds 90,294,180$
Amounts reported for governmental activities in the Statement of Net
Position were different because:
Capital assets used in governmental activities were not current financial
resources and, therefore, were not reported in the funds.
Non-depreciable 30,592,770$
Depreciable, net of accumulated depreciation 76,110,758
Total capital assets 106,703,528
Deferred losses on refunding of debt did not require current financial
resources but were deferred and subject to capitalization and
amortization on the Government-Wide Statement of Net Position.220,760
Long-term liabilities were not due and payable in the current period and
therefore were not reported in the governmental funds.
Long-term liabilities - due within one year (2,082,817)$
Long-term liabilities - due in more than one year
(net of $30,986 reported in Internal Service Fund)(15,543,396)
Total long-term liabilities (17,626,213)
Interest payable on long-term debt did not require current financial
resources. Therefore, interest payable was not reported as a liability in
the Governmental Funds Balance Sheet.(234,064)
Unavailable revenues recorded in governmental fund financial statements
resulting from activities in which revenues were earned but funds were
not available were recognized as revenues in the Government-Wide
Financial Statements.178,902
Internal service funds were used by management to charge the costs of
certain activities to individual funds. The assets and liabilities of the
internal service funds were included in governmental activities in the
Government-Wide Statement of Net Position.8,373,964
Net position of governmental activities 187,911,057$
City of Poway
Statement of Revenues, Expenditures and
Changes in Fund Balances
Governmental Funds
For the year ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
29
Housing Other Total
General Authority Governmental Governmental
Fund Fund Funds Funds
REVENUES
Taxes 33,272,810$ -$ 5,174,442$ 38,447,252$
Licenses and permits 561,251 - - 561,251
Intergovernmental 460,701 - 367,577 828,278
Charges for services 2,356,165 29,672 369 2,386,206
Fines and forfeitures 184,855 - - 184,855
Use of money and property 985,440 14,613 495,858 1,495,911
Developer fees 3,899,908 - 906,262 4,806,170
Assessment levied - - 1,898,872 1,898,872
Other revenues 642,865 139,136 1,052,530 1,834,531
Total revenues 42,363,995 183,421 9,895,910 52,443,326
EXPENDITURES
Current:
General government 4,199,348 3,493 - 4,202,841
Public safety 20,303,104 - 130,722 20,433,826
Public works 4,086,775 - 5,552,991 9,639,766
Development services 3,817,726 12,709 - 3,830,435
Community services 4,912,545 - - 4,912,545
Capital outlay 1,242,980 - 1,039,967 2,282,947
Debt service:
Principal - - 700,000 700,000
Interest and fiscal charges - - 506,527 506,527
Transfer to fiduciary funds - - 440,300 440,300
Total expenditures 38,562,478 16,202 8,370,507 46,949,187
Excess of revenues over
expenditures 3,801,517 167,219 1,525,403 5,494,139
OTHER FINANCING SOURCES (USES)
Transfers in 1,925,397 - 1,242,875 3,168,272
Transfers out (1,585,583) - (738,707) (2,324,290)
Total other financing sources (uses)339,814 - 504,168 843,982
Net change in fund balances 4,141,331 167,219 2,029,571 6,338,121
Fund balances, beginning of year 58,026,138 4,212,973 21,716,948 83,956,059
Fund balances, end of year 62,167,469$4,380,192$ 23,746,519$90,294,180$
Major Funds
City of Poway
Reconciliation of the Statement of Revenues, Expenditures
And Changes in Fund Balance - Governmental Funds to the
Government-wide Statement of Activities
For the year ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
30
Net change in fund balance - total governmental funds 6,338,121$
Amounts reported for governmental activities in the Statement of Activities were
different because:
Governmental funds report capital outlay as expenditures. However, in the
Government-Wide Statement of Activities, the cost of those assets will be
allocated over their estimated useful lives as depreciation expense.
Capital outlay 974,948$
Depreciation expense (5,675,854)
Loss due to disposition of capital assets (6,130)
(4,707,036)
Compensated absences were reported in the Government-wide Statement of
Net Position, but they did not require the use of current financial resources.
Therefore, compensated absences were not reported as expenditures in
governmental funds. This amount represents the change in compensated
absences from prior year (net of $1,270 reported in internal service funds).23,329
Repayment of bond principal was an expenditure in governmental funds, but the
repayment reduces long-term liabilities in the Government-wide Statement of
Net position.700,000
Amortization on bond premiums was reported in the Government-wide Statement
of Activities, but did not require the use of current financial resources.
Therefore, amortization was not reported as expenditures in governmental funds.
2005 Certificates of Participation 4,235$
2012 Certificates of Participation 20,489
24,724
Amortization of deferred loss on refunding was reported in the Government-wide
Statement of Activities, but it did not require the use of current financial resources.
Therefore, amortization was not reported as an expenditure in the governmental
funds.(11,933)
Interest expense on long-term debt was reported in the Government-wide
Statement of Activities, but they did not require the use of current financial
resources. Therefore, interest expense was not reported as expenditures in
Governmental Funds. The following amount represents the change in accrued
interest from the prior year.(2,679)
Revenues in the Government-wide Statement of Activities that did not provide
current financial resources are not reported as revenues
in the funds. 12,230
Internal service funds were used by management to charge the costs of certain
activities, such as insurance and fleet management, to individual funds. The
net revenue of the internal service funds was reported with governmental
activities.1,719,571
Change in net position of governmental activities 4,096,327$
31
PROPRIETARY FUND
FINANCIAL STATEMENTS
32
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City of Poway
Statement of Net Position
Proprietary Funds
June 30, 2014
The accompanying notes are an integral part of these financial statements.
33
Governmental
Activities -
Internal Service
Water Sewer Total Fund
ASSETS
Current assets:
Cash and investments 5,340,591$ 15,938,040$ 21,278,631$ 8,447,902$
Cash and investments with fiscal agents 279,579 - 279,579 -
Receivables:
Accounts 4,248,672 1,151,245 5,399,917 511
Due from other governments - 69,342 69,342 -
Inventories 2,891,118 11,163 2,902,281 -
Total current assets 12,759,960 17,169,790 29,929,750 8,448,413
Noncurrent assets:
Advances to other funds - 214,500 214,500 -
Loans to the Successor Agency to the
Poway Redevelopment Agency 2,085,083 4,198,898 6,283,981 -
Loans to the Business Park Fiduciary Fund - 370,000 370,000
Capital assets:
Nondepreciable 782,068 155,371 937,439 -
Depreciable 58,070,264 36,088,800 94,159,064 -
Less accumulated depreciation (35,775,198) (20,076,824) (55,852,022) -
Total net capital assets 23,077,134 16,167,347 39,244,481 -
Total noncurrent assets 25,162,217 20,950,745 46,112,962 -
Total assets 37,922,177 38,120,535 76,042,712 8,448,413
LIABILITIES
Current liabilities:
Accounts payable 1,769,197 1,126,189 2,895,386 35,398
Accrued liabilities 82,033 11,644 93,677 8,065
Accrued interest payable 4,721 - 4,721 -
Deposits 107,125 - 107,125 -
Compensated absences due within one year 200,298 31,981 232,279 -
Long-term debt - due within one year 250,000 - 250,000 -
Total current liabilities 2,413,374 1,169,814 3,583,188 43,463
Noncurrent liabilities:
Compensated absences 41,025 - 41,025 30,986
Long-term debt - due in more than one year 262,660 - 262,660 -
Total noncurrent liabilities 303,685 - 303,685 30,986
Total liabilities 2,717,059 1,169,814 3,886,873 74,449
NET POSITION
Net investment in capital assets 22,564,474 16,167,347 38,731,821 -
Restricted for debt service 279,579 - 279,579 -
Unrestricted 12,361,065 20,783,374 33,144,439 8,373,964
Total net position 35,205,118$ 36,950,721$ 72,155,839$ 8,373,964$
Major Funds
City of Poway
Statement of Revenues, Expenses and Changes
In Net Position
Proprietary Funds
For the year ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
34
Governmental
Activities -
Internal Service
Water Sewer Total Fund
OPERATING REVENUES
Charges for services 23,240,231 7,159,373 30,399,604$ 3,305,132$
Connection fees 141,722$ 188,129$ 329,851 -
Other 25,350 57,580 82,930 -
Total operating revenues 23,407,303 7,405,082 30,812,385 3,305,132
OPERATING EXPENSES
Personnel services 3,315,156 532,291 3,847,447 334,937
Maintenance and operations 4,038,223 7,768,961 11,807,184 935,016
Cost of purchased water 14,403,066 - 14,403,066 -
Depreciation 1,557,788 1,133,487 2,691,275 -
Total operating expenses 23,314,233 9,434,739 32,748,972 1,269,953
Operating income (loss) 93,070 (2,029,657) (1,936,587) 2,035,179
NONOPERATING REVENUES (EXPENSES)
Interest revenue 69,421 182,162 251,583 83,765
Interest expense and fiscal charges (34,389) - (34,389) -
Other nonoperating revenue - - - 2,884
Total nonoperating revenues (expenses) 35,032 182,162 217,194 86,649
Income (loss) before transfers 128,102 (1,847,495) (1,719,393) 2,121,828
TRANSFERS
Transfers in - - - 640,683
Transfers out (280,507) (161,218) (441,725) (1,042,940)
Total transfers (280,507) (161,218) (441,725) (402,257)
Change in net position (152,405) (2,008,713) (2,161,118) 1,719,571
Net position, beginning of year, as restated 35,357,523 38,959,434 74,316,957 6,654,393
Net position, end of year 35,205,118$ 36,950,721$ 72,155,839$ 8,373,964$
Major Funds
City of Poway
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
35
Governmental
Activities -
Internal Service
Water Sewer Total Funds
Cash flows from operating activities:
Cash received from customers 23,167,412$ 7,509,393$ 30,676,805$ 3,304,621$
Cash paid to employees for services (3,312,279) (532,012) (3,844,291) (331,515)
Cash paid to suppliers for goods or services (19,931,443) (7,691,073) (27,622,516) (927,659)
Cash paid to other City funds (68,430) (101,330) (169,760) -
Other 84,300 57,580 141,880 -
Net cash provided by (used for)
operating activities (60,440) (757,442) (817,882) 2,045,447
Cash flows from noncapital financing activities:
Payments received on loan to the
Business Park Fiduciary Fund - 170,000 170,000 640,683
Transfers out (280,507) (161,218) (441,725) (1,042,940)
Net cash provided by (used for)
noncapital financing activities (280,507) 8,782 (271,725) (402,257)
Cash flows from capital and related financing
activities:
Acquisition of capital assets (390,465) (111,867) (502,332) -
Sale of capital assets - - - 2,884
Principal paid on long-term debt (233,244) - (233,244) -
Payment of interest and fees (36,543) - (36,543) -
Net cash provided by (used for) capital and
related financing activities (660,252) (111,867) (772,119) 2,884
Cash flows from investing activities:
Interest income 69,421 182,162 251,583 83,765
Net cash provided by
investing activities 69,421 182,162 251,583 83,765
Net increase (decrease) in cash and investments (931,778) (678,365) (1,610,143) 1,729,839
Cash and investments, beginning of year 6,551,948 16,616,405 23,168,353 6,718,063
Cash and investments, end of year 5,620,170$ 15,938,040$ 21,558,210$ 8,447,902$
Reconciliation of cash and investments
to the Statement of Net Position
Cash and investments 5,340,591$ 15,938,040$ 21,278,631$ 8,447,902$
Cash and investments with fiscal agents 279,579 - 279,579 -
Total cash and investments 5,620,170$ 15,938,040$ 21,558,210$ 8,447,902$
Reconciliation of operating income (loss) to net
cash provided by (used for) operating
activities:
Operating income (loss) 93,070$ (2,029,657)$ (1,936,587)$ 2,035,179$
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating
activities:
Depreciation 1,557,788 1,133,487 2,691,275 -
Loss on disposal of capital assets 58,950 - 58,950 -
(Increase) decrease in assets:
Accounts receivable (214,544) 161,891 (52,653) (511)
Inventories (550,769) (189) (550,958) -
Increase (decrease) in liabilities:
Accounts payable (1,049,911) (23,253) (1,073,164) 7,357
Accrued liabilities 18,274 1,583 19,857 2,151
Compensated absences (15,394) (1,304) (16,698) 1,271
Deposits 42,096 - 42,096 -
Net cash provided by (used for)
operating activities (60,440)$ (757,442)$ (817,882)$ 2,045,447$
Major Funds
36
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37
FIDUCIARY FUND
FINANCIAL STATEMENTS
Agency funds are used to account for assets held by the City as an agent for individuals,
private organizations, other governments, and/or other funds.
RDA Successor Agency Private Purpose Trust Fund is used to account for monies received
from the San Diego County Auditor Controller for the repayment of the enforceable obligations
of the former Poway Redevelopment Agency. These funds are restricted for the sole purpose of
payment of items on an approved Recognized Payment Obligation Schedule (ROPS).
38
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City of Poway
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2014
The accompanying notes are an integral part of these financial statements.
39
Successor Agency
to the Poway
Agency Redevelopment
Funds Agency
ASSETS
Current assets
Cash and investments 6,408,205$ 7,159,767$
Receivables:
Taxes 2,087 -
Interest 14 33,276
Notes - 5,358,494
Due from fiduciary fund - 11,860
Due from other governments - 4,705
Cash and investments with fiscal agent 1,708,564 19,059,449
Prepaid charges, net - 190,783
Total current assets 8,118,870 31,818,334
Noncurrent assets
Capital assets:
Nondepreciable - 24,731,737
Depreciable - 35,320,861
Less accumulated depreciation - (13,536,795)
Total noncurrent assets - 46,515,803
Total assets 8,118,870$ 78,334,137
LIABILITIES
Current liabilities
Accounts payable 45,928$ 2,350
Deposits - 1,830
Due to fiduciary fund 11,860 -
Long-term debt - due within one year - 7,930,000
Total current liabilities 57,788 7,934,180
Noncurrent liabilities
Due to bondholders 4,951,169 -
Developer deposits 2,739,913 -
Advances from City of Poway 370,000 14,876,533
Interest payable - 462,063
Long-term debt due - in more than one year - 204,890,898
Total non current liabilities 8,061,082 220,229,494
Total liabilities 8,118,870$ 228,163,674
NET POSITION (DEFICIT)
Held in trust for retirement of obligations
of the former Poway Redevelopment Agency (149,829,537)$
City of Poway
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
40
Successor Agency
to the Poway
Redevelopment
Agency
ADDITIONS
Redevelopment Property Tax Trust Fund 40,907,419$
Investment earnings 972,998
Other revenue 511,101
Transfer from City 440,300
Total additions 42,831,818
DEDUCTIONS
Enforceable obligations payments 33,517,074
Administration expenses 1,912,258
Depreciation 1,014,094
Interest expense and fiscal charges 10,914,213
Total deductions 47,357,639
Change in net position (4,525,821)
Net position (deficit), beginning of year, as restated (145,303,716)
Net position (deficit), end of year (149,829,537)$
41
City of Poway
Comprehensive Annual Financial Report
For the year ended June 30, 2014
Notes to Basic Financial Statements
City of Poway
Notes to Basic Financial Statements
June 30, 2014
42
Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the City of Poway, California, (the “City”) have been prepared
in conformity with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards
Board (“GASB”) is the accepted standard setting body for establishing governmental accounting
and financial reporting principles. The more significant of the City’s accounting policies are
described below:
A. Financial Reporting Entity
The City was incorporated December 1, 1980, under the general laws of the State of
California. The City operates under a Council-Manager form of government and provides the
following services: public safety (police – through the County of San Diego, and fire),
community services, engineering services, planning services, public works, general
administrative services, and capital improvements.
As required by U.S. GAAP, these basic financial statements present the City and its
component units, entities for which the City is considered to be financially accountable. The
City is considered to be financially accountable for an organization if the City appoints a
voting majority of that organization’s governing body and either the City is able to impose its
will on 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. Component units for which the City is considered financially accountable are
described below:
Poway Public Financing Authority
The Poway Public Financing Authority (the “Authority”) is a joint powers authority organized
pursuant to the State of California Government Code, Section 6500. The Authority exists
under a Joint Exercise of Power Agreement dated October 8, 1991, between the City and
the former Poway Redevelopment Agency (the “Agency”). Its purpose is to assist in
financing and refinancing projects for the benefit of the City and the Agency. The Authority
was included within the scope of the reporting entity of the City because its governing body
is composed in its entirety of council members of the City. Separate financial statements can
be obtained from the Department of Administrative Services located at Poway City Hall.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
43
Note 1 – Summary of Significant Accounting Policies (Continued)
A. Financial Reporting Entity (Continued)
Housing Authority
On March 1, 2011, the City Council of the City of Poway declared a need for a housing
authority in the City of Poway and adopted a resolution forming the Poway Housing
Authority (the “Housing Authority”). The creation of the Housing Authority provides the City
legal authority to continue monitoring ongoing rent and income compliance at affordable
housing developments.
The former Poway Redevelopment Agency (the “Agency”) and the Housing Authority
prepared a Cooperation Agreement to provide for implementation of certain low and
moderate income housing projects and to make payments by the Agency to the Housing
Authority for the costs to the Housing Authority for performing its obligations. The Agency
was dissolved due to the passage of Assembly Bill x1 26 which became effective on
October 1, 2011. In accordance with Health and Safety code 34175(b), on February 1, 2012,
all housing assets, liabilities and fund balance of the Agency were transferred to the
Housing Authority as the Successor Agency to the Poway Redevelopment Agency.
The Housing Authority was included within the scope of the reporting entity of the City
because its governing body is composed in its entirety of council members of the City.
Separate financial statements can be obtained from the Department of Administrative
Services located at Poway City Hall.
B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a
separate accounting entity. The operations of each fund are accounted for by providing a
separate set of self-balancing accounts that comprise its assets, liabilities, fund equity,
revenues and expenditures or expenses, as appropriate. Governmental resources are
allocated to and accounted for in individual funds based upon the purpose for which they are
to be spent and means by which spending activities are controlled.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
44
Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Accounting and Measurement Focus (Continued)
Government–Wide and Fund Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Position and
a Statement of Activities and Changes in Net Position. These statements present
summaries of governmental and business-type activities for the City accompanied by a total
column.
These basic financial statements are presented on an “economic resources” measurement
focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities,
including capital assets, as well as infrastructure assets, and long-term liabilities, are
included in the accompanying Statement of Net Position. The Statement of Activities
presents changes in net position. Under the accrual basis of accounting, revenues are
recognized in the period in which they are earned while expenses are recognized in the
period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City in three
categories:
Charges for services
Operating contributions and grants
Capital contributions and grants
Certain eliminations have been made in regards to interfund activities, payables and
receivables. All internal balances in the Statement of Net Position have been eliminated
except those representing balances between the governmental activities and the business-
type activities, which are presented as internal balances and eliminated in the total primary
government column. In the Statement of Activities, internal service fund transactions have
been eliminated; however, those transactions between governmental and business-type
activities have not been eliminated. The following interfund activities have been eliminated:
Due to and from other funds
Advances to and from other funds
Transfers in and out
City of Poway
Notes to Basic Financial Statements
June 30, 2014
45
Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Accounting and Measurement Focus (Continued)
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of
Revenues, Expenditures and Changes in Fund Balances for all major governmental funds
and non-major funds aggregated. An accompanying schedule is presented to reconcile and
explain the differences in fund balances as presented in these statements to the net position
presented in the government-wide financial statements. The City has presented all major
funds that met those qualifications.
All governmental funds are accounted for on a spending or “current financial resources”
measurement focus and the modified accrual basis of accounting. Accordingly, only current
assets and current liabilities are included on the balance sheets. The Statement of
Revenues, Expenditures and Changes in Fund Balances present increases (revenues and
other financing sources) and decreases (expenditures and other financing uses) in fund
balances. Under the modified accrual basis of accounting, revenues are recognized in the
accounting period in which they become both measurable and available to finance
expenditures of the current period.
Revenues are recorded when received in cash, except that revenues subject to accrual
(generally 60 days after year-end) are recognized when due. The primary revenue sources,
which have been treated as susceptible to accrual by the City, are real and personal
property tax, other local taxes, franchise fees, forfeitures and penalties, motor license fees,
rents and concessions, interest revenue, and state and federal grants and subventions.
Expenditures are recorded in the accounting period in which the related fund liability is
incurred except for interest on long-term debt, claims and judgments, and compensated
absences, which are recorded only when due.
Unearned revenues arise when the government receives resources before it has a legal
claim to them, as when grant monies are received prior to incurring qualifying expenditures.
In subsequent periods when both revenue recognition criteria are met or when the
government has a legal claim to the resources, the unearned revenue is removed from the
balance sheet and revenue is recognized.
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial
Statements is provided to explain the differences created by the integrated approach of
GASB Statement No. 34.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
46
Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Accounting and Measurement Focus (Continued)
The City reports the following major governmental funds:
The General Fund is the general operating fund of the City. It is used to account for all
financial resources except those required to be accounted for in another fund.
The Housing Authority Fund receives lease payments from properties owned by the
Authority as well as residual payments from its non-profit partners that own and
operate affordable housing projects that received funding from the former
Redevelopment Agency.
Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Position, a Statement of
Revenues, Expenses and Changes in Net Position, and a Statement of Cash Flows for all
proprietary funds.
A separate column representing internal service funds is also presented in these
statements. However, internal service balances and activities have been combined with the
governmental activities in the government-wide financial statements.
Proprietary funds are accounted for using the “economic resources” measurement focus
and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current
or noncurrent) are included on the Statement of Net Position. The Statement of Revenues,
Expenses and Change in Fund Net Position presents increases (revenues) and decreases
(expenses) in total net position. Under the accrual basis of accounting, revenues are
recognized in the period in which they are earned while expenses are recognized in the
period in which the liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from
the primary operations of the fund. All other revenues are reported as non-operating
revenues. Operating expenses are those expenses that are essential to the primary
operations of the fund. All other expenses are reported as non-operating expenses.
The City reports the following major proprietary funds:
The Water Enterprise Fund is used to account for the provision of water services to
the residents of the City. All activities necessary to provide such services are
accounted for in this fund, including, but not limited to administration, operations,
maintenance, financing and related debt service, and billing and collection.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
47
Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Accounting and Measurement Focus (Continued)
The Sewer Enterprise Fund is used to account for the provision of sewer services to
the residents of the City. All activities necessary to provide such services are
accounted for in this fund, including, but not limited to administration, operations,
maintenance, financing and related debt service, and billing and collection.
Fiduciary Fund Financial Statements
The Agency Funds are custodial in nature (assets equal liabilities) and use the accrual
basis of accounting, but do not involve measurement of results of operations.
The Private Purpose Trust Fund is used to account for non-housing activities of the City
of Poway Successor Agency on behalf of the former Poway Redevelopment Agency.
C. Implementation of new pronouncement
Effective July 1, 2013, for the 2013-14 fiscal year, the City adopted the provisions of GASB
Statement No. 65, Items Previously Reported as Assets and Liabilities. GASB 65
establishes accounting and financial reporting standards that reclassify, as deferred
outflows of resources or deferred inflows of resources, certain items that were previously
reported as assets and liabilities and recognizes, as outflows of resources or inflows of
resources, certain items that were previously reported as assets and liabilities. Deferred
amounts resulting from the refunding of debt are reported as a deferred outflow of
resources or a deferred inflow of resources and recognized as a component of interest
expense in a systematic and rational manner over the remaining life of the old debt or the
life of the new debt, whichever is shorter. Accordingly, the City’s deferred amount on
refunding of debt has been classified as a deferred outflow of resources in the statement of
net position in conformity with GASB 65. GASB 65 amended prior guidance with respect to
the treatment of debt issuance costs. Under GASB 65, debt issuance costs, except any
portion related to prepaid insurance costs, are recognized as an expense in the period
incurred rather than reported as an asset on the statement of net position and recognized
as an expense in a systematic and rational manner over the duration of the related debt.
Accordingly, as described in Note 16 of the financial statements, the City has restated
beginning net position for unamortized debt issuance costs.
D. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City considers pooled cash
and highly liquid investments held with financial institutions, a fiscal agent, and in a pooled
account with the State, to be cash equivalents.
City investments are reported at fair value except for investments in Improvement Bond Act
of 1915 bonds which are recorded at cost less principal repayments. The estimated fair
value of all investments is the quoted market price.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
48
Note 1 – Summary of Significant Accounting Policies (Continued)
D. Cash, Cash Equivalents and Investments (Continued)
The cash flow statements require presentation of “cash and cash equivalents.” For the
purposes of the statement of cash flows, the City considers all proprietary fund pooled cash
and investments as “cash and cash equivalents,” as such funds are available to the various
funds as needed. With respect to cash and investments with fiscal agents, the City
considers all investments with an original maturity of less than three months to be cash
equivalents.
The City participates in an investment pool managed by the State of California titled Local
Agency Investment Fund (LAIF) which has invested a portion of the pooled funds in
structured notes and asset-backed securities. LAIF’s investments are subject to credit risk
with the full faith and credit of the State of California collateralizing these investments. In
addition, these structured notes and asset-backed securities are subject to market risk and
to change in interest rates.
The City adheres to certain disclosure requirements, if applicable for deposit and
investment risk that are specified for the following areas:
Interest Rate Risk
Credit Risk
Overall
Custodial Credit Risk
Concentration of Credit Risk
Foreign Currency Risk
The City pools cash and investments of all funds, except assets held by fiscal agents. Each
fund’s share in this pool is displayed in the accompanying financial statements as cash and
investments. Investment income earned by the pooled investments is allocated to the
various funds on each fund’s average cash and investment balance.
Investments are reported in the accompanying financial statements at fair value. Changes in
fair value that occur during a fiscal year are recognized as investment earnings reported for
that fiscal year. Investment income includes interest earnings, changes in fair value, and any
gains or losses realized upon the liquidation, maturity, or sale of an investment.
E. Inter-fund Transactions
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as “due to/from other funds” (i.e.,
current portion of interfund loans). Any residual balances outstanding between the
governmental activities and business-type activities are reported in the governmental-wide
financial statements as “interfund balances.”
City of Poway
Notes to Basic Financial Statements
June 30, 2014
49
Note 1 – Summary of Significant Accounting Policies (Continued)
F. Inventories
Inventories within the various fund types consist of water, materials and supplies which are
valued at cost on a first-in, first-out basis. Reported expenditures reflecting the purchase of
supplies have been restated to reflect the consumption method of recognizing inventory-
related expenditures. A reservation of fund balance has been reported in the governmental
funds to show that inventories do not constitute “available spendable resources,” even
though they are a component of net current assets.
G. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g.,
roads, streets, sidewalks, medians and storm drains), are reported in the applicable
governmental or business-type activities in the Government-Wide Financial Statements.
City policy has set the capitalization threshold for reporting capital assets at $5,000. Capital
assets are valued at historical cost or estimated historical cost if actual historical cost was
not available. Donated assets are valued at their estimated fair market value on the date
donated.
Depreciation is recorded on a straight-line basis over estimated useful lives of the assets as
follows:
Buildings 10-50 years
Buildings improvements 10-100 years
Furniture and Equipment 5-20 years
Infrastructure 20-50 years
The City defines infrastructure as the basic physical assets that allow the City to function.
These assets include streets, bridges, sidewalks, drainage systems, and lighting systems,
etc. Each major infrastructure system can be divided into subsystems. For example the
street system can be subdivided into pavement, curb and gutters, sidewalks, medians,
streetlights, landscaping and land. These subsystems are not delineated in the basic
financial statements. The appropriate operating department maintains information
regarding the subsystems.
For infrastructure systems, the City elected to use the “Basic Approach” for infrastructure
reporting.
Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest on construction-related debt incurred during the period of construction
for business-type and proprietary fund assets is capitalized as a cost of the constructed
assets. Capital assets acquired under capital lease are capitalized at the net present value
of the total lease payments.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
50
Note 1 – Summary of Significant Accounting Policies (Continued)
G. Capital Assets (Continued)
Capital Assets Acquired Under Lease Purchase Contracts
The long-term principal portion of debt on non-proprietary capital assets acquired through
lease purchase contracts is accounted for in the government-wide financial statements as
“capital lease obligations.” A capital asset is recorded at the net present value of total lease
payments in the government-wide financial statements.
H. Deferred inflows and deferred outflows of resources
Deferred outflows of resources are transactions that result in the consumption of net
position in one period that are applicable to future periods and are not considered assets as
described by the statement. Deferred inflows of resources are required to be presented
separately after assets on the statement of net position.
Deferred inflows of resources are transactions that result in the acquisition of net position in
one period that are applicable to future periods and are not considered to be liabilities as
described by the statement. Deferred inflows of resources are required to be presented
separately after liabilities on the statement of net position.
I. Compensated Absences
Government-Wide Financial Statements
For governmental and business-type activities, compensated absences are recorded as
incurred and the related expenses and liabilities are reported.
Fund Financial Statements
In governmental funds, compensated absences are recorded as expenditures in the years
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. In proprietary
funds, compensated absences are expensed to the various funds in the period they are
earned, and such fund’s share of the unpaid liability is recorded as a long-term liability of
the fund. Vested or accumulated compensated absences are recorded in proprietary funds
as an expense and liability of those funds as the benefits accrue to employees.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
51
Note 1 – Summary of Significant Accounting Policies (Continued)
J. Long-Term Debt
Government-Wide Financial Statements
Long-term debt and other long-term obligations are reported as liabilities in the appropriate
activities.
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 applicable premium or
discount.
Fund Financial Statements
The governmental fund financial statements do not present long-term debt but are shown in
the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide
Statement of Net Position.
K. Net Position
In the governmental-wide financial statements and proprietary fund financial statements, net
position is classified as follows:
Net Investment in Capital Assets – This component of net position consists of capital
assets, net of accumulated depreciation, reduced by the outstanding balances of debt
that are attributable to the acquisition, construction, or improvement of those assets.
Restricted – This component of net position consists of restricted assets and deferred
outflows of resources reduced by liabilities and deferred inflows of resources related to
those assets.
Unrestricted – This component of net position is the amount of the assets, deferred
outflows of resources, liabilities, and deferred inflows of resources that are not included
in the determination of net investment in capital assets or the restricted component of
net position.
When expenses are incurred for purposes for which both restricted and unrestricted net
assets are available, the City’s policy is to apply restricted net position first, then unrestricted
net position as it is needed.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
52
Note 1 – Summary of Significant Accounting Policies (Continued)
L. Fund Balances
In the Governmental Fund Financial Statements, fund balances are classified in the
following categories:
Nonspendable – Items that cannot be spent because they are not in spendable form,
such as prepaid items and inventories, items that are legally or contractually required to
be maintained intact, such as principal of an endowment or revolving loan funds.
Restricted – Restricted fund balances encompass the portion of net fund resources
subject to externally enforceable legal restrictions. This includes externally imposed
restrictions by creditors, such as through debt covenants, grantors, contributions, laws or
regulations of other governments, as well as restrictions imposed by law through
constitutional provisions or enabling legislation.
Committed – Committed fund balances encompass the portion of net fund resources,
the use of which is constrained by limitations that the government imposes upon itself at
its highest level of decision making, normally the governing body through council
resolutions, etc., and that remain binding unless removed in the same manner. The City
Council is considered the highest authority for the City.
Assigned – Assigned fund balances encompass the portion of net fund resources
reflecting the government’s intended use of resources. Assignment of resources can be
done by the highest level of decision making or by a committee or official designated for
that purpose. The City Council has authorized the City Manager for that purpose.
Unassigned – This category is for any balances that have no restrictions placed upon
them.
The City Council is authorized to determine the components of fund balance classified as
“Committed Fund Balance,” and has designated the City Manager as the City official to
determine the components of fund balance that are classified as “Assigned Fund Balance.”
It is the City’s policy that expenditures from fund balance, unless otherwise specified by the
requirement of a fund, will be made in the following order: Restricted, Unassigned, Assigned
and Committed.
M. Use of Estimates
The preparation of the basic financial statements in conformity with generally accepted
accounting principles in the United States (U.S. GAAP) requires management to make
estimates and assumptions that affect the reported amounts of certain assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the basic financial
statements and the related reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Management believes that
the estimates are reasonable.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
53
Note 1 – Summary of Significant Accounting Policies (Continued)
N. Accounting Changes
GASB has issued Statement No. 66, Technical Corrections - 2012 an Amendment of GASB
Statements No. 10. And No. 62. The objective of this Statement is to improve accounting
and financial reporting for a governmental financial reporting entity by resolving conflicting
guidance that resulted from the issuance of two pronouncements, Statements No. 54, Fund
Balance Reporting and Governmental Fund Type Definitions, and No. 62, Codification of
Accounting and Financial Reporting Guidance. This statement became effective for periods
beginning after December 15, 2012 and did not have a significant impact on the City’s
financial statements for the year ended June 30, 2014.
GASB has issued Statement No. 67, Financial Reporting for Pension Plans - an amendment
of GASB Statement No. 25. The objective of this Statement is to improve financial reporting
by state and local governmental pension plans. This Statement results from a
comprehensive review of the effectiveness of existing standards of accounting and financial
reporting for pensions with regard to providing decision-useful information, supporting
assessments of accountability and interperiod equity, and creating additional transparency.
This statement became effective for periods beginning after June 15, 2013 and did not have
a significant impact on the City’s financial statements for year ended June 30, 2014.
GASB has issued Statement No. 68, Accounting and Financial Reporting for Pensions - an
amendment of GASB Statement No. 27. The primary objective of this Statement is to
improve accounting and financial reporting by state and local governments for pensions. It
also improves information provided by state and local governmental employers about
financial support for pensions that is provided by other entities. This Statement results from
a comprehensive review of the effectiveness of existing standards of accounting and
financial reporting for pensions with regard to providing decision-useful information,
supporting assessments of accountability and interperiod equity, and creating additional
transparency. This statement will become effective for period beginning after June 15, 2014
and will be effective for the 2014-15 fiscal year.
GASB has issued Statement No. 69, Government Combinations and Disposals of
Government Operation. This Statement establishes accounting and financial reporting
standards related to government combinations and disposals of government operations. As
used in this Statement, the term government combinations includes a variety of transactions
referred to as mergers, acquisitions, and transfers of operations. This statement will become
effective for periods beginning after December 15, 2013 and will be effective for the 2014-15
fiscal year.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
54
Note 1 – Summary of Significant Accounting Policies (Continued)
N. Accounting Changes (Continued)
GASB has issued Statement No. 70, Accounting and Financial Reporting for Nonexchange
Financial Guarantees. The objective of this Statement is to improve accounting and financial
reporting by state and local governments that extend and receive nonexchange financial
guarantees. This statement became effective for periods beginning after June 15, 2013 and
did not have a significant impact on the City’s financial statements for year ended June 30,
2014.
GASB has issued Statement No. 71, Pension Transaction for Contributions Made
Subsequent to the Measurement Date - and amendment of GASB Statement No. 68. The
objective of this Statement is to address an issue regarding application of the transition
provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue
relates to amounts associated with contributions, if any, made by a state or local
government employer or nonemployer contributing entity to a defined benefit pension plan
after the measurement date of the government’s beginning net pension liability. This
statement will become effective for periods beginning after June 15, 2014 and will be
effective for the 2014-15 fiscal year.
Note 2 – Cash, Cash Equivalents and Investments
The City maintains a cash and investment pool, which includes cash balances and authorized
investments of all funds. This pooled cash is invested by the City Treasurer to enhance
earnings. The pooled interest earned is allocated to the funds based on average month-end
cash balances of the various funds.
The following is a summary of cash and investments at June 30, 2014:
Fiduciary
Funds
Governmental Business-Type Statement of
Activities Activities Net Position Total
Cash and investments 78,530,019$ 21,278,631$ 13,567,972$ 113,376,622$
Cash and investments with fiscal agent 647,131 279,579 20,768,013 21,694,723
Total 79,177,150$ 21,558,210$ 34,335,985$ 135,071,345$
Government-Wide
Statement of Net Position
City of Poway
Notes to Basic Financial Statements
June 30, 2014
55
Note 2 – Cash, Cash Equivalents and Investments (Continued)
Cash, cash equivalents, and investments consisted of the following at June 30, 2014:
Cash on hand 8,060$
Demand deposits 295,531
Investments 134,767,754
Total 135,071,345$
A. Cash Deposits
The carrying amounts of the City’s demand deposits were $295,531 at June 30, 2014. Bank
balances at June 30, 2014, were $1,610,440 which were fully insured or collateralized with
securities held by the pledging financial institutions in the City’s name as discussed below:
The California Government Code requires California banks and savings and loan
associations to secure the City’s cash deposits by pledging securities as collateral. This
Code states that collateral pledged in this manner shall have the effect of perfecting a
security interest in such collateral superior to those of a general creditor. Thus, collateral for
cash deposits is considered to be held in the City's name.
The market value of pledged securities must equal at least 110% of the City's cash deposits.
California law also allows institutions to secure City deposits by pledging first trust deed
mortgage notes having a value of 150% of the City’s total cash deposits. The City may
waive collateral requirements for cash deposits, which are fully insured by the Federal
Deposit Insurance Corporation. The City, however, has not waived the collateralization
requirements.
The City follows the practice of pooling cash and investments of all funds, except for funds
required to be held by fiscal agents under the provisions of bond indentures. Interest income
earned on pooled cash and investments is allocated on an accounting period basis to the
various funds based on the period-end cash and investment balances. Interest income from
cash and investments with fiscal agents is credited directly to the related fund.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
56
Note 2 – Cash, Cash Equivalents and Investments (Continued)
B. Investments
The table below identifies the investment types that are authorized for the City by the
California Government Code (or the City’s investment policy, where more restrictive). The
table also identifies certain provisions of the California Government Code (or the City’s
investment policy, where more restrictive) that address interest rate risk, credit risk, and
concentration of credit risk. This table does not address investments of debt proceeds held
by bond trustee that are governed by the provisions of debt agreements of the City, rather
than the general provisions of the California Government Code or the City’s investment
policy.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity* of Portfolio* in One Issuer*
U.S. Treasury Obligation 5 years None None
U.S. Agency Securities 5 years 75% 25%
Bankers Acceptances 180 days 40% 5%
Medium-Term and Corporate Notes 5 years 30% 5%
Money Market Mutual Funds N/A 20% 10%
Mortgage Backed Securities 5 years 20% None
Asset Backed Securities 5 years 20% 5%
Commercial Paper 270 days 25% 5%
Negotiable Certificates of Deposits 5 years 30% 5%
Local Agency Investment Fund (LAIF) N/A None 50,000,000$
County of San Diego Investment Pool N/A None None
CalTrust Joint Powers Authority N/A None None
Obligation of any State 5 years 30% 5%
* Excluding amounts held by trustee that are not subject to California Government Code restriction.
C. Investment Authorized by Debt Agreements
Investments of debt proceeds held by bond trustees are governed by provisions of the debt
agreement, rather than the general provisions of the California Government Code or the
City’s investment policy. The table below identifies certain provisions of these debt
agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer
Repurchase agreement 1 year None 30%
Money Market Mutual Funds N/A None None
U.S. Agency Securities 5 years 75% 25%
Investment Contracts 30 years None None
Local Agency Investment Fund (LAIF) N/A None 50,000,000$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
57
Note 2 – Cash, Cash Equivalents and Investments (Continued)
D. Risk Disclosures
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 is to changes in the 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.
Information about the sensitivity of the fair values of the City’s investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the City’s investments by maturity:
12 Months 13 to 24 25 to 60 More than
Investment Type Amounts or Less Months Months 60 Months
U.S. Treasury Bills 2,055,156$ -$ -$ 2,055,156$ -$
U.S. Agencies 22,304,468 - 3,125,383 19,179,085 -
CalTrust Investment Pool - Short term 13,393,111 13,393,111 - - -
CalTrust Investment Pool - Medium term 29,422,232 29,422,232 - - -
Commercial Paper 1,999,984 1,999,984 - - -
Medium-Term and Corporate Notes 27,680,209 3,582,615 7,327,950 16,769,644 -
Local Agency Investment Fund (LAIF) 16,019,416 16,019,416 - - -
San Diego County Investment Pool 69,480 69,480 - - -
Improvement Bond Act of 1915 78,975 78,975 - - -
Certificates of Deposit 50,000 50,000 - - -
Held by bond trustee:
Money Market Funds 10,620,791 10,620,791 - - -
Investment Contracts 11,073,932 - - - 11,073,932
Total 134,767,754$ 75,236,604$ 10,453,333$ 38,003,885$ 11,073,932$
Remaining Maturities
City of Poway
Notes to Basic Financial Statements
June 30, 2014
58
Note 2 – Cash, Cash Equivalents and Investments (Continued)
E. Risk Disclosures (Continued)
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. The following presentation is the minimum rating
required by (where applicable) the California Government Code, the City’s investment
policy, or debt agreements, and the actual rating as of June 30, 2014 for each investment
type:
Minimum
Investment Type Rating S&P Moody's Fair Value
U.S. Treasury Bills Aaa AA Aaa 2,055,156$
U.S. Agencies Aaa AA Aaa 22,304,468
CalTrust Investment Pool-Short term AAf Aaf not rated 13,393,111
CalTrust Investment Pool-Medium term N/A not rated not rated 29,422,232
Commercial Paper A-1/P-1 A-1 P-1 1,999,984
Medium-Term and Corporate Notes A-/A3 AA Aaa 16,932,599
A Aa 10,747,610
Local Agency Investment Fund (LAIF) N/A not rated not rated 16,019,416
San Diego County Investment Pool AAAf AAAf not rated 69,480
1915 Act Improvement Bond N/A exempt exempt 78,975
Certificates of Deposit N/A exempt exempt 50,000
Held by bond trustee:
Money Market Funds N/A AAAm Aaamf 10,620,791
Investment Contracts N/A exempt exempt 11,073,932
Total 134,767,754$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
59
Note 2 – Cash, Cash Equivalents and Investments (Continued)
E. Risk Disclosures (Continued)
Concentration of Credit Risk
The City’s Policy states that not more than 25% of the portfolio shall be invested in any one
entity or any one instrument to protect the City from concentration of credit risk, with the
following exceptions: U.S. Treasury Obligations and investments pools (State of California –
Local Agency Investment Fund and CalTrust Investment Pool). In addition, purchases of
commercial paper must not exceed 25% of the value of the portfolio at any time and single
issuer holdings must not exceed 5% per issuer. The City is in compliance with these
provisions of the Policy.
The following is a chart of the City’s investment portfolio:
Reported
Trustee/Custodian Investment Type Amount
Union Bank U.S. Treasuries 2,055,156$
Union Bank U.S. Agencies 22,304,468
Union Bank Commercial Paper 1,999,984
Union Bank Corporates 27,680,209
Wells Fargo CalTrust Investment Pool 42,815,343
Wells Fargo Certificates of Deposit 50,000
State Treasurer Office LAIF 16,019,416
San Diego County Investment Pool 69,480
US Bank Investment Contract 11,073,932
US Bank Money Market 10,620,791
City of Poway Improvement Bond Act of 1915 78,975
F. Investment in Local Agency Investment Funds
The City’s investments with Local Agency Investment Funds (“LAIF”) at June 30, 2014,
included a portion of the pooled funds invested in Medium-Term and Short-Term Structured
Notes and Asset-Backed Securities. These investments included the following:
City of Poway
Notes to Basic Financial Statements
June 30, 2014
60
Note 2 – Cash, Cash Equivalents and Investments (Continued)
F. Investment in Local Agency Investment Funds (Continued)
Structured Notes are debt securities (other than asset-backed securities) whose cash
flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon
one or more indices and/or that have embedded forwards or options.
Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their
purchasers to receive a share of the cash flows from a pool of assets such as principal
and interest repayments from a pool of mortgages (such as Collateralized Mortgage
Obligations) or credit card receivables.
The Local Investment Advisory Board provides oversight for LAIF. The Board consists of five
members as designated by statute. The State Treasurer, as Chairman, or his designated
representative appoints two members qualified by training and experience in the field of
investment or finance, and two members who are treasurers, finance or fiscal officers or
business managers employed by any county, city or local district or municipal corporation of
this state.
As of June 30, 2014, the City had $16,019,416 invested in LAIF, which had invested 1.86%
of the pooled investment funds in short-term and medium-term Structured Notes and Asset-
Backed Securities. The fair value of the City’s position in the pool is the same as the value
of the pool shares.
G. Investment in CalTRUST
The City is a voluntary participant in the Investment Trust of California (CalTRUST) a Joint
Powers Authority. CalTRUST is a program established by public agencies in California for
the purpose of pooling and investing local agency funds. CalTRUST invests in fixed income
securities eligible for investment pursuant to California Government Code Sections 53601,
et. seq. and 53635, et. Seq. Investments in CalTRUST are highly liquid, as deposits can be
converted to cash within 24 hours without loss of interest. The balance available for
withdrawal is based on the accounting records maintained by CalTRUST, which are
recorded on a fair market value basis. Separate CalTRUST financial statements are
available from CalTRUST’s offices at 400 Capital Mall, Suite 702, Sacramento, CA 95814.
As of June 30, 2014, the City had $42,815,343 invested in CalTRUST.
The City’s investment in this pool is reported in the accompanying financial statements at
fair market value.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
61
Note 2 – Cash, Cash Equivalents and Investments (Continued)
H. Investment in San Diego County Investment Pool
The City is a voluntary participant in the County Treasury Pool (“County Pool”) which is
regulated under the oversight of the Treasurer of the County of San Diego. The fair value of
the City’s investment in the County Pool is reported in the accompanying financial
statements based upon the City’s pro-rata share of the fair value provided by the County
Pool for the entire portfolio. The balance available for withdrawal is based on the accounting
records maintained by the Pool. Included in the County Pool’s investment portfolio are
collateralized and negotiable certificates of deposit, floating rate securities issued by federal
agencies and corporations, money market funds, repurchase agreements and commercial
paper.
At June 30, 2014, the City had $69,480 invested in the San Diego County Investment Pool.
The City’s investment in this pool is reported in the accompanying financial statements at
fair market value.
Note 3 – Interfund Transactions
A. Due To and Due From Other Funds
As of June 30, 2014, balances were as follows:
Successor
General Agency to the
Due to other funds Fund Poway RDA Total
Governmental Activities:
Non-major Governmental Funds 348,391$ -$ 348,391$
Fiduciary - 11,860 11,860
Total 348,391$ 11,860$ 360,251$
Due from other funds
These balances resulted from loans to cover negative cash balances as of June 30, 2014.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
62
Note 3 – Interfund Transactions (Continued)
B. Advances To and Advances From Other Funds
Non-major
Governmental
Advances to other funds Funds Total
Governmental Activities:
General Fund 798,299$ 798,299$
Non-major Governmental Funds 17,576 17,576
Business-Type Activities
Sewer 214,500 214,500
Total 1,030,375$ 1,030,375$
Advances from other funds
C. Advances To and Advances From Fiduciary Funds
Business
Park Successor
Fiduciary Agency to the
Advances to fiduciary funds Fund Poway RDA Total
Governmental Activities:
General Fund -$ 2,641,166$ 2,641,166$
Housing Authority - 2,975,306 2,975,306
Non-major Governmental Funds - 2,976,080 2,976,080
Business-Type Activities
Water - 2,085,083 2,085,083
Sewer 370,000 4,198,898 4,568,898
Total 370,000$ 14,876,533$ 15,246,533$
Advances from fiduciary funds
City of Poway
Notes to Basic Financial Statements
June 30, 2014
63
Note 3 – Interfund Transactions (Continued)
C. Advances To and Advances From Fiduciary Funds (Continued)
The advances to fiduciary funds were primarily used for the following:
The City Council authorized various loans to the former Poway Redevelopment Agency,
which now reside in the Successor Agency, totaling $14,876,533. The terms of the loans
are indefinite. Accrued interest on the loans of $293,237 is not reflected in the
accompanying basic financial statements as payment is contingent upon the availability
of funds. Interest is recorded when it becomes payable from available spendable
resources. Repayment of the former Poway Redevelopment Agency loans is also
contingent upon approval of the Successor Agency’s Oversight Board per the AB 1484
legislation.
The City’s Sewer Fund has an outstanding loan balance of $370,000 due from the
Parkway Business Center CFD #88-1 Bond Deposit Fiduciary Fund. Interest on this loan
is paid on an annual basis and the outstanding principal balance will be paid with the
final bond maturity in August 2015.
Some of the advances to the Successor Agency to the Poway Redevelopment Agency have
been disapproved as enforceable obligations by the California Department of Finance. The
disapproval is being contested by the City as described at Note 13, Item G.
D. Transfers To and From Other Funds
Transfers for the year ended June 30, 2014, were as follows:
Non-major Internal
Governmental Service
Transfers Out General Funds Fund Total
General Fund -$ 944,900$ 640,683$ 1,585,583$
Non-major Governmental Funds 738,707 - - 738,707
Water Enterprise Fund 103,980 176,527 - 280,507
Sewer Engerprise Fund 39,770 121,448 161,218
Internal Service Funds 1,042,940 - - 1,042,940
Total 1,925,397$ 1,242,875$ 640,683$ 3,808,955$
Transfers In
Transfers are primarily used for the following:
Move revenues from the fund that statute or budget requires to collect them to the fund
that statute or budget requires to expend them;
Move receipt restricted to the debt service from the funds collecting the receipts, to the
debt service fund as debt service payments become due;
Move available funds to capital project funds for approved projects;
Move available funds to new funds, or closed funds, at the direction of the Council.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
64
Note 3 – Interfund Transactions (Continued)
E. Transfers To and From Fiduciary Funds
During the year, the City Debt Service Fund transferred $440,300 to the Successor Agency
to the Poway Redevelopment Agency fiduciary fund in order to cover the City’s portion of
the 2005 Certificates of Participation debt service payments.
During the year, the Developer Deposits Agency Fund transferred $17,923 to the City's
General Fund for fees included in developer deposits collected. These fees are special
revenue for City programs.
Note 4 – Capital Assets
A. Governmental Activities
Summary of changes in capital assets for governmental activities for the year ended June
30, 2014 is as follows:
Balance at Balance at
July 1, 2013 Additions Deletions June 30, 2014
Non-Depreciable Assets
Land 29,971,363$ -$ -$ 29,971,363$
Construction in progress - 621,407 - 621,407
Total non-depreciable assets 29,971,363 621,407 - 30,592,770
Depreciable Assets
Buildings 51,091,788 - - 51,091,788
Improvements other than buildings 3,053,174 - - 3,053,174
Infrastructure 128,788,431 - - 128,788,431
Machinery and equipment 17,337,644 353,541 (8,584) 17,682,601
Total depreciable assets 200,271,037 353,541 (8,584) 200,615,994
Less accumulated depreciation
Buildings (19,579,798) (1,412,654) - (20,992,452)
Improvements other than buildings (848,607) (139,258) - (987,865)
Infrastructure (87,342,270) (2,872,269) - (90,214,539)
Machinery and equipment (11,061,160) (1,251,673) 2,453 (12,310,380)
Total accumulated depreciation (118,831,835) (5,675,854) 2,453 (124,505,236)
Total depreciable assets, net 81,439,202 (5,322,313) (6,131) 76,110,758
Total governmental activities 111,410,565$ (4,700,906)$ (6,131)$ 106,703,528$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
65
Note 4 – Capital Assets (Continued)
A. Governmental Activities (Continued)
Governmental activities depreciation expense for capital assets for the year ended June 30,
2014 is as follows:
General government 1,059,137$
Public safety 1,044,597
Public works 3,167,078
Community services 405,042
Total depreciation expense 5,675,854$
B. Business-type Activities
Summary of changes in capital assets for business-type activities for the year ended June
30, 2014 is as follows:
Balance at Balance at
July 1, 2013 Additions Deletions June 30, 2014
Non-Depreciable Assets
Land 76,797$ -$ -$ 76,797$
Construction in progress 781,162 387,379 (307,899) 860,642
Total non-depreciable assets 857,959 387,379 (307,899) 937,439
Depreciable Assets
Buildings 21,128,309 - - 21,128,309
Improvements other than buildings 69,538,752 - - 69,538,752
Machinery and equipment 3,576,552 422,854 (507,403) 3,492,003
Total depreciable assets 94,243,613 422,854 (507,403) 94,159,064
Less accumulated depreciation
Buildings (16,518,119) (467,197) - (16,985,316)
Improvements other than buildings (34,574,642) (2,046,402) - (36,621,044)
Machinery and equipment (2,516,439) (177,676) 448,453 (2,245,662)
Total accumulated depreciation (53,609,200) (2,691,275) 448,453 (55,852,022)
Total depreciable assets, net 40,634,413 (2,268,421) (58,950) 38,307,042
Total business-type activities 41,492,372$ (1,881,042)$ (366,849)$ 39,244,481$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
66
Note 4 – Capital Assets (Continued)
B. Business-type Activities (Continued)
Business-type activities depreciation expense for capital assets for the year ended June 30,
2014 is as follows:
Water Enterprise Fund 1,557,788$
Sewer Enterprise Fund 1,133,487
Total depreciation expense 2,691,275$
C. Fiduciary Activities
Summary of changes in capital assets for fiduciary activities for the year ended June 30,
2014 is as follows:
Balance at Balance at
July 1, 2013 Additions Deletions June 30, 2014
Non-Depreciable Assets
Land 24,731,737$ -$ -$ 24,731,737$
Total non-depreciable assets 24,731,737 - - 24,731,737
Depreciable Assets
Buildings 17,581,603 - - 17,581,603
Infrastructure 17,739,258 - - 17,739,258
Total depreciable assets 35,320,861 - - 35,320,861
Less accumulated depreciation
Buildings (11,059,898) (659,307) - (11,719,205)
Infrastructure (1,462,803) (354,787) - (1,817,590)
Total accumulated depreciation (12,522,701) (1,014,094) - (13,536,795)
Total depreciable assets, net 22,798,160 (1,014,094) - 21,784,066
Total governmental activities 47,529,897$ (1,014,094)$ -$ 46,515,803$
All depreciation was recorded in the Successor Agency to the Poway Redevelopment
Agency private purpose trust fund.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
67
Note 5 – Long Term Debt
Summary of changes in long-term debt for the year ended June 30, 2014:
Amount Amount
Balance Balance Due Within Due In More
July 1, 2013 Additions Reductions June 30, 2014 One Year Than One Year
Governmental Activities
Certificates of Participation 16,986,191$ -$ (724,724)$ 16,261,467$ 715,000$ 15,546,467$
Compensated Absences 1,417,791 1,386,264 (1,408,323) 1,395,732 1,367,817 27,915
Total governmental activities 18,403,982$ 1,386,264$ (2,133,047)$ 17,657,199$ 2,082,817$ 15,574,382$
Business-Type Activities
Revenue Bonds 745,904$ -$ (233,244)$ 512,660$ 250,000$ 262,660$
Compensated Absences 290,002 240,902 (257,600) 273,304 232,279 41,025
Total business-type activities 1,035,906$ 240,902$ (490,844)$ 785,964$ 482,279$ 303,685$
Fiduciary Funds
Certificates of Participation 1,986,311$ -$ (367,434)$ 1,618,877$ 380,000$ 1,238,877$
Tax Allocation Bonds 215,576,452 - (7,259,980)$ 208,316,472 7,450,000 200,866,472
Notes Payable 2,780,463 194,913 (89,827) 2,885,549 100,000 2,785,549
Total fiduciary activities 220,343,226$ 194,913$ (7,717,241)$ 212,820,898$ 7,930,000$ 204,890,898$
Classification
A. Governmental Activities Long-Term Debt
Certificates of Participation at June 30, 2014, consisted of the following:
Amount Amount
Balance Balance Due Within Due In More
July 1, 2013 Additions Reductions June 30, 2014 One Year Than One Year
2005 Certificates of Participation 2,835,000$ -$ (155,000)$ 2,680,000$ 160,000$ 2,520,000$
Bond Premium 33,883 - (4,235) 29,648 - 29,648
2012 Certificates of Participation 13,865,000 - (545,000) 13,320,000 555,000 12,765,000
Bond Premium 252,308 - (20,489) 231,819 - 231,819
Total Certificates of Participation 16,986,191$ -$ (724,724)$ 16,261,467$ 715,000$ 15,546,467$
Classification
2005 Certificates of Participation
In April 2005, the City issued 2005 Refunding Certificates of Participation in the amount of
$8,245,000 to refund and defease the City’s outstanding 1995 Certificates of Participation and
the 1996 Certificates of Participation. The original 1995 Certificates of Participation were used
for several projects such as the City’s pool and Performing Arts Center, while the 1996
Certificates of Participation were used to build the City’s Sheriff Substation. The 2005 Refunding
Certificates of Participation consisted of $6,830,000 serial certificates maturing from 2005
through 2020 in annual installments of $305,000 to $610,000 and term certificates of
$1,415,000 maturing in 2026. Interest is payable semi-annually on February 1 and August 1 at
rates ranging from 3.00% to 4.50%. Certificates maturing on or after August 1, 2016 are subject
to optional redemption in whole or in part, on any date beginning August 1, 2015. Certificates
maturing on August 1, 2026 are subject to mandatory redemptions on August 1 of each year
beginning August 1, 2021. At February 1, 2012, $2,335,000 was transferred to the Successor
Agency. At June 30, 2014, the City’s portion of the outstanding balance of the 2005 Certificates
of Participation was $2,680,000.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
68
Note 5 – Long Term Debt (Continued)
A. Governmental Activities Long-Term Debt (Continued)
The annual requirements to amortize the City portion of Certificates of Participation outstanding
at June 30, 2014, are as follows:
Year Ending
June 30, Principal Interest Total
2015 160,000$ 112,338$ 272,338$
2016 165,000 105,744 270,744
2017 175,000 98,713 273,713
2018 180,000 91,175 271,175
2019 185,000 83,875 268,875
2020 - 2024 1,060,000 291,431 1,351,431
2025 - 2027 755,000 52,088 807,088
Total 2,680,000$ 835,364$ 3,515,364$
2012 Certificates of Participation
On October 5, 2012, the City issued the 2012 Refunding Certificates of Participation to provide
for the defeasance and refunding of the 2003 Certificates of Participation, to fund a reserve
account for the Certificates, and to pay costs incurred in connection with executing and
delivering the Certificates. The City will lease certain existing property to the Public Financing
Authority (the “PFA”) pursuant to a Site and Facilities Lease dated as of January 1, 2003, as
amended by an Amendment to Site and Facilities Lease, dated as of October 1, 2012. The
Certificates are payable solely from and secured by certain lease payments to be made by the
City to the PFA. The interest with respect to the Certificates is payable on January 1 and July 1
of each year, commencing January 1, 2013 at rates ranging from 2.00% to 3.25%. At June 30,
2014, the outstanding balance of the 2012 Certificates of Participation was $13,320,000.
The annual requirements to amortize Certificates of Participation outstanding at June 30, 2014,
are as follows:
Year Ending
June 30, Principal Interest Total
2015 555,000$ 372,770$ 927,770$
2016 570,000 361,670 931,670
2017 580,000 350,270 930,270
2018 590,000 338,670 928,670
2019 605,000 326,870 931,870
2020 - 2024 3,240,000 1,407,875 4,647,875
2025 - 2029 3,745,000 900,538 4,645,538
2030 - 2033 3,435,000 282,375 3,717,375
Total 13,320,000$ 4,341,038$ 17,661,038$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
69
Note 5 – Long Term Debt (Continued)
B. Business-Type Activities Long-Term Debt
Revenue Bonds
Revenue Bonds at June 30, 2014, consisted of the following:
Amount Amount
Balance Balance Due Within Due In More
July 1, 2013 Additions Reductions June 30, 2014 One Year Than One Year
1995 Revenue Bonds 750,000$ -$ (235,000)$ 515,000$ 250,000$ 265,000$
Bond Discount (4,096) - 1,756 (2,340) - (2,340)
Total Revenue Bonds 745,904$ -$ (233,244)$ 512,660$ 250,000$ 262,660$
Classification
1995 Revenue Bonds
In November 1995, the Poway Public Financing Authority issued the 1995 Revenue Bonds in
the amount of $3,380,000 to provide funds to construct certain water facility improvements. The
bonds consist of $2,190,000 in serial bonds maturing from 1996 to 2010 in annual installments
of $105,000 to $200,000 and $1,190,000 in term bonds maturing in 2015.
Interest is payable semi-annually on May 1 and November 1 with rates ranging from 3.70% to
5.75%. Bonds maturing on or after November 1, 2006 are subject to optional redemption prior to
maturity, in whole or in part, on any date on or after November 1, 2005. The term bonds are
subject to mandatory redemption in part on November 1, 2011 to 2015 in the amounts ranging
from $215,000 to $265,000. At June 30, 2014, the outstanding balance of the 1995 Revenue
Bonds was $515,000.
The City has pledged a portion of future water revenue to repay the 1995 Revenue Bonds. Total
principal and interest remaining on the bond is $543,738 payable through 2016.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
70
Note 5 – Long Term Debt (Continued)
B. Business-Type Activities Long-Term Debt (Continued)
1995 Revenue Bonds (Continued)
The annual requirements to amortize the bonds outstanding at June 30, 2014 are as follows:
Year Ending
June 30, Principal Interest Total
2015 250,000$ 21,450$ 271,450$
2016 265,000 7,288 272,288
Total 515,000$ 28,738$ 543,738$
C. Fiduciary Funds Long Term Debt
Certificates of Participation
Certificates of Participation at June 30, 2014, consisted of the following:
Amount Amount
Balance Balance Due Within Due In More
July 1, 2013 Additions Reductions June 30, 2014 One Year Than One Year
2005 Certificates of Participation 1,980,000$ -$ (365,000)$ 1,615,000$ 380,000$ 1,235,000$
Bond Discount 6,311 - (2,434) 3,877 - 3,877
Total Revenue Bonds 1,986,311$ -$ (367,434)$ 1,618,877$ 380,000$ 1,238,877$
Classification
2005 Certificates of Participation
In April 2005, the City issued 2005 Refunding Certificates of Participation in the amount of
$8,245,000 to refund and defease the City’s outstanding 1995 Certificates of Participation and
the 1996 Certificates of Participation. The original 1995 Certificates of Participation were used
for several projects such as the City’s pool and Performing Arts Center, while the 1996
Certificates of Participation were used to build the City’s Sheriff Substation. The 2005 Refunding
Certificates of Participation consisted of $6,830,000 serial certificates maturing from 2005
through 2020 in annual installments of $305,000 to $610,000 and term certificates of
$1,415,000 maturing in 2026. Interest is payable semi-annually on February 1 and August 1 at
rates ranging from 3.00% to 4.50%. Certificates maturing on or after August 1, 2016 are subject
to optional redemption in whole or in part, on any date beginning August 1, 2015. Certificates
maturing on August 1, 2026 are subject to mandatory redemptions on August 1 of each year
beginning August 1, 2021. At February 1, 2012, $2,335,000 was transferred to the Successor
Agency. At June 30, 2014, the Successor Agency’s portion of the outstanding balance of the
2005 Certificates of Participation was $1,615,000.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
71
Note 5 – Long Term Debt (Continued)
C. Fiduciary Funds Long Term Debt (Continued)
2005 Certificates of Participation (Continued)
The annual requirements to amortize the Successor Agency portion of 2005 Certificates of
Participation (previously discussed) outstanding at June 30, 2014, are as follows:
Year Ending
June 30, Principal Interest Total
2015 380,000$ 58,775$ 438,775$
2016 395,000 43,056 438,056
2017 410,000 26,425 436,425
2018 430,000 8,600 438,600
Total 1,615,000$ 136,856$ 1,751,856$
Tax Allocation Bonds
Tax Allocation Bonds at June 30, 2014, consisted of the following:
Amount Amount
Balance Balance Due Within Due In More
July 1, 2013 Additions Reductions June 30, 2014 One Year Than One Year
2000 Tax Allocation Bonds 5,815,000$ -$ -$ 5,815,000$ -$ 5,815,000$
2001 Tax Allocation Bonds 68,335,000 - (2,295,000) 66,040,000 2,410,000 63,630,000
2003 Tax Allocation Bonds 114,025,000 - (4,695,000) 109,330,000 5,010,000 104,320,000
Bond Premium 1,766,559 - (176,629) 1,589,930 - 1,589,930
2007 Tax Allocation Bonds 24,560,000 - (30,000) 24,530,000 30,000 24,500,000
Bond Premium 1,074,893 - (63,351) 1,011,542 - 1,011,542
Total Tax Allocation Bonds 215,576,452$ -$ (7,259,980)$ 208,316,472$ 7,450,000$ 200,866,472$
Classification
2000 Tax Allocation Bonds
In March 2000, the former Poway Redevelopment Agency (the “Agency”) issued the 2000 Tax
Allocation Refunding Bonds in the amount of $39,915,000. The bonds were issued on a
subordinate basis to the portion of the Agency’s previously issued $21,595,000 Paguay
Redevelopment Project Tax Allocation Refunding Bonds, Series 1990A, of which $5,855,000
were not refunded and $4,305,000 are currently outstanding. The bonds consisted of serial
bonds of $9,940,000 maturing from 2000 to 2011 in semi-annual installments of $45,000 to
$785,000 and term bonds of $29,975,000 maturing in 2033. Interest is paid semiannually on
June 15 and December 15 at rates ranging from 3.75% to 5.75%.
Bonds maturing on or after June 11, 2011 are subject to optional redemption in whole or in part
on any interest payment date. Bonds maturing on June 15, 2033 are subject to mandatory
redemption on each interest payment date beginning June 15, 2027.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
72
Note 5 – Long Term Debt (Continued)
C. Fiduciary Funds Long Term Debt (Continued)
Tax Allocation Bonds (Continued)
2000 Tax Allocation Bonds (Continued)
The Successor Agency has pledged a portion of future Redevelopment Property Tax Trust Fund
distribution revenue to repay the 2000 Tax Allocation Refunding Bonds. The bonds required
0.85% of Redevelopment Property Tax Trust Fund distributions received by the project area.
Future principal and interest payments will be funded by Redevelopment Property Tax Trust
Fund distributions received by the Successor Agency Private Purpose Trust Fund.
The outstanding balance of the bonds in the amount of $5,815,000 was transferred to the
Successor Agency on February 1, 2012 due to the dissolution of the Agency. Total principal and
interest remaining on the bond is $11,230,348 payable through 2033.
The annual requirements to amortize the bonds outstanding at June 30, 2014, are as follows:
Year Ending
June 30, Principal Interest Total
2015 -$ 334,362$ 334,362$
2016 - 334,362 334,362
2017 - 334,362 334,362
2018 - 334,362 334,362
2019 - 334,362 334,362
2020 - 2024 - 1,671,813 1,671,813
2025 - 2029 1,990,000 1,560,694 3,550,694
2030 - 2033 3,825,000 511,031 4,336,031
Total 5,815,000$ 5,415,348$ 11,230,348$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
73
Note 5 – Long Term Debt (Continued)
C. Fiduciary Funds Long Term Debt (Continued)
Tax Allocation Bonds (Continued)
2001 Tax Allocation Bonds
In July 2001, the former Poway Redevelopment Agency (the “Agency”) issued the 2001 Tax
Allocation Bonds in the amount of $76,395,000 for the purpose of refinancing the Agency’s
outstanding Paguay Redevelopment Project Subordinate Tax Allocation Bonds of 1999,
financing certain improvements, including low and moderate income housing improvements in
the Paguay Redevelopment Project Area, funding an escrow for future capital improvement,
funding a reserve account and paying the bond issuance costs. The bonds bear interest from
3% to 5.25%, payable semi-annually on June 15 and December 15 through 2033. Payment of
the bonds is collateralized by a pledge of tax revenues to be received by the Agency. The bonds
maturing on or after June 15, 2012 are subject to redemption prior to maturity at the option of
the Agency.
The Successor Agency has pledged a portion of future Redevelopment Property Tax Trust Fund
distributions to repay the 2001 Tax Allocation Bonds. The bonds required 14.70% of
Redevelopment Property Tax Trust Fund distributions received by the project area. Future
principal and interest payments will be funded by Redevelopment Property Tax Trust Fund
distributions received by the Successor Agency Private Purpose Trust Fund.
The outstanding balance of the bonds in the amount of $71,225,000 was transferred to the
Successor Agency on February 1, 2012 due to the dissolution of the Agency. Total principal and
interest remaining on the bond is $104,315,199, payable through 2033.
The annual requirements to amortize the bonds outstanding at June 30, 2014, are as follows:
Year Ending
June 30, Principal Interest Total
2015 2,410,000$ 3,395,149$ 5,805,149$
2016 2,225,000 3,269,861 5,494,861
2017 2,345,000 3,152,011 5,497,011
2018 2,475,000 3,024,355 5,499,355
2019 2,250,000 2,894,280 5,144,280
2020 - 2024 13,175,000 12,541,359 25,716,359
2025 - 2029 23,320,000 8,002,198 31,322,198
2030 - 2033 17,840,000 1,995,986 19,835,986
Total 66,040,000$ 38,275,199$ 104,315,199$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
74
Note 5 – Long Term Debt (Continued)
C. Fiduciary Funds Long Term Debt (Continued)
Tax Allocation Bonds (Continued)
2003 Tax Allocation Bonds
In October 2003, the former Poway Redevelopment Agency (the “Agency”) issued the 2003
Series A Tax Allocation Bonds in the amount of $150,300,000 for the purpose of refinancing
the outstanding 1993 Tax Allocation Refunding Bonds in the amount of $94,740,000, paying
approximately $10,983,000 owed under two owner participation agreements related to the
properties located in the City’s business parks, with one being paid in full, providing financing
for certain improvements in the Paguay Redevelopment Project Area, funding a reserve
account and paying the bond issuance costs. The bonds bear interest from 2.0% to 5.25% and
are payable semiannually on June 15 and December 15 through 2033. Payment of the bonds
is collateralized by a pledge of tax revenues to be received by the Agency. The bonds maturing
on or after June 15, 2028 are subject to redemption prior to maturity at the option of the
Agency.
The Successor Agency has pledged a portion of future Redevelopment Property Tax Trust
Fund distributions to repay the 2003 Tax Allocation Bonds. The bonds required 26.49% of
Redevelopment Property Tax Trust Fund distributions received by the project area. Future
principal and interest payments will be funded by Redevelopment Property Tax Trust Fund
distributions received by the Successor Agency Private Purpose Trust Fund.
The outstanding balance of the bonds in the amount of $122,440,000 was transferred to the
Successor Agency on February 1, 2012 due to the dissolution of the Agency. Total principal
and interest remaining on the bond is $161,916,064 payable through 2033.
The annual requirements to amortize the bonds outstanding at June 30, 2014, are as follows:
Year Ending
June 30, Principal Interest Total
2015 5,010,000$ 5,614,300$ 10,624,300$
2016 5,225,000 5,352,475 10,577,475
2017 5,490,000 5,079,263 10,569,263
2018 5,780,000 4,792,038 10,572,038
2019 6,085,000 4,489,500 10,574,500
2020 - 2024 35,620,000 17,315,863 52,935,863
2025 - 2029 27,545,000 7,675,875 35,220,875
2030 - 2033 18,575,000 2,266,750 20,841,750
Total 109,330,000$ 52,586,064$ 161,916,064$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
75
Note 5 – Long Term Debt (Continued)
C. Fiduciary Funds Long Term Debt (Continued)
Tax Allocation Bonds (Continued)
2007 Tax Allocation Bonds
In February 2007, the former Poway Redevelopment Agency (the “Agency”) issued the 2007
Tax Allocation Bonds in the amount of $24,965,000 for the purpose of refinancing a portion of
the 2000 Tax Allocation Refunding Bonds, originally issued in the principal amount of
$39,915,000, of which $36,610,000 was outstanding (and of which $12,450,000 remained
outstanding upon issuance of the Bonds), to refinance bonds and finance certain improvements
in the Paguay Redevelopment Project Area and paying the bond issuance costs. The bonds
bear interest from 3.5% to 4.125% and are payable semi-annually on June 15 and December 15
through 2033. Payments of the bonds are collateralized by a pledge of tax revenues to be
received by the Agency. The bonds maturing on or before June 15, 2017 are not subject to call
and optional redemption prior to maturity. Bonds maturing on or after December 15, 2017 are
subject to redemption prior to maturity at the option of the Agency.
The Successor Agency has pledged a portion of future Redevelopment Property Tax Trust Fund
distributions to repay the 2007 Tax Allocation Bonds. The bonds required 3.17% of
Redevelopment Property Tax Trust Fund distributions received by the project area. Future
principal and interest payments will be funded by Redevelopment Property Tax Trust Fund
distributions received by the Successor Agency Private Purpose Trust Fund.
The outstanding balance of the bonds in the amount of $24,560,000 was transferred to the
Successor Agency on February 1, 2012 due to the dissolution of the Agency. Total principal and
interest remaining on the bond is $44,102,090 payable through 2033.
The annual requirements to amortize the bonds outstanding at June 30, 2014, are as follows:
Year Ending
June 30, Principal Interest Total
2015 30,000$ 1,221,525$ 1,251,525$
2016 30,000 1,220,415 1,250,415
2017 40,000 1,219,188 1,259,188
2018 40,000 1,217,668 1,257,668
2019 40,000 1,216,125 1,256,125
2020 - 2024 215,000 6,055,981 6,270,981
2025 - 2029 8,450,000 5,605,063 14,055,063
2030 - 2033 15,685,000 1,816,125 17,501,125
Total 24,530,000$ 19,572,090$ 44,102,090$
City of Poway
Notes to Basic Financial Statements
June 30, 2014
76
Note 5 – Long Term Debt (Continued)
C. Fiduciary Funds Long Term Debt (Continued)
Notes Payable
Notes payable at June 30, 2014, consisted of the following:
Amount Amount
Balance Balance Due Within Due In More
July 1, 2013 Additions Reductions June 30, 2014 One Year Than One Year
Mossy Nissan 2,780,463$ 194,913$ (89,827)$ 2,885,549$ 100,000$ 2,785,549$
Total Revenue Bonds 2,780,463$ 194,913$ (89,827)$ 2,885,549$ 100,000$ 2,785,549$
Classification
The former Poway Redevelopment Agency (the “Agency”) entered into an Owner Participation
Agreement with AZ Poway LLC (dba Mossy Nissan) that went into effect upon issuance of the
certificate of completion for the Mossy Nissan automobile dealership on July 11, 2003. The
Agency purchased an operating covenant for $1,900,000 that accrues interest at the rate of 7%
per annum. Annual payment of the operating covenant is based on 50% of the net new sales in
effect until (i) the purchase price and accrued interested is paid in full, or (ii) the fifteenth annual
payment is made. The operating covenant is deemed paid in full after the fifteenth annual
payment is made, and all remaining balances, including accrued interest, are forgiven. The
outstanding balance in the amount of $2,598,406 was transferred to the Successor Agency on
February 1, 2012 due to the dissolution of the Agency. The remaining balance on the notes was
$2,885,549 at June 30, 2014.
D. Compensated Absences
This liability represents the total unpaid vacation and compensatory time earned by employees
of the City. Since this amount is paid to the employee upon termination of employment, there is
no fixed payment schedule for earned but unpaid compensated absences. The compensated
absences are predominately associated with the General Fund, Water Fund and Sewer Fund.
At June 30, 2014, the outstanding balance of governmental activities and business-type
activities compensated absences were $1,395,732 and $273,304, respectively.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
77
Note 6 – Assessment District and Community Facilities Districts Bonds Issue
Community Facilities District Special Refunding Bonds
In May 1998, the City issued $35,445,000 in Special Tax Refunding Bonds to refund the
outstanding portion of the $30,000,000 and $8,000,000 Community Facilities District No. 88-1
(Parkway Business Centre) Special Tax Bonds, Series 1990, respectively. In December 2009
the City issued $16,545,000 in Special Tax Refunding Bonds to refund the outstanding portion
of the $35,445,000 Community Facilities District No. 88-1 (Parkway Business Centre) Special
Tax Refunding Bonds Series 1998. The bonds are authorized pursuant to the Mello-Roos
Community Facilities Act of 1982 and are secured by and payable from the proceeds of annual
special assessment taxes levied and collected on the property within the District. The Bonds are
not general or special obligations of the City. The City is acting as agent only for the property
owners in collecting the special assessments and forwarding the collections to the fiscal agents.
Neither faith and credit nor the taxing power of the City is pledged to the payment of these
bonds. At June 30, 2014, the outstanding balance of December 2009 issuance was $4,775,570.
Integrated Financing Assessment District No. 96-1 Limited Obligation Improvement Bonds
In June 1996, the City issued the $586,470 Integrated Financing Assessment District No. 96-1
(High Valley Roads) Limited Obligation Improvement Bonds to finance the cost of acquisition
and construction of certain public infrastructure improvements, benefiting properties within the
boundaries of the assessment district. The bonds are authorized pursuant to the Improvement
Bond Act of 1915 and are secured by and payable from the proceeds of annual special
assessment taxes levied and collected on the property within the District. The Bonds are not
general or special obligations of the City. The City is only acting as an agent for the property
owners in collecting the special assessments and forwarding the collections to the fiscal agents.
Neither faith and credit nor the taxing power of the City is pledged to the payment of these
bonds. At June 30, 2014, the outstanding balance of the bonds was $110,628.
Old Coach Water Line Assessment District No. 2001-01 Limited Obligation Improvement Bonds
In July 2001, the City issued the $290,350 Old Coach Water Line Assessment District No. 2001-
01 Limited Obligation Improvement Bonds to finance the cost of acquisition and construction of
certain public infrastructure improvements benefiting properties within the boundaries of the
assessment district. The bonds are authorized pursuant to the Improvement Bond Act of 1915
and are secured by and payable from the proceeds of annual special assessment taxes levied
and collected on the property within the District. The Bonds are not general or special
obligations of the City. The City is acting as agent only for the property owners in collecting the
special assessments and forwarding the collections to the fiscal agents. Neither faith and credit
nor the taxing power of the City is pledged to the payment of these bonds. At June 30, 2014, the
outstanding balance of the bonds was $64,771.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
78
Note 7 – Retirement Benefits
A. California Public Employees’ Retirement Plan (PERS)
Plan Description
The City contributes to the California Public Employees’ Retirement System (“PERS”), an agent
multiple employer public employee defined benefit pension plan. PERS provides retirement and
disability benefits, annual cost-of-living adjustments, and death benefits to plan members and
beneficiaries. PERS acts as a common investment and administrative agent for participating
public entities within the State of California. Benefit provisions and all other requirements are
established by state statute and city ordinance. In September 2012, the California Public
Employees’ Pension Reform Act (PEPRA) was enacted. Under its provisions, employees hired
after January 1, 2013 have a lower cost–pension benefit formula than employees hired before
that date. The City has a three tiered retirement plan with PERS for both its Miscellaneous and
Safety members.
For Miscellaneous (non-safety) members hired on or before December 31, 2011, (Tier 1) the
City provides the 2%-at-55 formula with the one year highest compensation option. For
Miscellaneous members hired after December 31, 2011 and before January 1, 2013, (Tier 2)
the City provides the 2%-at-60 formula with the three year highest average compensation
option. For Miscellaneous members hired on or after January 1, 2013 (Tier 3), the City provides
the 2%-at-62 formula with the three year highest average compensation option. For
Miscellaneous members considered classic PERS members hired on or after January 1, 2013,
the City provides the 2%-at-60 formula with the three-year highest average compensation
option.
For Safety members hired on or before December 31, 2011, (Tier 1) the City provides the 3%-
at-50 formula with the three year highest average compensation option. For Safety members
hired after December 31, 2011 and before January1, 2013, (Tier 2) the City provides the 3%-at-
55 formula with the three year highest average compensation option. For Safety members hired
on or after January 1, 2013 (Tier 3), the City provides the 2.7%-at-57 formula with the three year
average compensation option. For Safety members considered classic members of PERS hired
on or after January 1, 2013, the City provides the 3%-at-55 formula with the final three-year
average compensation option.
Copies of PERS’ annual financial report may be obtained from their Executive Office located at
400 P Street, Sacramento, California 95814.
Funding Policy
Active members are required by State statute to contribute the following percentage of their
annual covered salary: 7% if a Miscellaneous Tier 1 or 2 member, and 50% of normal cost for
Miscellaneous Tier 3 members, currently 6.25%; 9% if a Safety Tier 1 or 2 member, and 50% of
normal cost for Safety Tier 3 members, currently 11.5%. All active members pay 100% of their
required contribution. For the current fiscal year, the City’s required employer contribution rate
was 15.521% for Miscellaneous employees Tiers 1, 2 and 3 and 25.168%, 20.774%, and
11.500% for Safety employees, Tiers 1, 2 and 3 respectively.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
79
Note 7 – Retirement Benefits (Continued)
A. California Public Employees’ Retirement Plan (PERS) (Continued)
Annual Pension Cost
For the year ended June 30, 2014, the City’s annual pension cost of $2,738,148 for PERS was
equal to the City’s required and actual contributions. The required contribution was determined
as part of the June 30, 2013, actuarial valuation using the entry age normal actuarial cost
method. The actuarial assumptions included (a) 7.50% investment rate of return (net of
administrative expenses), (b) projected salary increases range from 3.30% to 14.20% for
miscellaneous employees and 3.30% to 14.20% for safety employees depending on age,
service, and type of employment, and (c) 2.00% per year cost-of-living adjustments. Both (a)
and (b) included an inflation component of 2.75%. The actuarial value of PERS assets was
determined using techniques that smooth the effects of short-term volatility in the market value
of investments over a three year period. PERS unfunded actuarial accrued liability (or surplus)
is being amortized as a level percentage of projected payroll on a closed basis. The
amortization period at June 30, 2012, was 26 years for miscellaneous employees and 19 years
for safety employees for prior and current service unfunded liability.
Three-Year Trend Information for PERS
Percentage Net
of APC Pension
Fiscal Year Safety Miscellaneous Total Contributed Obligation
6/30/2012 1,022$ 1,411$ 2,433$ 100% -$
6/30/2013 1,099 1,429 2,528 100% -
6/30/2014 1,159 1,579 2,738 100% -
Annual Pension Cost
(Amounts in thousands)
Most Recent Actuarial Study – Schedule of Funding Progress
Unfunded
Actuarial
Entry Age Unfunded Liability as
Actuarial Actuarial Actuarial Actuarial a Percentage
Valuation Asset Accrued Accrued Funded Covered of Covered
Date Value Liability Liability Ratio Payroll Payroll
Miscellaneous
Employee Group 6/30/2013 63,869$ 85,981$ 22,112$ 74.28% 10,071$ 219.56%
Public Safety
Employee Group
The City's safety plan became part of a CalPERS Risk Pool for employers with less than 100 active plan members. As part of
a cost sharing multiple-employer defined benefit plan, disclosures of the schedule of funding progress is not required.
(Amounts in thousands)
The schedules of funding progress, presented as required supplementary information (“RSI”)
following the notes to the financial statements, present multiyear trend information about
whether the actuarial values of plan assets are increasing or decreasing over time relative to the
Actuarial Accrued Liabilities for benefits.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
80
Note 7 – Retirement Benefits (Continued)
B. Public Agency Retirement Plan (PARS)
Plan Description
The City sponsors the PARS Retirement Enhancement Plan for Miscellaneous employees hired
before January 1, 2012. The PARS benefit can be received only if the employee retires from the
City, and the vesting period ranges from five years to twenty years depending on the
employee’s job classification at retirement. For employees hired before March 28, 2008, the
benefit applies to the City of Poway and all prior CalPERS or reciprocal agency service. For
employees hired between March 28, 2008 and December 31, 2011, the benefit applies only to
service with the City of Poway. Employees hired after December 31, 2011, do not receive this
benefit. The plan provides a benefit equal to the 2.7% at 55 plan factor, less the CalPERS 2% at
55 plan factors, based upon the above described benefit. Sample rates are as follows:
Age Net Factor Age Net Factor Age Net Factor
50 1.426% 55 2.000% 60 2.262%
51 1.522% 56 2.052% 61 2.314%
52 1.628% 57 2.104% 62 2.366%
53 1.742% 58 2.156% 63 2.418%
54 1.866% 59 2.210% 64 + 2.418%
Funding Policy
The City’s funding policy is to contribute the annual required contribution. The annual required
contribution equals the sum of:
Normal cost (3.69%)
Amortization of the unfunded actuarial accrued liability (9.09%)
Total contribution rate (12.78%)
Annual Pension Cost
For the year ended June 30, 2014, the City's annual required contribution is $1,363,916. The
required contribution was based on the June 30, 2013 actuarial valuation using the entry age
normal actuarial cost method. The actuarial assumptions included (a) 7.0% investment return
(net of administrative expenses), (b) the CalPERS 1997 – 2007 Experience Study table for
Males and Females, (c) projected salary increases range from 3.85% to 12.65%, and (d) cost-
of-living adjustment of 2% per year. Both (a) and (c) included an inflation component of 3.00%.
The City based its contribution rate on the 20 year amortization period which has 9 years
remaining at June 30, 2014.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
81
Note 7 – Retirement Benefits (Continued)
B. Public Agency Retirement Plan (PARS) (Continued)
Three-Year Trend Information for PARS
Annual Percentage Net
Pension of APC Pension
Fiscal Year Cost Contributed Obligation
6/30/2012 1,031$ 100%-$
6/30/2013 1,242 100%-
6/30/2014 1,364 100%-
(Amounts in thousands)
Most Recent Actuarial Study – Schedule of Funding Progress
Unfunded
Actuarial
Entry Age Unfunded Liability as
Actuarial Actuarial Actuarial Actuarial a Percentage
Valuation Asset Accrued Accrued Funded Covered of Covered
Date Value Liability Liability Ratio Payroll Payroll
Miscellaneous
Employee Group 6/30/2013 6,672$ 13,471$ 6,799$ 49.53% 9,197$ 73.93%
(Amounts in thousands)
The actuarial calculation for the PARS benefit is performed every two years, with the next one
being for the fiscal year ended June 30, 2015. As of June 30, 2013, the Asset Market Value is
$6,672,210.
C. Defined Contribution Plan
The City provides pension benefits for all of its part-time employees through a defined
contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed
to the plan plus investment earnings. The plan is administered as part of the Public Agency
Retirement System (“PARS”). All part-time employees are eligible to participate from the date of
employment. Federal legislation requires contributions of at least 7.5% to a retirement plan, and
City Council resolved to match the employees’ contribution of 3.75% for employees hired prior
to July 1, 1996. Employees hired after July 1, 1996 pay 7.5% of the contributions. The City’s
contribution for each employee (and interest earned by the accounts) are fully vested
immediately.
For the year ended June 30, 2014, the City’s payroll covered by the plan was $871,749. The
City made employer contributions of $549 (0.06% of current covered payroll), and employees
contributed $64,832 (7.44% of current covered payroll).
City of Poway
Notes to Basic Financial Statements
June 30, 2014
82
Note 8 – Rehabilitation Loan Programs
A. City and Housing Authority Loan Programs
Housing Rehabilitation Loan Program
There are two types of housing rehabilitation loans. Forgivable rehabilitation loans are forgiven
at a rate of 10% per year given all loan covenants are met. Non-forgivable loans are due upon
the sale, transfer or foreclosure of the property. Due to the contingent repayment schedule of
these loans, an expenditure is recorded when the loan is made and no receivable is included in
the accompanying basic financial statements. The balance of the forgivable rehabilitation loans
at June 30, 2014 is $41,594, and the balance of the non-forgivable rehabilitation loans at June
30, 2014 is $104,068.
BEGIN Program Loans
This program is sponsored by a State of California grant to aid first-time buyers in the purchase
of affordable housing in the City of Poway. These loans have a thirty year term with a one
percent interest rate. If the property is transferred or sold within five years the loan must be
repaid. After five years, if the property is transferred or sold the loan must be assumed by the
buyer for the remaining term. At the end of the thirty years the loan must be repaid with principal
and interest. Per the grant terms, loan repayments must be re-loaned. Due to the contingent
nature of the repayment schedule of these loans, an expenditure is recorded when the loan is
made and no receivable is included in the accompanying basic financial statements. The
balance of the BEGIN loans, including accrued interest, at June 30, 2014 is $1,602,292.
Affordable Housing Loans
These loans are made to aid in the purchase of affordable housing in the City of Poway. They
are for a 45 year term with no interest and if there is a sale, transfer or foreclosure before the
end of the term the loan must be assumed by an income qualified buyer and the 45 year term
starts over. Due to the contingent nature of the repayment schedule of these loans, an
expenditure is recorded when the loan is made and no receivable is included in the
accompanying basic financial statements. The balance of these Affordable Housing loans at
June 30, 2014 is $3,907,632.
Development Loans
The City, through the Housing Authority, has development loans primarily for affordable rental
housing projects and for one group home for the developmentally disabled. The affordable
rental housing loans have 55 year terms with three percent simple interest. Loan payments are
made from residual receipts and generally do not cover the annual accrued interest. Therefore,
due to the contingent nature of the repayment schedule of these loans, an expenditure is
recorded when the loan is made and no receivable is included in the accompanying basic
financial statements. The balance of the development loans, including accrued interest, at June
30, 2014 is $34,167,859.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
83
Note 9 – Risk Management
The City is a member of the California Joint Powers Insurance Authority (“Authority”). The
Authority is composed of 119 California public entities and is organized under a joint powers
agreement pursuant to California Government Code Section 6500 et. Seq. The purpose of the
Authority is to arrange and administer programs for the pooling of self-insured losses, to
purchase excess insurance or reinsurance, and to arrange for group-purchased insurance for
property and other coverage. The Authority’s pool began covering claims of its members in
1978. Each member government has an elected official as its representative on the Board of
Directors. The Board operates through a 9-member Executive Committee. The audited
Financial Statements can be obtained from the City of Poway. No settlements have exceeded
the City’s insurance coverage for each of the past three years.
Each member pays an annual contribution to cover estimated losses for the coverage period.
This initial funding is paid at the beginning of the coverage period. After the close of the
coverage period, outstanding claims are valued. A retrospective deposit computation is then
conducted annually thereafter until all claims incurred during the coverage period are closed on
a pool-wide basis. This subsequent cost re-allocation among members based on actual claim
development can result in adjustments of either refunds or additional deposits required.
The total funding requirement for self-insurance programs is estimated using actuarial models
and pre-funded through the annual contribution. Costs are allocated to individual agencies
based on exposure (payroll) and experience (claims) relative to other members of the risk-
sharing pool. Additional information regarding the cost allocation methodology is provided
below.
A. General Liabilities
In the liability program claims are pooled separately between police and non-police exposures.
(1) The payroll of each member is evaluated relative to the payroll of other members. A variable
credibility factor is determined for each member, which establishes the weight applied to payroll
and the weight applied to losses within the formula. (2) The first layer of losses includes incurred
costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s total
incurred costs within the first layer. (3) The second layer of losses includes incurred costs from
$30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool’s total
incurred costs within the second layer. (4) Incurred costs in excess of $750,000 up to the
reinsurance attachment point of $5 million are distributed based on the outcome of cost
allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to
$10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate
deductible. The $2.5 million annual aggregate deductible is fully covered under a separate
policy; as such no portion of it is retained by the Authority. Costs of covered claims from $10
million to $15 million are paid under two reinsurance contracts subject to a combined $3 million
annual aggregate deductible. The $3.0 million annual aggregate deductible is fully retained by
the Authority. (6) Costs of covered claims from $15 million up to $50 million are covered through
excess insurance policies.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
84
Note 9 – Risk Management (Continued)
A. General Liabilities (Continued)
The overall coverage limit for each member including all layers of coverage is $50 million per
occurrence.
Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance
with a pooled sub-limit of $25 million per occurrence. This $25 million subsidence sub-limit is
composed of (a) $5 million retained within the pool’s SIR, (b) $10 million in reinsurance and (c)
$10 million in excess insurance. The excess insurance layer has a $10 million annual
aggregate.
B. Workers’ Compensation
In the workers’ compensation program claims are pooled separately between public safety
(police and fire) and non-public safety exposures. (1) The payroll of each member is evaluated
relative to the payroll of other members. A variable credibility factor is determined for each
member, which establishes the weight applied to payroll and the weight applied to losses within
the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each
occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first
layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each
occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second
layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2
million are distributed based on the outcome of cost allocation within the first and second loss
layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a
reinsurance policy. Protection is provided per statutory liability under California Workers’
Compensation Law.
Employer’s Liability losses are pooled among members to $2 million. Coverage from $2 million
to $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from
$5 million to $10 million are pooled among members.
C. Pollution Legal Liability Insurance
The City of Poway participates in the pollution legal liability insurance program (formerly called
environmental insurance) which is available through the Authority. The policy covers sudden
and gradual pollution of scheduled property, streets, and storm drains owned by the City of
Poway. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has
a limit of $50 million for the 3-year period from July 1, 2011 through July 1, 2014. Each member
of the Authority has a $10 million sub-limit during the 3-year term of the policy.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
85
Note 9 – Risk Management (Continued)
D. Property Insurance
The City of Poway participates in the all-risk property protection program of the Authority. This
insurance protection is underwritten by several insurance companies. City of Poway property is
currently insured according to a schedule of covered property submitted by the City of Poway to
the Authority. City of Poway property currently has all-risk property insurance protection in the
amount of $160,973,268. There is a $5,000 deductible per occurrence except for non-
emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are
paid annually and are not subject to retrospective adjustments.
E. Crime Insurance
The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500
deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually
and are not subject to retroactive adjustments. At June 30, 2014, no liability was recorded in the
accompanying basic financial statements.
Note 10 – Joint Venture
The City is a member of the Regional Solid Waste Association Joint Powers Authority (“JPA”).
The JPA was formed on September 1, 1997 by the cities of Del Mar, Encinitas, National City,
Poway, Solana Beach and Vista to provide stable, long-term, cost effective options for all
aspects of regional solid waste disposal. Each member provides a proportionate percentage of
revenue to cover all costs related to the obligations and liabilities of the JPA when they become
due and payable. In the event of dissolution of the JPA, any money or assets in possession of
the Regional Solid Waste Association after the payment of all liabilities, costs, expenses and
charges shall be distributed to the member agencies in proportion to their contributions
determined as of the time of termination. The activities of the JPA are supervised by a board
consisting of one elected member of the legislative body of each of the member agencies. The
City of Escondido joined the JPA as a special contract party for the purpose of working on
Regional Household Hazardous Waste issues. Summarized unaudited information of the JPA
for the fiscal year ended June 30, 2014 is as follows:
Total Assets 390,797$
Total Liabilities 5,471$
Total Equity 385,326$
Total Revenues 278,514$
Total Expenses 250,104$
Net Increase in Fund Equity 28,410$
Amounts in Thousands
City of Poway
Notes to Basic Financial Statements
June 30, 2014
86
Note 10 – Joint Venture (Continued)
City’s share of the JPA’s assets and liabilities are not available. Separate financial statements of
the JPA are available at the City of Poway.
Note 11 – Deficit Net Position
At June 30, 2014, the following funds had deficit net position:
Fund Type Fund Deficit
Fiduciary Fund Successor Agency to the Poway Redevelopment Agency (149,829,537)$
Successor Agency to the Poway Redevelopment Agency - The Successor Agency to the Poway
Redevelopment Agency Private Purpose Trust fund had an accumulated deficit of
$(149,829,537), which resulted from the issuance of tax allocation bonds that were intended to
be repaid by the former Poway Redevelopment Agency’s future property tax increment revenue.
Now that the Redevelopment Agency has been dissolved, the Successor Agency expects to
receive sufficient Redevelopment Property Tax Trust Fund distributions through the remaining
life of the bonds to fully fund their repayment.
Note 12 – Property Taxes
Property taxes are levied on March 1 and are payable in two installments: November 1 and
February 1 of each year. Property taxes become delinquent on December 10 and April 10, for
the first and second installments, respectively. The lien date is January 1. The County of San
Diego, California (the “County”) bills and collects property taxes and remits them to the City
according to a payment schedule established by the County.
The County is permitted by State law to levy taxes at 1% of full market value (at time of
purchase) and can increase the property tax rate no more than 2% per year. The City receives a
share of this basic tax levy proportionate to what it received during the years 1980-1981.
Property tax revenue is recognized in the fiscal year for which the taxes have been levied,
provided the taxes are received within 60 days after the end of the fiscal year. Property taxes
received after this date are not considered available as a resource that can be used to finance
the current year operations of the City and, therefore, are not recorded as revenue until
collected.
No allowance for doubtful accounts was considered necessary.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
87
Note 13 – Contingent Liabilities and Commitments
A. Litigation
The City is a defendant in certain legal actions arising in the normal course of operations. The
accompanying basic financial statements reflect a liability for the probable amounts of loss
associated with these claims.
B. Grants
The City participates in a number of programs that are fully or partially funded by grants
received from federal, state, and county governments. Expenditures financed by grants are
subject to audit by the appropriate grantor agency. If expenditures are disallowed due to non-
compliance with grant program regulations, the City may be required to reimburse the grantor
agency. As of June 30, 2014, significant amounts of grant expenditures have not been audited
by the grantor agencies, but the City believes that disallowed expenditures, if any, based on
subsequent audits will not have a material effect on any of the individual governmental funds or
the City’s overall financial position.
C. Construction
Various construction projects were in progress at June 30, 2014 with an estimated cost to
complete of approximately $8,925,717 in all fund types.
D. Successor Agency – Long Range Property Management Plan
The City, acting as the Successor Agency to the Poway Redevelopment Agency, prepared a
Long Range Property Management Plan (LRPMP) in compliance with AB 1484. The Successor
Agency Oversight Board reviewed and approved the LRPMP on September 25, 2013 and
submitted it to the California Department of Finance for review on November 15, 2013. The
Department of Finance has not yet issued a determination letter regarding the LRPMP.
E. Smith Judgment
As a result of a 1995 court judgment, known as the Smith Judgment, the former Poway
Redevelopment Agency was required to allocate 2% of its annual gross tax increment for
distribution to non-profit housing entities for specified housing uses. Per the Judgment this
practice is required to continue through the life of the redevelopment project area.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
88
Note 13 – Contingent Liabilities and Commitments (Continued)
E. Smith Judgment (Continued)
Funds related to the Smith Judgment have been separately accounted for in the Housing
Special Projects Fund. In March 2011, the former Poway Redevelopment Agency transferred all
rights, interests, and obligations under the Smith Judgment to the City of Poway as part of an
Amended and Restated Cooperation Agreement. Since that time, the City has administered the
Housing Special Projects Fund pursuant to the City’s obligations as a defendant in the Smith
Judgment, and to fulfill the Agency obligations under the Smith Judgment as required by the
Cooperation Agreement.
Through their review of Poway’s Due Diligence Review (DDR), the California Department of
Finance (DOF) confirmed in May 2013 that funds related to the Smith Judgment are restricted
and cannot be used for distribution to other taxing entities; however, they directed that the funds
be moved to the Successor Agency.
It is the City of Poway’s position, acting as the Successor Agency to the Poway Redevelopment
Agency, that under Assembly Bill No. 26 and Assembly Bill No. 1484 (collectively “Dissolution
Act") the Smith Judgment qualifies as an Enforceable Obligation and its funding should continue
as required by the Judgment. Furthermore, based on the Dissolution Act requirement that all
housing assets and functions be transferred to the housing successor, and given the restricted
housing related use and purpose of the Housing Special Projects Fund, the Poway City Council,
Poway Housing Authority, and Oversight Board to the Successor Agency of the Poway
Redevelopment Agency passed resolutions in August 2013, authorizing the transfer of the
Housing Special Projects Fund from the City of Poway to the Poway Housing Authority, as the
housing successor, rather than moving it to the Successor Agency as previously directed by
DOF.
As a result of DOF’s review of the August 2013 actions taken by the Oversight Board, the initial
DDR finding by DOF was revised and it is now DOF’s position that the Judgment is not an
Enforceable Obligation and the funds should be used to pay other enforceable obligations of the
former Redevelopment Agency. The City objects to this interpretation and as initiated litigation,
City of Poway, et al. v. Cohen, et al., Superior Court for the County of Sacramento Case No. 34-
2013-80001923, in order to ensure the intent and terms of the original judgment are carried out,
and therefore, the fund continues to be classified as a City special revenue fund in these
financial statements.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
89
Note 13 – Contingent Liabilities and Commitments (Continued)
F. Former Redevelopment Agency Asset Transfers
Pursuant to Health and Safety Code section 34167.5, the office of the California State Controller
(SCO) performed a review of all asset transfers made by the Poway Redevelopment Agency
(previously dissolved) to the City and any other public agency after January 1, 2011. In its draft
Asset Transfer Review report included with a letter to the City dated December 17, 2014, the
SCO concluded that $24,608,104 in unallowable transfers were made to the City of Poway and
the Poway Housing Authority. The SCO further requested that assets in the amount of the
unallowable transfers be transferred from the City to the SA.
A description of the disallowed asset transfers is shown below:
Cash transfers - City Special Programs (Smith Settlement) 2,762,808$
Land transfers 12,759,527
Building and Improvement transfers 7,395,044
Construction in process transfers 1,690,725
Total disallowed transfers 24,608,104$
The City is disputing the SCO findings and City Management plans to pursue all available
recourses including legal action against the State of California. It is management's opinion that
the asset transfers were allowed under the provisions of Health and Safety Code section
34167.5.
In regard to the disallowed cash transfers (Smith Settlement) the City has initiated litigation, City
of Poway, et al. v. Cohen, et al., Superior Court for the County of Sacramento Case No. 34-
2013-80001923. For additional details of the Smith Settlement see section 'E'.
Should the City not prevail in disputing the SCO findings the City will be required to transfer the
amount of the disallowed transfers to the SA. This could potentially decrease the City's net
position by $24,608,104.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
90
Note 13 – Contingent Liabilities and Commitments (Continued)
G. Approval of City Advances to the Successor Agency
Upon dissolution of the former Poway Redevelopment Agency, advances made from the City to
the former Poway Redevelopment Agency required approval by certain regulatory oversight
agencies to be considered enforceable obligations of the Successor Agency. Certain advances
were approved as enforceable obligations by the respective regulatory oversight agencies while
other advances were disapproved. The City's position is that all of the advances to the former
Poway Redevelopment Agency, which now reside in the Successor Agency, were for legitimate
redevelopment purposes, and therefore, should be included in future Recognized Obligation
Repayment Schedules (ROPS), and paid from Poway's Redevelopment Property Tax Trust
Fund. The Successor Agency's Oversight Board (OSB) has approved all but one advance. The
one advance was not presented to the OSB and is continuing to be researched by the City, and
it intends to present it to the OSB at a future date for approval. The Department of Finance
(DOF) position on the advances it did not approve is that sufficient loan documentation was not
provided. The City provided council actions and budgetary documents in support of each of the
advances, and believes this documentation does support the repayment of the advances.
A summary of the approved status of City advances to the Successor Agency at June 30, 2014
is shown below:
Advances to fiduciary funds
Not Submitted
to OSB
Approved by
OSB,
not approved
by DOF
Approved by
OSB,
approved by
DOF Total
Governmental Activities:
General Fund 1,713,966$ 927,200$ -$ 2,641,166$
Housing Authority 428,491 1,725,030 821,785 2,975,306
Non-Major Governmental Funds 1,894,355 1,081,725 2,976,080
Business -Type Activities:
Water - 563,483 1,521,600 2,085,083
Sewer - 3,515,081 683,817 4,198,898
Total 2,142,457$ 8,625,149$ 4,108,927$ 14,876,533$
Advances from fiduciary funds
It is the intention of City management to dispute the DOF approval findings. Should the City be
unsuccessful in its dispute and the DOF findings stand, the City will be required to cancel the
amount of the disapproved loans to the SA. This could potentially decrease the City's net
position by $8,625,149. If the City is unsuccessful in obtaining OSB approval and DOF approval
for the loans not submitted to the OSB, the City's net position could potentially decrease by an
additional $2,142,457.
H. Other Matters
As of June 30, 2014, in the opinion of City management, there were no additional outstanding
matters that would have a significant effect on the financial position of the funds of the City.
City of Poway
Notes to Basic Financial Statements
June 30, 2014
91
Note 14 – Commitments Under Developer Agreements
On April 1, 1999, the former Poway Redevelopment Agency (the “Agency”) entered into an
Owner Participation Agreement with a developer with regard to certain parcels of real estate
located in the Project Area within the boundaries of Community Facilities District (“CFD”) No.
88-1. In order to provide for the funding of certain public improvements associated with the
project, the Agency will pay the developer on each annual payment date, an amount equal to
gross property tax increment allocated to and received by the Agency with respect to the site,
less the housing set-aside and the County and City administrative charges for the previous
fiscal year ending June 30 preceding the annual payment date.
Note 15 – Fund Balances Classification
The City’s fund balances at June 30, 2014 are tabulated below by fund types.
Housing Other
General Authority Governmental
Fund Fund Funds Total
Nonspendable:
Prepaid Items 4,606$ -$ -$ 4,606$
Inventories 122,763 - - 122,763
Notes Receivable 10,006,638 - - 10,006,638
Total nonspendable 10,134,007 - - 10,134,007
Restricted:
Streets - - 3,394,414 3,394,414
Drainage - - 2,572,809 2,572,809
Maintenance Districts - - 7,304,204 7,304,204
Fire Protection - - 104,654 104,654
Grants - - 76,569 76,569
Housing - 4,380,192 5,328,668 9,708,860
Debt Service Payments - - 1,509,186 1,509,186
Other Purposes - - 1,805,450 1,805,450
Parks and Recreation - - 478,605 478,605
Transportation - - 1,171,960 1,171,960
Total restricted -$ 4,380,192$ 23,746,519$ 28,126,711$
Major Funds
City of Poway
Notes to Basic Financial Statements
June 30, 2014
92
Note 15 – Fund Balances Classification (Continued)
Housing Other
General Authority Governmental
Fund Fund Funds Total
Committed:
Economic Stabilization 3,105,552$ -$ -$ 3,105,552$
Street Maintenance 4,491,316 - - 4,491,316
Pension Stabilization 2,429,211 - - 2,429,211
Total committed 10,026,079 - - 10,026,079
Assigned:
Capital Projects 9,049,074 - - 9,049,074
Contractual Services 17,271 - - 17,271
Education and Training 592,418 - - 592,418
Equipment 862 - - 862
Library 256,992 - - 256,992
Parks and Recreation 573,428 - - 573,428
Public Safety 88,121 - - 88,121
Repair and Maintenance 4,805,178 - - 4,805,178
Total assigned 15,383,344 - - 15,383,344
Unassigned 26,624,039 - - 26,624,039
Total unassigned 26,624,039 - - 26,624,039
Total fund balances 62,167,469$ 4,380,192$ 23,746,519$ 90,294,180$
Major Funds
Note 16 –Change in Accounting Principle
As discussed in Note 1, the City implemented GASB Statement No. 65 effective July 1, 2013. GASB 65,
among other provisions, amended prior guidance with respect to the treatment of debt issuance costs.
Under GASB 65, debt issuance costs, except any portion related to prepaid insurance costs, are
recognized as an expense in the period incurred rather than reported as an asset on the statement of net
position and recognized as an expense in a systematic and rational manner over the duration of the
related debt. The Successor Agency’s unamortized balance of debt issuance costs at the beginning of the
year was $274,837. GASB 65 requires that accounting changes adopted to conform to the provisions of
the Statement be applied retroactively by restating financial statements.
Accordingly, beginning net position on the Statement of Changes in Net Position has been restated for
any unamortized debt issuance costs previously reported on the Statement of Net Position as follows:
Government Water Successor
Wide Fund Agency
Beginning net position as previously reported 184,223,420$ 35,372,537$ (145,028,879)$
Change in accounting principle (408,690) (15,014) (274,837)
Beginning net position, as restated 183,814,730$ 35,357,523$ (145,303,716)$
93
City of Poway
Comprehensive Annual Financial Report
For the year ended June 30, 2014
Required Supplementary Information (Unaudited)
City of Poway
Required Supplementary Information
For the year ended June 30, 2014
94
Note 1 – Budgetary Information
The City prepares its budgets on the basis of estimated expenditures and, accordingly, the
budget amounts included in the accompanying financial statements are presented on a basis
consistent with generally accepted accounting principles.
The City Manager presents a proposed budget to the City Council appointed Budget Review
Committee (BRC) in May. The BRC holds public budget meetings during May and early June.
The final budget is adopted by the City Council during late June.
No budget expenditures can be disbursed without proper appropriations. Once the budget is
adopted, no additional fund appropriations can be authorized without the Council’s approval.
The level of budget control (the level on which expenditures may not legally exceed
appropriations) is the individual fund level. The City Manager can authorize budget transfers
between departments without additional appropriations.
The City holds a mid-year budget review meeting. During the meeting, all the budget
expenditures are reviewed and projections for the whole year are made. Therefore, any
necessary changes are submitted for approval by the City Council with a resolution.
Annual appropriated budgets are adopted for the general, special revenue (except for the
Performing Arts Center Trust), the permanent funds, and one debt service fund. Budgets are
adopted on a basis consistent with generally accepted accounting principles. Budgeted amounts
are as originally adopted and as further amended by the City Council. Capital improvement
projects budgets are adopted upon project approval and remaining project balances are carried
forward to subsequent fiscal years until the project’s completion.
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase
orders and contracts) outstanding at year-end are reported as reservations of fund balances
and do not constitute expenditures or liabilities. The commitments will be reappropriated and
honored in the subsequent year.
City of Poway
Required Supplementary Information (Continued)
For the year ended June 30, 2014
95
Note 1 – Budgetary Information (Continued)
The following are the budget comparison schedules for the General Fund and major special
revenue funds.
Budget Comparison Schedule, General Fund
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 29,368,640$ 29,368,640$ 33,272,810$ 3,904,170$
Licenses and permits 498,910 498,910 561,251 62,341
Intergovernmental 354,200 354,200 460,701 106,501
Charges for services 2,141,780 2,161,540 2,356,165 194,625
Fines and forfeitures 185,000 185,000 184,855 (145)
Use of money and property 702,250 702,250 985,440 283,190
Developer fees 3,261,600 3,762,210 3,899,908 137,698
Other revenues 496,400 501,400 642,865 141,465
Total revenues 37,008,780 37,534,150 42,363,995 4,829,845
EXPENDITURES
Current:
General government 4,277,429 4,719,334 4,199,348 519,986
Public safety 20,286,520 20,437,800 20,303,104 134,696
Public works 4,082,915 4,177,056 4,086,775 90,281
Development services 3,467,319 3,901,402 3,817,726 83,676
Community services 4,865,650 4,934,990 4,912,545 22,445
Capital outlay 10,160,850 10,337,849 1,242,980 9,094,869
Total expenditures 47,140,683 48,508,431 38,562,478 9,945,953
Excess (deficiency) of revenues
over (under) expenditures (10,131,903) (10,974,281) 3,801,517 14,775,798
OTHER FINANCING SOURCES (USES)
Transfers in 886,020 2,042,337 1,925,397 (116,940)
Transfers out (973,230) (1,614,481) (1,585,583) 28,898
Total other financing sources (uses) (87,210) 427,856 339,814 (88,042)
Net change in fund balance (10,219,113)$ (10,546,425)$ 4,141,331 14,687,756$
Fund balance, beginning of year 58,026,138
Fund balance, end of year 62,167,469$
Budgeted Amounts
City of Poway
Required Supplementary Information (Continued)
For the year ended June 30, 2014
96
Note 1 – Budgetary Information (Continued)
Budget Comparison Schedule, Housing Authority Fund
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Charges for services 26,740$ 26,740$ 29,672$ 2,932$
Use of money and property 54,750 54,750 14,613 (40,137)
Other revenues 40,000 40,000 139,136 99,136
Total revenues 121,490 121,490 183,421 61,931
EXPENDITURES
Current:
General government - 3,500 3,493 7
Development services - 12,710 12,709 1
Total expenditures - 16,210 16,202 8
Net change in fund balance 121,490$ 105,280$ 167,219 61,939$
Fund balance, beginning of year 4,212,973
Fund balance, end of year 4,380,192$
Budget Amounts
City of Poway
Required Supplementary Information (Continued)
For the year ended June 30, 2014
97
Note 2 – Defined Benefit Pension Plans
A. California Public Employees’ Retirement Plan (PERS)
A schedule of funding progress for the year ended June 30, 2014 including the past three
actuarial valuations is presented below.
Unfunded
Actuarial
Entry Age Unfunded Liability as
Actuarial Actuarial Actuarial Actuarial a Percentage
Valuation Asset Accrued Accrued Funded Covered of Covered
Date Value Liability Liability Ratio Payroll Payroll
Miscellaneous 6/30/2011 66,319$ 78,673$ 12,354$ 84.30% 11,191$ 110.39%
Employee Group 6/30/2012 69,323 81,942 12,619 84.60% 10,458 120.66%
Tiers 1-3 6/30/2013 63,869 85,981 22,112 74.28% 10,071 219.56%
Public Safety 6/30/2011 34,926$ 39,552$ 4,626$ 88.30% 4,684$ 98.76%
Employee Group 6/30/2012 35,828 40,700 4,872 88.03% 4,500 108.27%
Tier 1 6/30/2013 33,533 43,255 9,722 77.52% 4,595 211.58%
Public Safety
Employee Group 6/30/2012 1,574$ 1,744$ 170$ 90.25% 36$ 472.22%
Tier 2 6/30/2013 14,280 17,719 3 80.59% 74 4.05%
Public Safety
Employee Group
Tier 3 6/30/2013 1$ 0.75$ 1 146.70% 65$ 1.54%
(Amounts in thousands)
Beginning with the 6/30/2013 valuation, Actuarial Value of Assets equals Market Value of
Assets per CalPERS Direct Rate Smoothing Policy.
B. Public Agency Retirement Services (PARS)
A schedule of funding progress for the year ended June 30, 2014 including the past three
actuarial valuations is presented below.
Unfunded
Actuarial
Entry Age Unfunded Liability as
Actuarial Actuarial Actuarial Actuarial a Percentage
Valuation Asset Accrued Accrued Funded Covered of Covered
Date Value Liability Liability Ratio Payroll Payroll
Miscellaneous 6/30/2009 2,409$ 9,755$ 7,346$ 24.70% 12,112$ 60.65%
Employee Group 6/30/2011 4,665 12,177 7,512 38.31% 10,981 68.41%
6/30/2013 6,672 13,471 6,799 49.53%9,197 73.93%
(Amounts in thousands)
98
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99
SUPPLEMENTARY INFORMATION
100
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101
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS:
Fire Protection Fund – Used to account for revenues received from the Fire Protection Special
Tax. Voters approved this special tax in June 1997. It is used to pay for a portion of the costs of
fire protection within the City of Poway.
800 MHz Regional Communication System Fund – Used to account for revenues received
from the 800 MHz Regional Communication System Special Tax. Voters approved this special
tax in June 1998. It is used to pay for the City's share of the County-wide radio backbone
system, and a portion of the annual maintenance expenses.
Gas Tax Fund – Used to account for revenues received and expenditures made for street
maintenance. Financing is provided by the City's share of State gasoline taxes made pursuant
to the California State Constitution and authorized by the State Legislature.
Street Improvement Fund – Used to account for revenues received and expenditures made for
street improvements. Financing is provided primarily from developer's traffic mitigation fees. City
Ordinance No. 80 authorized the collection and the segregation of the funding.
Drainage Fund – Used to account for operations of the flood control and drainage division.
Financing is provided by developer's drainage fees and flood zone fees from the County. Poway
Municipal Code Section 16.72 requires the segregation of the funding.
Maintenance Districts Fund – Used for lighting, landscape and maintenance. Costs of the
districts are estimated and property owners are assessed their proportionate share based on an
engineer's report. The assessments are collected via the tax rolls.
Miscellaneous Grants Fund – Used to account for grants from various agencies used for
operations and maintenance, and to account for specific in-lieu fees from developers. Financing
for grants is provided by the State, County and Federal Government. Such grants provide for
payment of all current operating costs and may be used only for specified purposes.
AB 939 Integrated Waste Management Fund – Used to account for revenue received from a
fee collected with solid waste disposal that was created as a result of AB 939. All revenues in
this fund are to be used to reduce the toxicity of solid waste in landfills and improve the
management of waste resources.
Community Development Block Grant Fund – Used to account for revenues received and
expenditures made for community development and housing assistance. Financing is provided
under agreement with the county whereby the City is a secondary recipient with funds made
available from the U.S. Department of Housing and Urban Development under the Housing and
Community Development Acts of 1974 and 1977.
102
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS (Continued):
Transportation Development Act Fund – Used to account for revenues received and
expenditures made for transportation development, transit and related studies. Funding is
provided to the City as secondary recipient under agreements with the county and with the San
Diego Association of Governments.
Proposition A Fund – To account for the San Diego County special Proposition A one-half
(1/2) cent transportation sales tax which became effective July 1, 1988. All revenues of this fund
must be expended for certain transportation related purposes.
SB 1186 Disabled Access Law Fund – Used to account for revenue received from a fee
collected upon issuance of a business registration that was created as a result of AB 1186. All
revenues in this fund are to be used to pay for certified access specialists in local building
departments and to pay for educational and training resources at the state and local level to
promote compliance.
Excess SAFE Reserve Fund – Used to account for revenue received related to the dissolution
of the San Diego Service Authority for Freeway Emergencies (SAFE), and their expenditure for
motorist aid services and support.
Regional Arterial Traffic Mitigation Fund – Used to account for new fees required by the San
Diego Association of Governments.
Fire Protection Impact Fees Fund – Used to account for revenues received and expenditures
made for fire protection improvements. Financing is provided primarily from developer fees.
BEGIN Program Fund – The Building Equity and Growth in Neighborhoods program (BEGIN)
is funded by the California Department of Housing and Community Development to provide
down payment assistance to low and moderate income first-time home buyers of newly
constructed homes.
Housing In-lieu Fund – Used to account for revenues received and expenditures made for
affordable housing. Funding is provided primarily from developer fees that are collected in-lieu
of the developer providing inclusionary affordable housing units. The funds are used by the City
to support its first-time home buyer program, Supporting Home Ownership in Poway (SHOP),
which is available to low and moderate income homebuyers.
Habitat In-lieu Fund – Used to account for revenues received and expenditures made for the
mitigation of environmental impacts to natural habitat. Funding is provided primarily from
developer fees that are collected in-lieu of the developer providing actual land. The funds are
used by the City to purchase open space as land and funding become available.
103
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS (Continued):
Housing Special Programs Fund – Used to account for revenue related to the Smith
Judgment. The former Poway Redevelopment Agency was required to allocate 2% of its annual
gross tax increment to this fund. Subsequent to the Redevelopment Agency’s dissolution 2%
percent of the Redevelopment Property Tax Trust Fund gross revenues have been allocated to
this fund. These funds are to be distributed to non-profit entities for specific housing uses as
specified by the judgment.
DEBT SERVICE FUND:
City of Poway Debt Service Fund – Used to account for lease payments received and
transfers in from other funds that are used to make debt service payments.
PERMANENT FUND:
Mary Patricia Ross Trust Fund – Used to account for revenue and expenses provided by a
private estate to finance community park and recreation purposes. The principal must be
maintained intact until 2006. Interest income must also be used to finance such recreational
purposes.
CAPITAL PROJECTS FUNDS:
Park Improvement Fund – Used to account for the financing and construction of park facilities
throughout the City.
Municipal Improvement Fund – Used to account for the financing and construction of the Old
Coach water line. The remaining funds are to be used for the maintenance and operation costs
of the water line.
City of Poway
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2014
104
800 MHz
Fire Communication Gas Street
Protection System Tax Improvement Drainage
ASSETS
Cash and investments -$ 69,488$ 1,655,048$ 928,724$ 902,688$
Receivables:
Taxes 2,347 23 - - 2,617
Accounts - - 292 - 12,169
Interest - 61 - - -
Advances to other funds - - - - 17,576
Due from other governments - - 157,100 - -
Advances to fiduciary funds - - - 1,314,355 1,661,725
Restricted assets:
Cash and investments with fiscal agents - - - - -
Total assets 2,347$ 69,572$ 1,812,440$ 2,243,079$ 2,596,775$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable -$ 26,751$ 64,249$ -$ 12,054$
Accrued liabilities - - 17,918 - 11,911
Due to other funds - - - - -
Advances from other funds - - - 723,147 -
Unearned revenues - - - - -
Total liabilities - 26,751 82,167 723,147 23,965
Deferred inflows of resources:
Unavailable revenue - - - - -
Total deferred inflows of resources - - - - -
FUND BALANCES
Restricted 2,347 42,821 1,730,273 1,519,932 2,572,810
Total fund balances 2,347 42,821 1,730,273 1,519,932 2,572,810
Total liabilities, deferred inflows of
resources and fund balances 2,347$ 69,572$ 1,812,440$ 2,243,079$ 2,596,775$
Special Revenue Funds
City of Poway
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2014
105
AB 939
Integrated Community Transportation SB 1186
Maintenance Miscellaneous Waste Development Development Disabled
Districts Grants Management Block Grant Act Proposition A Access Law
7,437,490$ 247,820$ 515,727$ 11,761$ 498,502$ 374,853$ 2,023$
6,027 - - - - - -
10,784 - 49,313 - - - -
- - - - - - -
- - - - - - -
- 229,962 - 147,541 16,074 - -
- - - - - - -
- - - - - - -
7,454,301$ 477,782$ 565,040$ 159,302$ 514,576$ 374,853$ 2,023$
147,209$ 7,729$ 39,239$ 11,761$ 1,399$ -$ 166$
2,890 1,321 - - - - -
- 200,850 - 147,541 - - -
- - - - - - -
- 14,622 - - - - -
150,099 224,522 39,239 159,302 1,399 - 166
- 178,902 - - - - -
- 178,902 - - - - -
7,304,202 74,358 525,801 - 513,177 374,853 1,857
7,304,202 74,358 525,801 - 513,177 374,853 1,857
7,454,301$ 477,782$ 565,040$ 159,302$ 514,576$ 374,853$ 2,023$
Special Revenue Funds
City of Poway
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2014
106
Regional Fire
Excess Arterial Protection
SAFE Traffic Impact BEGIN Housing
Reserve Mitigation Fees Program In-lieu
ASSETS
Cash and investments 144,210$ 290,910$ 59,486$ 2,211$ 903,864$
Receivables:
Taxes - - - - -
Accounts - - - - -
Interest - - - - -
Advances to other funds - - - - -
Due from other governments - - - - -
Advances to fiduciary funds - - - - -
Restricted assets:
Cash and investments with fiscal agents - - - - -
Total assets 144,210$ 290,910$ 59,486$ 2,211$ 903,864$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable -$ 6,980$ -$ -$ -$
Accrued liabilities - - - - -
Due to other funds - - - - -
Advances from other funds - - - - -
Unearned revenues - - - - -
Total liabilities - 6,980 - - -
Deferred inflows of resources:
Unavailable revenue - - - - -
Total deferred inflows of resources - - - - -
FUND BALANCES
Restricted 144,210 283,930 59,486 2,211 903,864
Total fund balances 144,210 283,930 59,486 2,211 903,864
Total liabilities, deferred inflows of
resources and fund balances 144,210$ 290,910$ 59,486$ 2,211$ 903,864$
Special Revenue Funds
City of Poway
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2014
107
Debt
Service Permanent
Fund Fund
Total
Housing Mary Other
Habitat Special Debt Patricia Park Municipal Governmental
In-lieu Programs Service Ross Trust Improvement Improvement Funds
1,273,948$ 4,424,804$ 1,004,302$ 91,069$ 694,764$ 3,844$ 21,537,536$
- - - - - - 11,014
- - - - - - 72,558
- - 3 - - - 64
- - - - - - 17,576
- - - - - - 550,677
- - - - - - 2,976,080
- - 647,131 - - - 647,131
1,273,948$ 4,424,804$ 1,651,436$ 91,069$ 694,764$ 3,844$ 25,812,636$
-$ -$ -$ -$ -$ -$ 317,537$
- - - - - - 34,040
- - - - - - 348,391
- - - - 307,228 - 1,030,375
- - 142,250 - - - 156,872
- - 142,250 - 307,228 - 1,887,215
- - - - - - 178,902
- - - - - - 178,902
1,273,948 4,424,804 1,509,186 91,069 387,536 3,844 23,746,519
1,273,948 4,424,804 1,509,186 91,069 387,536 3,844 23,746,519
1,273,948$ 4,424,804$ 1,651,436$ 91,069$ 694,764$ 3,844$ 25,812,636$
Special Revenue Funds Capital Projects Funds
City of Poway
Combining Statement of Revenues, Expenditures
and Changes in Fund Balance
Non-Major Governmental Funds
For the year ended June 30, 2014
108
800 MHz
Fire Communication Gas Street
Protection System Tax Improvement Drainage
REVENUES
Taxes 633,029$ 135,057$ 1,639,039$ -$ 1,042,347$
Intergovernmental - - - - -
Charges for services - - 369 - -
Use of money and property - 215 16,861 4,906 7,730
Developer fees - - - 806,281 5,990
Assessments levied - - - - -
Other revenues - - 1,827 - 12,169
Total revenues 633,029 135,272 1,658,096 811,187 1,068,236
EXPENDITURES
Current:
Public safety - 130,722 - - -
Public works - - 1,453,026 - 658,480
Capital outlay - - - 19,910 364,113
Debt service:
Principal - - - - -
Interest and fiscal charges - - - - -
Transfers to fiduciary fund - - - - -
Total expenditures - 130,722 1,453,026 19,910 1,022,593
Excess (deficiency) of revenues
over (under) expenditures 633,029 4,550 205,070 791,277 45,643
OTHER FINANCING SOURCES
Transfers in - - - - -
Transfer out (632,509) - - - -
Total other financing sources (uses) (632,509) - - - -
Net change in fund balances 520 4,550 205,070 791,277 45,643
Fund balances, beginning of year 1,827 38,271 1,525,203 728,655 2,527,167
Fund balances, end of year 2,347$ 42,821$ 1,730,273$ 1,519,932$ 2,572,810$
Special Revenue Funds
City of Poway
Combining Statement of Revenues, Expenditures
and Changes in Fund Balance
Non-Major Governmental Funds
For the year ended June 30, 2014
109
AB 939
Integrated Community Transportation SB 1186
Maintenance Miscellaneous Waste Development Development Disabled
Districts Grants Management Block Grant Act Proposition A Access Law
354,570$ -$ -$ -$ -$ 1,370,400$ -$
- 129,883 22,320 210,374 5,000 - -
- - - - - - -
77,627 1,698 5,153 - 5,574 692 16
- - - - - - -
1,898,872 - - - - - -
9,470 - 198,089 - 11,074 - 1,174
2,340,539 131,581 225,562 210,374 21,648 1,371,092 1,190
- - - - - - -
2,410,011 - - - 11,074 1,020,400 -
- 230,106 135,633 210,374 17,516 - -
- - - - - - -
- - - - - - -
- - - - - - -
2,410,011 230,106 135,633 210,374 28,590 1,020,400 -
(69,472) (98,525) 89,929 - (6,942) 350,692 1,190
324,902 - - - - - -
- (100,000) - - - - -
324,902 (100,000) - - - - -
255,430 (198,525) 89,929 - (6,942) 350,692 1,190
7,048,772 272,883 435,872 - 520,119 24,161 667
7,304,202$ 74,358$ 525,801$ -$ 513,177$ 374,853$ 1,857$
Special Revenue Funds
City of Poway
Combining Statement of Revenues, Expenditures
and Changes in Fund Balance
Non-Major Governmental Funds
For the year ended June 30, 2014
110
Regional Fire
Excess Arterial Protection
SAFE Traffic Impact BEGIN Housing
Reserve Mitigation Fees Program In-lieu
REVENUES
Taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Charges for services - - - - -
Use of money and property 1,626 3,201 530 18 9,863
Developer fees - 17,671 26,589 - 4,500
Assessments levied - - - - -
Other revenues - - - - -
Total revenues 1,626 20,872 27,119 18 14,363
EXPENDITURES
Current:
Public safety - - - - -
Public works - - - - -
Capital outlay 17,076 16,686 - - -
Debt service:
Principal - - - - -
Interest and fiscal charges - - - - -
Transfers to fiduciary fund - - - - -
Total expenditures 17,076 16,686 - - -
Excess (deficiency) of revenues
over (under) expenditures (15,450) 4,186 27,119 18 14,363
OTHER FINANCING SOURCES
Transfers in - - - - -
Transfer out - - - - -
Total other financing sources (uses)- - - - -
Net change in fund balances (15,450) 4,186 27,119 18 14,363
Fund balances, beginning of year 159,660 279,744 32,367 2,193 889,501
Fund balances, end of year 144,210$ 283,930$ 59,486$ 2,211$ 903,864$
Special Revenue Funds
City of Poway
Combining Statement of Revenues, Expenditures
and Changes in Fund Balance
Non-Major Governmental Funds
For the year ended June 30, 2014
111
Debt
Service Permanent
Fund Fund
Total
Housing Mary Other
Habitat Special Debt Patricia Park Municipal Governmental
In-lieu Programs Service Ross Trust Improvement Improvement Funds
-$ -$ -$ -$ -$ -$ 5,174,442$
- - - - - - 367,577
- - - - - - 369
13,895 42,894 294,587 996 7,734 42 495,858
8,735 - - - 36,496 - 906,262
- - - - - - 1,898,872
- 818,727 - - - - 1,052,530
22,630 861,621 294,587 996 44,230 42 9,895,910
- - - - - - 130,722
- - - - - - 5,552,991
- - - - 28,553 - 1,039,967
- - 700,000 - - - 700,000
- - 506,527 - - - 506,527
- - 440,300 - - - 440,300
- - 1,646,827 - 28,553 - 8,370,507
22,630 861,621 (1,352,240) 996 15,677 42 1,525,403
- - 917,973 - - - 1,242,875
- - (6,198) - - - (738,707)
- - 911,775 - - - 504,168
22,630 861,621 (440,465) 996 15,677 42 2,029,571
1,251,318 3,563,183 1,949,651 90,073 371,859 3,802 21,716,948
1,273,948$ 4,424,804$ 1,509,186$ 91,069$ 387,536$ 3,844$ 23,746,519$
Capital Projects FundsSpecial Revenue Funds
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Fire Protection Special Revenue Fund
For the year ended June 30, 2014
112
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 634,000$ 634,000$ 633,029$ (971)$
Total revenues 634,000 634,000 633,029 (971)
OTHER FINANCING (USES)
Transfers out (636,000) (636,000) (632,509) 3,491
Total other financing (uses) (636,000) (636,000) (632,509) 3,491
Net change in fund balance (2,000) (2,000) 520 2,520
Fund balance, beginning of year 1,827 1,827 1,827 -
Fund balance, end of year (173)$ (173)$ 2,347$ 2,520$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
800 MHz Communication System Special Revenue Fund
For the year ended June 30, 2014
113
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 136,000$ 136,000$ 135,057$ (943)$
Use of money and property 30 30 215 185
Total revenues 136,030 136,030 135,272 (758)
EXPENDITURES
Current:
Public Safety 132,960 132,960 130,722 2,238
Total expenditures 132,960 132,960 130,722 2,238
Net change in fund blance 3,070 3,070 4,550 1,480
Fund balance, beginning of year 38,271 38,271 38,271 -
Fund balance, end of year 41,341$ 41,341$ 42,821$ 1,480$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Gas Tax Special Revenue Fund
For the year ended June 30, 2014
114
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 1,515,550$ 1,515,550$ 1,639,039$ 123,489$
Charges for services - - 369 369
Use of money and property 4,720 4,720 16,861 12,141
Other revenues - - 1,827 1,827
Total revenues 1,520,270 1,520,270 1,658,096 137,826
EXPENDITURES
Current:
Public works 1,797,085 1,793,160 1,453,026 340,134
Total expenditures 1,797,085 1,793,160 1,453,026 340,134
Net change in fund balance (276,815) (272,890) 205,070 477,960
Fund balance, beginning of year 1,525,203 1,525,203 1,525,203 -
Fund balance, end of year 1,248,388$ 1,252,313$ 1,730,273$ 477,960$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Street Improvement Special Revenue Fund
For the year ended June 30, 2014
115
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 850$ 850$ 4,906$ 4,056$
Developer fees 68,650 68,650 806,281 737,631
Total revenues 69,500 69,500 811,187 741,687
EXPENDITURES
Capital outlay 257,200 302,200 19,910 282,290
Total expenditures 257,200 302,200 19,910 282,290
Net change in fund balance (187,700) (232,700) 791,277 1,023,977
Fund balance, beginning of year 728,655 728,655 728,655 -
Fund balance, end of year 540,955$ 495,955$ 1,519,932$ 1,023,977$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Drainage Special Revenue Fund
For the year ended June 30, 2014
116
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 927,240$ 927,240$ 1,042,347$ 115,107$
Use of money and property 2,400 2,400 7,730 5,330
Developer fees 21,000 21,000 5,990 (15,010)
Other revenues - - 12,169 12,169
Total revenues 950,640 950,640 1,068,236 117,596
EXPENDITURES
Current:
Public works 637,908 678,709 658,480 20,229
Capital outlay 581,988 609,838 364,113 245,725
Total expenditures 1,219,896 1,288,547 1,022,593 265,954
Net change in fund balance (269,256) (337,907) 45,643 383,550
Fund balance, beginning of year 2,527,167 2,527,167 2,527,167 -
Fund balance, end of year 2,257,911$ 2,189,260$ 2,572,810$ 383,550$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Maintenance Districts Special Revenue Fund
For the year ended June 30, 2014
117
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 319,690$ 319,690$ 354,570$ 34,880$
Assessment levied 1,882,200 1,882,200 1,898,872 16,672
Use of money and property 38,440 38,440 77,627 39,187
Other revenue - - 9,470 9,470
Total revenues 2,240,330 2,240,330 2,340,539 100,209
EXPENDITURES
Public works 2,786,389 2,917,968 2,410,011 507,957
Total expenditures 2,786,389 2,917,968 2,410,011 507,957
Deficiency of revenues
over expenditures (546,059) (677,638) (69,472) (608,166)
OTHER FINANCING SOURCES
Transfers in 329,150 329,150 324,902 (4,248)
Total other financing sources 329,150 329,150 324,902 (4,248)
Net change in fund balance (216,909) (348,488) 255,430 603,918
Fund balance, beginning of year 7,048,772 7,048,772 7,048,772 -
Fund balance, end of year 6,831,863$ 6,700,284$ 7,304,202$ 603,918$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Miscellaneous Grants Special Revenue Fund
For the year ended June 30, 2014
118
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 126,670$ 126,670$ 129,883$ 3,213$
Use of money and property 1,150 1,150 1,698 548
Total revenues 127,820 127,820 131,581 3,761
EXPENDITURES
Capital outlay 221,257 230,239 230,106 133
Total expenditures 221,257 230,239 230,106 133
Deficiency of revenues
over expenditures (93,437) (102,419) (98,525) 3,894
OTHER FINANCING SOURCES (USES)
Transfers out (100,000) (100,000) (100,000) -
Total other financing sources (uses) (100,000) (100,000) (100,000) -
Net change in fund balance (193,437) (202,419) (198,525) 3,894
Fund balance, beginning of year 272,883 272,883 272,883 -
Fund balance, end of year 79,446$ 70,464$ 74,358$ 3,894$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
AB 939 Integrated Waste Management Fund
For the year ended June 30, 2014
119
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 22,600$ 22,600$ 22,320$ (280)$
Use of money and property 1,830 1,830 5,153 3,323
Other revenue 195,000 195,000 198,089 3,089
Total revenues 219,430 219,430 225,562 6,132
EXPENDITURES
Capital outlay 314,251 314,251 135,633 178,618
Total expenditures 314,251 314,251 135,633 178,618
Net change in fund balance (94,821) (94,821) 89,929 184,750
Fund balance, beginning of year 435,872 435,872 435,872 -
Fund balance, end of year 341,051$ 341,051$ 525,801$ 184,750$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Community Development Block Grant Special Revenue Fund
For the year ended June 30, 2014
120
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 140,780$ 140,780$ 210,374$ 69,594$
Total revenues 140,780 140,780 210,374 69,594
EXPENDITURES
Capital outlay 228,219 234,213 210,374 23,839
Total expenditures 228,219 234,213 210,374 23,839
Net change in fund balance (87,439) (93,433) - 93,433
Fund balance, beginning of year - - - -
Fund balance, end of year (87,439)$ (93,433)$ -$ 93,433$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Transportation Development Act Special Revenue Fund
For the year ended June 30, 2014
121
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 10,000$ 10,000$ 5,000$ (5,000)$
Use of money and property 3,250 3,250 5,574 2,324
Other revenue - - 11,074 11,074
Total revenues 13,250 13,250 21,648 8,398
EXPENDITURES
Current:
Public works 5,000 11,080 11,074 6
Capital outlay 513,011 513,011 17,516 495,495
Total expenditures 518,011 524,091 28,590 495,501
Net change in fund balance (504,761) (510,841) (6,942) 503,899
Fund balance, beginning of year 520,119 520,119 520,119 -
Fund balance, end of year 15,358$ 9,278$ 513,177$ 503,899$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Proposition A Special Revenue Fund
For the year ended June 30, 2014
122
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 1,378,100$ 1,378,100$ 1,370,400$ (7,700)$
Use of money and property 4,050 4,050 692 (3,358)
Total revenues 1,382,150 1,382,150 1,371,092 (11,058)
EXPENDITURES
Current:
Public works 773,100 1,020,400 1,020,400 -
Capital outlay 350,000 350,000 - 350,000
Total expenditures 1,123,100 1,370,400 1,020,400 350,000
Net change in fund balance 259,050 11,750 350,692 338,942
Fund balance, beginning of year 24,161 24,161 24,161 -
Fund balance, end of year 283,211$ 35,911$ 374,853$ 338,942$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
SB 1186 Disabled Access Law Special Revenue Fund
For the year ended June 30, 2014
123
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property -$ -$ 16$ 16$
Other revenue 1,050 1,050 1,174 124
Total revenues 1,050 1,050 1,190 140
Net change in fund balance 1,050 1,050 1,190 140
Fund balance, beginning of year 667 667 667 -
Fund balance, end of year 1,717$ 1,717$ 1,857$ 140$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Excess SAFE Reserve Special Revenue Fund
For the year ended June 30, 2014
124
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property -$ -$ 1,626$ 1,626$
Total revenues - - 1,626 1,626
EXPENDITURES
Capital outlay 158,948 158,948 17,076 141,872
Total expenditures 158,948 158,948 17,076 141,872
Net change in fund balance (158,948) (158,948) (15,450) 143,498
Fund balance, beginning of year 159,660 159,660 159,660 -
Fund balance, end of year 712$ 712$ 144,210$ 143,498$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Regional Arterial Traffic Mitigation Special Revenue Fund
For the year ended June 30, 2014
125
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 1,540$ 1,540$ 3,201$ 1,661$
Developmer fees 17,660 17,660 17,671 11
Total revenues 19,200 19,200 20,872 1,672
EXPENDITURES
Capital outlay 47,878 47,878 16,686 31,192
Total expenditures 47,878 47,878 16,686 31,192
Net change in fund balance (28,678) (28,678) 4,186 32,864
Fund balance, beginning of year 279,744 279,744 279,744 -
Fund balance, end of year 251,066$ 251,066$ 283,930$ 32,864$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Fire Protection Impact Fees Fund
For the year ended June 30, 2014
126
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 130$ 130$ 530$ 400$
Developer fees 3,020 3,020 26,589 23,569
Total revenues 3,150 3,150 27,119 23,969
Net change in fund balance 3,150 3,150 27,119 23,969
Fund balance, beginning of year 32,367 32,367 32,367 -
Fund balance, end of year 35,517$ 35,517$ 59,486$ 23,969$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
BEGIN Program Special Revenue Fund
For the year ended June 30, 2014
127
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property -$ -$ 18$ 18$
Total revenues - - 18 18
Net change in fund balance - - 18 18
Fund balance, beginning of year 2,193 2,193 2,193 -
Fund balance, end of year 2,193$ 2,193$ 2,211$ 18$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Housing In-lieu Fund
For the year ended June 30, 2014
128
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 5,280$ 5,280$ 9,863$ 4,583$
Developer fees 4,500 4,500 4,500 -
Total revenues 9,780 9,780 14,363 4,583
EXPENDITURES
Capital outlay 259,479 259,479 - 259,479
Total expenditures 259,479 259,479 - 259,479
Net change in fund balance (249,699) (249,699) 14,363 264,062
Fund balance, beginning of year 889,501 889,501 889,501 -
Fund balance, end of year 639,802$ 639,802$ 903,864$ 264,062$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Habitat In-lieu Fund
For the year ended June 30, 2014
129
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 7,300$ 7,300$ 13,895$ 6,595$
Developer fees 17,000 17,000 8,735 (8,265)
Total revenues 24,300 24,300 22,630 (1,670)
Net change in fund balance 24,300 24,300 22,630 (1,670)
Fund balance, beginning of year 1,251,318 1,251,318 1,251,318 -
Fund balance, end of year 1,275,618$ 1,275,618$ 1,273,948$ (1,670)$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Housing Special Programs Fund
For the year ended June 30, 2014
130
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 17,130$ 17,130$ 42,894$ 25,764$
Other revenues 780,000 780,000 818,727 38,727
Total revenues 797,130 797,130 861,621 64,491
EXPENDITURES
Capital outlay 1,014,420 1,014,420 - 1,014,420
Total expenditures 1,014,420 1,014,420 - 1,014,420
Net change in fund balance (217,290) (217,290) 861,621 1,078,911
Fund balance, beginning of year 3,563,183 3,563,183 3,563,183 -
Fund balance, end of year 3,345,893$ 3,345,893$ 4,424,804$ 1,078,911$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
City Debt Service Fund
For the year ended June 30, 2014
131
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 289,530$ 289,530$ 294,587$ 5,057$
Total revenues 289,530 289,530 294,587 5,057
EXPENDITURES
Debt service:
Principal 700,000 700,000 700,000 -
Interest and fiscal charges 511,000 511,000 506,527 4,473
Transfers to fiduciary fund 440,300 440,300 440,300 -
Total expenditures 1,651,300 1,651,300 1,646,827 4,473
Excess (deficiency) of revenues
over (under) expenditures (1,361,770) (1,361,770) (1,352,240) 9,530
OTHER FINANCING SOURCES (USES)
Transfers in 931,500 931,500 917,973 (13,527)
Transfers out (6,270) (6,270) (6,198) 72
Total other financing sources (uses) 925,230 925,230 911,775 (13,455)
Net change in fund balance (436,540) (436,540) (440,465) (3,925)
Fund balance, beginning of year 1,949,651 1,949,651 1,949,651 -
Fund balance, end of year 1,513,111$ 1,513,111$ 1,509,186$ (3,925)$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Mary Patricia Ross Trust Permanent Fund
For the year ended June 30, 2014
132
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 540$ 540$ 996$ 456$
Total revenues 540 540 996 456
Net change in fund balance 540 540 996 456
Fund balance, beginning of year 90,073 90,073 90,073 -
Fund balance, end of year 90,613$ 90,613$ 91,069$ 456$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Park Improvement Capital Project Fund
For the year ended June 30, 2014
133
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Developer fees 45,620$ 45,620$ 36,496$ (9,124)$
Use of money and property 5,580 5,580 7,734 2,154
Total revenues 51,200 51,200 44,230 (6,970)
EXPENDITURES
Capital outlay 50,000 50,000 28,553 21,447
Total expenditures 50,000 50,000 28,553 21,447
Net change in fund balance 1,200 1,200 15,677 14,477
Fund balance, beginning of year 371,859 371,859 371,859 -
Fund balance, end of year 373,059$ 373,059$ 387,536$ 14,477$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Municipal Improvement Capital Project Fund
For the year ended June 30, 2014
134
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 20$ 20$ 42$ 22$
Total revenues 20 20 42 22
Net change in fund balance 20 20 42 22
Fund balance, beginning of year 3,802 3,802 3,802 -
Fund balance, end of year 3,822$ 3,822$ 3,844$ 22$
Budget Amounts
135
INTERNAL SERVICE FUND
Vehicle Maintenance Fund - Used to account for the cost of operating a maintenance facility
for automotive equipment used by other City departments. Such costs to other departments are
billed on a direct cost basis. The Vehicle Maintenance Fund is responsible for financing
replacement vehicles, as necessary.
136
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City of Poway
Statement of Net Position
Internal Service Fund - Vehicle Maintenance Fund
June 30, 2014
137
ASSETS
Current assets:
Cash and investments 8,447,902$
Accounts receivable 511
Total current assets 8,448,413
Total assets 8,448,413
LIABILITIES
Current liabilities:
Accounts payable 35,398
Accrued liabilities 8,065
Total current liabilities 43,463
Noncurrent liabilities:
Compensated absences 30,986
Total noncurrent liabilities 30,986
Total liabilities 74,449
NET POSITION
Unrestricted 8,373,964
Total net position 8,373,964$
City of Poway
Statement of Revenues, Expenses and Changes in Net Position
Internal Service Fund - Vehicle Maintenance Fund
For the year ended June 30, 2014
138
OPERATING REVENUES
Charges for services 3,305,132$
Total operating revenues 3,305,132
OPERATING EXPENSES
Personnel services 334,937
Maintenance and operations 935,016
Total operating expenses 1,269,953
Operating income 2,035,179
NONOPERATING REVENUES
Interest revenue 83,765
Other nonoperating revenue 2,884
Total nonoperating revenues 86,649
Income before transfers 2,121,828
TRANSFERS
Transfers in 640,683
Transfers out (1,042,940)
Total transfers (402,257)
Change in net position 1,719,571
Net position, beginning of year 6,654,393
Net position, end of year 8,373,964$
City of Poway
Statement of Cash Flows
Internal Service Fund - Vehicle Maintenance Fund
For the year ended June 30, 2014
139
Cash flows from operating activities:
Cash receipts from users 3,304,621$
Cash payments to employees for services (331,515)
Cash payments to suppliers of goods or services (927,659)
Net cash provided by
operating activities 2,045,447
Cash flows from noncapital financing activities:
Transfer from other funds 640,683
Transfer to other funds (1,042,940)
Net cash (used for) noncapital
financing activities (402,257)
Cash flows from capital and related
financing activities:
Sale of assets 2,884
Net cash provided by capital and
related financing activities 2,884
Cash flows from investing activities:
Interest received 83,765
Net cash provided by investing activities 83,765
Net increase in cash 1,729,839
and investments
Cash and investments, beginning of year 6,718,063
Cash and investments, end of year 8,447,902$
Reconciliation of operating income to net
cash provided by (used for) operating activities:
Operating income 2,035,179$
Adjustments to reconcile operating income to
net cash provided by operating activities:
(Increase) decrease in assets:
Accounts receivable (511)
Increase (decrease) in liabilities:
Accounts payable 7,357
Accrued liabilities 3,422
Total adjustments 10,268
Net cash provided by operating activities 2,045,447$
140
FIDUCIARY FUNDS
AGENCY FUNDS
The agency funds are used to account for assets held by the City as an agent. Agency funds
include the following:
Developer Deposits Fund - Used to account for the collection and payments of development
deposits from and on behalf of the collective and individual developers.
South Poway CFD No. 1 Bond Deposits Fund - Used to account for debt service payments
CFD No. 1 Bond Deposits collected through property tax assessments remitted to fiscal agent-
trustee for payment on bonds.
Parkway Business Centre CFD No. 88-1 Bond Deposits Fund - Used to account for debt
service payments CFD No. 88-1 Bond Deposits collected through property tax assessments
remitted to fiscal agent-trustee for payment on bonds.
High Valley Road AD No. 96-1 Bond Deposits Fund - Used to account for debt service
payments AD No. 96-1 Bond Deposits collected through property tax assessments remitted to
fiscal agent-trustee for payment on bonds.
Old Coach Waterline AD No. 00-1 Bond Deposits Fund - Used to account for debt service
payments AD No. 00-1 Bond Deposits collected through property tax assessments remitted to
fiscal agent-trustee for payment on bonds.
City of Poway
Combining Statement of Fiduciary Net Position
Agency Funds
June 30, 2014
141
Parkway
South Poway Business Old Coach
CFD No. 1 Centre CFD High Valley Water Line
Bond No. 88.1 Road AD No. 96-1 AD No. 00-1 Total
Developer Deposits Bond Bond Deposits Bond Deposits Agency
Deposits Fund Deposits Fund Fund Fund Funds
ASSETS
Current assets
Cash and investments 2,793,466$ -$ 3,490,743$ 59,225$ 64,771$ 6,408,205$
Cash and investments with
fiscal agents - - 1,654,813 53,751 - 1,708,564
Receivables, net:
Taxes - - - 2,087 - 2,087
Interest - - 14 - - 14
Total current assets 2,793,466$ -$ 5,145,570$ 115,063$ 64,771$ 8,118,870$
LIABILITIES
Current liabilities
Accounts payable 41,693$ -$ -$ 4,235$ -$ 45,928$
Due to fiduciary fund 11,860 - - - - 11,860
Total current liabilities 53,553 - - 4,235 - 57,788
Noncurrent liabilities
Deposits 2,739,913 - - - - 2,739,913
Due to bondholders - - 4,775,570 110,828 64,771 4,951,169
Advances from City of Poway - - 370,000 - - 370,000
Total non current liabilities 2,739,913 - 5,145,570 110,828 64,771 8,061,082
Total liabilities 2,793,466$ -$ 5,145,570$ 115,063$ 64,771$ 8,118,870$
City of Poway
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the year ended June 30, 2014
142
Balance Balance
June 30, 2013 Additions Deletions June 30, 2014
Assets
Cash and investments 3,319,435$ 764,813$ (1,290,782)$ 2,793,466$
Total assets 3,319,435$ 764,813$ (1,290,782)$ 2,793,466$
Liabilities
Accounts payable 17,566$ 41,693$ (17,566)$ 41,693$
Deposits 3,301,869 711,260 (1,273,216) 2,739,913
Due to fiduciary fund - 11,860 - 11,860
Total liabilities 3,319,435$ 764,813$ (1,290,782)$ 2,793,466$
Assets
Cash and investments 246$ 20,720$ (20,966)$ -$
Total assets 246$ 20,720$ (20,966)$ -$
Liabilities
Accounts payable 246$ 20,720$ (20,966)$ -$
Total liabilities 246$ 20,720$ (20,966)$ -$
Assets
Cash and investments 3,654,701$ 3,311,096$ (3,475,054)$ 3,490,743$
Cash and investments with fiscal agents 1,654,644 3,301,194 (3,301,025) 1,654,813
Taxes receivable 2,535 - (2,535) -
Accounts receivable 540,000 - (540,000) -
Interest receivable 14 14 (14) 14
Total assets 5,851,894$ 6,612,304$ (7,318,628)$ 5,145,570$
Liabilities
Due to bond holders 5,311,894$ 3,311,265$ (3,847,589)$ 4,775,570$
Advances from City of Poway 540,000 - (170,000) 370,000
Total liabilities 5,851,894$ 3,311,265$ (4,017,589)$ 5,145,570$
CFD No. 88-1 BOND DEPOSITS FUND
BOND DEPOSITS FUND
DEVELOPER DEPOSITS FUND
SOUTH POWAY CFD No. 1
PARKWAY BUSINESS CENTRE
City of Poway
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the year ended June 30, 2014
143
Balance Balance
June 30, 2013 Additions Deletions June 30, 2014
Assets
Cash and investments 55,521$ 59,925$ (56,221)$ 59,225$
Cash and investments with fiscal agents 53,754 50,006 (50,009) 53,751
Taxes receivable 90 2,087 (90) 2,087
Interest receivable 1 - (1) -
Total assets 109,366$ 112,018$ (106,321)$ 115,063$
Liabilities
Accounts payable 4,235$ -$ -$ 4,235$
Due to bond holders 105,131 57,792 (52,095) 110,828
Total liabilities 109,366$ 57,792$ (52,095)$ 115,063$
Assets
Cash and investments 64,634$ 32,972$ (32,835)$ 64,771$
Taxes receivable 984 - (984) -
Total assets 65,618$ 32,972$ (33,819)$ 64,771$
Liabilities
Due to bond holders 65,618$ 32,972$ (33,819)$ 64,771$
Total liabilities 65,618$ 32,972$ (33,819)$ 64,771$
Assets
Cash and investments 7,094,537$ 4,189,526$ (4,875,858)$ 6,408,205$
Cash and investments with fiscal agents 1,708,398 3,351,200 (3,351,034) 1,708,564
Taxes receivable 3,609 2,087 (3,609) 2,087
Accounts receivable 540,000 - (540,000) -
Interest receivable 15 14 (15) 14
Total assets 9,346,559$ 7,542,827$ (8,770,516)$ 8,118,870$
Liabilities
Accounts payable 22,047$ 62,413$ (38,532)$ 45,928$
Deposits 3,301,869 711,260 (1,273,216) 2,739,913
Due to fiduciary fund - 11,860 - 11,860
Due to bondholders 5,482,643 3,402,029 (3,933,503) 4,951,169
Advances from City of Poway 540,000 - (170,000) 370,000
Total liabilities 9,346,559$ 4,187,562$ (5,415,251)$ 8,118,870$
ALL AGENCY FUNDS
AD No. 00-1 BND DEPOSITS FUND
AD No. 96-1 BOND DEPOSITS FUND
HIGH VALLEY ROAD
OLD COACH WATERLINE
144
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Statistical Section
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145
STATISTICAL SECTION
This part of the City of Poway's comprehensive annual financial report presents detailed
information as context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the government's overall
financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the
government's financial performance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the government's most
significant local revenue sources.
Debt Capacity
These schedules present information to help the reader assess the affordability of the
government's current levels of outstanding debt and the government's ability to issue
additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand
the environment within which the government's financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how
the information in the government's financial report relates to the services the government
provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
City of Poway Net Position by Component Current and Prior Eight Years (accrual basis of accounting) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year EndedJune 30, 2014June 30, 2013June 30, 2012June 30, 2011June 30, 2010June 30, 2009June 30, 2008June 30, 2007June 30, 2006Governmental activitiesNet investment in capital assets90,442,061$ 94,657,067$ 93,097,532$ 50,255,141$ 46,412,443$ 36,713,773$ 28,805,157$ 21,675,540$ 16,728,005$ Restricted23,746,519 25,637,627 24,523,246 70,931,373 78,369,565 99,252,462 101,384,182 99,518,581 98,416,094 Unrestricted - as restated73,722,477 63,928,726 59,865,964 (71,148,492) (93,996,026) (98,283,120) (95,193,402) (97,582,504) (105,519,982) Total governmental activities net assets187,911,057 184,223,420 177,486,742 50,038,022 30,785,982 37,683,115 34,995,937 23,611,617 9,624,117 Business-type activitiesNet investment in capital assets38,731,821 40,746,468 42,846,682 43,976,262 43,508,027 39,127,764 34,657,630 35,055,052 36,472,213 Restricted279,579 279,604 279,575 280,450 280,450 280,469 281,531 283,938 283,534 Unrestricted33,144,439 33,305,899 34,543,173 36,469,136 35,320,341 34,194,395 32,511,666 30,112,939 25,587,312 Total business-type activities net assets72,155,839 74,331,971 77,669,430 80,725,848 79,108,818 73,602,628 67,450,827 65,451,929 62,343,059 Primary governmentNet investment in capital assets129,173,882 135,403,535 135,944,214 94,231,403 89,920,470 75,841,537 63,462,787 56,730,592 53,200,218 Restricted24,026,098 25,917,231 24,802,821 71,211,823 78,650,015 99,532,931 101,665,713 99,802,519 98,699,628 Unrestricted106,866,916 97,234,625 94,409,137 (34,679,356) (58,675,685) (64,088,725) (62,681,736) (67,469,565) (79,932,670) Total primary government net assets260,066,896$ 258,555,391$ 255,156,172$ 130,763,870$ 109,894,800$ 111,285,743$ 102,446,764$ 89,063,546$ 71,967,176$ Note: The City began to report accrual information when it implemented GASB Statement 34 infiscal year 2003. The City implemented the retroactive reporting of infrastructure in fiscal year 2007.The City is reporting its ten year history with the implementation of GASB 44 in fiscal year 2006. 146
City of Poway Changes in Net Position Current and Prior Eight Years (accrual basis of accounting) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year EndedJune 30, 2014June 30, 2013June 30, 2012June 30, 2011June 30, 2010June 30, 2009June 30, 2008June 30, 2007June 30, 2006Expenses:Governmental Activities:General Government5,227,809$ 5,981,436$ 14,226,478$ 17,144,376$ 23,947,500$ 23,261,446$ 18,616,222$ 14,559,177$ 15,689,334$ Public Safety20,906,884 20,213,645 19,514,321 18,899,606 19,475,481 19,227,914 19,039,199 18,121,264 17,313,198 Public Works11,863,623 12,283,876 12,484,070 12,622,204 12,595,756 11,213,841 10,607,352 9,100,534 13,023,698 Development Services3,815,282 3,745,329 2,767,969 2,348,622 4,423,865 5,226,071 5,367,148 4,978,301 Community Services6,115,485 5,063,022 4,848,768 14,398,426 25,213,955 16,195,999 18,329,674 16,964,745 19,510,067 Interest and fiscal charges509,206 (249,757) 8,247,159 17,232,642 14,969,311 16,692,399 17,038,330 19,697,044 16,986,839 Transfer to fiduciary funds440,300 444,282 - - - - - - - Total governmental expenses48,878,589 47,481,833 62,088,765 82,645,876 100,625,868 91,817,670 88,997,925 83,421,065 82,523,136 Business-type activities:Water23,314,233 22,367,122 20,652,724 18,143,829 18,226,463 18,697,576 17,534,682 17,371,707 16,009,205 Sewer9,434,739 10,069,336 8,374,223 7,651,228 7,522,634 8,011,470 7,743,880 7,970,848 8,730,098 Total business-type expenses32,748,972 32,436,458 29,026,947 25,795,057 25,749,097 26,709,046 25,278,562 25,342,555 24,739,303 Total primary government expenses81,627,561$ 79,918,291$ 91,115,712$ 108,440,933$ 126,374,965$ 118,526,716$ 114,276,487$ 108,763,620$ 107,262,439$ Program revenues:Governmental Activities:Charges for services:General Government260,802$ 118,347$ 120,126$ 96,397$ 91,745$ 105,084$ 133,893$ 176,938$ 173,484$ Public Safety1,908,337 2,155,607 2,030,510 2,121,984 2,131,729 2,413,197 2,068,632 2,181,971 2,104,975 Public Works2,753,917 2,738,196 3,537,666 4,422,522 4,479,896 4,868,530 4,327,217 4,011,644 3,512,623 Development Services1,534,304 1,384,543 1,049,318 1,584,838 1,332,714 1,388,448 1,522,060 1,451,489 Community Services2,436,024 2,243,495 2,160,596 2,111,476 2,821,718 3,033,466 2,935,862 2,894,396 3,908,179 Operating grants and contributions1,706,081 1,811,203 4,760,819 5,857,360 7,615,477 5,826,044 6,478,997 6,103,045 6,198,885 Capital grants and contributions66,167 99,831 833,137 1,155,384 1,246,555 2,110,463 5,128,657 2,940,273 3,088,436 Total program revenues10,665,632 10,551,222 14,492,172 17,349,961 19,719,834 19,745,232 22,595,318 19,759,756 18,986,582 Business-type activities:Charges for services:Water23,381,953 22,207,174 20,612,607 18,694,318 17,881,695 16,714,571 16,806,379 16,637,705 15,181,771 Sewer7,347,502 7,228,097 7,300,875 8,759,001 8,651,681 8,651,968 8,440,646 7,943,890 7,479,071 Capital grants and contributions- - - - - - - 63,604 66,840 Total program revenues30,729,455 29,435,271 27,913,482 27,453,319 26,533,376 25,366,539 25,247,025 24,645,199 22,727,682 Total primary government program revenue41,395,087$ 39,986,493$ 42,405,654$ 44,803,280$ 46,253,210$ 45,111,771$ 47,842,343$ 44,404,955$ 41,714,264$ Net (expense)/revenueGovernmental activities(38,212,957)$ (36,930,611)$ (47,596,593)$ (65,295,915)$ (80,906,034)$ (72,072,438)$ (66,402,607)$ (63,661,309)$ (63,536,554)$ Business-type activities(2,019,517) (3,001,187) (1,113,465) 1,658,262 784,279 (1,342,507) (31,537) (697,356) (2,011,621) Total primary government net (expense)(40,232,474)$ (39,931,798)$ (48,710,058)$ (63,637,653)$ (80,121,755)$ (73,414,945)$ (66,434,144)$ (64,358,665)$ (65,548,175)$ 147
City of Poway Changes in Net Position Current and Prior Eight Years (accrual basis of accounting) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year EndedJune 30, 2014June 30, 2013June 30, 2012June 30, 2011June 30, 2010June 30, 2009June 30, 2008June 30, 2007June 30, 2006General revenues and Other Changes in Net Position:Governmental Activities:Taxes:Property taxes 20,543,111$ 21,378,147$ 34,713,961$ 50,960,736$ 51,526,758$ 51,190,712$ 50,669,452$ 48,048,249$ 45,725,853$ Sales taxes 12,047,687 13,692,553 11,276,884 10,418,322 9,833,390 10,325,455 12,904,265 13,032,518 13,918,879 Motor vehicle license tax - 22,085 26,685 262,412 150,641 173,673 225,353 273,727 392,240 Transient occupancy tax 523,112 483,568 462,508 433,934 367,434 247,787 206,323 202,767 190,097 Franchise taxes 1,555,816 1,491,227 1,512,878 1,465,926 1,491,231 1,590,066 1,497,724 1,588,677 1,399,524 Other Taxes 3,777,526 1,816,574 626,421 616,466 629,589 597,880 598,965 596,868 609,982 Total taxes 38,447,252 38,884,154 48,619,337 64,157,796 63,999,043 64,125,573 66,102,082 63,742,806 62,236,575 Investment earnings 1,573,545 1,000,883 1,297,998 5,964,802 8,287,516 9,879,153 10,639,352 10,569,205 8,508,647 Miscellaneous 1,846,762 3,374,664 542,954 512,858 1,251,844 607,387 714,405 3,349,606 2,894,418 Sale/disposal of capital assets - - (2,088,434) 13,561,625 - - - - (11,262) Transfers441,725 407,588 2,284,985 350,874 470,498 147,503 331,088 (12,808) 460,810 Extraordinary Item- - 128,406,347 - - - - - - Total governmental activities42,309,284 43,667,289 179,063,187 84,547,955 74,008,901 74,759,616 77,786,927 77,648,809 74,089,188 Business-type activities:Property taxes- - - - - - - - 309,296 Investment earnings217,194 23,733 65,593 254,279 463,177 1,987,778 2,283,493 3,038,852 1,157,563 Contributed capital- - - - 4,225,637 4,720,039 - - - Miscellaneous82,930 47,583 276,439 55,363 503,595 933,994 78,030 754,566 738,337 Transfers(441,725) (407,588) (2,284,985) (350,874) (470,498) (147,503) (331,088) 12,808 (460,810) Total business-type activities(141,601) (336,272) (1,942,953) (41,232) 4,721,911 7,494,308 2,030,435 3,806,226 1,744,386 Total primary government42,167,683$ 43,331,017$ 177,120,234$ 84,506,723$ 78,730,812$ 82,253,924$ 79,817,362$ 81,455,035$ 75,833,574$ Change in Net PositionGovernmental activities4,096,327$ 6,736,678$ 131,466,594$ 19,252,040$ (6,897,133)$ 2,687,178$ 11,384,320$ 13,987,500$ 10,552,634$ Business-type activities(2,161,118) (3,337,459) (3,056,418) 1,617,030 5,506,190 6,151,801 1,998,898 3,108,870 (267,235) Total primary government1,935,209$ 3,399,219$ 128,410,176$ 20,869,070$ (1,390,943)$ 8,838,979$ 13,383,218$ 17,096,370$ 10,285,399$ Notes:The City began to report accrual information when it implemented GASB Statement 34 infiscal year 2003. The City implemented the retroactive reporting of infrastructure in fiscal year 2007.The City is reporting its ten year history with the implementation of GASB 44 in fiscal year 2006.148
City of Poway
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
149
2014 2013 2012 2011 2010
General Fund
Non-spendable 10,134,007$ 10,157,087$ 10,218,860$ 10,151,108$ -$
Restricted - - - - -
Committed 10,026,079 9,999,309 10,019,883 10,037,638 -
Assigned 15,383,344 7,173,822 6,666,188 6,466,719 -
Unassigned 26,624,039 30,695,920 22,906,009 23,955,242 -
Reserved - - - - 4,647,709
Unreserved:
Designated - - - - 31,724,737
Undesignated - - - - -
Total General Fund 62,167,469 58,026,138 49,810,940 50,610,707 36,372,446
All Other Governmental Funds
Non-spendable - - - - -
Restricted 28,126,711 25,929,921 23,733,859 62,455,191 -
Committed - - - - -
Assigned - - - 8,564,840 -
Unassigned - - - (88,658) -
Reserved - - - - 51,660,768
Unreserved:
Designated:
Special revenue funds - - - - -
Debt service funds - - - - -
Capital projects funds - - - - 20,795,704
Undesignated:
Special revenue funds - - - - 5,913,093
Debt service funds - - - - -
Capital projects funds - - - - -
Total all Other Governmental Funds 28,126,711 25,929,921 23,733,859 70,931,373 78,369,565
Total Fund Balance 90,294,180$ 83,956,059$ 73,544,799$ 121,542,080$ 114,742,011$
June 30,
City of Poway
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
150
2009 2008 2007 2006 2005
General Fund
Non-spendable -$ -$ -$ -$ -$
Restricted - - - - -
Committed - - - - -
Assigned - - - - -
Unassigned - - - - -
Reserved 5,561,391 8,478,531 7,538,564 7,389,245 7,885,013
Unreserved:
Designated 32,152,754 31,160,911 30,375,251 27,539,942 25,115,075
Undesignated - - - - -
Total General Fund 37,714,145 39,639,442 37,913,815 34,929,187 33,000,088
All Other Governmental Funds
Non-spendable - - - - -
Restricted - - - - -
Committed - - - - -
Assigned - - - - -
Unassigned - - - - -
Reserved 62,868,328 55,650,435 43,663,739 39,477,985 35,478,892
Unreserved:
Designated:
Special revenue funds - - - 7,760,635 8,816,961
Debt service funds - - - - -
Capital projects funds 24,840,402 32,578,654 43,037,658 - -
Undesignated:
Special revenue funds 5,982,341 4,676,562 5,278,620 6,014,938 7,795,241
Debt service funds - - - - -
Capital projects funds - - - 37,769,191 42,511,597
Total all Other Governmental Funds 93,691,071 92,905,651 91,980,017 91,022,749 94,602,691
Total Fund Balance 131,405,216$ 132,545,093$ 129,893,832$ 125,951,936$ 127,602,779
June 30,
City of Poway
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
151
2014 2013 2012 2011 2010
Revenues
Taxes 38,447,252$ 38,996,849$ 51,939,098$ 66,623,806$ 67,411,848$
Licenses and permits 561,251 543,838 507,908 457,905 433,517
Intergovernmental 828,278 1,062,851 1,564,484 1,800,145 2,994,005
Charges for services 2,386,206 1,671,506 1,439,891 3,232,221 3,140,274
Fines and forfeitures 184,855 527,006 554,570 678,468 750,551
Use of money and property 1,495,911 2,188,570 3,291,466 7,821,732 12,180,028
Developer Fees 4,806,170 4,029,232 3,279,373 4,516,243 3,711,578
Assessment levied 1,898,872 1,895,888 1,874,967 1,902,409 1,886,300
Other revenues 1,834,531 2,862,343 497,517 729,933 2,228,662
Total revenues 52,443,326 53,778,083 64,949,274 87,762,862 94,736,763
Expenditures
Current:
General government 4,202,841 4,239,824 5,798,899 2,680,162 6,056,348
Public safety 20,433,826 19,536,711 18,889,733 18,328,287 18,966,380
Public works 9,639,766 9,971,383 10,084,437 9,990,368 9,943,681
Development services 3,830,435 3,779,577 2,807,935 2,388,077 4,475,943
Community services 4,912,545 4,733,922 4,678,369 9,894,345 9,048,983
Capital outlay 2,282,947 860,039 8,542,370 16,818,821 27,639,839
Debt service:
Principal 700,000 635,000 2,405,000 6,703,020 7,150,000
Principal-early retirement-sale of capital asset - - - 26,720,000 -
Interest and fiscal charges 506,527 570,087 6,820,619 17,972,119 14,943,766
Transfers to fiduciary funds 440,300 444,282 - - -
Debt Issuance Costs - - - - -
Tax shift - - - 2,820,770 13,700,882
Tax increment reimbursements - - 48,711 5,948,554 2,380,740
Total expenditures 46,949,187 44,770,825 60,076,073 120,264,523 114,306,562
Excess of revenues over (under) expenditures 5,494,139 9,007,258 4,873,201 (32,501,661) (19,569,799)
Other Financing Sources (Uses)
Proceeds from issuance of debt - 14,350,000 105,109 169,930 161,049
Refunding bond activity -net - (15,013,350) - - -
Proceeds from sale of capital assets - 842,166 - 38,300,000 -
Transfers in (out) net 843,982 1,225,186 3,823,436 831,800 2,745,545
Total other financing sources 843,982 1,404,002 3,928,545 39,301,730 2,906,594
Extraordinary Items
Loss on dissolution of Poway Redevelopment Agency - - (56,799,027) - -
Net change in fund balance 6,338,121$ 10,411,260$ (47,997,281)$ 6,800,069$ (16,663,205)$
Debt service as a percentage of noncapital expenditures 3.1%3.3%17.9%22.1%21.3%
Note: The City implemented GASB 34 beginning with the fiscal year ended June 30, 2003. Prior to that time, interfund loans were
treated as "Other Financing Sources" and classified as "Proceeds from issuance of debt" in the fund receiving the loan.
Year Ended June 30,
City of Poway
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
152
2009 2008 2007 2006 2005
Revenues
Taxes 66,062,646$ 68,817,462$ 63,810,241$ 62,042,614$ 55,406,112$
Licenses and permits 422,948 328,159 330,755 296,935 288,716
Intergovernmental 2,889,804 3,971,720 4,336,767 5,796,558 4,637,517
Charges for services 2,954,967 2,676,329 4,419,664 7,557,159 7,607,467
Fines and forfeitures 852,535 803,552 720,949 732,633 273,322
Use of money and property 14,862,137 15,516,351 16,120,443 13,459,180 13,535,451
Developer Fees 3,897,877 3,780,128 4,509,741 489,210 536,404
Assessment levied 1,873,179 1,892,326 1,868,567 1,845,859 1,835,519
Other revenues 1,013,135 2,568,693 1,389,762 1,157,139 2,525,614
Total revenues 94,829,228 100,354,720 97,506,889 93,377,287 86,646,122
Expenditures
Current:
General government 6,733,135 7,252,320 9,614,109 9,552,247 11,114,009
Public safety 18,673,036 18,528,701 17,897,811 16,563,059 17,304,746
Public works 8,566,157 8,009,622 6,556,796 11,338,373 4,865,184
Development services 5,279,297 5,420,200 5,028,405 - -
Community services 9,741,990 12,593,136 11,877,425 11,884,718 10,671,636
Capital outlay 17,981,861 18,354,376 14,205,962 18,802,010 31,981,651
Debt service:
Principal 6,855,000 6,560,000 6,470,000 5,875,000 6,706,720
Principal-early retirement-sale of capital asset - - - - -
Interest and fiscal charges 16,732,005 17,077,417 17,896,630 17,101,983 16,482,351
Transfers to fiduciary funds - - - - -
Debt Issuance Costs - - - - 255,302
Tax shift - - - 1,674,851 2,549,564
Tax increment reimbursements 6,205,709 5,515,447 4,889,025 3,831,350 2,380,488
Total expenditures 96,768,190 99,311,219 94,436,163 96,623,591 104,311,651
Excess of revenues over (under) expenditures (1,938,962) 1,043,501 3,070,726 (3,246,304) (17,665,529)
Other Financing Sources (Uses)
Proceeds from issuance of debt 154,734 151,285 148,273 149,563 8,499,883
Refunding bond activity -net - - (184,586) - (9,301,120)
Proceeds from sale of capital assets - - - - 232,168
Transfers in (out) net 644,351 1,456,475 907,483 1,445,898 506,234
Total other financing sources 799,085 1,607,760 871,170 1,595,461 (62,835)
Extraordinary Items
Loss on dissolution of Poway Redevelopment Agency - - - - -
Net change in fund balance (1,139,877)$ 2,651,261$ 3,941,896$ (1,650,843)$ (17,728,364)$
Debt service as a percentage of noncapital expenditures 25.8%26.2%29.1%26.4%27.3%
Note: The City implemented GASB 34 beginning with the fiscal year ended June 30, 2003. Prior to that time, interfund loans were
treated as "Other Financing Sources" and classified as "Proceeds from issuance of debt" in the fund receiving the loan.
Year Ended June 30,
City of Poway Assessed Value of Taxable Property Last Ten Fiscal Years Fiscal YearAssessed ValueChangeEstimatedTotalEndedPersonalNet TaxableFromTaxDirectJune 30,LandImprovements PropertyTotalExemptionsValuePrior Year Revenues Tax Rate20052,611,610,220$ 3,535,334,922$ 187,042,681$ 6,333,987,823$ (214,007,737)$ 6,119,980,086$ 7.88% 6,895,981$ 0.211%20062,991,468,898 3,840,250,821 245,308,882 7,077,028,601 (217,368,560) 6,859,660,041 12.09% 7,615,898 0.211%20073,230,084,121 4,191,380,246 278,291,264 7,699,755,631 (229,216,072) 7,470,539,559 8.91% 8,358,741 0.211%20083,525,237,590 4,412,172,141 272,804,881 8,210,214,612 (229,932,712) 7,980,281,900 6.82% 8,939,836 0.211%20093,647,796,486 4,472,160,193 254,000,489 8,373,957,168 (244,967,192) 8,128,989,976 1.86% 9,117,319 0.211%20103,640,861,781 4,548,446,929 288,729,686 8,478,038,396 (261,984,967) 8,216,053,429 1.07% 9,024,247 0.211%20113,606,251,228 4,540,602,915 276,448,124 8,423,302,267 (255,814,376) 8,167,487,891 -0.59% 9,005,230 0.211%20123,638,418,566 4,608,371,669 286,292,343 8,533,082,578 (270,186,598) 8,262,895,980 1.17% 9,212,214 0.211%20133,604,077,934 4,615,585,498 294,522,436 8,514,185,868 (288,745,114) 8,225,440,754 -0.45% 9,151,456 0.211%20143,770,334,144 4,733,730,176 298,807,480 8,802,871,800 (301,978,962) 8,500,892,838 3.35% 9,489,978 0.211%Source: San Diego County Assessors OfficeIn 1978 the voters of the State of California passed Proposition 13 which resulted in dramatic tax reform as it relates toproperty tax collections. Proposition 13 established a property tax of 1% based upon the assessed value of the propertybeing taxed. Each year the assessed value of property may be increased by an "inflation factor" that may not exceed 2%. With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point the new assessedvalue is fixed at the purchase price of the property. Due to the nature of Proposition 13, over time the assessed value basehas become significantly undervalued when compared to the true market value of the property. Because the true marketvalue is not tied to any type of annual valuation process, there is no reliable means of determining the market value of theparcels within the City and therefore this amount is not disclosed. 153
City of Poway
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
154
Overlapping Rates
Poway Educational Palomar Total 1%
Fiscal Year City Unified Revenue Community Property
Ended Direct School San Diego Augmentation College All Tax
June 30, Rate District County Fund District Other Rate
2005 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2006 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2007 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2008 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2009 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2010 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2011 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2012 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2013 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2014 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
Rates for Voter Approved Bond Indebtedness
Total 1% Poway Total
Fiscal Year Property Unified Property
Ended Tax City School All Tax
June 30, Rate Rate District Other Rate
2005 1.000% 0.007% 0.047% 0.006% 1.060%
2006 1.000% 0.007% 0.043% 0.023% 1.072%
2007 1.000% 0.000% 0.046% 0.022% 1.069%
2008 1.000% 0.000% 0.045% 0.032% 1.077%
2009 1.000% 0.000% 0.047% 0.035% 1.082%
2010 1.000% 0.000% 0.055% 0.031% 1.086%
2011 1.000% 0.000% 0.055% 0.042% 1.097%
2012 1.000% 0.000% 0.055% 0.041% 1.096%
2013 1.000% 0.000% 0.055% 0.041% 1.096%
2014 1.000% 0.000% 0.055% 0.040% 1.095%
In 1978 the voters of the State of California passed Proposition 13 which resulted in dramatic tax reform as it relates to property tax
collections. Proposition 13 established a property tax of 1% based upon the assessed value of the property being taxed. The 1.00%
is shared by all taxing agencies which the subject property resides within. Because the rate is fixed at 1.00%, each agency's portion of
the 1.00% does not change materially from year-to-year. Rates over the 1.00% are for voter approved bonded indebtedness.
Source: San Diego County Assessors Office
City of Poway
Principal Secured Property Tax Payers
Current Year and Nine Years Ago
155
2014 2005
Taxable % of Total Taxable % of Total
Assessed City Assessed Assessed City Assessed
Secured Value Rank Secured Value Secured Value Rank Secured Value
Sorrento West Properties Inc 184,133,360$ 1 2.09%
Ventas Inc 76,048,361 2 0.86%
HCPLS Poway I LLC 72,295,572 3 0.82%
San Miguel Valley Corp 44,572,162 4 0.51%
Sysco Food Services 39,900,000 5 0.45%25,832,631$ 6 0.41%
Hometown Poway Royal Estates LLC 39,717,270 6 0.45%
Toray Membrane USA Inc 34,050,825 7 0.39%
Poway Crossings Investors LLC 30,373,282 8 0.35%
Costco Wholesale Corp 29,850,000 9 0.34%31,745,888 3 0.50%
PR Stowe LLC 28,377,812 10 0.32%
Slough Poway I LLC 40,073,490 1 0.63%
Prudential Insurance 36,622,894 2 0.58%
Al Dust Properties, LLC 29,893,771 4 0.47%
Government Employees Insurance Co.27,850,214 5 0.44%
Resmed Corporation 25,259,782 7 0.40%
PCF Funding Inc.23,326,524 8 0.37%
Cohu Inc.22,922,335 9 0.36%
Regency Centers LP 21,356,996 10 0.34%
579,318,644$ 6.58%284,884,525$ 4.50%
Source: San Diego County Assessors Office
City of Poway Assessed Value of Taxable Property Successor Agency & Redevelopment Tax Increment Property Tax Last Ten Fiscal Years Fiscal YearAssessed ValueChange Estimated TotalEnded Personal Base Year Net Taxable From Tax DirectJune 30, Land Improvements Property Total Exemptions Values Value Prior Year Revenues Tax RateRedevelopment Agency2005 1,190,799,171$ 1,756,732,835$ 145,512,135$ 3,093,044,141$ (51,334,639)$ (186,287,869)$ 2,855,421,633$ 8.02% 29,031,365$ 1.017%2006 1,366,315,823 1,923,849,526 205,148,011 3,495,313,360 (54,732,751) (186,287,869) 3,254,292,740 13.97% 33,064,572 1.016%2007 1,455,401,981 2,087,221,327 219,066,696 3,761,690,004 (61,891,980) (186,287,869) 3,513,510,155 7.97% 35,445,525 1.009%2008 1,590,220,327 2,198,461,319 212,387,349 4,001,068,995 (66,618,692) (186,287,869) 3,748,162,434 6.68% 37,854,271 1.010%2009 1,666,217,121 2,208,050,046 191,508,808 4,065,775,975 (66,638,280) (186,287,869) 3,812,849,826 1.73% 38,500,704 1.010%2010 1,698,144,577 2,286,610,454 213,648,005 4,198,403,036 (68,141,344) (186,287,869) 3,943,973,823 3.44% 39,822,711 1.010%2011 1,669,652,573 2,277,541,902 210,644,139 4,157,838,614 (67,140,049) (186,287,869) 3,904,410,696 -1.00% 39,482,933 1.011%Successor Agency2012 1,645,381,909 2,296,714,929 219,462,356 4,161,559,194 (73,438,572) (186,287,869) 3,901,832,753 -0.07% 39,018,328 1.000%2013 1,625,001,094 2,299,815,065 244,826,073 4,169,642,232 (90,214,209) (186,287,869) 3,893,140,154 -0.22% 38,931,402 1.000%2014 1,673,995,306 2,366,297,428 249,192,369 4,289,485,103 (94,861,189) (186,287,869) 4,008,336,045 2.96% 40,083,360 1.000%In 1978 the voters of the State of California passed Proposition 13 which resulted in dramatic tax reform as it relates to property tax collections. Proposition 13 established a property tax of 1% based upon the assessed value of the property being taxed. Each year the assessed value of property may be increased by an "inflation factor" that may not exceed 2%. With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point the new assessed value is fixed at the purchase price of the property.Due to the nature of Proposition 13, over time the assessed value base has become significantly undervalued when compared to the truemarket value of the property. Because the true market value is not tied to any type of annual valuation process, there is no reliablemeans of determining the market value of the parcels within the City and therefore this amount is not disclosed.AB XI 26 dissolved all Redevelopment Agencies in California and created Successor Agencies to manage the dissolution process which will last the life of each agency. Poway's Redevelopment Agency was scheduled to expire in January 2037.Source: San Diego County Assessors Office 156
City of Poway
Redevelopment Property Tax Levies and Collections
Fiscal Years 2004‐05 through 2011‐12
157
Within The Year of Levy Collections
Fiscal Year Current Current Percent From Prior
Ended Secured Secured of Levy Years'Total
June 30,Tax Levy Collected Collected Levies Collections
2005 28,914,339$ 28,583,331$ 98.86%387,359$ 28,970,690$
2006 32,938,833 32,397,596 98.36%494,520 32,892,116
2007 35,319,838 34,426,834 97.47%629,698 35,056,532
2008 37,650,893 36,657,780 97.36%930,938 37,588,718
2009 38,031,377 37,099,651 97.55%1,465,939 38,565,590
2010 39,609,344 38,592,272 97.43%1,495,015 40,087,287
2011 39,189,880 38,684,907 98.71%1,399,870 40,084,777
2012 39,162,627 21,655,038 55.30%580,773 22,235,811
Source: San Diego County Assessors Office
Note 1: San Diego County does not break out prior years' collections by fiscal year, therefore, the amount reported in the
Collections From Prior Years' Levies column is the cumulative amount collected during that fiscal year for
all prior year levies, not the amount related to each fiscal year.
Note 2: As part of AB XI 26 the Agency's last tax increment distribution was received in January 2012. Consequently,
the Percent of Levy Collected was only 55.30%.
Note 3: AB XI 26 dissolved all Redevelopment Agencies in California and created Successor Agencies to manage the
dissolution process which will last the life of each agency. Poway's Redevelopment Agency was scheduled
to expire in January 2037.
City of Poway General Property Tax Levies and Collections Last Ten Fiscal Years Within The Year of LevyCumulative Prior Years of LevyTotal Collections to DateFiscal YearCurrentCurrentPercentCollectionsPercentEndedSecuredSecuredof LevyPrior From Prior of Prior Year'sTotalTotalJune 30,Tax LevyCollectedCollected Year's Levies Year's Levies Levies CollectedLeviesCollections Percentage200515,074,377$ 14,925,461$ 99.01% 217,086$ 125,713$ 57.91%15,291,463$ 15,051,174$ 98.43%200615,924,752 15,669,141 98.39% 265,490 154,00658.01%16,190,242 15,823,147 97.73%200716,494,681 16,171,714 98.04% 420,812 269,86764.13%16,915,493 16,441,581 97.20%200817,034,013 16,641,698 97.70% 543,797 329,51760.60%17,577,810 16,971,215 96.55%200917,295,459 16,805,480 97.17% 674,580 378,56256.12%17,970,039 17,184,042 95.63%201016,665,674 16,276,757 97.67% 849,654 490,66857.75%17,515,328 16,767,426 95.73%201114,772,947 14,515,679 98.26% 808,521 411,30550.87%15,581,468 14,926,983 95.80%201214,976,590 14,752,163 98.50% 702,501 232,77333.13%15,679,092 14,984,936 95.57%201315,044,676 14,897,994 99.03% 550,273 214,57138.99%15,594,949 15,112,565 96.91%201415,325,043 15,160,972 98.93% 507,586 226,14644.55%15,832,630 15,387,118 97.19%Source: San Diego County Assessors OfficeNote: San Diego County does not break out prior years' collections by fiscal year, therefore, the amount reported in the Collections From Prior Years' Levies column is the cumulative amount collected during that fiscal year for all prior year levies, not the amount related to each fiscal year. 158
City of Poway
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
159
Fiscal Year Tax Certificates
Ended Allocation of Capital Loan General
June 30,Bonds Participation Leases Payable Obligation
2005 256,350,000$ 55,395,000$ 43,565$ 2,120,310$ 525,000$
2006 251,675,000 54,195,000 - 2,169,647 -
2007 247,395,000 52,810,000 - 2,201,788 -
2008 242,280,000 51,365,000 - 2,250,467 -
2009 236,940,000 49,850,000 - 2,282,702 -
2010 231,385,000 48,255,000 - 2,400,513 -
2011 225,610,000 20,690,000 - 2,542,009 -
2012 219,430,000 19,810,000 - 2,672,503 -
2013 212,735,000 18,680,000 - 2,780,463 -
2014 205,715,000 17,615,000 - 2,885,549 -
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source: City of Poway Administrative Services Department
Governmental Activities
City of Poway
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
160
Business-type
Activities
Fiscal Year Total Percentage
Ended Revenue Capital Contract Primary of Personal Per
June 30, Bonds Leases Payable Government Income Capita
2005 2,250,000$ 18,213$ 5,407$ 316,707,495$ 15.64% 6,250
2006 2,095,000 - - 310,136,653 14.36% 6,136
2007 1,930,000 - - 304,338,795 13.48% 5,987
2008 1,760,000 - - 297,657,475 12.39% 5,825
2009 1,580,000 - - 290,654,711 12.44% 5,685
2010 1,390,000 - - 283,432,523 12.22% 5,445
2011 1,190,000 - - 250,034,020 11.37% 5,192
2012 975,000 - - 242,889,515 10.59% 5,020
2013 750,000 - - 234,947,476 9.71% 4,838
2014 515,000 - - 226,730,549 9.31% 4,629
City of Poway
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
161
Outstanding
General
Bonded Debt
Fiscal Year Tax Percent of
Ended Allocation Assessed Per
June 30, Bonds Value (a) Capita
2005 256,350,000$ 4.05% 5,059
2006 251,675,000 3.56% 4,980
2007 247,395,000 3.21% 4,867
2008 242,280,000 2.95% 4,741
2009 236,940,000 2.83% 4,634
2010 231,385,000 2.73% 4,445
2011 225,610,000 2.68% 4,685
2012 219,430,000 2.57% 4,535
2013 212,735,000 2.50% 4,381
2014 205,715,000 2.34% 4,200
Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(a) Assessed value has been used because the actual value of taxable property is not readily
available in California.
Source: City of Poway Administrative Services Department
City of Poway
Direct and Overlapping Debt
As of June 30, 2014
162
2013-14 Assessed Valuation:8,575,806,518$
Estimated Share
Debt %of Overlapping
OVERLAPPING TAX AND ASSESSMENT DEBT:Outstanding Applicable (1)Debt
Metropolitan Water District 132,275,000$ 0.391%517,195$
Palomar Community College District 312,768,901 9.188%28,737,207
Poway Unified School District School Facilities Improvement District No. 2002-1 165,364,320 39.806% 65,824,921
Poway Unified School District School Facilities Improvement District No. 2007-1 178,999,086 40.254% 72,054,292
Escondido Union High School District 97,117,515 0.098%95,175
San Pasqual Union School District 458,792 2.797%12,832
Palomar Pomerado Hospital District 474,823,578 13.348%63,379,451
Poway Unified School District Community Facilities District No. 1 23,650,000 0.709%167,679
City of Poway Community Facilities District No. 88-1 4,590,000 100.000%4,590,000
City of Poway 1915 Act Bonds 218,975 100.000%218,975
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 1,390,266,167$ 235,597,727$
DIRECT & OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations 379,835,000$ 2.171%8,246,218$
San Diego County Pension Obligations 720,855,256 2.171%15,649,768
San Diego County Superintendent of Schools General Fund Obligations 16,125,000 2.171%350,074
Palomar Community College District Certificates of Participation 4,855,000 9.188%446,077
Escondido Union High School District Certificates of Participation 59,525,000 0.098%58,335
Poway Unified School District Certificates of Participation 62,498,869 25.060%15,662,217
City of Poway Certificates of Participaton 16,000,000 100.000%16,000,000
TOTAL OVERLAPPING GENERAL FUND DEBT 1,259,694,125$ 56,412,689$
OVERLAPPING TAX INCREMENT DEBT (Successor Agency):
Tax Allocation Bonds 205,715,000$ 100.000% 205,715,000$
Certificates of Participation 1,615,000 100.000%1,615,000
TOTAL OVERLAPPING TAX INCREMENT DEBT 207,330,000$ 207,330,000$
TOTAL DIRECT DEBT 16,000,000$
TOTAL OVERLAPPING DEBT 483,340,416$
COMBINED TOTAL DEBT 499,340,416$ (2)
Ratios to 2013-14 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 2.75%
Total Direct Debt 0.19%
Combined Total Debt 5.82%
Ratios to Redevelopment Successor Agency Incremental Valuation ($4,008,336,045):
Total Overlapping Tax Increment Debt 5.17%
Notes:
(1) The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable
percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries
of the City divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule
estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses
of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire
debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every
taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
Source: California Municipal Statistics, Inc.
City of Poway
Legal Debt Margin Information
Last Ten Fiscal Years
163
2014 2013 2012 2011 2010
Assessed valuation 4,567,470,473$ 4,408,143,750$ 4,437,851,067$ 4,340,755,570$ 4,350,898,397$
Conversion percentage 25%25%25%25%25%
Adjusted assessed valuation 1,141,867,618 1,102,035,938 1,109,462,767 1,085,188,893 1,087,724,599
Debt limit percentage 15%15%15%15%15%
Debt limit 171,280,143 165,305,391 166,419,415 162,778,334 163,158,690
Total net debt applicable to limit:
General obligation bonds - - - - -
Legal debt margin 0.00%0.00%0.00%0.00%0.00%
The Government Code of the State of California provides for a legal debt limit of
15% of gross assessed valuation. However, this provision was enacted when
assessed valuation was based upon 25% of market value. Effective with the 1981-82
fiscal year, each parcel is now assessed at 100% of market value (as of the most
recent change in ownership for that parcel). The computations shown above reflect
a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25% level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located
within the state.
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source:
City of Poway Administrative Services Department
San Diego County Assessors Office
FISCAL YEAR
City of Poway
Legal Debt Margin Information
Last Ten Fiscal Years (Continued)
164
2009 2008 2007 2006 2005
Assessed valuation 4,394,570,216$ 4,310,588,610$ 4,035,420,029$ 3,683,578,609$ 3,341,441,046$
Conversion percentage 25%25%25%25%25%
Adjusted assessed valuation 1,098,642,554 1,077,647,153 1,008,855,007 920,894,652 835,360,262
Debt limit percentage 15%15%15%15%15%
Debt limit 164,796,383 161,647,073 151,328,251 138,134,198 125,304,039
Total net debt applicable to limit:
General obligation bonds - - - - 243,728
Legal debt margin 0.00%0.00%0.00%0.00%0.19%
The Government Code of the State of California provides for a legal debt limit of
15% of gross assessed valuation. However, this provision was enacted when
assessed valuation was based upon 25% of market value. Effective with the 1981-82
fiscal year, each parcel is now assessed at 100% of market value (as of the most
recent change in ownership for that parcel). The computations shown above reflect
a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25% level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located
within the state.
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source:
City of Poway Administrative Services Department
San Diego County Assessors Office
FISCAL YEAR
City of Poway
Pledged Revenue Coverage
Last Ten Fiscal Years
165
Tax Allocation Bonds
Fiscal Year Debt Service
Ended Tax RPTTF
June 30, Increment Distribution Principal Interest Total Coverage
2005 30,428,470$ 4,560,000$ 13,740,175$ 18,300,175$ 1.66
2006 34,109,857 4,675,000 12,781,669 17,456,669 1.95
2007 36,011,865 5,085,000 12,328,271 17,413,271 2.07
2008 38,256,892 5,115,000 12,299,556 17,414,556 2.20
2009 38,940,302 5,340,000 12,068,451 17,408,451 2.24
2010 39,377,603 5,555,000 11,877,545 17,432,545 2.26
2011 39,015,261 5,775,000 11,658,142 17,433,142 2.24
2012 21,926,632 16,047,570$ 6,180,000 11,411,148 17,591,148 2.16
2013 - 39,511,570 6,695,000 11,169,832 17,864,832 2.21
2014 - 40,907,419 7,020,000 10,889,354 17,909,354 2.28
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
RPTTF is the acronym for the Redevelopment Property Tax Trust Fund
Source: City of Poway Administrative Services Department
City of Poway
Demographic and Economic Statistics
Last Ten Calendar Years
166
Per
Capita
Calendar Personal Personal Labor Unemployment
Year Population Income Income Force Rate
2005 50,675 2,025,072,272$ 39,962$ 27,300 2.5%
2006 50,542 2,159,204,782 42,721 27,400 2.4%
2007 50,830 2,258,376,900 44,430 28,000 2.7%
2008 51,103 2,402,914,163 47,021 28,600 3.5%
2009 51,126 2,336,764,956 45,706 28,100 6.1%
2010 52,056 2,318,838,039 44,545 28,000 6.3%
2011 48,155 2,198,908,930 45,663 27,900 6..2%
2012 48,382 2,292,564,112 47,385 28,600 5.5%
2013 48,559 2,418,759,897 49,811 29,100 4.3%
2014 48,979 2,434,069,144 49,696 28,900 3.6%
Source:
Population - State of California Department of Finance
Personal Income - State of California Department of Finance/U.S. Bureau of Economic Analysis
Employment Information - State of California Employment Development Department - Fiscal Year
City of Poway
Principal Employers
Current Year and Eight Years Prior
167
2014 2006
Percent of Percent of
Number of Total Number of Total
Employer Employees Rank Employment Employees Rank Employment
General Atomics Aeronautical Systems 5,000 1 17.30%
Geico Direct 1,720 2 5.95%1,800 1 6.57%
Poway Unified School District 1,258 3 4.35%758 5 2.77%
Delta Design, Inc.750 4 2.60%1,000 3 3.65%
Pomerado Hospital 738 5 2.55%750 6 2.74%
Sysco Food Services of SD 475 6 1.64%500 8 1.82%
H. M. Electronics Inc.315 7 1.09%935 4 3.41%
Walmart 300 8 1.04%
Neal Electric Corp.275 9 0.95%
Target 275 10 0.95%
HNR Framing 1,200 2 4.38%
Disguise, Inc 600 7 2.19%
Cor-O-Van 400 9 1.46%
Digirad Corporation 375 10 1.37%
Total 11,106 38.43% 8,318 30.36%
Total City Labor Force 28,900 27,400
Source:
City of Poway Economic Development Division-by employer
State of California Employment Development Department-total employment
Note:
Information on Principal Employers from nine years back is not available so
information from the year 2006 will be used for the comparison until 2016.
City of Poway
Full‐Time‐Equivalent City Employees by Function
Last Ten Fiscal Years
168
Function 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
General government 28.00 27.00 31.00 33.00 40.00 35.00 37.00 38.00 38.00 40.00
Public Safety (a)54.00 54.00 54.00 54.00 54.00 57.00 57.00 57.00 57.00 58.00
Public works 79.00 81.00 85.00 84.00 83.00 92.00 92.00 90.00 90.00 84.00
Redevelopment Services - - - 9.00 9.00 9.00 9.00 10.00 10.00 11.00
Community Services 20.00 20.00 20.00 20.00 20.00 27.00 28.00 29.00 28.00 28.00
Development Services 22.00 23.00 30.00 29.00 29.00 37.00 36.00 37.00 37.00 36.00
203.00 205.00 220.00 229.00 235.00 257.00 259.00 261.00 260.00 257.00
Notes:
Amounts shown are the number of positions approved in each operating budget for the fiscal year.
(a) Law enforcement services are provided through contract with the County of San Diego Sheriff.
The City is reporting its ten year history starting with the implementation of GASB 44 in fiscal year 2006,
and in this instance was able to add an additional two years.
Source: City of Poway Financial Plan
City of Poway
Operating Indicators
Current and Prior Eight Years
169
Function 201420132012201120102009200820072006
General government:
Business registrations issued 1,285 1,522 1,418 1,317 1,192 942 1,240 1,071 792
Vendor payments processed 6,426 6,770 7,020 7,063 7,804 8,936 10,230 10,562 10,782
Public Safety:
Arrests made 1,069 1,038 1,123 1,145 1,334 1,015 1,052 981 1,898
Fire emergency responses 4,099 3,846 3,638 3,811 3,691 3,711 3,907 3,460 3,602
Safety Inspections 2,899 2,687 2,474 2,863 1,606 2,104 4,827 4,024 3,196
Development Services:
Building permits issued (1)1,504 1,345 1,237 1,176 1,144 1,157 1,441 2,740 3,048
Building inspections 8,221 8,349 5,981 6,126 6,580 7,417 9,280 11,264 11,163
Culture and recreation:
Performing arts center attendance 55,652 59,389 59,897 53,249 61,214 68,993 74,420 64,728 67,004
Library-number of holdings in collection 93,951 75,000 96,000 104,367 125,977 124,977 124,977 124,977 120,628
Library-number of holdings circulated 709,823 782,288 693,783 765,704 638,494 562,865 545,279 492,501 390,974
Athletic field permits issued 282 156 161 152 148 144 140 124 214
Highways and streets:
Roads resurfaced in square feet 299,038 188,561 201,968 207,968 290,877 600,000 600,000 200,000 16,000
Roads slurry sealed in square feet 4,379,695 3,928,425 4,563,496 4,369,160 4,369,503 4,980,000 5,000,000 5,000,000 5,000,000
Pot holes repaired/work orders (2)175 644 1,323 571 193 147 46 36 35
Water:
Residential water customers 12,674 12,509 12,523 12,439 12,492 12,458 12,588 12,556 12,530
Commercial water customers 645 529 464 496 514 514 510 514 511
Average daily consumption (mg)10.66 10.16 9.36 8.99 9.57 11.61 12.82 13.83 13.37
Sewer:
Residential sewer customers 11,498 11,474 11,383 11,241 11,225 11,191 11,175 11,180 11,322
Commercial sewer customers 627 623 782 770 774 770 771 755 532
Average daily treatment (mg)2.73 2.86 3.01 3.27 3.15 3.43 3.24 3.25 3.42
Source:
City of Poway
The City is reporting its ten year history starting with the implementation of GASB 44 in fiscal year 2006.
(1) In Fiscal Year 2007-08 the Development Services Department changed the method used to
count the number of permits issued which led to the large decrease from the previous year.
(2) In Fiscal Year 2008-09 the Public Works Department began reporting pot holes fixed rather than
pot holes work orders.
City of Poway
Capital Assets Statistics
Current and Prior Eight Years
170
Function 2014 2013 2012 2011 2010 2009 2008 2007 2006
Public Safety:
Number of fire stations 3 3 3 3 3 3 3 3 3
Number of sheriff stations 1 1 1 1 1 1 1 1 1
Public works:
Total number of streetlights 3,059 3,059 3,073 3,073 3,045 3,045 3,026 2,889 2,874
Signal controlled intersections 56 55 55 55 55 55 55 55 53
Health and welfare
Senior center facilities 1 1 1 1 1 1 1 1 1
Culture and recreation
Number of Libraries 1 1 1 1 1 1 1 1 1
Number of Performing Arts Centers 1 1 1 1 1 1 1 1 1
Number of Parks 19 19 19 19 18 18 18 18 18
Acres of developed parks 232 232 232 232 232 232 232 232 232
Number of reserves/preserves 2 2 2 2 2 2 2 2 2
Acres of reserves/preserves 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400
Miles of trails 56 56 56 56 56 56 56 56 56
Highways and streets
Miles of roadway 165 165 165 165 165 165 165 165 165
Water
Miles of water lines 289 289 289 289 253 253 253 253 253
Water storage capacity (billon/gallons)1.11 1.11 1.11 1.11 1.11 1.11 1.11 1.11 1.11
Sewer
Miles of sewer lines 186 186 186 186 175 175 175 175 175
Miles of storm sewers 64 64 64 64 64 64 64 64 64
Source:
City of Poway
The City is reporting its ten year history starting with the implementation of GASB 44 in fiscal year 2006.
P.O. Box 789, Poway, California 92074-0789(858) 668-4400