ACFR FY 2017-2018Poway Community Swim Center Splash Pad
Comprehensive Financial Report
For the Year Ended June 30, 2018
C ITY OF POWAY, CALIFORNIA
City of Poway
Poway, California
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
Prepared by the
Finance Department
of the
City of Poway
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City of Poway
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
Table of Contents
……..i
……vi
…..vii
viii
…...1
…..4
Basic Financial Statements:
Government - Wide Financial Statements:
18
20
Fund Financial Statements:
Governmental Fund Financial Statements:
23
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position…………….………….…...………………….…………………………… 24
Statement of Revenues, Expenditures, and Changes in Fund
Balance - Governmental Funds……………..….………………………………..……………………...……25
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities …………………..……………...…26
Proprietary Fund Financial Statements:
Statement of Net Position…………………………………………………….…………….……………..……28
Statement of Revenues, Expenses and Changes in Net Position…………..…………………….……… 29
Statement of Cash Flows………………………..………..………………………………………….…………30
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position…………………………………………………..………………..………33
Statement of Changes in Fiduciary Net Position…………………………………...………………..………34
35
Required Supplementary Information (Unaudited):
93
94
95
Schedule of Changes in Net Pension Liability and Related
96
Schedule of Plan Contributions, Last 10 Years - Miscellaneous Plan…………………………………………………97
Schedule of the City's Proportionate Share of the Plan's Net Pension Liability and
98
99
Schedule of Changes in Net Pension Liability and Related
100
101
FINANCIAL SECTION
INTRODUCTORY SECTION
Letter of Transmittal………………….…….…………….…………..…….…......……………………………………….…...……
Principal Officers………………….……………...……………………..………………..……..………….………...…..…………
Organization Chart…………….….……..…………………………….….……………………..…………....…………...……...…
GFOA Certificate of Achievement for Excellence in Financial Reporting………………….….….…….……….…..…………
Independent Auditor's Report…………………….…………………...………………………………………………………..
Ratios, Last 10 Years - Miscellaneous Plan………………………………………………………………….……..…
Related Ratios as of the Measurement Date, Last 10 Years - Safety Plan………………………………………
Ratios, Last 10 Years - Retirement Enhancement Plan….……………………………………………………...…
Schedule of Plan Contributions, Last 10 Years - Retirement Enhancement Plan.………………….……...…………
Management's Discussion and Analysis (Unaudited)……...….……………………….…………………………………..
Statement of Net Position……………….....…….……..……………………….…………………………………………
Statement of Activities……………………………………………..……………….….…………….………………………
Balance Sheet - Governmental Funds...……………………………………..…..………………………..………
Notes to Basic Financial Statements……………………………………….………………………………….……..…………
Budgetary Information…………………………..……………....…….……………..…………………………..…………
Budgetary Comparison Schedule - General Fund………………..……………………...….………………..…………
Budgetary Comparison Schedule - Housing Authority Fund………………………………………..….……………...…
Schedule of Plan Contributions, Last 10 Years - Safety Plan……………………………………...……………………
City of Poway
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018 (Continued)
Table of Contents (Continued)
Non-Major Governmental Funds:
106
110
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Non-Major Special Revenue Funds:
Fire Protection……………..……………..……...…………………...………….……………………..……… 114
800 MHz Communication System………….…..……………………………...………..…………….………115
Gas Tax…………………………………….……………………………………….....…………………..………116
Drainage…….………………………...……………………...………...……….………..……………............. 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
Abandoned Vehicle Fees………………………………………………………………………………………129
Habitat In-lieu…………………………………………………………………………………..…...……...……130
Maintenance Districts…………………………………………………………………….…….………………131
Road Repair………………………………………………………………………………………………………132
Non-Major Debt Service Fund:
City Debt Service……………………………..…..…………………….….…………………....………………133
Non-Major Permanent Fund:
Mary Patricia Ross Trust……………...………….………...…………..………………….…………………..134
Non-Major Capital Project Funds:
Park Improvement Capital Projects Fund……………………....…….………….……………...……………135
Street Improvement Capital Projects Fund……………………....…….………….……………...………… 136
Municipal Improvement Capital Projects Fund…………………..….……………..…...……….....…………137
Internal Service Fund
139
140
141
Fiduciary Funds:
143
144
148
Combining Statement of Revenues, Expenditures and Changes in Fund Balance………………….….….............
Statement of Net Position………………………………………………………………………..…………...……………
Statement of Revenues, Expenses and Changes in Net Position…………………………..…………..………………
Statement of Cash Flows………….……………………………………………………………….……..…...……………
Combining Statement of Fiduciary Net Position - Agency Funds………..…………………...…………...……………
Combining Statement of Changes in Assets and Liabilities - Agency Funds………………..…...…………...………
STATISTICAL SECTION (Unaudited)
Combining Balance Sheet…….………………………………………………………………………...………….………
Net Position by Component – Current and Prior Nine Years……………………………………………………………………
City of Poway
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018 (Continued)
Table of Contents (Continued)
150
152
154
156
158
159
160
161
162
163
164
165
166
168
169
170
171
172
174
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters based on an Audit of
Financial Statements Performed in Accordance with
176Government Auditing Standards …….………..….…….…….....…………..…..……………...….………………………
Changes in Net Position – Current and Prior Nine 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 …………………………………………………………………
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 2008-2012………………………………………..
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, 2017…………………………………………………………………………...……
Legal Debt Margin Information – Last Ten Fiscal Years…………………………………………………………………………
Capital Assets Statistics – Current and Prior Nine Years ………………………………………………………………………
Pledged Revenue Coverage – Last Ten Fiscal Years……………………………………………………………………………
Demographic and Economic Statistics – Last Ten Calendar Years ................................................................................
Principal Employers – Current Year and Nine Years Prior ...............................................................................................
Full-Time-Equivalent City Employees by Function – Last Ten Fiscal Years .....................................................................
Operating Indicators – Current and Prior Nine Years …………………………………………………………………...………
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Introductory Section
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City of Poway
Principal Officers
City Council
Mayor Steve Vaus
Deputy Mayor Barry Leonard
Council: Caylin Frank
Dave Grosch
John Mullin
Appointed Officials
City Manager Tina White
City Attorney Alan Fenstermacher
Administrative Personnel
Assistant City Manager Wendy Kaserman
Director of Finance Donna Goldsmith
Director of Human Resources Jodene Dunphy
Director of Development Services Robert Manis
Director of Public Works Michael Obermiller
Director Community Services Robin Bettin
Director of Safety Services Mark Sanchez
City Clerk Nancy Neufeld
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-viii-
Financial Section
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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, 2018, and
the respective changes in financial position, and, where applicable, cash flows thereof for the
year then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information, Schedule of
Proportionate Share of the City's Net Pension Liability and Related Ratios as of the
Measurement Date, Schedules of Changes in Net Pension Liability and Related Ratios and
Schedules of Plan Contributions, as listed in the table of contents, be presented to supplement
the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
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 non-major fund financial statements and 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 generally accepted in the United States of
America. In our opinion, the combining and individual non-major fund financial statements and
budgetary comparison information are fairly stated in all material respects in relation to the
financial statements as a whole.
-3-
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 28, 2019, 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.
San Bernardino, California
January 28, 2019
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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, 2018. 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 total assets increased by 14.6% to $233.6 million, primarily as a result of the
transfer of property from the Successor Agency. Without the transfer total assets increased
by 1.72%, or $3.5 million, which was due to normal operations. During the year, the City’s revenues including program revenues, taxes, and other
governmental revenues were more than governmental and business activity expenses, net
of special items, by $3.5 million. Total revenues from all sources were $99.4 million. Total cost of all City programs was $95.9 million. Governmental net position was $170.4 million. The General Fund reported a Net change in fund balance of $72,877. Actual revenues received in the General Fund were more than the final budget by $4.3
million while actual expenditures were $26.6 million less than final budget before other
financing sources and uses. The expenditure variance is primarily attributable to the Capital
Outlay category which accounted for $23.5 million of the variance. At the end of the fiscal year, unassigned fund balance for the General Fund was $14.1
million or 27.3% of total General Fund expenditures (excluding other financing uses). The impact of Governmental Accounting Standards Board Statement No. 68 Accounting and
Financial Reporting for Pensions (GASB 68) resulted in an increase of pension expense in
the current year.
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 Position 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 Position 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 Position 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 position and changes thereto. Net position, 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 position is an indicator of whether
the financial health is improving or deteriorating.
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
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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 Statement of Net Position 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 Position and the Statement of Activities) and governmental funds through the
reconciliation in the Notes to Basic Financial Statements, Note 1.
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 Position and the Statement
of Activities.
These two statements report the City’s net position and changes thereto. Net position, the
difference between assets and liabilities, is one way to measure the City’s financial health, or
financial position. Over time, increases or decreases in net position are an indicator of whether
the financial health is improving or deteriorating. Again, 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.
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
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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 Position and Changes in Fiduciary Net Position. 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.
The 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 position (Table 1) and changes in net position (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 Position
(in Thousands)
Assets:
Current and
other assets $ 102,011 $ 100,882 $38,908 $33,426 $ 140,919 $ 134,308 $8,091 $ 14,370
Capital assets 121,518 95,823 32,118 32,941 153,636 128,764 2,865 40,862
Total assets 223,529 196,705 71,026 66,367 294,555 263,072 10,956 55,232
Deferred Outflows 10,532 9,012 1,750 1,336 12,282 10,348 - -
Liabilities:
Long-ter m
debt outstanding 14,782 15,541 292 250 15,074 15,791 157,843 167,217
Other liabilities 5,456 5,452 1,984 1,752 7,440 7,204 3,618 3,698
Net pension liability 42,622 39,129 7,139 5,820 49,761 44,949 - -
Total liabilities 62,860 60,122 9,415 7,822 72,275 67,944 161,461 170,915
Deferred Inflows 837 1,403 135 204 972 1,607 1,420 1,736
Net position:
Net Investment in
capital assets 108,495 82,021 32,118 32,941 140,613 114,962
Held in trust (151,925) (117,419)
Restricted 20,626 20,454 - - 20,626 20,454
Unrestricted 41,243 41,717 31,108 26,736 72,351 68,453
Total net position $170,364 $ 144,192 $63,226 $59,677 $ 233,590 $ 203,869 $ (151,925) $ (117,419)
2018 2017 2018 2017 2018
Private
Purpose
Trust
2017 20172018
Governmental Business
TotalActivities Activities
The City’s combined net position for the fiscal year ended June 30, 2018, were $233.6 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 position for
governmental activities increased by 18.2% from $144.2 million to $170.4 million.
The following is an explanation of the governmental activity changes between fiscal years as
shown in Table 1:
Current and other assets increased $1.1 million or 1.1% principally due to normal operations as
described below. Cash decreased, and Land held for resale increased as the result of the
purchase of properties from the Successor Agency.
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
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Capital assets increased $25.7 million (net of depreciation and additions) as detailed in
Table 3. This increase was caused by additions of capital assets from the Successor
Agency ($26.2) million, depreciation ($5.7) million and additions ($5.2) million that
included swim center renovations, a new boat dock, and street improvements.
Governmental long-term debt decreased $.8 million. The decrease was attributable to
scheduled principal payments.
Governmental other liabilities remained virtually the same as in the prior year.
Pension related items including Deferred Outflows, Net Pension Liability, and Deferred
Inflows, had a net increase of 4.0%. The change to the net balance was primarily due to
the reduction of the discount rate by the California Public Employees’ Retirement
System (CalPERS).
Invested in capital assets net of debt increased by $26.9 million primarily due to
acquisition of capital assets from the Successor Agency.
Restricted net position increased by $0.2 million, or 0.8%. The increase is primarily
attributable to an increase in the Streets category related to fees collected for a large
industrial project and decrease in Housing related to the purchase of property. The
other changes in this category were reflective of normal activity within the restricted
funds.
Unrestricted net position, the part of net position that can be used to finance day-to-day
operations without constraints established by debt covenants or other legal
requirements, decreased by $0.5 million, or 1.1%, again primarily due to normal
operations. Significant items will be discussed in the Governmental Activities section.
Governmental Activities
The cost of all Governmental activities this year was $61.6 million as shown on Table 2 and 2.1.
Of this cost, $9.8 million was paid for by those who directly benefited from the programs, $2.5
million was subsidized by grants received from other governmental organizations for both
capital and operating activities, and $48.8 million was financed through general City revenues.
Overall governmental program revenues, including intergovernmental aid and fees for services
were $12.4 million. Items of significance within Table 2 are described after the table
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
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Table 2
City of Poway Changes in Net Position
(in Thousands)
Revenues:
Program Revenues:
Charges for services $ 9,836 $ 9,632 $ 34,070 $29,847 $ 43,906 $ 39,479 $ - $ -
Operating grants
and contributions 2,323 1,134 - - 2,323 1,134 - -
Capital grants - -
and contributions 199 271 4 - 203 271 - -
General Revenues: - -
Property taxes 24,154 22,166 - - 24,154 22,166 47,750 46,954
Sales tax 13,981 13,775 - - 13,981 13,775 - -
Other taxes 5,896 5,323 - - 5,896 5,323 - -
Investment & misc. 4,753 2,971 4,203 3,484 8,956 6,455 673 3,122
Total revenues 61,142 55,272 38,277 33,331 99,419 88,603 48,423 50,076
Expenses:
General government 8,048 7,898 - - 8,048 7,898 46,007 39,808
Public safety 25,140 22,939 - - 25,140 22,939 - -
Public works 15,818 13,424 - - 15,818 13,424 - -
Development services 4,793 4,122 - - 4,793 4,122 - -
Community services 7,373 7,696 - - 7,373 7,696 - -
Interest & charges 430 444 - - 430 444 4,968 4,963
Water - - 25,503 21,005 25,503 21,005 - -
Sewer - - 8,798 8,565 8,798 8,565 - -
Total expenses 61,602 56,523 34,301 29,570 95,903 86,093 50,975 44,771
Change in net position
before transfers (460) (1,251) 3,976 3,761 3,516 2,510 (2,552) 5,305
Loss on sale of property - - - - - - (4,504) (2,109)
Special item 26,204 - - - 26,204 - (26,204) -
Transfers 427 439 (427) (439) - - - -
Change in net positon
after transfers 26,171 (812) 3,549 3,322 29,720 2,510 (33,260) 3,196
Net position - 7/1 144,192 145,004 59,677 56,355 203,869 201,359 (118,665) (121,861)
Net position - 6/30 $ 170,363 $ 144,192 $ 63,226 $59,677 $ 233,589 $ 203,869 $ (151,925) $ (118,665)
Governmental Business TotalActivities Activities
Private
Purpose
Trust
2018 2017 2018 2017 2018 2017 2018 2017
Revenues:
Property taxes increased by 9.0% which includes revenues from the Redevelopment
Property Tax Trust Fund (RPTTF). When adjustments are made for the RPTTF revenue
in both fiscal years, the remaining property taxes increased by 4.2%. Property values
have continued to increase, which has resulted in the reassessment of many properties
that received temporary assessment reductions during the Great Recession.
Sales tax increased by 1.5%, with the largest increase, of the seven major sales tax
categories, being in Building & Construction. Sales tax revenues may have been
adversely affected because of timing issues with the state’s new sales tax reporting
system.
The remaining taxes increased by 10.7%. This includes taxes that are used for street
purposes, franchise fees and transient occupancy tax. The gas and electric franchise fee
increased by $149 and the transient occupancy tax increased by $45. The remaining
increase was related to taxes collected for streets, including the new Road Maintenance
and Rehabilitation Account funds ($294).
Investment earnings increased by 26.0% due to rising interest. As an example, the yield
on two-year treasury notes increased from 1.38% on June 30, 2017 to 2.52% on June
29, 2018. The increase was partially offset by a loss in market value which was also
caused by the rising interest rates.
The Miscellaneous revenue category increased by $1.8 million, or 101.1%. The current
year is primarily higher due to one-time revenue related to the sale of land that was
owned by Successor Agency and sold to the City and outside parties. The proceeds
from these sales were distributed to all taxing agencies, and the City’s share, $1.2
million is included in this category.
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
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Charges for services increased by 2.1%, caused primarily by increases in Public Safety
for ambulance fees, and in Development Services for inspection fees. Those increases
were partially offset by a decrease in Community Services program fees due to the
closure of the City pool for repair and improvements.
Operating Grants and contributions increased by 104.9%. The increase was caused by a
significant street improvement revenue.
Expenses:
General Government Expenses increased 1.9%. There was a decrease related to the
purchase of non-capitalized equipment, which was offset by increased pension costs.
The Public Safety line increased by 9.6%. The law enforcement contract with the County
of San Diego accounted for 4.4% of the increase, while fire suppression accounted for
5.1% of the increase. Fire suppression’s increase included higher amounts for salaries,
benefits and overtime. These increases were driven by the new labor agreement and
decreased vacancies, higher pension costs, as well greater mutual aid participation. As
a result of the mutual aid participation, the City also had an increase in mutual aid
reimbursements.
Public Works had an 17.8% increase in expenses. Increased pension costs contributed
to the increase, as well as increased costs in park maintenance and street maintenance.
Also contributing to the increase was an analysis by the City which resulted in the
General Fund being charged a higher amount for city-wide maintenance operations.
Also, the Park Maintenance division was previously performing water conservation
duties, so a portion of its costs were allocated to the Water Fund. Those duties were no
longer being actively performed so that allocation was discontinued also causing
increased costs in the General Fund.
The Development Services department increased by 16.3%. The increase can be
primarily attributed to building inspection and capital improvement oversight of projects
funded by the General Fund.
Community Services had a decrease of 4.2%. The decrease is primarily related to the
closure of the City pool for significant rehab and improvements which led to reduced
operating expenses during the closure.
Interest and fiscal charges decreased by 3.2%. The decrease is related to lower interest
expense. There were no significant changes in this category.
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
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General government $ 8,048 $ 7,898 $ 960 $ 552 $ (7,088) $ (7,346)
Public safety 25,140 22,939 2,723 2,491 (22,417) (20,448)
Public works 15,818 13,424 2,855 2,820 (12,963) (10,604)
Development services 4,793 4,122 2,875 1,815 (1,918) (2,307)
Community services 7,373 7,696 2,944 3,358 (4,429) (4,338)
Interest and fiscal chgs 430 444 - - (430) (444)
Totals $ 61,602 $ 56,523 $ 12,357 $11,036 $ (49,245) $ (45,487)
2018
of Services
2018 2018 2017
Table 2.1
Net Cost of Governmental Activities
(in Thousands )
20172017
Program
Revenues
Net Cost
of Services
Total Cost
Fiscal Year 2018
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
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
-11-
Fiscal Year 2018
Total Cost of Services, Program Revenues & Net Cost –Governmental Activities (in thousands)
Total resources available during the year to finance governmental operations were $232.0
million consisting of Net Position at July 1, 2017 of $144.2 million, Program Revenues of $12.4
million, General Revenues of $48.8 million, Transfers of $0.4 million, and the transfer from the
Successor Agency of $26.2. Total Governmental Activities during the year were $61.6 million;
thus, Net Position increased to $170.4 million.
Business-Type Activities
Net Position of the Proprietary Funds (Business-Type activities) at June 30, 2018, as reflected
in Table 1 were $63.2 million. As shown in Table 2.2, program revenues were $34.1 million,
while the cost of providing all Proprietary (Business-Type) Activities this year was $34.3 million,
resulting in a decrease of $0.2 million. The net increase of $3.8 million from other revenues,
non-operating activity and transfers resulted in a Net Position increase of $3.5 million, or 6.9%.
The water revenue increase can be attributed to volume increases related to eased usage
restrictions and increased rates. While water purchases did increase, additionally the overall
increase in the cost of services was related to the adjustment for pensions. The other revenue
increased because the temporary drought recovery surcharge that was implemented while
revenues were lower due to decreased consumption, was in full effect for the entire fiscal year.
However, the drought recovery surcharge is scheduled to end in December 2018. There was no
significant change in the Sewer fund’s activity. Operating revenues slightly increased due to rate
increases, and Other revenue was down because while the fund once again received refunds
for prior year over-allocations of sewage transportation costs, they were less than received in
the previous year. The overall result was an increase in the fund’s net position.
Water $ 25,503 $ 21,005 $ 25,586 $ 21,450 $ 83 $ 445
Sewer 8,798 8,565 8,488 8,397 (310) (168)
Totals $ 34,301 $ 29,570 $ 34,074 $ 29,847 $ (227) $ 277
Table 2.2
Net Cost of Business Activities
(in Thousands)
Total Cost Program Net Cost
of Services Revenue of Services
2018 2017 2018 2017 2018 2017
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
-12-
Fiscal Year 2018
Total Cost of Services, Program Revenues & Net Cost – Business Activities (in thousands)
FUND HIGHLIGHTS
General Fund:
Actual revenues compared favorably to the final budget, resulting in a $4.3 million positive
variance (excluding other financing sources). The major variances were in Taxes, Charges for
Services, Developer Fees and Other Revenue. Actual Taxes revenue was again higher than
budgeted due to distributions from the Redevelopment Property Tax Trust Fund, which
accounted for $1.6 million of the variance. Other property related taxes ($305,000), and sales
tax ($335,000) also contributed to the positive variance. The Charges for services variance was
caused by higher than expected cell site lease revenue due to fewer sites being
decommissioned than expected, and higher lease revenue due to the acquisition of properties
from the Successor Agency that had existing leases. The increase in Developer Fees was
caused by both Development Services and Safety Services plan check and inspection fees, as
well as general planning fees and staff time reimbursement charges. The variance in the Other
revenues category was related to the City receiving its proportionate share from the Successor
Agency to the City of Poway Redevelopment Agency selling property in accordance with its
Long-Range Property Management Plan. The final appropriations for the City’s General Fund
expenditures at year-end were $26.6 million more than actual expenditures (excluding other
financing uses). The largest component of the budget to actual variance, $23.5 million, was in
the Capital Outlay category. The variance in the Capital Outlay category is attributable to delays
in previously approved projects such as a new community center, the undergrounding of
overhead lines, and swim center improvements, as well as the recording as the purchase of
land held for resale of $5.4 million which was budgeted as a capital outlay, but recorded as an
asset in the General Fund. The variance in the General Government category was primarily
caused by delays in equipment purchases, as well as partial year vacancies in the Finance and
Human Resources departments. The savings in Public Works was from Park and Facilities
Maintenance, with the savings being throughout the divisions. The savings in Development
Services is from staffing turnover, spending less on nuisance abatement than anticipated,
spending less on external plan check costs, and savings for storm water compliance, though a
significant encumbrance was outstanding at year-end. 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 a midyear budget update, which enhanced focus on the City’s financial position and
the current factors affecting that position.
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
-13-
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 as of February 1, 2012 to the Successor Agency. 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 $105,247 for
operations. 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
continues to explore how to best use these funds to improve the quantity and quality of
affordable housing in the City. The Housing Authority did purchase land for a future affordable
housing site, and received assistance from the Housing In-lieu fund to make the purchase.
Non-major Governmental Funds:
Three of the Non-major Governmental Funds had activity that should be noted. The Proposition
A Fund had a use of fund balance because projects that were planned for the prior fiscal year,
but delayed, were completed in the current fiscal year. The Housing In-lieu Fund provided
funding to the Housing Authority for the purchase of land for a future affordable housing site.
The Street Improvement Fund had unusually large fees related to the development of two large
industrial buildings.
FIDUCIARY FUNDS
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
Redevelopment Agency’s tax increment revenue) to pay for 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. During the fiscal year,
as part of its Long-Range Property Management Plan (LRPMP), all but one of the Successor
Agency’s remaining properties were sold. Five properties were sold to the City with the intent
that they be developed in accordance with the vision for the area that was foreseen when they
were purchased by the former Redevelopment Agency. Three properties were sold to private
parties via auctions. One property remains with the Successor Agency as it is tied to a long-term
lease. Finally, all the remaining capital assets were moved to the City in accordance with the
LRPMP. The activity is reflected in the Capital Asset section below
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
-14-
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. Total capital assets decreased by $13.1 million primarily due to sales
of Successor Agency owned assets of $4.4 million and current year depreciation of $8.3 million
offset by construction costs of $6.6 million for the swim center renovation, a new boat dock at
Lake Poway, Espola Road safety improvements, and reservoir rehabilitation. In addition, land
was purchased by the City from the Successor Agency for $5.4 million which resulted in a net
loss to the Successor Agency of $2.4 million. Finally, a $26.2 million, net of depreciation, of
land, buildings and infrastructure was moved from the Successor Agency to the City in
accordance with the Long-Range Property Management Plan. Depreciation on capital assets is
recognized in the Government-Wide financial statements. (See Table 3 & Notes 4 and 17 to the
financial statements)
Debt:
At year-end, the City had $14.8 million in governmental-type debt, $292,000 in Proprietary debt,
and $157.8 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.
The Compensated Absences increases were a result of the normal course of business. (See
Table 4 & Note 5 to financial statements)
Fiduciary
2018 2017
Tax Allocation Bonds $ - $ - $ - $ - $ 154,505 $163,594 $154,505 $ 163,594
Certificates of Participation 13,196 13,987 - - - 430 13,196 14,417
Revenue Bonds - - - - - - - -
Loans Payable - - - - 3,339 3,193 3,339 3,193
Comp Absences 1,586 1,554 292 250 - - 1,878 1,804
Total $ 14,782 $ 15,541 $ 292 $ 250 $ 157,844 $167,217 $172,918 $ 183,008
2017
Table 4
City of Poway Outstanding Debt at Year-End
(In Thousands)
Governmental Business
TotalActivities Activities
2018 2017 2018 2017 2018
City of Poway
June 30, 2018 Comprehensive Annual Financial Reporting
-15-
NEXT YEAR’S BUDGET AND ECONOMIC FACTORS
In considering the update of the City Budget for fiscal year 2018-2019, the City Council and
management continue to expect improvement in the local economy. Both property tax and sales
tax are expected to moderately increase over fiscal year’s 2017-18 budgeted revenues.
Increases in the budget for property and sales taxes, as well as for Investment Income and
Development Services fees, are the primary reasons that the total General Fund revenue
budget is projected to be 6.7% higher than that of Fiscal Year 2017-18 revenue budget.
Property taxes are expected to continue to rise, though at a slightly slower pace since assessed
values for properties that received reductions during the Great Recession have already started
to be recovered over the previous three years. Sales taxes are also expected to continue to
increase, with no significant increase expected in any one sector. The continued rise in interest
rates is expected to increase investment income, and development activity along Poway Road
is expected to increase both Development Services revenues and expenditures. General Fund
expenditures are budgeted to grow by 7.6%, which was a result of increases in most City
functions. One consideration when looking at the increase is that the City’s labor agreements
were approved after the adoption of the Fiscal Year 2017-18 budget, so that adopted budget did
not include those increases. Therefore, when comparing the two budgets it should be noted that
there are in essence two fiscal years’ worth of labor increases in the Fiscal Year 2018-19
budget. As mentioned above, increases in Development Services expenditures are partially
offset by additional revenues in these areas. The increase in the City’s Finance Department’s
budget was primarily caused by the inclusion of additional personnel expenses for succession
planning, and one-time overlap of support costs for two Electronic Resource Planning Systems.
During Fiscal Year 2018-19 the City will be converting from its 25-year legacy system to Tyler
Munis. There was also a 6% increase in the contract with the County of San Diego for law
enforcement services. The City’s initial projections showed a moderate operating surplus of
$852,000.
Aside from the General Fund, the other budget activity of note concerns the City’s Water and
Sewer funds. The Water Fund is being closely monitored because of the significant state-wide
water conservation efforts over the past several years. Poway’s consumption was significantly
reduced through Fiscal Year 2015-16, but water restrictions were eased, and Poway’s
consumption has now increased for the past two years by 13.3% for Fiscal Year 2017-18.
However, it was still necessary to increase water rates in January 2018. The City is scheduled
to hold a Water and Sewer Rate Workshop in January 2019 where the rate proposal for the next
year will be discussed. Projected consumption as well as the estimated pass-through costs will
be the determining factors that affect future rate adjustments. 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. However, now San Diego has created a Pure Water program which
will divert a significant amount of wastewater from the Point Loma Facility. During Fiscal Year
2017-18 the City participated in negotiations for a reinstated regional wastewater agreement
that will include the Pure Water program. Over the next several years a portion of these
reserves will be used to fund Poway’s portion of this program. The fund is continually analyzed
to ensure its long-term stability.
CONTACTING THE CITY’S FISCAL 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 Finance Department, at the City of Poway, 13325 Civic
Center Drive, Poway, California 92064 or online at http://www.poway.org.
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BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE
FINANCIAL STATEMENTS
City of Poway
Statement of Net Position
June 30, 2018
The accompanying notes are an integral part of these financial statements.
-18-
Governmental
Activities
Business-Type
Activities Total
ASSETS
Current assets:
Cash and investments 78,935,151$ 27,028,377$ 105,963,528$
Cash and investments with fiscal agents 627,958 - 627,958
Receivables:
Taxes 3,062,142 - 3,062,142
Accounts 782,885 6,309,377 7,092,262
Interest 856,612 - 856,612
Due from other governments 319,246 - 319,246
Prepaid items 121,433 - 121,433
Land held for resale 5,367,000 - 5,367,000
Inventories 140,207 3,160,255 3,300,462
Total current assets 90,212,634 36,498,009 126,710,643
Noncurrent assets:
Notes receivable 10,010,396 - 10,010,396
Internal balances 269,741 (269,741) -
Loans to the Successor Agency to the
Poway Redevelopment Agency 1,518,492 1,824,160 3,342,652
Loans to other governments - 855,221 855,221
Capital assets:
Nondepreciable assets 45,012,419 1,032,884 46,045,303
Depreciable assets, net 76,505,365 31,085,180 107,590,545
Total capital assets 121,517,784 32,118,064 153,635,848
Total noncurrent assets 133,316,413 34,527,704 167,844,117
Total assets 223,529,047 71,025,713 294,554,760
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding of debt 173,028 - 173,028
Pension related 10,358,871 1,750,189 12,109,060
Total deferred outflows of resources 10,531,899 1,750,189 12,282,088
Primary Government
City of Poway
Statement of Net Position
June 30, 2018 (Continued)
The accompanying notes are an integral part of these financial statements.
-19-
Governmental
Activities
Business-Type
Activities Total
LIABILITIES
Current liabilities:
Accounts payable 3,938,820$ 1,584,732$ 5,523,552$
Accrued liabilities 1,081,185 176,185 1,257,370
Accrued interest payable 199,481 - 199,481
Deposits - 124,617 124,617
Unearned revenue 236,888 98,400 335,288
Long-term debt - due within one year 2,367,918 284,030 2,651,948
Total current liabilities 7,824,292 2,267,964 10,092,256
Noncurrent liabilities:
Long-term debt - due in more than one year 12,413,764 8,386 12,422,150
Net pension liability 42,622,262 7,138,439 49,760,701
Total noncurrent liabilities 55,036,026 7,146,825 62,182,851
Total liabilities 62,860,318 9,414,789 72,275,107
DEFERRED INFLOWS OF RESOURCES
Pension related 837,212 134,764 971,976
NET POSITION
Net investment in capital assets 108,494,835 32,118,064 140,612,899
Restricted for:
Debt service 535,900 - 535,900
Drainage 2,930,941 - 2,930,941
Fire protection 125,248 - 125,248
Grants 294,732 - 294,732
Housing 2,920,294 - 2,920,294
Maintenance Districts 7,829,104 - 7,829,104
Other Purposes 2,622,300 - 2,622,300
Parks and recreation 590,313 - 590,313
Streets 1,915,188 - 1,915,188
Transportation 877,455 - 877,455
Total restricted 20,641,475 - 20,641,475
Unrestricted 41,227,106 31,108,285 72,335,391
Total net position 170,363,416$ 63,226,349$ 233,589,765$
Primary Government
City of Poway
Statement of Activities
For the Year Ended June 30, 2018
The accompanying notes are an integral part of these financial statements.
-20-
Operating Capital Total
Charges for Contributions Contributions Program
Functions/Programs Expenses Services and Grants and Grants Revenues
Primary government:
Governmental activities:
General government 8,048,190$ 352,830$ 607,115$ -$ 959,945$
Public safety 25,139,954 2,171,552 551,042 - 2,722,594
Public works 15,818,102 2,740,562 114,799 - 2,855,361
Development services 4,793,032 1,975,450 899,420 - 2,874,870
Community services 7,372,710 2,595,229 150,495 198,584 2,944,308
Interest and fiscal charges 429,617 - - - -
Total governmental activities 61,601,605 9,835,623 2,322,871 198,584 12,357,078
Business-type activities:
Water 25,502,524 25,583,581 - 2,108 25,585,689
Sewer 8,797,837 8,486,571 - 1,481 8,488,052
Total business-type activities 34,300,361 34,070,152 - 3,589 34,073,741
Total primary government 95,901,966$ 43,905,775$ 2,322,871$ 202,173$ 46,430,819$
`
Program Revenues
City of Poway
Statement of Activities
For the Year Ended June 30, 2018 (Continued)
The accompanying notes are an integral part of these financial statements.
-21-
Governmental Business-type
Functions/Programs Activities Activities Total
Primary government:
Governmental activities:
General government (7,088,245)$ -$ (7,088,245)$
Public safety (22,417,360) - (22,417,360)
Public works (12,962,741) - (12,962,741)
Development services (1,918,162) - (1,918,162)
Community services (4,428,402) - (4,428,402)
Interest and fiscal charges (429,617) - (429,617)
Total governmental activities (49,244,527) - (49,244,527)
Business-type activities:
Water - 83,165 83,165
Sewer - (309,785) (309,785)
Total business-type activities - (226,620) (226,620)
Total primary government (49,244,527) (226,620) (49,471,147)
General revenues:
Taxes:
Property taxes 24,153,826 - 24,153,826
Sales tax 13,981,478 - 13,981,478
Transient occupancy taxes 654,235 - 654,235
Franchise taxes 1,611,000 - 1,611,000
Other taxes 3,630,276 - 3,630,276
Total taxes 44,030,815 - 44,030,815
Investment earnings 1,468,845 264,609 1,733,454
Miscellaneous 3,285,592 3,938,311 7,223,903
Transfers in (out) 426,823 (426,823) -
Total general revenues and transfers 49,212,075 3,776,097 52,988,172
Special Item:
Transfer of capital assets 26,204,302 - 26,204,302
Change in net position 26,171,850 3,549,477 29,721,327
Net position, beginning of year 144,191,566 59,676,872 203,868,438
Net position, end of year 170,363,416$ 63,226,349$ 233,589,765$
Changes in Net Position
Net (Expense) Revenue and
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FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
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City of Poway
Balance Sheet - Governmental Funds
June 30, 2018
The accompanying notes are an integral part of these financial statements.
-23-
Special Revenue
Fund Total
Housing Non-major Total
General Authority Governmental Governmental
Fund Fund Funds Funds
ASSETS
Cash and investments 48,470,359$ 2,128,970$ 18,164,970$ 68,764,299$
Receivables:
Taxes 3,040,775 - 21,367 3,062,142
Notes 10,010,396 - - 10,010,396
Accounts 646,478 24,445 111,962 782,885
Interest 855,387 - 1,225 856,612
Due from other funds 274,747 - - 274,747
Advances to other funds 1,335,921 - 17,576 1,353,497
Due from other governments 73,753 - 245,493 319,246
Prepaid items 121,433 - - 121,433
Land held for resale 5,367,000 - - 5,367,000
Inventories, at cost 140,207 - - 140,207
Advances to fiduciary funds - 668,531 849,961 1,518,492
Restricted assets:
Cash and investments with
fiscal agents - - 627,958 627,958
Total assets 70,336,456$ 2,821,946$ 20,040,512$ 93,198,914$
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities:
Accounts payable 3,317,151$ 14,769$ 461,753$ 3,793,673$
Accrued liabilities 1,017,536 - 51,286 1,068,822
Due to other funds - - 328,128 328,128
Advances from other funds 360,500 - 1,109,275 1,469,775
Unearned revenue - 35,730 201,158 236,888
Total liabilities 4,695,187 50,499 2,151,600 6,897,286
Deferred inflows of resources:
Unavailable revenue 2,952 - 34,744 37,696
Total deferred inflows
of resources 2,952 - 34,744 37,696
FUND BALANCES
Nonspendable 15,639,036 - - 15,639,036
Restricted - 2,771,447 17,870,028 20,641,475
Assigned 16,613,992 - - 16,613,992
Committed 19,321,583 - - 19,321,583
Unassigned 14,063,706 - (15,860) 14,047,846
Total fund balances 65,638,317 2,771,447 17,854,168 86,263,932
Total liabilities, deferred
inflows of resources and
fund balances 70,336,456$ 2,821,946$ 20,040,512$ 93,198,914$
City of Poway
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2018
The accompanying notes are an integral part of these financial statements.
-24-
Total Fund Balances - Total Governmental Funds 86,263,932$
Amounts reported for governmental activities in the Statement of Net
Position were different because:
resources and, therefore, were not reported in the funds.
Non-depreciable 45,012,419$
Depreciable, net of accumulated depreciation 76,505,365 121,517,784
on the Government-Wide Statement of Net Position. 173,028
reported in the governmental funds:
Pension related deferred outflows of resources (net of $123,780 reported in
Internal Service Fund) 10,235,091
Pension related deferred inflows of resources (net of $10,415 reported in
Internal Service Fund) (826,797) 9,408,294
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
Long-term debt (810,432)
Compensated absences (net of $27,890 reported in Internal Service Fund) (1,529,596)
Long-term liabilities - due in more than one year
Long-term debt (12,385,545)
Pension related (net of $513,163 reported in Internal Service Fund) (42,109,099)
Compensated absences (net of $824 reported in Internal Service Fund) (27,395) (56,862,067)
Funds Balance Sheet.(199,481)
Statements.37,696
Statement of Net Position.10,024,230
Net position of governmental activities 170,363,416$
Deferred inflows and outflows of resources related to pensions have not been
Capital assets used in governmental activities were not current financial
Deferred losses on refunding of debt did not require current financial
resources but were deferred and subject to capitalization and amortization
activities to individual funds. The assets and liabilities of the internal service
funds were included in governmental activities in the Government-Wide
Interest payable on long-term debt did not require current financial resources.
resulting from activities in which revenues were earned but funds were not
available were recognized as revenues in the Government-Wide Financial
Unavailable revenues recorded in governmental fund financial statements
Internal service funds were used by management to charge the costs of certain
Therefore, interest payable was not reported as a liability in the Governmental
City of Poway
Statement of Revenues, Expenditures and Changes in Fund Balance -
Governmental Funds
For the Year Ended June 30, 2018
The accompanying notes are an integral part of these financial statements.
-25-
Special Revenue
Fund Total
Housing Non-major Total
General Authority Governmental Governmental
Fund Fund Funds Funds
REVENUES
Taxes 38,620,527$ -$ 5,410,288$ 44,030,815$
Licenses and permits 698,848 - - 698,848
Intergovernmental 783,241 - 666,296 1,449,537
Charges for services 2,623,079 59,839 - 2,682,918
Fines and forfeitures 150,968 - - 150,968
Use of money and property 881,797 40,295 454,901 1,376,993
Developer fees 4,458,832 - 1,079,793 5,538,625
Assessments levied - - 1,900,026 1,900,026
Other revenues 2,875,390 59,667 345,042 3,280,099
Total revenues 51,092,682 159,801 9,856,346 61,108,829
EXPENDITURES
Current:
General government 4,348,184 7,988 - 4,356,172
Public safety 24,203,074 - 158,279 24,361,353
Public works 5,443,423 - 6,221,631 11,665,054
Development services 4,468,523 34,861 - 4,503,384
Community services 5,837,896 - - 5,837,896
Capital outlay 7,292,310 831,705 1,925,036 10,049,051
Debt service:
Principal - - 770,000 770,000
Interest and fiscal charges - - 438,961 438,961
Total expenditures 51,593,410 874,554 9,513,907 61,981,871
Excess (deficiency) of revenues
over (under) expenditures (500,728) (714,753) 342,439 (873,042)
OTHER FINANCING SOURCES
(USES)
Transfers in 1,679,384 820,000 1,314,282 3,813,666
Transfers out (1,105,779) - (1,590,119) (2,695,898)
Total other financing
sources (uses) 573,605 820,000 (275,837) 1,117,768
Net change in fund balance 72,877 105,247 66,602 244,726
Fund balances, beginning of year 65,565,440 2,666,200 17,787,566 86,019,206
Fund balances, end of year 65,638,317$ 2,771,447$ 17,854,168$ 86,263,932$
City of Poway
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2018
The accompanying notes are an integral part of these financial statements.
-26-
Net change in fund balance - total governmental funds 244,726$
different because:
Capital asset expenditures 5,188,167$
Depreciation expense (5,693,254)
Loss due to disposition of capital assets (4,669) (509,756)
Capital Assets related to transfer of operations is included in the special item on the
Statement of Activities.26,204,302
Principal payments on long-term debt 770,000
Changes in pension related items (1,473,838) (703,838)
Change in compensated absences (51,301)
Change in interest expense on long term debt 9,344
Amortization of deferred loss on bond refunding (11,933)
Amortization of bond premium 2005 Certificates of Participation 3,236
Amortization of bond premium 2012 Certificates of Participation 18,086 (32,568)
(58,357)
1,027,341
Change in net position of governmental activities 26,171,850$
Government-Wide Statement of Activities, the cost of those assets will be
allocated over their estimated useful lives as depreciation expense.
Governmental funds report capital outlay as expenditures. However, in the
funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however,
has any effect on net position. Also, governmental funds report the
effect of premiums, discounts, and similar items when the debt is first
issued, whereas these are deferred and amortized in the statement of activities.
The issuance of long-term debt provides current financial resources to governmental
current financial resources and, therefore, are not reported as expenditures in
Some expenses reported in the statement of activities do not require the use of
governmental funds.
Amounts reported for governmental activities in the Statement of Activities were
revenue of the internal service fund was reported with governmental activities.
Revenues in the Government-wide Statement of Activities that did not provide
current financial resources are not reported as revenues in the funds.
The Internal service fund was used by management to charge the costs of certain
activities, such as insurance and fleet management, to individual funds. The net
-27-
PROPRIETARY FUND
FINANCIAL STATEMENTS
City of Poway
Statement of Net Position
Proprietary Funds
June 30, 2018
The accompanying notes are an integral part of these financial statements.
-28-
Governmental
Activities -
Internal Service
Water Sewer Total Fund
ASSETS
Current assets:
Cash and investments 8,628,404$ 18,399,973$ 27,028,377$ 10,170,852$
Receivables:
Accounts 4,911,733 1,397,644 6,309,377 -
Inventories 3,139,483 20,772 3,160,255 -
Due from other funds 32,890 20,491 53,381 -
Total current assets 16,712,510 19,838,880 36,551,390 10,170,852
Noncurrent assets:
Advances to other funds - 214,500 214,500 439,400
Advances to the Successor Agency to the
Poway Redevelopment Agency 1,260,483 563,677 1,824,160 -
Loans to other governments 149,446 705,775 855,221 -
Capital assets:
Nondepreciable 956,087 76,797 1,032,884 -
Depreciable 60,480,584 36,491,089 96,971,673 -
Less accumulated depreciation (41,754,505) (24,131,988) (65,886,493) -
Total net capital assets 19,682,166 12,435,898 32,118,064 -
Total noncurrent assets 21,092,095 13,919,850 35,011,945 439,400
Total assets 37,804,605 33,758,730 71,563,335 10,610,252
DEFERRED OUTFLOWS OF RESOURCES
Pension related items 1,506,367 243,822 1,750,189 123,780
LIABILITIES
Current liabilities:
Accounts payable 1,519,551 65,181 1,584,732 145,147
Accrued liabilities 154,857 21,328 176,185 12,363
Deposits 124,617 - 124,617 -
Unearned Revenue 68,007 30,393 98,400 -
Compensated absences due within one year 246,746 37,284 284,030 27,890
Total current liabilities 2,113,778 154,186 2,267,964 185,400
Noncurrent liabilities:
Advances from other funds 537,622 - 537,622 -
Compensated absences 6,615 1,771 8,386 824
Net pension liability 6,149,576 988,863 7,138,439 513,163
Total noncurrent liabilities 6,693,813 990,634 7,684,447 513,987
Total liabilities 8,807,591 1,144,820 9,952,411 699,387
DEFERRED INFLOWS OF RESOURCES
Pension related items 116,587 18,177 134,764 10,415
NET POSITION
Net investment in capital assets 19,682,166 12,435,898 32,118,064 -
Unrestricted 10,704,628 20,403,657 31,108,285 10,024,230
Total net position 30,386,794$ 32,839,555$ 63,226,349$ 10,024,230$
City of Poway
Statement of Revenues, Expenses and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2018
The accompanying notes are an integral part of these financial statements.
-29-
Governmental
Activities -
Internal Service
Water Sewer Total Fund
OPERATING REVENUES
Charges for services 25,345,527$ 8,408,917$ 33,754,444$ 3,078,163$
Connection fees 238,054 77,654 315,708 -
Other 3,200,735 737,576 3,938,311 -
Total operating revenues 28,784,316 9,224,147 38,008,463 3,078,163
OPERATING EXPENSES
Personnel services 4,716,874 624,565 5,341,439 237,069
Maintenance and operations 3,884,728 7,086,404 10,971,132 1,221,644
Administrative expenses 523,744 - 523,744 -
Cost of purchased water 14,852,123 - 14,852,123 -
Depreciation 1,513,219 1,086,868 2,600,087 -
Total operating expenses 25,490,688 8,797,837 34,288,525 1,458,713
Operating income 3,293,628 426,310 3,719,938 1,619,450
NONOPERATING REVENUES
(EXPENSES)
Interest revenue 113,720 150,889 264,609 60,171
Interest expense and fiscal charges (11,836) - (11,836) -
Gain on sale of property - - - 25,378
Grant revenue 2,108 1,481 3,589 6,309
Other nonoperating revenue - - - 6,978
Total nonoperating revenues
(expenses) 103,992 152,370 256,362 98,836
Income before transfers 3,397,620 578,680 3,976,300 1,718,286
TRANSFERS
Transfers in 33,364 22,240 55,604 9,580
Transfers out (318,940) (163,487) (482,427) (700,525)
Total transfers (285,576) (141,247) (426,823) (690,945)
Change in net position 3,112,044 437,433 3,549,477 1,027,341
Net position, beginning of year 27,274,750 32,402,122 59,676,872 8,996,889
Net position, end of year 30,386,794$ 32,839,555$ 63,226,349$ 10,024,230$
City of Poway
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2018
The accompanying notes are an integral part of these financial statements.
-30-
Governmental
Activities -
Internal Service
Water Sewer Total Fund
Cash flows from operating activities:
Cash received from customers 25,209,554$ 8,428,191$ 33,637,745$ -$
Cash received from interfund charges - - - 3,085,845
Cash paid to employees for services (3,827,482) (611,195) (4,438,677) (339,021)
Cash paid to suppliers for goods or services (19,218,309) (6,928,474) (26,146,783) (1,291,554)
Cash paid to other City funds (221,166) (84,017) (305,183) -
Other 3,200,735 737,576 3,938,311 -
Net cash provided by
operating activities 5,143,332 1,542,081 6,685,413 1,455,270
Cash flows from noncapital financing
activities:
Payments received on loan to the
Business Park Fiduciary Fund - 5,059 5,059 -
Loans to other governments (149,446) (656,773) (806,219) 5,397
Loan repayment to the Successor Agency 6,326 - 6,326 -
Due to (from) other funds (2,469) (1,341) (3,810) -
Advances from other funds (401,250) - (401,250) -
Other nonoperating revenues - - - 6,978
Transfers from other funds 33,364 22,240 55,604 9,580
Transfers to other funds (318,940) (163,487) (482,427) (700,525)
Net cash used for
noncapital financing activities (832,415) (794,302) (1,626,717) (678,570)
Cash flows from capital and related
financing activities:
Acquisition of capital assets (1,664,129) (112,581) (1,776,710) -
Sale of capital assets - - - 25,378
Capital grant revenue 2,108 1,481 3,589 6,309
Payment of interest and fees (11,836) - (11,836) -
Net cash provided by (used for) capital
and related financing activities (1,673,857) (111,100) (1,784,957) 31,687
Cash flows from investing activities:
Interest income 113,720 150,889 264,609 60,171
Net cash provided by
investing activities 113,720 150,889 264,609 60,171
Net increase in cash and
investments 2,750,780 787,568 3,538,348 868,558
Cash and investments, beginning of year 5,877,624 17,612,405 23,490,029 9,302,294
Cash and investments, end of year 8,628,404$ 18,399,973$ 27,028,377$ 10,170,852$
City of Poway
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2018 (Continued)
The accompanying notes are an integral part of these financial statements.
-31-
Governmental
Activities -
Internal Service
Water Sewer Total Funds
Reconciliation of operating income
to net cash provided by operating activities:
Operating income 3,293,628$ 426,310$ 3,719,938$ 1,619,450$
Adjustments to reconcile operating income
to net cash provided by
operating activities:
Depreciation 1,513,219 1,086,868 2,600,087 -
(Increase) decrease in assets:
Accounts receivable (374,027) (58,380) (432,407) 7,682
Inventories (311,487) 89 (311,398) -
Increase (decrease) in liabilities:
Accounts payable 30,966 43,431 74,397 (69,910)
Accrued liabilities 28,903 (3,430) 25,473 (4,516)
Compensated absences 42,885 (617) 42,268 (19,360)
Net Pension Liability 817,604 17,417 835,021 (78,076)
Unearned revenue 68,007 30,393 98,400 -
Deposits 33,634 - 33,634 -
Net cash provided by
operating activities 5,143,332$ 1,542,081$ 6,685,413$ 1,455,270$
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-32-
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).
This page intentionally left blank.
City of Poway
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2018
The accompanying notes are an integral part of these financial statements.
-33-
Successor Agency
to the Poway
Agency Redevelopment
Funds Agency
ASSETS
Current assets
Cash and investments 3,017,421$ 7,798,953$
Receivables:
Interest - 1,835
Prepaid charges, net - 290,619
Total current assets 3,017,421 8,091,407
Noncurrent assets
Capital assets:
Nondepreciable - 2,864,759
Total noncurrent assets - 2,864,759
Total assets 3,017,421$ 10,956,166
LIABILITIES
Current liabilities
Accounts payable 61,137$ -
Long-term debt - due within one year - 8,958,261
Total current liabilities 61,137 8,958,261
Noncurrent liabilities
Developer deposits 2,956,284 -
Advances from City of Poway - 3,342,652
Interest payable - 275,010
Long-term debt due - in more than one year - 148,884,891
Total non current liabilities 2,956,284 152,502,553
Total liabilities 3,017,421$ 161,460,814
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding of debt 1,420,198
NET POSITION (DEFICIT)
Held in trust for retirement of obligations
of the former Poway Redevelopment Agency (151,924,846)$
City of Poway
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2018
The accompanying notes are an integral part of these financial statements.
-34-
Successor Agency
to the Poway
Redevelopment
Agency
ADDITIONS
Redevelopment Property Tax Trust Fund 47,750,165$
Investment earnings 234,202
Other revenue 438,428
Total additions 48,422,795
DEDUCTIONS
Enforceable obligations payments 45,031,330
Administration expenses 975,371
Interest expense and fiscal charges 4,967,776
Loss on sale of property 4,503,803
Loss on transfer of property 26,204,302
Total deductions 81,682,582
Change in net position (33,259,787)
Net position (deficit), beginning of year, as restated (118,665,059)
Net position (deficit), end of year (151,924,846)$
-35-
City of Poway
Comprehensive Annual Financial Report
For the year ended June 30, 2018
Notes to Basic Financial Statements
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-36-
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 Finance Department located at Poway City Hall.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-37-
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 Finance Department 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, 2018
-38-
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, 2018
-39-
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, 2018
-40-
Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Accounting and Measurement Focus (Continued)
Governmental Fund Financial Statements (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. The fund is not required to be reported as a major fund every
year but is reported as such due to the significance of its operations.
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 the internal service fund 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-41-
Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Accounting and Measurement Focus (Continued)
Proprietary Fund Financial Statements (Continued)
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.
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.
The City reports one internal service fund that is used to account for vehicle maintenance
services provided to the City’s fleet of vehicles for which the user divisions are charged.
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 City
reports agency funds used to account for the collection of assessments from owners of
property with their respective Districts, and for the remittance of such assessments to the
bondholders as required by the Mello-Roos Community Facilities Act of 1982.
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. 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.
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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-42-
Note 1 – Summary of Significant Accounting Policies (Continued)
C. Cash, Cash Equivalents and Investments (Continued)
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.
D. 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.”
E. 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-43-
Note 1 – Summary of Significant Accounting Policies (Continued)
F. 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 acquisition value at the requisition date.
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.
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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-44-
Note 1 – Summary of Significant Accounting Policies (Continued)
G. 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.
Deferred outflows 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.
Deferred inflows of resources are required to be presented separately after liabilities on the
statement of net position.
H. 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.
I. 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-45-
Note 1 – Summary of Significant Accounting Policies (Continued)
J. Net Position
In the Government-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
position are available, the City’s policy is to apply restricted net position first, then
unrestricted net position as it is needed.
K. 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-46-
Note 1 – Summary of Significant Accounting Policies (Continued)
K. Fund Balances (Continued)
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 classification includes all residual fund balances for the General Fund
that has not been restricted, committed or assigned to specific purposes within the
General Fund. The General Fund is the only fund that reports a positive unassigned
fund balance amount. The unassigned classification also includes negative residual
fund balance of any other governmental fund that cannot be eliminated by offsetting of
assigned fund balance amounts.
It is the City’s policy to consider restricted fund balance spent first when expenditure is
incurred for purposes for which both restricted and unrestricted fund balance are available.
Similarly, when an expenditure is incurred for purposes for which amounts in any of the
unrestricted classifications of fund balance could be used, the City considers committed
amounts to be reduced first, followed by assigned amounts and then unassigned amounts.
In addition to the Fund types described earlier, the City reports the following fund types:
The Special Revenue Funds are used to account for and report the proceeds of specific
revenue sources that are restricted to expenditure for special purposes other than debt
service or capital projects.
The Capital Projects Funds are used to account for and report financial resources that are
restricted or assigned to expenditures for capital outlays including the acquisition or
construction of capital facilities and other capital assets.
The Debt Service Fund is used to account for the principal and interest payments on current
and long-term debt.
The Internal Service Fund is used to account for the financing of special activities that
provide services within the City. The primary activity of the City’s Internal Service Fund is
vehicle and equipment maintenance.
L. Use of Estimates
The preparation of the basic financial statements in conformity with 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, 2018
-47-
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, 2018:
Fiduciary
Funds
Governmental Business-Type Statement of
Activities Activities Net Position Total
Cash and investments 78,935,151$ 27,028,377$ 10,816,374$ 116,779,902$
Cash and investments with
fiscal agents 627,958 - - 627,958
Total 79,563,109$ 27,028,377$ 10,816,374$ 117,407,860$
Government-Wide
Statement of Net Position
Cash, cash equivalents, and investments consisted of the following at June 30, 2018:
Cash on hand 7,777$
Demand deposits 943,318
Investments 116,456,765
Total 117,407,860$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-48-
Note 2 – Cash, Cash Equivalents and Investments (Continued)
A. Cash Deposits
The carrying amounts of the City’s demand deposits were $943,318 at June 30, 2018. Bank
balances at June 30, 2018, were $2,507,166 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.
B. Investments
City Cash & Investment Pool
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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-49-
Note 2 – Cash, Cash Equivalents and Investments (Continued)
B. Investments (Continued)
City Cash & Investment Pool (Continued)
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% None
Commercial Paper 270 days 25% 3%
Municipal Bonds 5 years 30% 5%
Negotiable Certificates of Deposits 5 years 30% 5%
Local Agency Investment Fund (LAIF) N/A None None
County of San Diego Investment Pool N/A None None
CalTrust Joint Powers Authority N/A None None
Obligation of any State 5 years None None
* Excluding amounts held by trustee that are not subject to California Government Code restriction.
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 None
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-50-
Note 2 – Cash, Cash Equivalents and Investments (Continued)
C. 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 13,886,728$ 8,960,517$ 2,969,649$ 1,956,562$ -$
U.S. Agencies 36,409,814 16,865,214 15,636,881 3,907,719 -
Municipalities 1,233,432 1,233,432 - - -
CalTrust Investment Pool - Short term 10,836,888 10,836,888 - - -
CalTrust Investment Pool - Medium term 10,848,111 - 10,848,111 - -
Medium-Term and Corporate Notes 21,319,559 3,974,040 13,416,425 3,929,094 -
Local Agency Investment Fund (LAIF) 21,182,148 21,182,148 - - -
San Diego County Investment Pool 62,126 62,126 - - -
Certificates of Deposit 50,000 50,000 - - -
Held by bond trustee:
Money Market Funds 627,959 627,959 - - -
Total 116,456,765$ 63,792,324$ 42,871,066$ 9,793,375$ -$
Remaining Maturities
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, 2018 for each investment
type:
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-51-
Note 2 – Cash, Cash Equivalents and Investments (Continued)
C. Risk Disclosures (Continued)
Credit Risk (Continued)
Minimum
Investment Type Rating S&P Moody's Fair Value
U.S. Treasury Bills N/A N/A N/A 13,886,728$
U.S. Agencies Aaa AA Aaa 36,409,814
Municipalities Aaa AA not rated 1,233,432
CalTrust Investment Pool-Short term AAf AAf not rated 10,836,888
CalTrust Investment Pool-Medium term N/A not rated not rated 10,848,111
Medium-Term and Corporate Notes A-/A3 AA Aaa 21,319,559
Local Agency Investment Fund (LAIF) N/A not rated not rated 21,182,148
San Diego County Investment Pool AAAf AAAf not rated 62,126
Certificates of Deposit N/A exempt exempt 50,000
Held by bond trustee:
Money Market Funds N/A AAAm Aaamf 627,959
Total 116,456,765$
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:
Trustee/Custodian Investment Type Reported Amount
Union Bank U.S. Treasuries 13,886,728$
Union Bank U.S. Agencies 36,409,814
Union Bank Municipalities 1,233,432
Union Bank Corporates 21,319,559
Wells Fargo CalTrust Investment Pool 21,684,999
Wells Fargo Certificates of Deposit 50,000
State Treasurer Office LAIF 21,182,148
San Diego County Investment Pool 62,126
US Bank Money Market 627,959
116,456,765$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-52-
Note 2 – Cash, Cash Equivalents and Investments (Continued)
D. Investment in Local Agency Investment Funds
The City’s investments with Local Agency Investment Funds (“LAIF”) at June 30, 2018, 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:
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, 2018, the City had $21,182,148 invested in LAIF, which had invested 2.67%
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.
E. 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 Capitol Mall, Suite 702, Sacramento, CA 95814.
As of June 30, 2018, the City had $21,684,999 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, 2018
-53-
Note 2 – Cash, Cash Equivalents and Investments (Continued)
F. 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, 2018, the City had $62,126 invested in the San Diego County Investment Pool.
The City’s investment in this pool is reported in the accompanying financial statements at
fair market value.
G. Fair Value Measurements
GASB Statement No. 72, Fair Value Measurements and Application, establishes a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This
hierarchy consists of three broad levels: Level 1 inputs consist of quoted prices (unadjusted)
for identical assets and liabilities in active markets that a government can access at the
measurement date, Level 2 inputs are derived principally from or corroborated by
observable market data by correlation or other means for an asset or liability, and Level 3
inputs have the lowest priority and consist of unobservable inputs for an asset or liability.
The following table presents the balances of the assets measured at fair value on a
recurring basis as of June 30, 2018.
Not Subject to
Fair Value Level Total Level 1 Level 2 Level 3 GASB 72
U.S. Treasury Bills 13,886,728$ 13,886,728$ -$ -$ -$
U.S. Agencies 36,409,814 36,409,814 - - -
Municipal Bonds 1,233,432 - 1,233,432 - -
CalTrust Investment Pools 21,684,999 - - - 21,684,999
Medium-Term and Corporate Notes 21,319,559 - 21,319,559 - -
Local Agency Investment Fund (LAIF) 21,182,148 - - - 21,182,148
San Diego County Investment Pool 62,126 - - - 62,126
Certificates of Deposit 50,000 50,000 - - -
Held by Bond Trustees 627,959 - - - 627,959
Total investments by fair value level 116,456,765$ 50,346,542$ 22,552,991$ -$ 43,557,232$
Fair Value Measurement Using
Investments by
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-54-
Note 3 – Interfund Transactions
A. Due To and Due From Other Funds
As of June 30, 2018, balances were as follows:
General Water Sewer
Due to other funds Fund Fund Fund Total
Governmental Activities:
Non-major Governmental Funds 274,747$ 32,890$ 20,491$ 328,128$
Total due to other funds 274,747$ 32,890$ 20,491$ 328,128$
Due from other funds
These balances resulted from loans to cover negative cash balances as of June 30, 2018.
B. Advances To and Advances From Other Funds
Non-major
Governmental General Water
Advances to other funds Funds Fund Fund Total
Governmental Activities:
General Fund 798,299$ -$ 537,622$ 1,335,921$
Non-major Governmental Funds 17,576 - - 17,576
Business-Type Activities
Internal Service Fund 78,900 360,500 - 439,400
Sewer Fund 214,500 - - 214,500
Total advances to other funds 1,109,275$ 360,500$ 537,622$ 2,007,397$
Advances from other funds
C. Advances To and Advances From Fiduciary Funds
Advances from
governmental funds
Successor
Agency to the
Advances to fiduciary funds Poway RDA Total
Governmental Activities:
Housing Authority 668,531$ 668,531$
Non-major Governmental Funds 849,961 849,961
Business-Type Activities
Water Fund 1,260,483 1,260,483
Sewer Fund 563,677 563,677
Total 3,342,652$ 3,342,652$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-55-
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 advances to the former Poway Redevelopment
Agency, which now reside in the Successor Agency, totaling $3,342,652. As approved
by the California Department of Finance, these advances are being repaid through fiscal
year 2032-33.
D. Transfers To and From Other Funds
Transfers for the year ended June 30, 2018, were as follows:
Water Sewer Internal Non-major
Enterprise Enterprise Service Governmental
Transfers In General Fund Fund Fund Funds Total
General Fund -$ 150,980$ 57,760$ 700,525$ 770,119$ 1,679,384$
Housing Authority - - - - 820,000 820,000
Non-major Governmental Funds 1,040,595 167,960 105,727 - - 1,314,282
Water Enterprise Fund 33,364 - - - - 33,364
Sewer Enterprise Fund 22,240 - - - - 22,240
Internal Service Funds 9,580 - - - - 9,580
Total 1,105,779$ 318,940$ 163,487$ 700,525$ 1,590,119$ 3,878,850$
Transfers Out
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, 2018
-56-
Note 4 – Capital Assets
A. Governmental Activities
A summary of changes in capital assets for governmental activities for the year ended June 30,
2018 is as follows:
Balance at Balance at
June 30, 2017 Transfers* Additions Deletions June 30, 2018
Non-Depreciable Assets
Land 32,082,894$ 8,362,684$ 830,268$ (879,789)$ 40,396,057$
Construction in progress 512,113 - 4,470,581 (366,332) 4,616,362
Total non-depreciable assets 32,595,007 8,362,684 5,300,849 (1,246,121) 45,012,419
Depreciable Assets
Buildings 51,091,788 13,075,366 390,373 - 64,557,527
Improvements other than buildings 3,251,555 2,282,611 - - 5,534,166
Infrastructure 128,788,431 17,739,258 - - 146,527,689
Machinery and equipment 18,886,858 - 743,066 (270,074) 19,359,850
Total depreciable assets 202,018,632 33,097,235 1,133,439 (270,074) 235,979,232
Less accumulated depreciation
Buildings (24,703,381) (11,834,758) (1,342,107) - (37,880,246)
Improvements other than buildings (1,402,492) (538,914) (200,905) - (2,142,311)
Infrastructure (98,717,489) (2,881,945) (3,169,102) - (104,768,536)
Machinery and equipment (13,967,039) - (981,140) 265,405 (14,682,774)
Total accumulated depreciation (138,790,401) (15,255,617) (5,693,254) 265,405 (159,473,867)
Total depreciable assets, net 63,228,231 17,841,618 (4,559,815) (4,669) 76,505,365
Total governmental activities 95,823,238$ 26,204,302$ 741,034$ (1,250,790)$ 121,517,784$
*For additional information on transfers, see Note 17.
Governmental activities depreciation expense for capital assets for the year ended
June 30, 2018 is as follows:
General government 866,623$
Public safety 830,284
Public works 3,498,507
Community services 497,840
Total depreciation expense 5,693,254$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-57-
Note 4 – Capital Assets (Continued)
B. Business-type Activities
A summary of changes in capital assets for business-type activities for the year ended June 30,
2018 is as follows:
Balance at Balance at
June 30, 2017 Additions Deletions June 30, 2018
Non-Depreciable Assets
Land 76,797$ -$ -$ 76,797$
Construction in progress 1,301,813 2,093,010 (2,438,736) 956,087
Total non-depreciable assets 1,378,610 2,093,010 (2,438,736) 1,032,884
Depreciable Assets
Buildings 21,128,309 - - 21,128,309
Improvements other than buildings 70,034,543 1,914,992 - 71,949,535
Machinery and equipment 3,783,853 207,445 (97,469) 3,893,829
Total depreciable assets 94,946,705 2,122,437 (97,469) 96,971,673
Less accumulated depreciation
Buildings (18,386,905) (466,824) - (18,853,729)
Improvements other than buildings (42,410,614) (1,893,221) - (44,303,835)
Machinery and equipment (2,586,356) (240,042) 97,469 (2,728,929)
Total accumulated depreciation (63,383,875) (2,600,087) 97,469 (65,886,493)
Total depreciable assets, net 31,562,830 (477,650) - 31,085,180
Total business-type activities 32,941,440$ 1,615,360$ (2,438,736)$ 32,118,064$
Business-type activities depreciation expense for capital assets for the year ended
June 30, 2018 is as follows:
Water Enterprise Fund 1,513,219$
Sewer Enterprise Fund 1,086,868
Total depreciation expense 2,600,087$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-58-
Note 4 – Capital Assets (Continued)
C. Fiduciary Activities
A summary of changes in capital assets for fiduciary activities for the year ended June 30, 2018
is as follows:
Balance at Balance at
June 30, 2017 Transfers* Restatement* Additions Deletions June 30, 2018
Non-Depreciable Assets
Land 21,774,792$ (8,362,684)$ -$ -$ (10,547,349)$ 2,864,759$
Total non-depreciable assets 21,774,792 (8,362,684) - - (10,547,349) 2,864,759
Depreciable Assets
Buildings 17,581,603 (15,357,977) (2,223,626) - - -
Infrastructure 17,739,258 (17,739,258) - - - -
Total depreciable assets 35,320,861 (33,097,235) (2,223,626) - - -
Less accumulated depreciation
Buildings (13,351,561) 12,373,672 977,889 - - -
Infrastructure (2,881,945) 2,881,945 - - - -
Total accumulated depreciation (16,233,506) 15,255,617 977,889 - - -
Total depreciable assets, net 19,087,355 (17,841,618) (1,245,737) - - -
Total fiduciary activities 40,862,147$ (26,204,302)$ (1,245,737)$ -$ (10,547,349)$ 2,864,759$
*For additional information on transfers and restatement, see Note 17 and 18 respectively.
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, 2018
-59-
Note 5 – Long-Term Debt
A summary of changes in long-term debt for the year ended June 30, 2018:
Amount Amount
Balance Balance Due Within Due In More
June 30, 2017 Additions Reductions June 30, 2018 One Year Than One Year
Governmental Activities
Certificates of Participation 13,987,299$ -$ (791,322)$ 13,195,977$ 810,432$ 12,385,545$
Compensated Absences 1,553,764 1,558,061 (1,526,120) 1,585,705 1,557,486 28,219
Total governmental activities 15,541,063$ 1,558,061$ (2,317,442)$ 14,781,682$ 2,367,918$ 12,413,764$
Business-Type Activities
Compensated Absences 250,148$ 285,122$ (242,854)$ 292,416$ 284,030$ 8,386$
Total business-type activities 250,148$ 285,122$ (242,854)$ 292,416$ 284,030$ 8,386$
Fiduciary Funds
Certificates of Participation 430,053$ -$ (430,053)$ -$ -$ -$
Tax Allocation Bonds 163,593,731 - (9,089,143) 154,504,588 8,858,261 145,646,327
Notes Payable 3,193,031 224,154 (78,621) 3,338,564 100,000 3,238,564
Total fiduciary activities 167,216,815$ 224,154$ (9,597,817)$ 157,843,152$ 8,958,261$ 148,884,891$
Classification
A. Governmental Activities Long-Term Debt
Certificates of Participation at June 30, 2018, consisted of the following:
Amount Amount
Balance Balance Due Within Due in More
June 30, 2017 Additions Reductions June 30, 2018 One Year Than One Year
2005 Certificates of Participation 2,180,000$ -$ (180,000)$ 2,000,000$ 185,000$ 1,815,000$
Bond Premium 18,406 - (3,236) 15,170 2,977 12,193
2012 Certificates of Participation 11,615,000 - (590,000) 11,025,000 605,000 10,420,000
Bond Premium 173,893 - (18,086) 155,807 17,455 138,352
Total Certificates of Participation 13,987,299$ -$ (791,322)$ 13,195,977$ 810,432$ 12,385,545$
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 and 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-60-
Note 5 – Long-Term Debt (Continued)
A. Governmental Activities Long-Term Debt (Continued)
2005 Certificates of Participation (Continued)
At June 30, 2018, the City’s portion of the outstanding balance of the 2005 Certificates of
Participation was $2,000,000.
The annual requirements to amortize the City portion of Certificates of Participation outstanding
at June 30, 2018, are as follows:
Year Ending
June 30, Principal Interest Total
2019 185,000$ 83,875$ 268,875$
2020 195,000 76,153 271,153
2021 205,000 67,903 272,903
2022 210,000 58,950 268,950
2023 220,000 49,275 269,275
2024 - 2027 985,000 91,238 1,076,238
Total 2,000,000$ 427,394$ 2,427,394$
2012 Certificates of Participation
On October 5, 2012, the City issued 2012 Refunding Certificates of Participation to provide for
the defeasance and refunding of 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 leased 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, 2018, the
outstanding balance of the 2012 Certificates of Participation was $11,025,000.
The annual requirements to amortize Certificates of Participation outstanding at June 30, 2018,
are as follows:
Year Ending
June 30, Principal Interest Total
2019 605,000$ 326,870$ 931,870$
2020 615,000 314,770 929,770
2021 630,000 300,933 930,933
2022 645,000 283,608 928,608
2023 665,000 264,256 929,256
2024 - 2028 3,635,000 1,009,588 4,644,588
2029 - 2033 3,330,000 388,383 3,718,383
2034 900,000 29,250 929,250
Total 11,025,000$ 2,917,658$ 13,942,658$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-61-
Note 5 – Long-Term Debt (Continued)
B. Fiduciary Funds Long Term Debt
Certificates of Participation
Certificates of Participation at June 30, 2018, consisted of the following:
Amount Amount
Balance Balance Due Within Due in More
June 30, 2017 Additions Reductions June 30, 2018 One Year Than One Year
2005 Certificates
of Participation 430,000$ -$ (430,000)$ -$ -$ -$
Bond Premium 53 - (53) - - -
Total Certificates of
Participation 430,053$ -$ (430,053)$ -$ -$ -$
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 and 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, $2,335,000 was transferred to the Successor Agency. At June 30, 2018, the
Successor Agency’s portion of the outstanding balance of the 2005 Certificates of Participation
was paid off in full.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-62-
Note 5 – Long-Term Debt (Continued)
B. Fiduciary Funds Long Term Debt (Continued)
Tax Allocation Bonds
Tax Allocation Bonds at June 30, 2018, consisted of the following:
Amount Amount
Balance Balance Due Within Due in More
June 30, 2017 Additions Reductions June 30, 2018 One Year Than One Year
2015A Tax Allocation Bonds 133,110,000$ -$ -$ 133,110,000$ 1,885,000$ 131,225,000$
Bond Premium 18,188,731 - (1,884,143) 16,304,588 1,883,261 14,421,327
2015B Tax Allocation Bonds 12,295,000 - (7,205,000) 5,090,000 5,090,000 -
Total Tax Allocation Bonds 163,593,731$ -$ (9,089,143)$ 154,504,588$ 8,858,261$ 145,646,327$
Classification
2015A Tax Allocation Bonds
On July 1, 2015, the Successor Agency to the Poway Redevelopment Agency (Successor
Agency) issued 2015A Tax Allocation Bonds in the amount of $133,110,000 for the purpose of
effecting a refunding of the Poway Redevelopment Agency’s outstanding Paguay
Redevelopment Project Tax Allocation Refunding Bonds, Series 2000, Series 2001 and Series
2003. The bonds are dated July 1, 2015 and mature on June 15, 2033 in the principal amount
and bear interest from 4% to 5%. Interest is payable semi-annually on June 15 and December
15 through 2033. The bonds maturing on December 15, 2026, December 15, 2027, June 15,
2028, December 15, 2028 and on December 15, 2029 are subject to optional redemption prior
to maturity at the option of the Successor Agency. The Successor Agency reduced its
aggregate debt service payments by $50,776,463 which resulted in an economic gain of
$25,436,195.
The Successor Agency has pledged all revenues and all of the monies in the Redevelopment
Obligation Retirement Fund and all monies in the Debt Service Fund. No funds or properties,
other than those previously stated, shall be pledged for the payment of the principal or interest
or redemption premium on the bonds.
As of June 30, 2018, the balance of the 2015A Tax Allocation Bonds was $133,110,000.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-63-
Note 5 – Long Term Debt (Continued)
B. Fiduciary Funds Long Term Debt (Continued)
Tax Allocation Bonds (Continued)
2015A Tax Allocation Bonds (Continued)
The annual requirements to amortize the bonds outstanding at June 30, 2018 are as follows:
Year Ending
June 30, Principal Interest Total
2019 1,885,000$ 3,300,525$ 5,185,525$
2020 7,190,000 6,454,450 13,644,450
2021 7,545,000 6,108,625 13,653,625
2022 7,935,000 5,726,500 13,661,500
2023 8,345,000 5,324,750 13,669,750
2024 - 2028 47,845,000 19,711,625 67,556,625
2029 - 2033 40,835,000 7,032,125 47,867,125
2034 11,530,000 434,125 11,964,125
Total 133,110,000$ 54,092,725$ 187,202,725$
2015B Tax Allocation Bonds
On July 1, 2015, the Successor Agency to the Poway Redevelopment Agency (Successor
Agency) issued the 2015B Tax Allocation Bonds in the amount of $26,845,000 for the purpose
of effecting a refunding of the Poway Redevelopment Agency’s outstanding Paguay
Redevelopment Project Tax Allocation Refunding Bonds, Series 2007. The bonds are dated
July 1, 2015 and mature on June 15, 2019 in the principal amount of $26,845,000 and bears
interest from 0.50% to 2.35%. Interest is paid semi-annually on June 15 and December 15
through 2033. The bonds are not subject to optional redemption prior to maturity. The
Successor Agency reduced its aggregate debt service payments by $15,094,128 which resulted
in an economic gain of $3,786,053.
The Successor Agency has pledged all revenues and all of the monies in the Redevelopment
Obligation Retirement Fund and all monies in the Debt Service Fund. No funds or properties,
other than those previously stated, shall be pledged for the payment of the principal or interest
on the bonds.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-64-
Note 5 – Long Term Debt (Continued)
B. Fiduciary Funds Long Term Debt (Continued)
Tax Allocation Bonds (Continued)
2015B Tax Allocation Bonds (Continued)
As of June 30, 2018, the balance of the 2015B Tax Allocation Bonds was $5,090,000.
The annual requirements to amortize the bonds outstanding at June 30, 2018 are as follows:
Year Ending
June 30, Principal Interest Total
2019 5,090,000$ 73,637$ 5,163,637$
Total 5,090,000$ 73,637$ 5,163,637$
Notes Payable
Notes payable at June 30, 2018, consisted of the following:
Amount Amount
Balance Balance Due Within Due in More
June 30, 2017 Additions Reductions June 30, 2018 One Year Than One Year
Mossy Nissan 3,193,031$ 224,154$ (78,621)$ 3,338,564$ 100,000$ 3,238,564$
Total Notes Payable 3,193,031$ 224,154$ (78,621)$ 3,338,564$ 100,000$ 3,238,564$
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
$3,338,564 at June 30, 2018.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-65-
Note 5 – Long Term Debt (Continued)
C. 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, 2018, the outstanding balance of governmental activities and business-type
activities compensated absences were $1,585,705 and $292,416, respectively.
Note 6 – Pension Plan Summary
The City currently has a total of two pension plans administered by CalPERS and one
retirement enhancement plan administered by PARS. The pension plans consist of a
miscellaneous agent plan and a cost-sharing safety plan (see Note 7 for a full description of the
plans). The retirement enhancement plan serves as a supplemental defined benefit pension
plan (see Note 8 for a full description of the plan). The summary of the pension related liability,
deferred inflows of resources and deferred outflows of resources are as follows:
Miscellaneous Safety PARS Total
Deferred Outflows of
Resources -
Pension related 7,278,674$ 4,749,090$ 81,296$ 12,109,060$
Deferred Inflows of
Resources -
Pension related (411,833) (408,422) (151,721) (971,976)
Pension Liability 32,661,161 15,401,317 1,698,223 49,760,701
Note 7 – Defined Benefit Pension Plans – CalPERS
A. General Information about the Pension Plans
Plan Descriptions
The Plans consist of an agent multiple-employer defined benefit pension plan and a
public agency cost-sharing multiple-employer defined benefit pension plan administered
by the California Public Employees’ Retirement System (CalPERS).
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-66-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
A. General Information about the Pension Plans (Continued)
Plan Descriptions (Continued)
Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan
A full description of the pension plan regarding number of employees covered, benefit
provisions, assumptions (for funding, but not accounting purposes), and membership
information are listed in the plan’s June 30, 2016, Annual Actuarial Valuation Report
(funding valuation). Details of the benefits provided can be obtained in Appendix B of the
actuarial valuation report. This report and CalPERS’ audited financial statements are
publicly available reports that can be obtained at CalPERS’ website, at
www.calpers.ca.gov.
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
All qualified permanent and probationary employees are eligible to participate in the
Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan)
administered by the California Public Employees’ Retirement System (CalPERS.) The
Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and
fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits
for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans
within the safety or miscellaneous pools are not separate plans under GASB Statement
No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous
or safety risk pools. The City sponsors one safety plan in safety risk pools. Benefit
provisions under the Plan are established by State statute and the City resolution.
CalPERS issues publicly available reports that include a full description of the pension
plan regarding benefit provisions, assumptions and membership information that can be
found on the CalPERS’ website, at www.calpers.ca.gov.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living
adjustments and death benefits to plan members, who must be public employees and
beneficiaries. Benefits are based on years of credited service, equal to one year of full
time employment. Members with five years of total service are eligible to retire at age 50
with statutorily reduced benefits. All members are eligible for non-duty disability benefits
after 5 years of service. The death benefit is one of the following: the Basic Death
Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The
cost of living adjustments for each plan are applied as specified by the Public
Employees’ Retirement Law.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-67-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
A. General Information about the Pension Plans (Continued)
Benefits Provided, (Continued)
The Plan operates under the provisions of the California Public Employees’ Retirement
Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA),
and the regulations, procedures and policies adopted by the CalPERS Board of
Administration. The Plan’s authority to establish and amend the benefit terms are set by
the PERL and PEPRA, and may be amended by the California state legislature and in
some cases require approval by the CalPERS Board.
The Plans’ provisions and benefits in effect at June 30, 2018, are summarized as
follows:
On or After
Prior to January 1, 2011 Prior On or After
Hire date January 1, 2011 to January 1, 2013 January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 60 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 63 & Up 50 - 63 & Up 52-67 & Up
Monthly benefits, as a % of eligible
compensations 1.426% to 2.418% 1.092% to 2.418% 1.0% or 2.5%
Required employee contribution rates 7.000% 7.000% 6.250%
Required employer contribution rates 21.612% 21.612% 21.612%
On or After
Prior to January 1, 2011 Prior On or After
Hire date January 1, 2011 to January 1, 2013 January 1, 2013
Benefit formula 3.0% @ 50 3.0% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 & Up 50-55 & Up 50-57 & Up
Monthly benefits, as a % of eligible
compensations 3.0% 2.4% to 3.0% 2.0% to 2.7%
Required employee contribution rates 9.000% 9.000% 11.500%
Required employer contribution rates 18.615% 16.842% 11.990%
Miscellaneous Plans
Safety Plan
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-68-
Note 7 – Defined Benefit Pension Plans – CalPERS
A. General Information about the Pension Plans (Continued)
Employees Covered
At June 30, 2016 (valuation date), the following employees were covered by the benefit
terms:
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 224
Inactive employees entitled to but
not yet receiving benefits 206
Active employees 171
Total 601
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires
that the employer contribution rates for all public employers be determined on an annual
basis by the actuary and shall be effective on the July 1 following notice of a change in
the rate. The total plan contributions are determined through CalPERS’ annual actuarial
valuation process.
Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan
The actuarially determined rate is the estimated amount necessary to finance the costs
of benefits earned by employees during the year, with an additional amount to finance
any unfunded accrued liability. The employer is required to contribute the difference
between the actuarially determined rate and the contribution rate of employees.
Employer contribution rates may change if plan contracts are amended. Payments made
by the employer to satisfy contribution requirements that are identified by the pension
plan terms as plan member contribution requirements are classified as plan member
contributions. Employer Contributions to the Plan for the fiscal year ended June 30,
2018, were $2,452,302.
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
For public agency cost-sharing plans covered by either the Miscellaneous or Safety risk
pools, the Plan’s actuarially determined rate is based on the estimated amount
necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by
employees during the year, and any unfunded accrued liability. The employer is required
to contribute the difference between the actuarially determined rate and the contribution
rate of employees. Employer contribution rates may change if plan contracts are
amended. Payments made by the employer to satisfy contribution requirements that are
identified by the pension plan terms as plan member contribution requirements are
classified as plan member contributions. Employer Contributions to the Plan for the fiscal
year ended June 30, 2018, were $1,517,719.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-69-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
A. General Information about the Pension Plans (Continued)
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
The actual employer payments of $1,340,317 made to CalPERS by the City during the
measurement period ended June 30, 2017, differed from the City’s proportionate share
of the employer’s contributions of $1,450,314 by $109,997, which is being amortized
over the expected average remaining service lifetime in the Public Agency Cost-Sharing
Multiple Employer Plan.
B. Net Pension Liability
The City’s net pension liability for the Plan is measured as the total pension liability, less
the pension plan’s fiduciary net position. The net pension liability of the Plan is measured
as of June 30, 2017, using an annual actuarial valuation as of June 30, 2016 rolled
forward to June 30, 2017, using standard update procedures. A summary of principal
assumptions and methods used to determine the net pension liability is as follows.
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
Valuation Date June 30, 2016
Measurement Date June 30, 2017
Actuarial Cost Method Entry Age Normal
Asset Valuation Method: Market Value of Assets
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.75%
Salary Increase (1) 3.3% - 14.2%
Investment Rate of Return (2)7.65%
Mortality Rate Table (3) Derived using CalPERS' membership
data for all funds
Post Retirement Benefit Increase Contract COLA up to 2.75% until
purchasing power protection allowance
floor on purchasing power applies,
2.75% thereafter
(1) Annual increase vary by category, entry age, and duration of service
(2) Net of pension plan investment and administrative expenses; includes inflation
(3) The mortality table used was developed based on CalPERS' specific data. The table includes 20
years of mortality improvements using Society of Actuaries Scale BB. For more details on the table,
please refer to the 2014 experience study report.
All other actuarial assumptions used in the June 30, 2016, valuation were based on the
results of an actuarial experience study for the period from 1997 to 2011, including
updates to salary increase, mortality and retirement rates. The Experience Study report
can be obtained at CalPERS’ website under Forms and Publications.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-70-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
B. Net Pension Liability (Continued)
Change of Assumptions
In fiscal year 2016-17, the financial reporting discount rate for the PERF C was lowered
from 7.65 percent to 7.15 percent.
Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent and
reflects the long-term expected rate of return for the Plan net of investment expenses
and without reduction for administrative expenses. To determine whether the municipal
bond rate should be used in the calculation of the discount rate for public agency plans
(including PERF C), the amortization and smoothing periods adopted by the Board in
2013 were used. For the Plan, the crossover test was performed for a miscellaneous
agent plan and a safety agent plan selected as being more at risk of failing the crossover
test and resulting in a discount rate that would be different from the long-term expected
rate of return on pension investments. Based on the testing of the plans, the tests
revealed the assets would not run out. Therefore, the long-term expected rate of return
on pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability for PERF C. The crossover test results can be found
on CalPERS’ website, at www.calpers.ca.gov.
The long-term expected rate of return on pension plan investments was determined
using a building-block method in which expected future real rates of return (expected
returns, net of pension plan investment expense and inflation) are developed for each
major asset class.
In determining the long-term expected rate of return, CalPERS took into account both
short-term and long-term market return expectations as well as the expected pension
fund cash flows. Using historical returns of all the funds’ asset classes, expected
compound (geometric) returns were calculated over the short-term (first 10 years) and
the long-term (11+ years) using a building-block approach. Using the expected nominal
returns for both short-term and long-term, the present value of benefits was calculated
for each fund. The expected rate of return was set by calculating the rounded single
equivalent expected return that arrived at the same present value of benefits for cash
flows as the one calculated using both short-term and long-term returns. The expected
rate of return was then set equal to the single equivalent rate calculated above and
adjusted to account for assumed administrative expenses.
The following table reflects long-term expected real rate of return by asset class. The
rate of return was calculated using the capital market assumptions applied to determine
the discount rate and asset allocation. The target allocation shown was adopted by the
CalPERS Board effective on July 1, 2015.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-71-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
B. Net Pension Liability (Continued)
Discount Rate (Continued)
Asset Class
New
Strategic
Allocation
Real Return
Years 1 - 101
Real Return
Year 11+2
Global Equity 47.0% 4.90% 5.38%
Global Fixed income 19.0% 0.80% 2.27%
Inflation Sensitive 6.0% 0.60% 1.39%
Private Equity 12.0% 6.60% 6.63%
Real Estate 11.0% 2.80% 5.21%
Infrastructure and Forestland 3.0% 3.90% 5.36%
Liquidity 2.0% (0.40%) (0.90%)
Total 100.0%
1 An expected inflation of 2.5% used for this period
2 An expected inflation of 3.0% used for this period
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities,
deferred inflows of resources, and fiduciary net position are presented in CalPERS’
audited financial statements, which are publicly available reports that can be obtained at
CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and
additions to/deductions from the plan’s fiduciary net position have been determined on
the same basis used by the pension plan, which is the economic resources
measurement focus and the accrual basis of accounting. Benefits and refunds are
recognized when due and payable in accordance with the terms of the plan. Investments
are reported at fair value.
The plan fiduciary net position disclosed in the GASB 68 accounting valuation report
may differ from the plan assets reported in the funding actuarial valuation report due to
several reasons. First, for the accounting valuations, CalPERS must keep items such as
deficiency reserves, fiduciary self-insurance and Other Post-Employment Benefits
(OPEB) expense included as assets. These amounts are excluded for rate setting
purposes in the funding actuarial valuation. In addition, differences may result from early
Comprehensive Annual Financial Report closing and final reconciled reserves.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-72-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
C. Net Pension Liability and Proportionate Share of Net Pension Liability
Miscellaneous Plan
The following table shows the Plan’s change in net pension liability over the
measurement period.
Increase (Decrease)
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability/(Asset)
(c) = (a) - (b)
Balance at: 6/30/2016 (VD)100,303,363$ 71,519,775$ 28,783,588$
Changes Recognized for the
Measurement Period:
• Service Cost 1,785,822 - 1,785,822
• Interest on the Total
Pension Liability 7,456,135 - 7,456,135
• Changes of Benefit Terms
• Changes of Assumptions 6,085,867 - 6,085,867
• Differences between
Expected and Actual
Experience (471,057) - (471,057)
• Net Plan to Plan Resource
Movement - - -
• Contributions - Employer - 2,311,817 (2,311,817)
• Contributions - Employee - 806,615 (806,615)
• Net Investment Income - 7,966,356 (7,966,356)
• Benefit Payments,
including Refunds of - - -
Employee Contributions (5,058,914) (5,058,914) -
• Administrative Expense - (105,594) 105,594
Net Changes during 2016-17 9,797,853 5,920,280 3,877,573
Balance at: 6/30/2017 (MD)110,101,216$ 77,440,055$ 32,661,161$ Valuation Date (VD), Measurement Date (MD).
Safety Plan
The following table shows the Plan’s proportionate share of the net pension liability over
the measurement period.
Plan Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Plan Net Pension
Liability
(c) = (a) - (b)
Balance at: 6/30/2016 (VD) 52,189,011$ 38,848,860$ 13,340,151$
Balance at: 6/30/2017 (MD) 57,427,165$ 42,025,848$ 15,401,317$
Net changes during 2016-17 5,238,154$ 3,176,988$ 2,061,166$
Increase (Decrease)
Valuation Date (VD), Measurement Date (MD)
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-73-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
C. Net Pension Liability and Proportionate Share of Net Pension Liability (Continued)
The City’s net pension liability for each of the cost sharing, multiple-employer Plans is
measured as the proportionate share of the net pension liability. The net pension liability
of each of the Plans is measured as of June 30, 2017, and the total pension liability for
each Plan used to calculate the net pension liability was determined by an actuarial
valuation as of June 30, 2016, rolled forward to June 30, 2017, using standard update
procedures. The City’s proportion of the net pension liability was determined by
CalPERS using the output from the Actuarial Valuation System and the fiduciary net
position, as provided in the CalPERS Public Agency Cost-Sharing Allocation
Methodology Report, which is a publicly available report that can be obtained at
CalPERS’ website under Forms and Publications, at www.calpers.ca.gov. The City’s
proportionate share of the net pension liability for each Plan as of June 30, 2016, and
2017, was as follows:
Safety Plans
Proportionate Share of NPL - June 30, 2016 0.25757%
Proportionate Share of NPL - June 30, 2017 0.25775%
Change - Increase 0.00018%
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate
The following presents the City’s proportionate share of the net pension liability of each
Plan as of the measurement date, calculated using the discount rate of 7.15 percent, as
well as what the net pension liability would be if it were calculated using a discount rate
that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15
percent) than the current rate:
Discount Rate - 1%
(6.15%)
Current Discount Rate
(7.15%)
Discount Rate + 1%
(8.15%)
Miscellaneous Plans'
Net Pension Liability 47,271,229$ 32,661,161$ 20,566,230$
Safety Plans' Net
Pension Liability 23,436,358$ 15,401,317$ 8,833,073$
Subsequent Events
There were no subsequent events that would materially affect the results presented in
this disclosure.
Recognition of Gains and Losses
Under GASB 68, gains and losses related to changes in total pension liability and
fiduciary net position are recognized in pension expense systematically over time.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-74-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
C. Net Pension Liability and Proportionate Share of Net Pension Liability (Continued)
Recognition of Gains and Losses (Continued)
The first amortized amounts are recognized in pension expense for the year the gain or
loss occurs. The remaining amounts are categorized as deferred outflows and deferred
inflows of resources related to pensions and are to be recognized in future pension
expense.
The amortization period differs depending on the source of the gain or loss:
Difference between projected
and actual earnings
5 year straight-line amortization
All other amounts Straight-line amortization over the average
expected remaining service lives of all members
that are provided with benefits (active, inactive and
retired) as of the beginning of the measurement
period
For the agent, multiple employer plan, the expected average remaining service lifetime
(EARSL) is calculated by dividing the total future service years by the total number of
plan participants (active, inactive, and retired). For the cost sharing, multiple employer
plan, the EARSL is calculated by dividing the total future service years by the total
number of plan participants (active, inactive, and retired) in the Public Agency Cost
Sharing Multiple-Employer Plan (PERF C).
The EARSL for the miscellaneous agent plan for the June 30, 2017, measurement date
is 2.7 years, which was obtained by dividing the total service years of 1,630 (the sum of
remaining service lifetimes of the active employees) by 601 (the total number of
participants: active, inactive, and retired). Inactive employees and retirees have
remaining service lifetimes equal to 0. Total future service is based on the members’
probability of decrementing due to an event other than receiving a cash refund.
The EARSL for the Plan for the 2016-17 measurement period is 3.8 years, which was
obtained by dividing the total service years of 490,088 (the sum of remaining service
lifetimes of the active employees) by 130,595 (the total number of participants: active,
inactive, and retired). Note that inactive employees and retirees have remaining service
lifetimes equal to 0. Also note that total future service is based on the members’
probability of decrementing due to an event other than receiving a cash refund.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-75-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources
Related to Pensions
Miscellaneous Plan
As of the start of the measurement period (July 1, 2016), the net pension liability is
$28,783,588. For the measurement period ending June 30, 2017, (the measurement
date), the City incurred a pension expense of $4,974,832 for the Plan. A complete
breakdown of the pension expense is as follows:
Description Amount
Service Cost 1,785,822$
Interest on the Total Pension Liability 7,456,135
Changes of Benefit Terms -
Recognized Changes of Assumptions 1,815,348
Recognized Differences between Expected and Actual Experience (292,626)
Net Plan to Plan Resource Movement -
Employee Contributions (806,615)
Projected Earnings on Pension Plan Investments (5,027,236)
Recognized differences between Expected and Actual Earnings on
Plan Investments (61,590)
Administrative Expenses 105,594
Total Pension Expense 4,974,832$
Safety Plan
As of the start of the measurement period (July 1, 2016), the net pension liability for the
safety plan is $13,340,151. For the measurement period ending June 30, 2017 (the
measurement date), the City incurred a pension expense of $2,283,241 for the safety
plan.
As of June 30, 2018, the City has deferred outflows and deferred inflows of resources
related to pensions as follows:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between Expected and
Actual Experience -$ (411,833)$ 167,710$ (43,727)$
Changes of Assumptions 3,831,842 - 2,432,218 (186,606)
Net Difference between Projected and
Actual Earnings on Pension Plan
Investments 994,530 - 530,319 -
Change in Employer's Proportion - - 101,124 -
Difference in Actual vs Projected Contributions - - - (178,089)
Pension Contributions Subsequent to
Measurement Date 2,452,302 - 1,517,719 -
7,278,674$ (411,833)$ 4,749,090$ (408,422)$
Miscellaneous Safety
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-76-
Note 7 – Defined Benefit Pension Plans – CalPERS (Continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources
Related to Pensions, (Continued)
These amounts above are net of outflows and inflow recognized in the 2016-17
measurement period expense. $2,452,302 and $1,517,719 reported as deferred
outflows of resources related to contributions subsequent to the measurement date will
be recognized as a reduction of the net pension liability in the upcoming fiscal year.
Amounts reported as deferred outflows and deferred inflows of resources related to
pensions will be recognized in future pension expense as follows:
Measurement
Period Ended
June 30, Miscellaneous Safety
2018 1,902,725$ -$
2019 2,663,710 711,932
2020 435,927 1,486,243
2021 (587,823) 935,082
2022 - (310,308)
Thereafter
Deferred Outflows/(Inflows) of
Resources, Net
E. Payable to the Pension Plan
At June 30, 2018, the City reported a payable of $0 for the outstanding amount of
contributions to the pension plan required for the year ended June 30, 2018.
Note 8 – Defined Benefit Pension Plan – Retirement Enhancement Plan
A. General Information about the Pension Plan
Plan Description
The Plan is a single-employer, agent, supplemental employee defined benefit pension plan (the
plan II) administered by the Public Agency Retirement Services (PARS) Phase II Systems. A full
description of the pension plan regarding number of employees covered, benefit provisions,
assumptions (for funding, but not account purposes), and membership information are listed in
the July 1, 2017, Annual Actuarial Valuation Report. Details of the benefits provided can be
obtained from the actuarial valuation reports. PARS issues a publicly available financial report
that includes financial statement and required supplementary information for the plan II. That
report may be obtained by writing to PARS, 3961 MacArthur Boulevard, Suite 200, Newport
Beach, California, 92660.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-77-
Note 8 – Defined Benefit Pension Plan – Retirement Enhancement Plan (Continued)
A. General Information about the Pension Plan (Continued)
Benefits provided
The Retirement Enhancement Plan provides a benefit equal to the PARS "2.7% at 55" plan
factor (formula is a static 2.7% at age 55 and older), less the CalPERS "2.0% at 55" plan factor
times final compensation for all years of benefit service.
The Plan provides a pre-retirement death benefit for the eligible surviving spouse of any active
employee who dies after attaining the minimum age requirement and completing the required
years of service for the supplemental retirement benefit. The benefit will be equal to the
participant’s retirement benefit, actuarially reduced as if the participant had retired and elected a
100% joint-and-survivor annuity and paid as an annuity over the lifetime of the surviving spouse.
There is no death benefit payable if there is no surviving spouse.
City Councilmembers who do not meet eligibility requirements at termination of employment, but
will meet the eligibility requirements at a later date, will be eligible for a deferred retirement
benefit upon meeting all the requirements including retirement under CalPERS.
The Plan is closed to all employees hired on or before January 9, 2012 ("soft-freeze").
The Plan’s provisions and benefits in effect at June 30, 2018 (measurement date), are
summarized as follows:
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates
13.54%
none
21.42%
55
Supplemental
On or before January 9, 2012
2.7% @ 55 less CalPERS 2.0% @ 55
from date of hire
life only annuity
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the
employer contribution rates for all public employers be determined on an annual basis by the
actuary and shall be effective on the July 1 following notice of a change in the rate. The total
plan contributions are determined through PARS’ annual actuarial valuation process. The
actuarially determined rate is the estimated amount necessary to finance the costs of benefits
earned by employees during the year, with an additional amount to finance any unfunded
accrued liability. For the measurement period ended June 30, 2017 (the measurement date),
the employer’s contribution rate is 21.42 percent of annual payroll. Employer contribution rates
may change if plan contracts are amended. Employer Contributions for the measurement period
ended June 30, 2018, are $1,560,917.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-78-
Note 8 – Defined Benefit Pension Plan – Retirement Enhancement Plan (Continued)
B. Net Pension Liability
The City’s net pension liability for the Retirement Enhancement Plan is measured as the total
pension liability, less the pension plan’s fiduciary net position. The net pension liability of the
Plan is measured as of June 30, 2018, using an annual actuarial valuation as of June 30, 2018.
A summary of principal assumptions and methods used to determine the net pension liability is
as follows.
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
Supplemental
Valuation Date June 30, 2017
Measurement Date June 30, 2018
Actuarial Cost Method Entry Age Normal
Asset Valuation Method None
Actuarial Assumptions:
Discount Rate 7.00%
Inflation 2.75%
Salary Increases (1)3.5% - 9.90%
Investment Rate of Return 7.00%
Cost of Living Adjustment 2.00%
Mortality Rate Table
(1) Includes inflation. Graded based on years of service, 3.50% after 30 years of service.
Pre-retirement:
CalPERS Miscellaneous
Non-Industrial Rates.
Post-retirement:
CalPERS 1997-2011
Healthy Retiree
Tables (sex distinct)
projected using Scale
AA and base year of
2008.
Discount rate
GASB 67 and 68 generally require that a blended discount rate be used to measure the Total
Pension Liability (the Actuarial Accrued Liability calculated using the Individual Entry Age
Normal Cost Method). The long-term expected return on plan investments may be used to
discount liabilities to the extent that the plan's Fiduciary Net Position (fair market value of
assets) is projected to cover benefit payments and administrative expenses. A 20-year high
quality (AA/Aa or higher) municipal bond rate must be used for periods where the Fiduciary Net
Position is not projected to cover benefit payments and administrative expenses. Determining
the discount rate under GASB 67 and 68 will often require that the actuary perform complex
projections of future benefit payments and asset values.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-79-
Note 8 – Defined Benefit Pension Plan – Retirement Enhancement Plan (Continued)
B. Net Pension Liability (Continued)
Discount rate (continued)
GASB 67 and 68 (paragraph 29) do allow for alternative evaluations of projected solvency, if
such evaluation can reliably be made. GASB does not contemplate a specific method for
making an alternative evaluation of sufficiency; it is left to professional judgment.
The following circumstances justify an alternative evaluation of sufficiency for the City of Poway:
The City of Poway has at least a 5-year history of paying at least 100% of the Actuarially
Determined Contribution (previously termed the Annual Required Contribution).
The Actuarially Determined Contribution is based on a closed amortization period, which
means that payment of the Actuarially Determined Contribution each year will bring the
plan to a 100% funded position by the end of the amortization period.
GASB 67 and 68 specify that the projections regarding future solvency assume that plan
assets earn the assumed rate of return and there are no future changes in the plan
provisions or actuarial methods and assumptions, which means that the projections
would not reflect any adverse future experience which might impact the plan's funded
position.
Based on these circumstances, the City believes that the detailed depletion date projections
outlined in GASB 67 and 68 will show that the Fiduciary Net Position is always projected to be
sufficient to cover benefit payments and administrative expenses.
June 30, 2017 June 30, 2018
Discount rate 7.00% 7.00%
Long-term expected rate of return,
net of investment expense 7.00% 7.00%
Municipal bond rate N/A N/A
The plan's fiduciary net position was projected to be available to make all projected future
benefit payments of current active and inactive employees. Therefore, the discount rate for
calculating the total pension liability is equal to the long-term expected rate of return.
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred
inflows of resources, and fiduciary net position are presented in the City’s GASB 68 Employer
Accounting Information report. The plan’s fiduciary net position and additions to/deductions from
the plan’s fiduciary net position have been determined on the same basis used by the pension
plan, which is the economic resources measurement focus and the accrual basis of accounting.
Benefits and refunds are recognized when due and payable in accordance with the terms of
each plan. Investments are reported at fair value.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-80-
Note 8 – Defined Benefit Pension Plan – Retirement Enhancement Plan (Continued)
C. Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement
period.
Increase (Decrease)
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(c) = (a) - (b)
Balances as of June 30, 2017 17,165,512$ 14,340,771$ 2,824,741$
Changes for the year:
• Service Cost 228,468 - 228,468
• Interest on the Total
Pension Liability 1,191,080 - 1,191,080
• Effect of Plan Changes - - -
• Effect of Economic
Demographic Gains or
Losses 52,208 - 52,208
• Effect of Assumptions
Changes or Inputs - - -
• Benefit Payments (876,349) (876,349) -
• Employer Contributions - 1,560,917 (1,560,917)
• Member Contributions - - -
• Net Investment Income - 1,062,788 (1,062,788)
• Administrative Expenses - (25,431) 25,431
Net Changes during 2017-18 595,407 1,721,925 (1,126,518)
Balance as of June 30, 2018 17,760,919$ 16,062,696$ 1,698,223$
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the City of Poway Retirement Enhancement
Plan, calculated using the discount rate of 7%, as well as what Plan's net pension liability would
be if it were calculated using a discount rate that is 1 percentage point lower (6.00%) or 1
percentage point higher (8.00%) than the current rate.
Discount Rate -
1%
(6.00%)
Current Discount
Rate (7.00%)
Discount Rate + 1%
(8.00%)
Net Pension Liability 3,815,007$ 1,698,223$ (202,500)$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-81-
Note 8 – Defined Benefit Pension Plan – Retirement Enhancement Plan (Continued)
C. Changes in the Net Pension Liability (Continued)
Subsequent Events
There were no subsequent events that would materially affect the results presented in this
disclosure.
Recognition of Gains and Losses
Investment gains/losses are recognized in pension expense over a period of five years;
economic/demographic gains/losses and assumption changes or inputs are recognized over the
average remaining service life for all active and inactive members.
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources
Related to Pensions
As of the start of the measurement period (July 1, 2017), the net pension liability is $2,824,741.
For the measurement period ending June 30, 2017 (the measurement date), the City incurred a
pension expense of $505,960 for the Plan.
As of June 30, 2018, the City has deferred outflows and deferred inflows of resources related to
pensions as follows:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Differences between Expected and
Actual Experience 59,950$ (151,721)$
Changes of Assumptions - -
Net Difference between Projected and
Actual Earnings on Pension Plan 21,346 -
Pension Contributions Subsequent to
Measurement Date - -
Total 81,296$ (151,721)$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-82-
Note 8 – Defined Benefit Pension Plan – Retirement Enhancement Plan (Continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources
Related to Pensions (Continued)
Amounts reported as deferred outflows and deferred inflows of resources related to pensions
will be recognized in future pension expense as follows:
Measurement
Period Ended
Deferred
Outflows/(Inflows) of
Resources, Net
June 30, PARS
2019 87,514$
2020 5,761
2021 (137,969)
2022 (25,731)
2023 -
Thereafter -
E. Payable to the Pension Plan
At June 30, 2018, the City reported a payable of $0 for the outstanding amount of contributions
to the pension plan required for the year ended June 30, 2018.
Note 9 – City and Housing Authority Rehabilitation 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, 2018 is $0, and the balance of the non-forgivable rehabilitation loans at June 30,
2018 is $102,128.
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, 2018 is $1,660,509.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-83-
Note 9 – City and Housing Authority Rehabilitation Loan Programs (Continued)
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, 2018 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, 2018 is $36,698,434.
Note 10 – Risk Management
The City is a member of the California Joint Powers Insurance Authority (“Authority”). The
Authority is composed of 117 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-84-
Note 10 – Risk Management (Continued)
Each member pays an annual contribution at the beginning of the coverage period. A
retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and
prior. The total funding requirement for self-insurance programs is based on an actuarial
analysis. Costs are allocated to individual agencies based on payroll and claims history, 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 from $750,000 to $50 million, are distributed based on
the outcome of cost allocation within the first and second loss layers.
The overall coverage limit for each member, including all layers of coverage, is $50
million per occurrence. Costs of covered claims for subsidence losses have a sub-limit
of $40 million per occurrence.
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 to statutory limits are distributed based on the outcome of cost allocation
within the first and second loss layers.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-85-
Note 10 – Risk Management (Continued)
B. Workers’ Compensation (continued)
For 2017-18 the Authority’s pooled retention is $2 million per occurrence, with
reissuance to statutory limits 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 reissuance policy, and Employer’s Liability losses form
$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, 2017
through July 1, 2020. Each member of the Authority has a $10 million sub-limit during
the 3-year term of the policy.
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 $170,388,689. There is a $10,000
deductible per occurrence except for non-emergency vehicle insurance which has a
$2,500 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
$2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are
paid annually and are not subject to retroactive adjustments. At June 30, 2018, no
liability was recorded in the accompanying basic financial statements.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-86-
Note 11 – Joint Venture
The City is a member of the Regional Solid Waste Association Joint Powers Authority (“JPA”).
The JPA was formed on September 1, 1997 by the cities of Del Mar, Encinitas, National City,
Poway, Solana Beach and Vista to provide stable, long-term, cost effective options for all
aspects of regional solid waste disposal. Each member provides a proportionate percentage of
revenue to cover all costs related to the obligations and liabilities of the JPA when they become
due and payable. In the event of dissolution of the JPA, any money or assets in possession of
the Regional Solid Waste Association after the payment of all liabilities, costs, expenses and
charges shall be distributed to the member agencies in proportion to their contributions
determined as of the time of termination. The activities of the JPA are supervised by a board
consisting of one elected member of the legislative body of each of the member agencies.
The City of Escondido joined the JPA as a special contract party for the purpose of working on
Regional Household Hazardous Waste issues. Summarized unaudited information of the JPA
for the fiscal year ended June 30, 2018 is as follows:
Total Assets 479$
Total Liabilities 7$
Total Equity 472$
Total Revenues 315$
Total Expenses 329$
Net Increase in Fund Equity (14)$
Amounts in Thousands
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 12 – Deficit Net Position
At June 30, 2018, the following funds had deficit net position:
Fund Type Fund Deficit
Special Revenue Fund 800 MHz Communication System (15,860)$
Fiduciary Fund Successor Agency to the Poway Redevelopment Agency (151,924,846)$
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-87-
Note 12 – Deficit Net Position (Continued)
Successor Agency to the Poway Redevelopment Agency - The Successor Agency to the Poway
Redevelopment Agency Private Purpose Trust fund had an accumulated deficit of
$(151,924,844), 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.
The 800 MHz Special Revenue fund had a deficit balance of $(15,860) which resulted from an
inter-fund loan from the Internal Service fund which was used for its share of payments to the
County of San Diego for system infrastructure improvements. The collection of assessments in
future years will be sufficient to eliminate the deficit.
Note 13 – 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.
Note 14 – 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-88-
Note 14 – Contingent Liabilities and Commitments (Continued)
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, 2018, 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, 2018 with an estimated cost to
complete of approximately $14,750,336 in all fund types.
D. Significant Encumbrances
Encumbrances represent purchase orders, contracts or other commitments for the expenditure
of monies. However, because these commitments will be honored in subsequent years, they do
not constitute an expenditure or liability for financial statement purposes. At fiscal year-end, the
City had the following significant encumbrances.
Special
General Enterprise Revenue
Purpose Fund Funds Funds Total
Water Projects -$ 819,876$ -$ 819,876$
Sewer Projects - 78,111 - 78,111
Drainage Projects 88,000 - - 88,000
Street Projects 2,365,929 482,808 - 2,848,737
Computer Equipment and Software 169,905 - - 169,905
Vehicles 1,339,948 - - 1,339,948
Facilities 2,308,594 - - 2,308,594
Professional Services 107,221 - 3,401 110,622
Total Outstanding Encumbrances 6,379,597$ 1,380,795$ 3,401$ 7,763,793$
E. Other Matters
As of June 30, 2018, 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, 2018
-89-
Note 15 – 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.
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-90-
Note 16 – Fund Balances Classification
The City’s fund balances at June 30, 2018 are tabulated below by fund types.
Total
Housing Non-Major
General Authority Governmental
Fund Fund Funds Total
Nonspendable:
Prepaid Items 121,433$ -$ -$ 121,433$
Inventories 140,207 - - 140,207
Land held for resale 5,367,000 - - 5,367,000
Notes Receivable 10,010,396 - - 10,010,396
Total nonspendable 15,639,036 - - 15,639,036
Restricted:
Debt Service Payments - - 535,900 535,900
Drainage - - 2,930,941 2,930,941
Fire Protection - - 125,248 125,248
Grants - - 294,732 294,732
Housing - 2,771,447 148,847 2,920,294
Maintenance Districts - - 7,829,104 7,829,104
Other Purposes - - 2,622,300 2,622,300
Parks and Recreation - - 590,313 590,313
Streets - - 1,915,188 1,915,188
Transportation - - 877,455 877,455
Total restricted - 2,771,447 17,870,028 20,641,475
Committed:
Economic Volatility 6,440,524 - - 6,440,524
Extreme Events 12,881,059 - - 12,881,059
Total committed 19,321,583 - - 19,321,583
Assigned:
Capital Projects 11,404,089 - - 11,404,089
Contractual Services 197,182 - - 197,182
Equipment/ Furniture 8,007 - - 8,007
Library 255,775 - - 255,775
Parks and Recreation 280,571 - - 280,571
Public Education & Govt Programming 588,452 - - 588,452
Public Safety 104,648 - - 104,648
Repair and Maintenance 3,775,268 - - 3,775,268
Total assigned 16,613,992 - - 16,613,992
Unassigned 14,063,706 - (15,860) 14,047,846
Total unassigned 14,063,706 - (15,860) 14,047,846
Total fund balances 65,638,317$ 2,771,447$ 17,854,168$ 86,263,932$
Major Funds
City of Poway
Notes to Basic Financial Statements
June 30, 2018
-91-
Note 17 – Special Item (Transfer of Capital Assets)
The Successor Agency transferred capital asset to the City in accordance with the approved
Long Range Property Management Plan. The following capital assets were transferred from the
Successor Agency to the City:
Related to transfer of capital assets
Land (8,362,684)$
Buildings (15,357,977)
Infrastructure (17,739,258)
A/D- Building 12,373,672
A/D- Infrastructure 2,881,945
Total special item (26,204,302)$
Note 18 – Prior Period Restatement
During the fiscal year ended June 30, 2018, the City discovered that Land improvements from
the prior year sale were still being reported on the City’s financial statements. Therefore, an
adjustment to beginning fund balance and net position has been recorded to account for these
variances.
Beginning Net
Position, as
previously
reported Restatement
Beginning Net
Position,
as restated
Fiduciary Fund
Successor Agency to the Poway
Redevelopment Agency (117,419,322)$ (1,245,737)$ (118,665,059)$
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City of Poway
Comprehensive Annual Financial Report
For the year ended June 30, 2018
Required Supplementary Information (Unaudited)
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018
-93-
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.
The following are the budget comparison schedules for the General Fund and major special
revenue funds.
2) Expenditure in Excess of Appropriations
Final
Governmental Funds - Non-Major Fund Budget Expenditures Excess
Special Revenue Funds:
Housing Authority 32,450$ 34,861$ (2,411)$
Maintenance Districts Fund - 185,431 (185,431)
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018
-94-
Budgetary Comparison Schedule, General Fund
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 35,828,350$ 36,238,350$ 38,620,527$ 2,382,177$
Licenses and permits 693,050 693,050 698,848 5,798
Intergovernmental 371,930 658,520 783,241 124,721
Charges for services 2,458,410 2,506,940 2,623,079 116,139
Fines and forfeitures 130,000 130,000 150,968 20,968
Use of money and property 863,920 863,920 881,797 17,877
Developer fees 3,932,440 4,133,750 4,458,832 325,082
Other revenues 741,230 1,561,230 2,875,390 1,314,160
Total revenues 45,019,330 46,785,760 51,092,682 4,306,922
EXPENDITURES
Current:
General government 7,133,486 7,110,015 4,348,184 2,761,831
Public safety 23,555,220 24,237,957 24,203,074 34,883
Public works 4,163,335 4,241,175 5,443,423 (1,202,248)
Development services 5,289,871 5,611,291 4,468,523 1,142,768
Community services 6,059,515 6,225,247 5,837,896 387,351
Capital outlay 21,024,284 30,742,925 7,292,310 23,450,615
Total expenditures 67,225,711 78,168,610 51,593,410 26,575,200
Excess (deficiency) of revenues
over (under) expenditures (22,206,381) (31,382,850) (500,728) 30,882,122
OTHER FINANCING SOURCES (USES)
Transfers in 4,404,529 4,978,891 1,679,384 (3,299,507)
Transfers out (2,326,720) (2,836,852) (1,105,779) 1,731,073
Total other financing sources (uses) 2,077,809 2,142,039 573,605 (1,568,434)
Net change in fund balance (20,128,572)$ (29,240,811)$ 72,877 29,313,688$
Fund balance, beginning of year 65,565,440
Fund balance, end of year 65,638,317$
Budget Amounts
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018
-95-
Budgetary Information (Continued)
Budgetary Comparison Schedule, Housing Authority Fund
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Charges for services 49,120$ 49,120$ 59,839$ 10,719$
Use of money and property 22,000 22,000 40,295 18,295
Other revenues 40,000 40,000 59,667 19,667
Total revenues 111,120 111,120 159,801 48,681
EXPENDITURES
Current:
General government 10,400 10,400 7,988 2,412
Development services 10,000 32,450 34,861 (2,411)
Capital outlay 554,319 1,645,819 831,705 814,114
Total expenditures 574,719 1,688,669 874,554 814,115
Excess (deficiency) of revenues
over (under) expenditures (463,599) (1,577,549) (714,753) (765,434)
OTHER FINANCING SOURCES
(USES)
Transfers in - 820,000 820,000 -
Total other financing
sources (uses) - 820,000 820,000 -
Net change in fund balance (463,599)$ (757,549)$ 105,247 862,796$
Fund balance, beginning of year 2,666,200
Fund balance, end of year 2,771,447$
Budget Amounts
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018
-96-
Schedule of Changes in Net Pension Liability and Related Ratios
Last 10 Years*
Miscellaneous Plan
Measurement Measurement Measurement Measurement
Period Period Period Period
6/30/2014 6/30/2015 6/30/2016 6/30/2017
TOTAL PENSION LIABILITY
Service Cost 1,515,714$ 1,463,621$ 1,552,133$ 1,785,822$
Interest 6,646,592 6,973,473 7,241,818 7,456,135
Changes of Benefit Terms - - - -
Difference Between Expected and Actual Experience - 179,245 (444,504) (471,057)
Changes of Assumptions - (1,692,043) - 6,085,867
Benefit Payments, Including Refunds of Employee Contributions (3,875,819) (4,300,520) (4,757,620) (5,058,914)
Net Change in Total Pension Liability 4,286,487 2,623,776 3,591,827 9,797,853
Total Pension Liability - Beginning 89,801,273 94,087,760 96,711,536 100,303,363
Total Pension Liability - Ending (a) 94,087,760$ 96,711,536$ 100,303,363$ 110,101,216$
PLAN FIDUCIARY NET POSITION
Contributions - Employer 1,590,147$ 1,651,614$ 1,961,662$ 2,311,817$
Contributions - Employee 716,942 773,660 778,160 806,615
Net Investment Income 11,075,599 1,674,500 387,630 7,966,356
Benefit Payments, Including Refunds of Employee Contributions (3,875,819) (4,300,520) (4,757,620) (5,058,914)
Administrative Expenses - (82,323) (44,608) (105,594)
Net Change in Fiduciary Net Position 9,506,869 (283,069) (1,674,776) 5,920,280
Plan Fiduciary Net Position - Beginning 63,970,749 73,477,618 73,194,551 71,519,775
Plan Fiduciary Net Position - Ending (b) 73,477,618$ 73,194,549$ 71,519,775$ 77,440,055$
Plan Net Position Liability - Ending (a) - (b) 20,610,142$ 23,516,987$ 28,783,588$ 32,661,161$
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 78.09% 75.68% 71.30% 70.34%
Covered Payroll 10,373,075$ 10,272,463$ 10,938,986$ 11,566,248$
Plan Net Pension Liability as a Percentage of Covered-Employee Payroll 198.69% 228.93% 263.13% 282.38%
Notes to Schedule:
* Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation, therefore, only four years are presented.
Changes in Benefit Terms: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2016
valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes in Assumptions: In 2017, the accounting discount rate reduced from 7.65 to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported
reflected an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 (without a reduction for pension plan administrative expense.) In
2014, amounts reported were based on the 7.5 percent discount rate.
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018 (Continued)
-97-
Schedule of Plan Contributions
Last 10 Years*
Miscellaneous Plan Contribution in Contributions as
Relation to the a Percentage of
Contractually Contractually Contribution Covered-
Determined Determined Deficiency Employer's Employee
Contributions Contributions (Excess) Covered Payroll Payroll
2014-15 1,651,614$ (1,651,614)$ -$ 10,272,463$ 16.08%
2015-16 1,961,662$ (1,961,662)$ -$ 10,938,986$ 17.93%
2016-17 2,311,817$ (2,311,817)$ -$ 11,566,248$ 19.99%
2017-18 2,452,302$ (2,452,302)$ -$ 11,662,050$ 21.03%
Notes to Schedule:
Actuarial Cost Method Entry Age Normal
Amortization Method/Period For details, see June 30, 2014, Funding Valuation Report.
Asset Valuation Method
Inflation 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Investment Rate of Return
Retirement Age
Mortality The probabilities of mortality are based on the 2014 CalPERS Experience
Study for the period from 1997 to 2007. Pre-retirement and Post-retirement
mortality rates include 5 years of projected mortality improvement using Scale
AA published by the Society of Actuaries.
* Measurement period 2013-14 (fiscal year 2014-15) was the first year of implementation, therefore, only four years
are presented.
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2016-17
were derived from the June 30, 2014, Funding Valuation Report.
Fiscal Year
Actuarial Value of Assets. For details, see June 30, 2014, Funding Valuation
Report.
7.50% Net of Pension Plan Investment and Administrative Expenses; includes
Inflation.
The probabilities of Retirement are based on the 2014 CalPERS Experience
Study for the period from 1997 to 2007.
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018 (Continued)
-98-
Schedule of the City's Proportionate Share of the Plan's Net Pension Liability and
Related Ratios as of the Measurement Date
Last 10 Years*
Safety Plan Employer's
Proportionate
Share of the
Collective Net Pension's Plans
Employer's Employer's Pension Liability Fiduciary Net
Proportion of Proportion as a Percentage Position as a
the Collective Share of the of the Employer's Percentage of
Net Pension Collective Net Employer's Covered- the Total
Liability1 Pension Liability Covered Payroll Employee Payroll Pension Liability
6/30/2014 0.14119% 8,785,355$ 4,733,734$ 185.59% 81.42%
6/30/2015 0.25032% 10,314,344$ 4,875,746$ 211.54% 79.03%
6/30/2016 0.25757% 13,340,151$ 4,765,209$ 279.95% 74.44%
6/30/2017 0.25775% 15,401,317$ 4,813,604$ 319.95% 74.14%
* Measurement date June 30, 2014 was the first year of implementation, therefore, only four years are presented.
Measurement
Date
1 Proportion of the collective net pension liability represents the plan's proportion of PERF C, which includes
both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool.
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018 (Continued)
-99-
Schedule of Plan Contributions
Last 10 Years*
Safety Plan Contribution in Contributions as
Relation to the a Percentage of
Contractually Contractually Contribution Covered-
Determined Determined Deficiency Employer's Employee
Contributions Contributions (Excess) Covered Payroll Payroll
2014-15 1,159,123$ (1,159,123)$ -$ 4,875,746$ 23.77%
2015-16 1,322,635$ (1,172,369)$ 150,266$ 4,765,209$ 24.60%
2016-17 1,340,317$ (1,340,317)$ -$ 4,813,604$ 27.84%
2017-18 1,517,719$ (1,517,719)$ -$ 4,948,089$ 30.67%
Notes to Schedule:
Change in Benefit Terms: None
* Measurement period 2013-14 (fiscal year 2014-15) was the first year of implementation, therefore, only four years
are presented.
Change in Assumptions: In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In
2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent
(net of administrative expense) to 7.65 percent (without a reduction for pension plan plan administrative expense). In
2014, amounts reported were based on the 7.5 discount rate.
Fiscal Year
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018 (Continued)
-100-
Schedule of Changes in Net Pension Liability and Related Ratios
Last 10 Years*
Retirement Enhancement Plan
Measurement
Date
Measurement
Date
Measurement
Date
Measurement
Date
2014-15 2015-16 2016-17 2017-18
TOTAL PENSION LIABILITY
Service Cost 252,845$ 253,408$ 235,041$ 228,468$
Interest 1,071,102 1,117,733 1,148,044 1,191,080
Effect of plan changes - - - -
Effect of economic/demographic gains or losses - 32,923 (231,575) 52,208
Effect of assumptions changes or inputs - - - -
Benefit payments (628,101) (689,668) (753,594) (876,349)
Net Change in Total Pension Liability 695,846 714,396 397,916 595,407
Total Pension Liability - Beginning 15,357,354 16,053,200 16,767,596 17,165,512
Total Pension Liability - Ending (a) 16,053,200$ 16,767,596$ 17,165,512$ 17,760,919$
PLAN FIDUCIARY NET POSITION
Contributions - Employer 1,302,085$ 1,379,421$ 3,846,093$ 1,560,917$
Net Investment Income 205,418 (43,672) 1,332,806 1,062,788
Benefit Payments, Including Refunds of Employee Contributions (628,101) (689,668) (753,594) (876,349)
Administrative Expenses (18,030) (18,906) (24,614) (25,431)
Net Change in Fiduciary Net Position 861,372 627,175 4,400,691 1,721,925
Plan Fiduciary Net Position - Beginning 8,451,533 9,312,905 9,940,080 14,340,771
Plan Fiduciary Net Position - Ending (b) 9,312,905$ 9,940,080$ 14,340,771$ 16,062,696$
Plan Net Position Liability - Ending (a) - (b) 6,740,295$ 6,827,516$ 2,824,741$ 1,698,223$
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 58.01% 59.28% 83.54% 90.44%
Covered Payroll 8,347,917$ 7,653,837$ 7,041,971$ 6,666,563$
Plan Net Pension Liability as a Percentage of Covered Payroll 80.74% 89.20% 40.11% 25.47%
Notes to Schedule:
* Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation, therefore, only four years are presented.
Changes in Benefit Terms: None
Changes in Assumptions: The retirement, disability, salary scale and pre-retirement mortality assumptions were updated to be consistent with those
recommended for CalPERS actuarial valuations of public agency pension plans. These new demographic assumptions are described in the January 2014
experience study of the California Public Employees Retirement System. This study used data from 1997 to 2011. The post-retirement mortality was updated
to the CalPERS 1997-2011 Healthy Retiree Mortality Tables (sex-distinct) with an assumed base year of 2008 and full generational projections using Scale
AA.
City of Poway
Required Supplementary Information
For the Year Ended June 30, 2018 (Continued)
-101-
Schedule of Plan Contributions
Last 10 Years*
Retirement Enhancement Plan
Contribution in Contributions as
Relation to the a Percentage of
Contractually Contractually Contribution Covered-
Fiscal Year Determined Determined Deficiency Employer's Employee
Contributions Contributions (Excess) Covered Payroll Payroll
2014-15 1,298,155$ (1,302,085)$ (3,930)$ 7,807,232$ 16.68%
2015-16 1,335,335$ (1,379,421)$ (44,086)$ 7,653,837$ 18.02%
2016-17 1,320,199$ (3,846,093)$ (2,525,894)$ 7,041,971$ 54.62%
2017-18 1,427,809$ (1,560,917)$ (133,108)$ 6,666,563$ 23.41%
Notes to Schedule:
Valuation Timing
Actuarial Cost Method
Amortization Method/Period
Asset Valuation Method
Inflation
Salary Increases Varies by years of Service
Cost of Living Adjustments 2.00%
Investment Rate of Return 7.00%
Payroll Growth 3.00%
Withdrawal/Disability
Retirement Age
Mortality
Maximum Benefits and Salary No benefit or salary maximum is applied.
Family Composition
Form of Payment Single Life Annuity
Pre-Retirement: Consistent with the Non-Industrial rates used to value the
Miscellaneous CalPERS Pension Plans.
Post-Retirement: CalPERS 1997-2001 Healthy Retiree Mortality Tables (sex-
distinct) with an assumed base year of 2008 and full generational
improvements using Scale AA.
85% of active members are asssumed to have an eligible beneficiary who is
potentially eligible to receive a preretirement death benefit. Wives are
assumed to be three years younger than their husbands.
Entry Age Normal
Level dollar, closed periods, 7 years amortization period 0.00% growth rate
The actuarial value of assets is the market value of assets as provided by
Public Agency Retirement Services.
2.75%
* Measurement period 2013-14 (fiscal year 2014-15) was the first year of implementation, therefore, only four years
are presented.
The actuarial methods and assumptions used to set the actuarially
Actuarially determined contribution rates are calculated as of June 30, two
years prior to the end of the fiscal year in which the contributions are reported.
Consistent with Non-Industrial rates used to value Miscellaneous Agency
CalPERS Pension Plans.
The retirement rates are consistent with those used to value the
Miscellaneous CalPERS Pension Plans 2.7% at age 55. The rates used are
those for retirees with 20 years of service, with an increased retirement rate of
20% at age 55.
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SUPPLEMENTARY INFORMATION
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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 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.
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.
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.
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.
-104-
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS (Continued):
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.
Abandoned Vehicle Fees Fund – Used to account for fees collected from the sale and citation
of abandoned vehicles remitted from San Diego County. A budget was not adopted for this fund.
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.
-105-
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS (Continued):
Maintenance Districts Fund receives assessments from property owners based on the
proportionate share of the costs, as estimated by an engineer’s report. Assessments are
collected via tax rolls. The fund is used for lighting, landscape and maintenance.
Road Repair – Used to account for revenues received and expenditures made for road
maintenance and rehabilitation. Financing is provided by the City’s share of the Road
Maintenance and Rehabilitation account revenues pursuant the Road Repair and Accountability
Act of 2017 (SB1)
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.
Street Improvement Fund receives revenues 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.
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, 2018
-106-
800 MHz
Fire Communication Gas Miscellaneous
Protection System Tax Drainage Grants
ASSETS
Cash and investments -$ 62,126$ 1,113,378$ 2,157,485$ 337,156$
Receivables:
Taxes 3,988 265 - 5,656 -
Accounts - - 2,826 - 30
Interest - 649 - - -
Advances to other funds - - - 17,576 -
Due from other governments - - - - 34,744
Advances to fiduciary funds - - - 849,961 -
Restricted assets:
Cash and investments with
fiscal agents - - - - -
Total assets 3,988$ 63,040$ 1,116,204$ 3,030,678$ 371,930$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable -$ -$ 154,262$ 36,732$ -$
Accrued liabilities - - 27,859 18,484 -
Due to other funds - - - - 34,044
Advances from other funds - 78,900 - - -
Unearned revenues - - - 44,521 14,386
Total liabilities - 78,900 182,121 99,737 48,430
Deferred inflows of resources:
Unavailable revenue - - - - 34,744
Total deferred inflows of resources - - - - 34,744
FUND BALANCES (deficit)
Restricted 3,988 - 934,083 2,930,941 288,756
Unassigned - (15,860) - - -
Total fund balances 3,988 (15,860) 934,083 2,930,941 288,756
Total liabilities, deferred inflows of
resources and fund balances 3,988$ 63,040$ 1,116,204$ 3,030,678$ 371,930$
Special Revenue Funds
City of Poway
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2018 (Continued)
-107-
AB 939
Integrated Community Transportation SB 1186 Excess
Waste Development Development Disabled SAFE
Management Block Grant Act Proposition A Access Law Reserve
737,627$ 14,694$ 359,952$ 187,229$ 10,238$ 148,555$
- - - - - -
49,589 - - - - -
- - - - - -
- - - - - -
- 86,950 17,288 - - -
- - - - - -
- - - - - -
787,216$ 101,644$ 377,240$ 187,229$ 10,238$ 148,555$
45,777$ 14,694$ 2,697$ 6,861$ -$ -$
- - - - 234 -
- 86,950 - - - -
- - - - - -
- - - - - -
45,777 101,644 2,697 6,861 234 -
- - - - - -
- - - - - -
741,439 - 374,543 180,368 10,004 148,555
- - - - - -
741,439 - 374,543 180,368 10,004 148,555
787,216$ 101,644$ 377,240$ 187,229$ 10,238$ 148,555$
Special Revenue Funds
City of Poway
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2018 (Continued)
-108-
Regional Fire
Arterial Protection Abandoned
Traffic Impact BEGIN Housing Vehicle Habitat
Mitigation Fees Program In-lieu Fees In-lieu
ASSETS
Cash and investments 325,093$ 121,260$ 5,976$ 148,847$ 320,619$ 1,547,078$
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 325,093$ 121,260$ 5,976$ 148,847$ 320,619$ 1,547,078$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 2,549$ -$ -$ -$ -$ 800$
Accrued liabilities - - - - - -
Due to other funds - - - - - -
Advances from other funds - - - - - -
Unearned revenues - - - - - -
Total liabilities 2,549 - - - - 800
Deferred inflows of resources:
Unavailable revenue - - - - - -
Total deferred inflows of resources - - - - - -
FUND BALANCES (deficit)
Restricted 322,544 121,260 5,976 148,847 320,619 1,546,278
Unassigned - - - - - -
Total fund balances 322,544 121,260 5,976 148,847 320,619 1,546,278
Total liabilities, deferred inflows of
resources and fund balances 325,093$ 121,260$ 5,976$ 148,847$ 320,619$ 1,547,078$
Special Revenue Funds
City of Poway
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2018 (Continued)
-109-
Debt
Service Permanent
Fund Fund
Total
Mary Non-major
Maintenance Road Debt Patricia Park Street Municipal Governmental
Districts Repair Service Ross Trust Improvement Improvement Improvement Funds
7,959,219$ -$ 213,052$ 93,813$ 804,728$ 1,492,885$ 3,960$ 18,164,970$
11,458 - - - - - - 21,367
59,517 - - - - - - 111,962
- - 576 - - - - 1,225
- - - - - - - 17,576
- 106,511 - - - - - 245,493
- - - - - - - 849,961
- - 627,958 - - - - 627,958
8,030,194$ 106,511$ 841,586$ 93,813$ 804,728$ 1,492,885$ 3,960$ 20,040,512$
196,381$ -$ -$ -$ 1,000$ -$ -$ 461,753$
4,709 - - - - - - 51,286
- 43,699 163,435 - - - - 328,128
- - - - 307,228 723,147 - 1,109,275
- - 142,251 - - - - 201,158
201,090 43,699 305,686 - 308,228 723,147 - 2,151,600
- - - - - - - 34,744
- - - - - - - 34,744
7,829,104 62,812 535,900 93,813 496,500 769,738 3,960 17,870,028
- - - - - - - (15,860)
7,829,104 62,812 535,900 93,813 496,500 769,738 3,960 17,854,168
8,030,194$ 106,511$ 841,586$ 93,813$ 804,728$ 1,492,885$ 3,960$ 20,040,512$
Capital Projects FundsSpecial 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, 2018
-110-
800 MHz
Fire Communication Gas Miscellaneous
Protection System Tax Drainage Grants
REVENUES
Taxes 636,285$ 135,637$ 1,018,492$ 1,367,769$ -$
Intergovernmental - - 15,576 224,058 261,916
Use of money and property - 2,038 7,574 50,014 1,804
Developer fees - - - 56,953 -
Assessments levied - - - - -
Other revenues - - 64,563 3,997 -
Total revenues 636,285 137,675 1,106,205 1,702,791 263,720
EXPENDITURES
Current:
Public safety - 158,279 - - -
Public works - - 1,135,455 686,590 -
Capital outlay - - - 996,593 61,546
Debt service:
Principal - - - - -
Interest and fiscal charges - - - - -
Total expenditures - 158,279 1,135,455 1,683,183 61,546
Excess (deficiency) of revenues
over (under) expenditures 636,285 (20,604) (29,250) 19,608 202,174
OTHER FINANCING SOURCES (USES)
Transfers in - - - 3,835 -
Transfer out (636,178) - - - (129,324)
Total other financing sources (uses) (636,178) - - 3,835 (129,324)
Net change in fund balances 107 (20,604) (29,250) 23,443 72,850
Fund balances, beginning of year 3,881 4,744 963,333 2,907,498 215,906
Fund balances (deficit), end of year 3,988$ (15,860)$ 934,083$ 2,930,941$ 288,756$
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, 2018 (Continued)
-111-
AB 939
Integrated Community Transportation SB 1186 Excess
Waste Development Development Disabled SAFE
Management Block Grant Act Proposition A Access Law Reserve
-$ -$ -$ 1,518,950$ -$ -$
28,199 105,862 16,879 - - -
5,055 - 2,654 2,506 35 1,056
- - - - - -
- - - - - -
226,565 - 409 - 4,057 -
259,819 105,862 19,942 1,521,456 4,092 1,056
- - - - - -
- - 409 1,420,169 - -
212,243 105,862 16,879 251,570 - -
- - - - - -
- - - - - -
212,243 105,862 17,288 1,671,739 - -
47,576 - 2,654 (150,283) 4,092 1,056
- - - - - -
- - - - - -
- - - - - -
47,576 - 2,654 (150,283) 4,092 1,056
693,863 - 371,889 330,651 5,912 147,499
741,439$ -$ 374,543$ 180,368$ 10,004$ 148,555$
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, 2018 (Continued)
-112-
Regional Fire
Arterial Protection Abandoned
Traffic Impact BEGIN Housing Vehicle Habitat
Mitigation Fees Program In-lieu Fees In-lieu
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Intergovernmental - - - - - -
Use of money and property 2,627 745 73 8,940 2,281 10,464
Developer fees 43,275 45,858 - 12,200 - 73,389
Assessments levied - - - - - -
Other revenues - - - - - -
Total revenues 45,902 46,603 73 21,140 2,281 83,853
EXPENDITURES
Current:
Public safety - - - - - -
Public works - - - - - -
Capital outlay 57,755 - - - - 16,068
Debt service:
Principal - - - - - -
Interest and fiscal charges - - - - - -
Total expenditures 57,755 - - - - 16,068
Excess (deficiency) of revenues
over (under) expenditures (11,853) 46,603 73 21,140 2,281 67,785
OTHER FINANCING SOURCES
Transfers in - - - - - -
Transfer out - - - (820,000) - -
Total other financing sources (uses) - - - (820,000) - -
Net change in fund balances (11,853) 46,603 73 (798,860) 2,281 67,785
Fund balances, beginning of year 334,397 74,657 5,903 947,707 318,338 1,478,493
Fund balances (deficit), end of year 322,544$ 121,260$ 5,976$ 148,847$ 320,619$ 1,546,278$
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, 2018 (Continued)
-113-
Debt Service Permanent
Fund Fund
Total
Mary Non-major
Maintenance Road Debt Patricia Park Street Municipal Governmental
Districts Repair Service Ross Trust Improvement Improvement Improvement Funds
438,695$ 294,460 -$ -$ -$ -$ -$ 5,410,288$
13,806 - - - - - - 666,296
54,425 - 287,765 667 5,216 8,933 29 454,901
- - - - 91,240 756,878 - 1,079,793
1,900,026 - - - - - - 1,900,026
45,451 - - - - - - 345,042
2,452,403 294,460 287,765 667 96,456 765,811 29 9,856,346
- - - - - - - 158,279
2,747,360 231,648 - - - - - 6,221,631
185,431 - - - 11,065 10,024 - 1,925,036
- - 770,000 - - - - 770,000
- - 438,961 - - - - 438,961
2,932,791 231,648 1,208,961 - 11,065 10,024 - 9,513,907
(480,388) 62,812 (921,196) 667 85,391 755,787 29 342,439
375,528 - 934,919 - - - - 1,314,282
- - (4,617) - - - - (1,590,119)
375,528 - 930,302 - - - - (275,837)
(104,860) 62,812 9,106 667 85,391 755,787 29 66,602
7,933,964 - 526,794 93,146 411,109 13,951 3,931 17,787,566
7,829,104$ 62,812$ 535,900$ 93,813$ 496,500$ 769,738$ 3,960$ 17,854,168$
Capital Projects FundsSpecial Revenue Funds
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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, 2018
-114-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 633,000$ 633,000$ 636,285$ 3,285$
Total revenues 633,000 633,000 636,285 3,285
OTHER FINANCING (USES)
Transfers out (633,000) (636,180) (636,178) 2
Total other financing (uses) (633,000) (636,180) (636,178) 2
Net change in fund balance - (3,180) 107 3,287
Fund balance, beginning of year 3,881 3,881 3,881 -
Fund balance, end of year 3,881$ 701$ 3,988$ 3,287$
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, 2018
-115-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 136,000$ 136,000$ 135,637$ (363)$
Use of money and property 200 200 2,038 1,838
Total revenues 136,200 136,200 137,675 1,475
EXPENDITURES
Current:
Public Safety 160,124 160,124 158,279 1,845
Total expenditures 160,124 160,124 158,279 1,845
Net change in fund balance (23,924) (23,924) (20,604) 3,320
Fund balance, beginning of year 4,744 4,744 4,744 -
Fund balance (deficit), end of year (19,180)$ (19,180)$ (15,860)$ 3,320$
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, 2018
-116-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 1,056,190$ 1,056,190$ 1,018,492$ (37,698)$
Intergovernmental - - 15,576 15,576
Use of money and property 11,500 11,500 7,574 (3,926)
Other revenues 57,330 57,330 64,563 7,233
Total revenues 1,125,020 1,125,020 1,106,205 (18,815)
EXPENDITURES
Current:
Public works 2,149,161 1,779,288 1,135,455 643,833
Total expenditures 2,149,161 1,779,288 1,135,455 643,833
Net change in fund balance (1,024,141) (654,268) (29,250) 625,018
Fund balance, beginning of year 963,333 963,333 963,333 -
Fund balance, end of year (60,808)$ 309,065$ 934,083$ 625,018$
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, 2018
-117-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 1,265,100$ 1,265,100$ 1,367,769$ 102,669$
Intergovernmental - - 224,058 224,058
Use of money and property 17,340 17,340 50,014 32,674
Developer fees 26,040 26,040 56,953 30,913
Other revenues - - 3,997 3,997
Total revenues 1,308,480 1,308,480 1,702,791 394,311
EXPENDITURES
Current:
Public works 724,721 728,717 686,590 42,127
Capital outlay 1,207,871 1,182,329 996,593 185,736
Total expenditures 1,932,592 1,911,046 1,683,183 227,863
OTHER FINANCING SOURCES
Transfers in 4,700 4,700 3,835 (865)
Total other financing sources 4,700 4,700 3,835 (865)
Net change in fund balance (619,412) (597,866) 23,443 621,309
Fund balance, beginning of year 2,907,498 2,907,498 2,907,498 -
Fund balance, end of year 2,288,086$ 2,309,632$ 2,930,941$ 621,309$
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, 2018
-118-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 125,710$ 125,710$ 261,916$ 136,206$
Use of money and property 1,860 1,860 1,804 (56)
Total revenues 127,570 127,570 263,720 136,150
EXPENDITURES
Capital outlay 367,587 375,728 61,546 314,182
Total expenditures 367,587 375,728 61,546 314,182
OTHER FINANCING USES
Transfers out (100,000) (129,330) (129,324) 6
Total other financing uses (100,000) (129,330) (129,324) 6
Net change in fund balance (340,017) (377,488) 72,850 450,338
Fund balance, beginning of year 215,906 215,906 215,906 -
Fund balance, end of year (124,111)$ (161,582)$ 288,756$ 450,338$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
AB 939 Integrated Waste Management Special Revenue Fund
For the Year Ended June 30, 2018
-119-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 22,600$ 22,600$ 28,199$ 5,599$
Use of money and property 6,940 6,940 5,055 (1,885)
Other revenue 197,160 197,160 226,565 29,405
Total revenues 226,700 226,700 259,819 33,119
EXPENDITURES
Capital outlay 262,086 262,086 212,243 49,843
Total expenditures 262,086 262,086 212,243 49,843
Net change in fund balance (35,386) (35,386) 47,576 82,962
Fund balance, beginning of year 693,863 693,863 693,863 -
Fund balance, end of year 658,477$ 658,477$ 741,439$ 82,962$
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, 2018
-120-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 136,050$ 136,050$ 105,862$ (30,188)$
Total revenues 136,050 136,050 105,862 (30,188)
EXPENDITURES
Capital outlay 136,228 200,013 105,862 94,151
Total expenditures 136,228 200,013 105,862 94,151
Net change in fund balance (178) (63,963) - 63,963
Fund balance, beginning of year - - - -
Fund balance, end of year (178)$ (63,963)$ -$ 63,963$
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, 2018
-121-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Intergovernmental 5,000$ 5,000$ 16,879$ 11,879$
Use of money and property 3,970 3,970 2,654 (1,316)
Other revenue 5,000 5,000 409 (4,591)
Total revenues 13,970 13,970 19,942 5,972
EXPENDITURES
Current:
Public works 5,000 5,000 409 4,591
Capital outlay 375,334 375,334 16,879 358,455
Total expenditures 380,334 380,334 17,288 363,046
Net change in fund balance (366,364) (366,364) 2,654 369,018
Fund balance, beginning of year 371,889 371,889 371,889 -
Fund balance, end of year 5,525$ 5,525$ 374,543$ 369,018$
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, 2018
-122-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 1,552,170$ 1,514,070$ 1,518,950$ 4,880$
Use of money and property 500.00 500.00 2,506 2,006
Total revenues 1,552,670 1,514,570 1,521,456 6,886
EXPENDITURES
Current:
Public works 1,352,170 1,518,086 1,420,169 97,917
Capital outlay 317,447 317,447 251,570 65,877
Total expenditures 1,669,617 1,835,533 1,671,739 163,794
Net change in fund balance (116,947) (320,963) (150,283) 170,680
Fund balance, beginning of year 330,651 330,651 330,651 -
Fund balance, end of year 213,704$ 9,688$ 180,368$ 170,680$
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, 2018
-123-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 50$ 50$ 35$ (15)$
Other revenue 1,050 1,050 4,057 3,007
Total revenues 1,100 1,100 4,092 2,992
Net change in fund balance 1,100 1,100 4,092 2,992
Fund balance, beginning of year 5,912 5,912 5,912 -
Fund balance, end of year 7,012$ 7,012$ 10,004$ 2,992$
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, 2018
-124-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 1,640$ 1,640$ 1,056$ (584)$
Total revenues 1,640 1,640 1,056 (584)
EXPENDITURES
Capital outlay 141,872 141,872 - 141,872
Total expenditures 141,872 141,872 - 141,872
Net change in fund balance (140,232) (140,232) 1,056 141,288
Fund balance, beginning of year 147,499 147,499 147,499 -
Fund balance, end of year 7,267$ 7,267$ 148,555$ 141,288$
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, 2018
-125-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 3,000$ 3,000$ 2,627$ (373)$
Developer fees 27,020 27,020 43,275 16,255
Total revenues 30,020 30,020 45,902 15,882
EXPENDITURES
Capital outlay 56,092 57,762 57,755 7
Total expenditures 56,092 57,762 57,755 7
Net change in fund balance (26,072) (27,742) (11,853) 15,889
Fund balance, beginning of year 334,397 334,397 334,397 -
Fund balance, end of year 308,325$ 306,655$ 322,544$ 15,889$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Fire Protection Impact Fees Special Revenue Fund
For the Year Ended June 30, 2018
-126-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 690$ 690$ 745$ 55$
Developer fees 3,510 3,510 45,858 42,348
Total revenues 4,200 4,200 46,603 42,403
Net change in fund balance 4,200 4,200 46,603 42,403
Fund balance, beginning of year 74,657 74,657 74,657 -
Fund balance, end of year 78,857$ 78,857$ 121,260$ 42,403$
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, 2018
-127-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 70$ 70$ 73$ 3$
Total revenues 70 70 73 3
Net change in fund balance 70 70 73 3
Fund balance, beginning of year 5,903 5,903 5,903 -
Fund balance, end of year 5,973$ 5,973$ 5,976$ 3$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Housing In-lieu Special Revenue Fund
For the Year Ended June 30, 2018
-128-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 9,000$ 9,000$ 8,940$ (60)$
Developer fees 8,000 8,000 12,200 4,200
Total revenues 17,000 17,000 21,140 4,140
EXPENDITURES
Capital outlay 259,379 136,719 - 136,719
Total expenditures 259,379 136,719 - 136,719
OTHER FINANCING SOURCES
Transfers out - (820,000) (820,000) -
Total other financing sources - (820,000) (820,000) -
Net change in fund balance (242,379) (939,719) (798,860) 140,859
Fund balance, beginning of year 947,707 947,707 947,707 -
Fund balance, end of year 705,328$ 7,988$ 148,847$ 140,859$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Abandoned Vehicle Fees Special Revenue Fund
For the year ended June 30, 2018
-129-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 3,540$ 3,540$ 2,281$ (1,259)$
Total revenues 3,540 3,540 2,281 (1,259)
Net change in fund balance 3,540 3,540 2,281 (1,259)
Fund balance, beginning of year 318,338 318,338 318,338 -
Fund balance, end of year 321,878$ 321,878$ 320,619$ (1,259)$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Habitat In-lieu Special Revenue Fund
For the year ended June 30, 2018
-130-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 14,000$ 14,000$ 10,464$ (3,536)$
Developer fees 17,000 17,000 73,389 56,389
Total revenues 31,000 31,000 83,853 52,853
EXPENDITURES
Capital outlay 3 16,073 16,068 5
Total expenditures 3 16,073 16,068 5
Net change in fund balance 30,997 14,927 67,785 52,858
Fund balance, beginning of year 1,478,493 1,478,493 1,478,493 -
Fund balance, end of year 1,509,490$ 1,493,420$ 1,546,278$ 52,858$
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, 2018
-131-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 415,530$ 415,530$ 438,695$ 23,165$
Intergovernmental - - 13,806 13,806
Use of money and property 82,760 82,760 54,425 (28,335)
Assessment levied 1,438,310 1,869,820 1,900,026 30,206
Other revenue - - 45,451 45,451
Total revenues 1,936,600 2,368,110 2,452,403 84,293
EXPENDITURES
Current:
Public works 3,270,377 3,462,238 2,747,360 714,878
Capital outlay - - 185,431 (185,431)
Total expenditures 3,270,377 3,462,238 2,932,791 529,447
Excess (deficiency) of revenues
over (under) expenditures (1,333,777) (1,094,128) (480,388) 613,740
OTHER FINANCING SOURCES
Transfers in 375,650 375,650 375,528 (122)
Total other financing sources 375,650 375,650 375,528 (122)
Net change in fund balance (958,127) (718,478) (104,860) 613,618
Fund balance, beginning of year 7,933,964 7,933,964 7,933,964 -
Fund balance, end of year 6,975,837$ 7,215,486$ 7,829,104$ 613,618$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Road Repair Special Revenue Fund
For the year ended June 30, 2018
-132-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 288,930$ 288,930$ 294,460$ 5,530$
Total revenues 288,930 288,930 294,460 5,530
EXPENDITURES
Current:
Public works 250,000 250,000 231,648 18,352
Total expenditures 250,000 250,000 231,648 18,352
Net change in fund balance 38,930 38,930 62,812 23,882
Fund balance, beginning of year - - - -
Fund balance, end of year 38,930$ 38,930$ 62,812$ 23,882$
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, 2018
-133-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 285,740$ 285,740$ 287,765$ 2,025$
Total revenues 285,740 285,740 287,765 2,025
EXPENDITURES
Debt service:
Principal 1,200,000 1,200,000 770,000 430,000
Interest and fiscal charges 446,450 446,450 438,961 7,489
Total expenditures 1,646,450 1,646,450 1,208,961 437,489
Excess (deficiency) of revenues
over (under) expenditures (1,360,710) (1,360,710) (921,196) 439,514
OTHER FINANCING SOURCES (USES)
Transfers in 1,372,300 1,373,540 934,919 (438,621)
Transfers out (4,620) (4,620) (4,617) 3
Total other financing sources (uses) 1,367,680 1,368,920 930,302 (438,618)
Net change in fund balance 6,970 8,210 9,106 896
Fund balance, beginning of year 526,794 526,794 526,794 -
Fund balance, end of year 533,764$ 535,004$ 535,900$ 896$
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, 2018
-134-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 950$ 950$ 667$ (283)$
Total revenues 950 950 667 (283)
Net change in fund balance 950 950 667 (283)
Fund balance, beginning of year 93,146 93,146 93,146 -
Fund balance, end of year 94,096$ 94,096$ 93,813$ (283)$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Park Improvement Capital Projects Fund
For the year ended June 30, 2018
-135-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 2,500$ 2,500$ 5,216$ 2,716$
Developer fees 63,870 63,870 91,240 27,370
Total revenues 66,370 66,370 96,456 30,086
EXPENDITURES
Capital outlay 11,065 11,065 11,065 -
Total expenditures 11,065 11,065 11,065 -
Net change in fund balance 55,305 55,305 85,391 30,086
Fund balance, beginning of year 411,109 411,109 411,109 -
Fund balance, end of year 466,414$ 466,414$ 496,500$ 30,086$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Street Improvement Capital Projects Fund
For the year ended June 30, 2018
-136-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 5,000$ 5,000$ 8,933$ 3,933$
Developer fees 94,650 94,650 756,878 662,228
Total revenues 99,650 99,650 765,811 666,161
EXPENDITURES
Capital outlay 74,634 74,634 10,024 64,610
Total expenditures 74,634 74,634 10,024 64,610
Net change in fund balance 25,016 25,016 755,787 730,771
Fund balance, beginning of year 13,951 13,951 13,951 -
Fund balance, end of year 38,967$ 38,967$ 769,738$ 730,771$
Budget Amounts
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Municipal Improvement Capital Projects Fund
For the year ended June 30, 2018
-137-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Use of money and property 40$ 40$ 29$ (11)$
Total revenues 40 40 29 (11)
Net change in fund balance 40 40 29 (11)
Fund balance, beginning of year 3,931 3,931 3,931 -
Fund balance, end of year 3,971$ 3,971$ 3,960$ (11)$
Budget Amounts
-138-
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.
City of Poway
Statement of Net Position
Internal Service Fund - Vehicle Maintenance Fund
June 30, 2018
-139-
ASSETS
Current assets:
Cash and investments 10,170,852$
Advances to other funds 439,400
Total current assets 10,610,252
Total assets 10,610,252
DEFERRED OUTFLOWS OF RESOURCES
Pension related 123,780
LIABILITIES
Current liabilities:
Accounts payable 145,147
Accrued liabilities 12,363
Compensated absences due within one year 27,890
Total current liabilities 185,400
Noncurrent liabilities:
Compensated absences 824
Net pension liability 513,163
Total noncurrent liabilities 513,987
Total liabilities 699,387
DEFERRED INFLOWS OF RESOURCES
Pension related 10,415
NET POSITION
Unrestricted 10,024,230
Total net position 10,024,230$
City of Poway
Statement of Revenues, Expenses and Changes in Net Position
Internal Service Fund - Vehicle Maintenance Fund
For the year ended June 30, 2018
-140-
OPERATING REVENUES
Charges for services 3,078,163$
Total operating revenues 3,078,163
OPERATING EXPENSES
Personnel services 237,069
Maintenance and operations 1,221,644
Total operating expenses 1,458,713
Operating income 1,619,450
NONOPERATING REVENUES
Interest revenue 60,171
Gain on sale of property 25,378
Grant revenue 6,309
Other nonoperating revenue 6,978
Total nonoperating revenues 98,836
Income before transfers 1,718,286
TRANSFERS
Transfers in 9,580
Transfers out (700,525)
Total transfers (690,945)
Change in net position 1,027,341
Net position, beginning of year 8,996,889
Net position, end of year 10,024,230$
City of Poway
Statement of Cash Flows
Internal Service Fund - Vehicle Maintenance Fund
For the year ended June 30, 2018
-141-
Cash flows from operating activities:
Cash receipts from interfund charges 3,085,845$
Cash paid to employees for services (339,021)
Cash paid to suppliers of goods or services (1,291,554)
Net cash provided by
operating activities 1,455,270
Cash flows from noncapital financing activities:
Due from other governments 5,397
Other nonoperating revenues 6,978
Transfers from other funds 9,580
Transfer to other funds (700,525)
Net cash (used for) noncapital
financing activities (678,570)
Cash flows from capital and related
financing activities:
Sale of capital assets 25,378
Capital grant revenue 6,309
Net cash provided by capital and
related financing activities 31,687
Cash flows from investing activities:
Interest income 60,171
Net cash provided by investing activities 60,171
Net increase in cash
and investments 868,558
Cash and investments, beginning of year 9,302,294
Cash and investments, end of year 10,170,852$
Reconciliation of operating income to net
cash provided by operating activities:
Operating income 1,619,450$
Adjustments to net cash provided by operating activities:
(Increase) decrease in assets:
Accounts receivable 7,682
Increase (decrease) in liabilities:
Accounts payable (69,910)
Accrued liabilities (4,516)
Compensated absences (19,360)
Net Pension Liability (78,076)
Total adjustments (164,180)
Net cash provided by operating activities 1,455,270$
-142-
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.
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.
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City of Poway
Combining Statement of Fiduciary Net Position
Agency Funds
June 30, 2018
-143-
Parkway
Business Old Coach
Centre CFD High Valley Water Line
No. 88.1 Road AD No. 96-1 AD No. 00-1 Total
Developer Bond Bond Deposits Bond Deposits Agency
Deposits Deposits Fund Fund Fund Funds
ASSETS
Cash and investments 2,975,932$ 3,235$ 26,811$ 11,443$ 3,017,421$
Total assets 2,975,932$ 3,235$ 26,811$ 11,443$ 3,017,421$
LIABILITIES
Accounts payable 19,898$ 3,257$ 26,620$ 11,362$ 61,137$
Developer deposits 2,956,034 (22) 191 81 2,956,284
Total liabilities 2,975,932$ 3,235$ 26,811$ 11,443$ 3,017,421$
City of Poway
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the year ended June 30, 2018
-144-
Balance Balance
June 30, 2017 Additions Deletions June 30, 2018
Assets
Cash and investments 2,893,316$ 705,725$ (623,109)$ 2,975,932$
Total assets 2,893,316$ 705,725$ (623,109)$ 2,975,932$
Liabilities
Accounts payable 20,595$ 19,898$ (20,595)$ 19,898$
Developer deposits 2,872,721 685,827 (602,514) 2,956,034
Total liabilities 2,893,316$ 705,725$ (623,109)$ 2,975,932$
Assets
Cash and investments -$ 3,235$ -$ 3,235$
Total assets -$ 3,235$ -$ 3,235$
Liabilities
Accounts payable -$ 3,257$ -$ 3,257$
Developer deposits - - (22) (22)
Total liabilities -$ 3,257$ (22)$ 3,235$
Assets
Cash and investments 26,620$ 191$ -$ 26,811$
Total assets 26,620$ 191$ -$ 26,811$
Liabilities
Accounts payable 26,620$ -$ -$ 26,620$
Developer deposits - 191 - 191
Total liabilities 26,620$ 191$ -$ 26,811$
HIGH VALLEY ROAD
AD No. 96-1 BOND DEPOSITS FUND
CFD No. 88-1 BOND DEPOSITS FUND
DEVELOPER DEPOSITS FUND
PARKWAY BUSINESS CENTRE
City of Poway
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the year ended June 30, 2018 (Continued)
-145-
Balance Balance
June 30, 2017 Additions Deletions June 30, 2018
Assets
Cash and investments 11,362$ 81$ -$ 11,443$
Total assets 11,362$ 81$ -$ 11,443$
Liabilities
Accounts payable 11,362$ -$ -$ 11,362$
Developer Deposits - 81 - 81
Total liabilities 11,362$ 81$ -$ 11,443$
Assets
Cash and investments 2,931,298$ 709,232$ (623,109)$ 3,017,421$
Total assets 2,931,298$ 709,232$ (623,109)$ 3,017,421$
Liabilities
Accounts payable 58,577$ 23,155$ (20,595)$ 61,137$
Developer Deposits 2,872,721 685,827 (602,514) 2,956,034
Total liabilities 2,931,298$ 709,254$ (623,131)$ 3,017,421$
ALL AGENCY FUNDS
AD No. 00-1 BND DEPOSITS FUND
OLD COACH WATERLINE
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-146-
Statistical Section
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-147-
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 Nine Fiscal Years
(accrual basis of accounting)
-148-
Year Ended Year Ended Year Ended Year Ended
June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Governmental activities
Net investment in capital assets 108,494,835$ 82,020,900$ 83,171,720$ 86,341,264$
Restricted 20,641,475 20,453,766 20,846,798 27,543,292
Unrestricted - as restated 41,227,106 41,716,900 40,985,170 38,671,488
Total governmental activities net position 170,363,416 144,191,566 145,003,688 152,556,044
Business-type activities
Net investment in capital assets 32,118,064 32,941,440 34,817,565 36,827,442
Restricted - - 272,301
Unrestricted - as restated 31,108,285 26,735,432 21,537,274 26,130,925
Total business-type activities net position 63,226,349 59,676,872 56,354,839 63,230,668
Primary government
Net investment in capital assets 140,612,899 114,962,340 117,989,285 123,168,706
Restricted 20,641,475 20,453,766 20,846,798 27,815,593
Unrestricted - as restated 72,335,391 68,452,332 62,522,444 64,802,413
Total primary government net position 233,589,765$ 203,868,438$ 201,358,527$ 215,786,712$
The City is reporting its ten year history with the implementation of GASB 44 in fiscal year 2006.
The City restated the Unrestricted Net Position as of June 30, 2014 for the implementation of GASB 68.
Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. The
City implemented the retroactive reporting of infrastructure in fiscal year 2007.
City of Poway
Net Position by Component
Current and Prior Nine Fiscal Years
(accrual basis of accounting) (Continued)
-149-
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011 June 30, 2010 June 30, 2009
90,442,061$ 94,657,067$ 93,097,532$ 50,255,141$ 46,412,443$ 36,713,773$
28,126,711 25,637,627 24,523,246 70,931,373 78,369,565 99,252,462
33,998,725 63,928,726 59,865,964 (71,148,492) (93,996,026) (98,283,120)
152,567,497 184,223,420 177,486,742 50,038,022 30,785,982 37,683,115
38,731,821 40,746,468 42,846,682 43,976,262 43,508,027 39,127,764
279,579 279,604 279,575 280,450 280,450 280,469
26,867,660 33,305,899 34,543,173 36,469,136 35,320,341 34,194,395
65,879,060 74,331,971 77,669,430 80,725,848 79,108,818 73,602,628
129,173,882 135,403,535 135,944,214 94,231,403 89,920,470 75,841,537
28,406,290 25,917,231 24,802,821 71,211,823 78,650,015 99,532,931
60,866,385 97,234,625 94,409,137 (34,679,356) (58,675,685) (64,088,725)
218,446,557$ 258,555,391$ 255,156,172$ 130,763,870$ 109,894,800$ 111,285,743$
City of Poway Changes in Net Position Current and Prior Nine Years (accrual basis of accounting) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year EndedJune 30, 2018June 30, 2017June 30, 2016June 30, 2015June 30, 2014June 30, 2013June 30, 2012June 30, 2011June 30, 2010June 30, 2009Expenses:Governmental Activities:General Government8,048,190$ 7,897,624$ 5,131,272$ 5,196,033$ 5,227,809$ 5,981,436$ 14,226,478$ 17,144,376$ 23,947,500$ 23,261,446$ Public Safety25,139,954 22,939,218 22,347,525 21,500,327 20,906,884 20,213,645 19,514,321 18,899,606 19,475,481 19,227,914 Public Works15,818,102 13,424,529 12,381,234 11,595,286 11,863,623 12,283,876 12,484,070 12,622,204 12,595,756 11,213,841 Development Services4,793,032 4,122,212 3,821,920 3,664,378 3,815,282 3,745,329 2,767,969 2,348,622 4,423,865 5,226,071 Community Services7,372,710 7,695,548 7,197,816 5,843,807 6,115,485 5,063,022 4,848,768 14,398,426 25,213,955 16,195,999 Interest and fiscal charges429,617 443,901 505,811 481,905 509,206 (249,757) 8,247,159 17,232,642 14,969,311 16,692,399 Total governmental expenses61,601,605 56,523,032 51,385,578 48,281,736 48,438,289 47,037,551 62,088,765 82,645,876 100,625,868 91,817,670 Business-type activities:Water25,502,524 21,005,264 21,502,464 22,349,556 23,314,233 22,367,122 20,652,724 18,143,829 18,226,463 18,697,576 Sewer8,797,837 8,564,971 8,730,955 9,451,529 9,434,739 10,069,336 8,374,223 7,651,228 7,522,634 8,011,470 Total business-type expenses34,300,361 29,570,235 30,233,419 31,801,085 32,748,972 32,436,458 29,026,947 25,795,057 25,749,097 26,709,046 Total primary government expenses95,901,966$ 86,093,267$ 81,618,997$ 80,082,821$ 81,187,261$ 79,474,009$ 91,115,712$ 108,440,933$ 126,374,965$ 118,526,716$ Program revenues:Governmental Activities:Charges for services:General Government352,830$ 326,019$ 276,113$ 280,796$ 260,802$ 118,347$ 120,126$ 96,397$ 91,745$ 105,084$ Public Safety2,171,552 2,067,306 1,884,369 1,759,543 1,908,337 2,155,607 2,030,510 2,121,984 2,131,729 2,413,197 Public Works2,740,562 2,727,104 2,733,956 2,699,095 2,753,917 2,738,196 3,537,666 4,422,522 4,479,896 4,868,530 Development Services1,975,450 1,648,388 1,780,160 1,558,945 1,534,304 1,384,543 1,049,318 1,584,838 1,332,714 1,388,448 Community Services2,595,229 2,862,789 2,625,260 2,570,423 2,436,024 2,243,495 2,160,596 2,111,476 2,821,718 3,033,466 Operating grants and contributions2,322,871 1,133,734 1,356,811 1,543,785 1,706,081 1,811,203 4,760,819 5,857,360 7,615,477 5,826,044 Capital grants and contributions198,584 270,802 120,271 90,379 66,168 99,831 833,137 1,155,384 1,246,555 2,110,463 Total program revenues12,357,078 11,036,142 10,776,940 10,502,966 10,665,633 10,551,222 14,492,172 17,349,961 19,719,834 19,745,232 Business-type activities:Charges for services:Water25,583,581 21,450,064 18,590,894 20,629,080 23,381,953 22,207,174 20,612,607 18,694,318 17,881,695 16,714,571 Sewer8,486,571 8,396,553 8,003,913 7,423,494 7,347,502 7,228,097 7,300,875 8,759,001 8,651,681 8,651,968 Capital grants and contributions3,589 - - - - - - - - - Total program revenues34,073,741 29,846,617 26,594,807 28,052,574 30,729,455 29,435,271 27,913,482 27,453,319 26,533,376 25,366,539 Total primary government program revenue46,430,819$ 40,882,759$ 37,371,747$ 38,555,540$ 41,395,088$ 39,986,493$ 42,405,654$ 44,803,280$ 46,253,210$ 45,111,771$ Net (expense)/revenueGovernmental activities(49,244,527) (45,486,890) (40,608,638) (37,778,770) (37,772,656) (36,486,329) (47,596,593) (65,295,915) (80,906,034) (72,072,438) Business-type activities(226,620) 276,382 (3,638,612) (3,748,511) (2,019,517) (3,001,187) (1,113,465) 1,658,262 784,279 (1,342,507) Total primary governmentnet (expense)(49,471,147)$ (45,210,508)$ (44,247,250)$ (41,527,281)$ (39,792,173)$ (39,487,516)$ (48,710,058)$ (63,637,653)$ (80,121,755)$ (73,414,945)$ -150-
City of Poway Changes in Net Position Current and Prior Nine Years (accrual basis of accounting) (Continued) General revenues and Other Changes in Net Position:Governmental Activities:Taxes:Property taxes 24,153,826$ 22,166,004$ 20,455,287$ 18,998,523$ 20,188,541$ 21,378,147$ 34,713,961$ 50,960,736$ 51,526,758$ 51,190,712$ Sales taxes13,981,478 13,774,763 13,172,467 12,520,103 13,418,087 13,692,553 11,276,884 10,418,322 9,833,390 10,325,455 Motor vehicle license tax- - - - - 22,085 26,685 262,412 150,641 173,673 Transient occupancy tax654,235 609,306 615,482 573,531 523,112 483,568 462,508 433,934 367,434 247,787 Franchise taxes1,611,000 1,466,388 1,639,956 1,696,186 1,555,816 1,491,227 1,512,878 1,465,926 1,491,231 1,590,066 Other Taxes3,630,276 3,247,931 3,423,165 3,192,356 2,761,696 1,816,574 626,421 616,466 629,589 597,880 Total taxes44,030,815 41,264,392 39,306,357 36,980,699 38,447,252 38,884,154 48,619,337 64,157,796 63,999,043 64,125,573 Investment earnings1,468,845 1,165,528 1,845,972 1,380,030 1,573,545 1,000,883 1,297,998 5,964,802 8,287,516 9,879,153 Miscellaneous3,285,592 1,805,482 1,195,244 1,330,954 1,846,762 3,374,664 542,954 512,858 1,251,844 607,387 Sale/disposal of capital assets- - - (385,253) - - (2,088,434) 13,561,625 - - Transfers426,823 439,366 467,591 (1,539,113) 1,425 (36,694) 2,284,985 350,874 470,498 147,503 Extraordinary Item26,204,302 - (9,758,882) - - - 128,406,347 - - - Total governmental activities75,416,377 44,674,768 33,056,282 37,767,317 41,868,984 43,223,007 179,063,187 84,547,955 74,008,901 74,759,616 Business-type activities:Property taxes- - - - - - - - - - Investment earnings264,609 102,656 230,982 149,611 217,194 23,733 65,593 254,279 463,177 1,987,778 Contributed capital- - - - - - - - 4,225,637 4,720,039 Miscellaneous3,938,311 3,382,361 1,077,957 1,261,448 82,930 47,583 276,439 55,363 503,595 933,994 Transfers(426,823) (439,366) (467,591) (310,940) (441,725) (407,588) (2,284,985) (350,874) (470,498) (147,503) Extraordinary Item- (4,078,565) - - - - - - - Total business-type activities3,776,097 3,045,651 (3,237,217) 1,100,119 (141,601) (336,272) (1,942,953) (41,232) 4,721,911 7,494,308 Total primary government79,192,474$ 47,720,419$ 29,819,065$ 38,867,436$ 41,727,383$ 42,886,735$ 177,120,234$ 84,506,723$ 78,730,812$ 82,253,924$ Change in Net PositionGovernmental activities26,171,850$ (812,122)$ (7,552,356)$ (11,453)$ 4,096,328$ 6,736,678$ 131,466,594$ 19,252,040$ (6,897,133)$ 2,687,178$ Business-type activities3,549,477 3,322,033 (6,875,829) (2,648,392) (2,161,118) (3,337,459) (3,056,418) 1,617,030 5,506,190 6,151,801 Total primary government29,721,327$ 2,509,911$ (14,428,185)$ (2,659,845)$ 1,935,210$ 3,399,219$ 128,410,176$ 20,869,070$ (1,390,943)$ 8,838,979$ Notes:The City is reporting its ten year history with the implementation of GASB 44 in fiscal year 2006.The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. The City implemented theretroactive reporting of infrastructure in fiscal year 2007.-151-
City of Poway
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
-152-
June 30,
2018 2017 2016 2015
General Fund
Non-spendable 15,639,036$ 10,477,915$ 10,286,955$ 10,495,426$
Restricted - - - -
Committed 19,321,583 - - 10,022,691
Assigned 16,613,992 40,438,366 40,367,436 15,870,595
Unassigned 14,063,706 14,649,159 16,010,227 29,285,138
Reserved - - - -
Unreserved:
Designated - - - -
Undesignated - - - -
Total General Fund 65,638,317$ 65,565,440$ 66,664,618$ 65,673,850$
All Other Governmental Funds
Non-spendable -$ -$ -$ -$
Restricted 20,641,475 20,453,766 20,846,798 27,543,292
Committed - - - -
Assigned - - - -
Unassigned (15,860) - - -
Reserved - - - -
Unreserved:
Designated:
Special revenue funds - - - -
Debt service funds - - - -
Capital projects funds - - - -
Undesignated:
Special revenue funds - - - -
Debt service funds - - - -
Capital projects funds - - - -
Total all Other Governmental Funds 20,625,615$ 20,453,766$ 20,846,798$ 27,543,292$
Total Fund Balance 86,263,932$ 86,019,206$ 87,511,416$ 93,217,142$
Note: The City implemented GASB 54, which established new classifications
for fund balances, in Fiscal Year 2011.
City of Poway
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting) (Continued)
-153-
June 30,
2014 2013 2012 2011 2010 2009
10,134,007$ 10,157,087$ 10,218,860$ 10,151,108$ -$ -$
- - - - - -
10,026,079 9,999,309 10,019,883 10,037,638 - -
15,383,344 7,173,822 6,666,188 6,466,719 - -
26,624,039 30,695,920 22,906,009 23,955,242 - -
- - - - 4,647,709$ 5,561,391$
- - - - 31,724,737 32,152,754
- - - - - -
62,167,469$ 58,026,138$ 49,810,940$ 50,610,707$ 36,372,446$ 37,714,145$
-$ -$ -$ -$ -$ -$
28,126,711 25,929,921 23,733,859 62,455,191 - -
- - - - - -
- - - 8,564,840 - -
- - - (88,658) - -
- - - - 51,660,768$ 62,868,328$
- - - - - -
- - - - - -
- - - - 20,795,704 24,840,402
- - - - 5,913,093 5,982,341
- - - - - -
- - - - - -
28,126,711$ 25,929,921$ 23,733,859$ 70,931,373$ 78,369,565$ 93,691,071$
90,294,180$ 83,956,059$ 73,544,799$ 121,542,080$ 114,742,011$ 131,405,216$
City of Poway
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
-154-
2018 2017 2016 2015
Revenues
Taxes 44,030,815$ 41,264,392$ 39,306,357$ 36,980,699$
Licenses and permits 698,848 691,524 608,914 546,742
Intergovernmental 1,449,537 978,759 1,252,604 1,361,671
Charges for services 2,682,918 2,870,826 2,629,776 2,564,852
Fines and forfeitures 150,968 137,772 121,246 135,609
Use of money and property 1,376,993 1,116,686 1,664,836 1,265,837
Developer Fees 5,538,625 4,339,215 4,317,628 4,013,227
Assessment levied 1,900,026 1,919,533 1,926,988 1,903,369
Other revenues 3,280,099 1,802,405 1,241,968 1,328,515
Total revenues 61,108,829 55,121,112 53,070,317 50,100,521
Expenditures
Current:
General government 4,356,172 4,920,707 4,713,981 4,372,077
Public safety 24,361,353 22,842,844 21,857,490 21,299,851
Public works 11,665,054 10,914,521 10,063,808 9,526,140
Development services 4,503,384 4,305,937 4,067,434 3,811,954
Community services 5,837,896 6,197,514 5,954,740 5,212,917
Capital outlay 10,049,051 7,898,228 2,855,748 1,603,241
Debt service:
Principal 770,000 755,000 735,000 715,000
Principal-early retirement-sale of capital asset - - -
Interest and fiscal charges 438,961 452,512 514,008 490,336
Transfers to fiduciary funds - - - -
Debt Issuance Costs - - - -
Tax shift - - - -
Tax increment reimbursements - - - -
Total expenditures 61,981,871 58,287,263 50,762,209 47,031,516
Excess of revenues over (under) expenditures (873,042) (3,166,151) 2,308,108 3,069,005
Other Financing Sources (Uses)
Proceeds from issuance of debt - - - -
Refunding bond activity -net - - - -
Proceeds from sale of capital assets - - - -
Transfers in (out) net 1,117,768 1,673,941 1,745,048 (146,043)
Total other financing sources 1,117,768 1,673,941 1,745,048 (146,043)
Extraordinary Items - - (9,758,882) -
Net change in fund balance 244,726$ (1,492,210)$ (5,705,726)$ 2,922,962$
Debt service as a percentage of noncapital expenditures 2.1% 2.2% 2.5% 2.6%
Year Ended June 30,
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.
City of Poway
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting) (Continued)
-155-
2014 2013 2012 2011 2010 2009
38,447,252$ 38,996,849$ 51,939,098$ 66,623,806$ 67,411,848$ 66,062,646$
561,251 543,838 507,908 457,905 433,517 422,948
828,278 1,062,851 1,564,484 1,800,145 2,994,005 2,889,804
2,386,206 1,671,506 1,439,891 3,232,221 3,140,274 2,954,967
184,855 527,006 554,570 678,468 750,551 852,535
1,495,911 2,188,570 3,291,466 7,821,732 12,180,028 14,862,137
4,806,170 4,029,232 3,279,373 4,516,243 3,711,578 3,897,877
1,898,872 1,895,888 1,874,967 1,902,409 1,886,300 1,873,179
1,834,531 2,862,343 497,517 729,933 2,228,662 1,013,135
52,443,326 53,778,083 64,949,274 87,762,862 94,736,763 94,829,228
4,202,841 4,239,824 5,798,899 2,680,162 6,056,348 6,733,135
20,433,826 19,536,711 18,889,733 18,328,287 18,966,380 18,673,036
9,639,766 9,971,383 10,084,437 9,990,368 9,943,681 8,566,157
3,830,435 3,779,577 2,807,935 2,388,077 4,475,943 5,279,297
4,912,545 4,733,922 4,678,369 9,894,345 9,048,983 9,741,990
2,282,947 860,039 8,542,370 16,818,821 27,639,839 17,981,861
700,000 635,000 2,405,000 6,703,020 7,150,000 6,855,000
- - - 26,720,000 - -
506,527 570,087 6,820,619 17,972,119 14,943,766 16,732,005
440,300 444,282 - - - -
- - - - - -
- - - 2,820,770 13,700,882 -
- - 48,711 5,948,554 2,380,740 6,205,709
46,949,187 44,770,825 60,076,073 120,264,523 114,306,562 96,768,190
5,494,139 9,007,258 4,873,201 (32,501,661) (19,569,799) (1,938,962)
- 14,350,000 105,109 169,930 161,049 154,734
- (15,013,350) - - - -
- 842,166 - 38,300,000 - -
843,982 1,225,186 3,823,436 831,800 2,745,545 644,351
843,982 1,404,002 3,928,545 39,301,730 2,906,594 799,085
- - (56,799,027) - - -
6,338,121$ 10,411,260$ (47,997,281)$ 6,800,069$ (16,663,205)$ (1,139,877)$
2.6% 2.7% 15.8% 22.1% 21.3% 25.8%
Year Ended June 30,
City of Poway
Assessed Value of Taxable Property
Last Ten Fiscal Years
-156-
Fiscal Year Assessed Value
Ended Personal Net Taxable
June 30, Land Improvements Property Total Exemptions Value before HOE
2009 3,647,796,486$ 4,472,160,193$ 254,000,489$ 8,373,957,168$ (166,537,126)$ 8,207,420,042$
2010 3,640,861,781 4,548,446,929 288,729,686 8,478,038,396 (183,766,176) 8,294,272,220
2011 3,606,251,228 4,540,602,915 276,448,124 8,423,302,267 (178,136,001) 8,245,166,266
2012 3,638,418,566 4,608,371,669 286,292,343 8,533,082,578 (193,398,758) 8,339,683,820
2013 3,604,077,934 4,615,585,498 294,522,436 8,514,185,868 (212,901,964) 8,301,283,904
2014 3,770,334,144 4,733,730,176 298,807,480 8,802,871,800 (227,065,282) 8,575,806,518
2015 3,980,268,935 4,944,098,407 286,435,733 9,210,803,075 (236,519,578) 8,974,283,497
2016 4,198,319,498 5,193,793,825 287,853,187 9,679,966,510 (243,798,083) 9,436,168,427
2017 4,360,983,790 5,372,307,118 303,567,743 10,036,858,651 (248,041,928) 9,788,816,723
2018 4,572,607,138 5,547,678,336 299,989,126 10,420,274,600 (255,512,475) 10,164,762,125
Source: San Diego County Assessor's Office
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 true market value of the property. Because the true market
value is not tied to any type of annual valuation process, there is no reliable means of determining the market value of the
parcels within the City and therefore this amount is not disclosed.
City of Poway
Assessed Value of Taxable Property
Last Ten Fiscal Years (Continued)
-157-
Assessed Value (Continued) Change Estimated Total
Homeowners Net Taxable From Tax Direct
Exemptions (HOE) Value Prior Year Revenues Tax Rate
(78,430,066)$ 8,128,989,976$ 1.86% 9,282,993$ 0.211%
(78,218,791) 8,216,053,429 1.07% 9,189,474 0.211%
(77,678,375) 8,167,487,891 -0.59% 9,169,316 0.211%
(76,787,840) 8,262,895,980 1.17% 9,374,419 0.211%
(75,843,150) 8,225,440,754 -0.45% 9,311,665 0.211%
(74,913,680) 8,500,892,838 3.35% 9,648,224 0.211%
(74,448,910) 8,899,834,587 4.69% 10,117,764 0.211%
(73,706,162) 9,362,462,265 5.20% 10,614,545 0.211%
(73,044,158) 9,715,772,565 3.77% 11,043,425 0.211%
(72,492,736) 10,092,269,389 3.88% 11,498,968 0.211%
City of Poway
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
-158-
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
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%
2015 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2016 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2017 0.211% 0.389% 0.167% 0.118% 0.067% 0.047% 1.000%
2018 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
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%
2015 1.000% 0.000% 0.055% 0.040% 1.095%
2016 1.000% 0.000% 0.055% 0.040% 1.095%
2017 1.000% 0.000% 0.055% 0.045% 1.100%
2018 1.000% 0.000% 0.055% 0.044% 1.100%
Source: San Diego County Assessor's Office
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.
City of Poway
Principal Secured Property Tax Payers
Current Year and Nine Years Ago
-159-
2018 2009
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 315,394,937$ 1 3.03%88,745,482$ 1 1.06%
HCPLS Poway I LLC 101,311,386 2 0.97%
Ventas Inc 80,690,401 3 0.77%
San Miguel Valley Corp 65,769,732 4 0.63%
Hometown Poway Royal Estates LLC 42,141,634 5 0.40%
P M I Summerlyn LLC 41,973,000 6 0.40%
Sysco Food Services 37,500,000 7 0.36%35,374,370 5 0.42%
Costco Wholesale Corp 36,499,129 8 0.35%35,326,203 6 0.42%
Poway Crossings Investors LLC 35,369,861 9 0.34%31,275,000 9 0.37%
C T Crosthwaite I LLC 34,731,000 10 0.33%
Slough Poway I LLC 66,779,944 3 0.80%
Prudential Insurance 39,714,613 4 0.47%
PDP Pomerado LLC 69,558,551 2 0.83%
Government Employees Insurance Co.35,299,468 7 0.42%
Fairfield Township LLC 33,686,003 8 0.40%
Poway Tech Center Investors LLC 27,030,000 10 0.32%
791,381,080$ 7.58% 462,789,634$ 5.53%
Source: San Diego County Assessor's Office
City of Poway Assessed Value of Taxable Property Successor Agency & Redevelopment Tax Increment Property Tax Last Ten Fiscal Years Fiscal YearAssessed ValueChange Estimated TotalEndedPersonalBase Year Net Taxable FromTaxDirectJune 30,Land Improvements PropertyTotalExemptionsValuesValue Prior Year Revenues Tax RateRedevelopment Agency20091,666,217,121$ 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%20101,698,144,577 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%20111,669,652,573 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 Agency20121,645,381,909 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%20131,625,001,094 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%20141,673,995,306 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%20151,765,636,957 2,462,514,646 237,703,511 4,465,855,114 (95,034,853) (186,287,869) 4,184,532,392 4.40% 41,845,324 1.000%20161,858,719,377 2,594,263,565 243,714,010 4,696,696,952 (99,167,944) (186,287,869) 4,411,241,139 5.42% 44,112,411 1.000%20171,913,629,433 2,680,780,152 252,543,674 4,846,953,259 (99,807,403) (186,287,869) 4,560,857,987 3.39% 45,608,580 1.000%20182,000,869,745 2,762,424,969 245,541,310 5,008,836,024 (101,399,206) (186,287,869) 4,721,148,949 3.51% 47,211,489 1.000%Source: San Diego County Assessor's OfficeIn 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 13established 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 newassessedvalue 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 undervaluedwhen compared to the true market value of the property. Because the true market value is not tied to any type of annual valuation process, there is no reliable meansof 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 lifeof eachagency. Poway's Redevelopment Agency was scheduled to expire in January 2037.-160-
City of Poway
Redevelopment Property Tax Levies and Collections
Fiscal Years 2009-2012
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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
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 Assessor's 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.
Note 4:As part of AB XI 26 the Redevelopment Agency' was dissolved and the last tax increment distribution was received in
January 2012, which is why there is less than ten years of activity presented.
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 YearCurrentCurrentPercentCollections PercentEndedSecuredSecuredof LevyPrior From Prior of Prior Year'sTotalTotalJune 30,Tax LevyCollectedCollected Year's Levies Year's Levies Levies Collected Levies Collections Percentage200917,295,459$ 16,805,480$ 97.17% 674,580$ 378,562$ 56.12% 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%201512,524,910 12,418,741 99.15% 470,515 278,06959.10% 12,995,425 12,696,810 97.70%201612,958,510 12,859,128 99.23% 312,585 143,34545.86% 13,271,094 13,002,474 97.98%201713,390,895 13,279,054 99.16% 285,552 140,08149.06% 13,676,447 13,419,135 98.12%201813,390,895 13,279,054 99.16% 285,552 140,08149.06% 13,676,447 13,419,135 98.12%Source: San Diego County Assessor's 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. The significant decrease in the June 30, 2015 Current Secured Tax Levy was due to the final assessment for theCommunity Facilities District #88-1 being in the prior fiscal year. That amount was $3,209,813.-162-
City of Poway Ratios of Outstanding Debt by Type Last Ten Fiscal Years Business-typeGovernmental Activities Activities Private Purpose TrustFiscal Year Tax Certificates Total Percentage Certificates Tax TotalEnded Allocation of Loan Revenue Primary of Personal Per of Allocation Loan PrivateJune 30, Bonds Participation Payable Bonds Government Income Capita Participation Bonds Payable Purpose Trust2009 240,800,638$ 50,068,163$ 2,282,702$ 1,568,547$ 294,720,050$ 12.61% 5,765 - - - - 2010234,987,072 48,454,096 2,400,513 1,380,571 287,222,252 12.39% 5,518 - - - - 2011228,957,393 20,870,836 2,542,009 1,182,394 253,552,632 11.53% 5,265 - - - - 2012- 17,627,771 - 969,149 18,596,920 0.81% 384 2,344,312 222,516,942 2,672,503 227,533,757 2013- 16,753,498 - 745,904 17,499,402 0.72% 360 1,986,311 215,576,452 2,780,463 220,343,226 2014- 16,261,467 - 512,660 16,774,127 0.69% 342 1,618,877 208,316,472 2,885,549 212,820,898 2015- 15,522,575 - 264,415 15,786,990 0.62% 322 1,237,034 200,633,015 2,971,614 204,841,663 2016- 14,764,508 - - 14,764,508 0.54% 295 840,722 172,587,873 3,087,885 176,516,480 2017- 13,987,299 - - 13,987,299 0.49% 278 430,053 163,593,731 3,193,031 167,216,815 2018- 13,195,978 - - 13,195,978 0.45% 263 - 154,504,587 3,338,564 157,843,151 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. The Tax Allocation Bonds were refunded in July 2015.Source: City of Poway Finance Department-163-
City of Poway
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
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Outstanding
General
Bonded Debt
Fiscal Year Tax Percent of
Ended Allocation Assessed Per
June 30, Bonds Value (a) Capita
2009 -$ 0.00% -
2010 - 0.00% -
2011 - 0.00% -
2012 222,516,942 2.61% 4,599
2013 215,576,452 2.53% 4,439
2014 208,316,472 2.37% 4,253
2015 200,633,015 2.18% 4,091
2016 172,587,873 1.78% 3,445
2017 163,593,731 1.63% 3,255
2018 154,504,587 1.48% 3,077
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.
The Tax Allocation Bonds were refunded in July 2015.
Source: City of Poway Finance Department
City of Poway
Direct and Overlapping Debt
As of June 30, 2018
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2017-18 Assessed Valuation: 10,164,762,125$
Estimated Share
Debt % of Overlapping
OVERLAPPING TAX AND ASSESSMENT DEBT:Outstanding Applicable (1) Debt
Metropolitan Water District 60,600,000$ 0.369% 223,614$
Palomar Community College District 627,826,320 8.764% 55,022,699
Poway Unified School District School Facilities Improvement District No. 2002-1 139,985,766 39.710% 55,588,348
Poway Unified School District School Facilities Improvement District No. 2007-1 176,749,937 40.348% 71,315,065
Escondido Union High School District 87,884,694 0.077% 67,671
San Pasqual Union School District 243,535 2.284% 5,562
Palomar Pomerado Hospital District 436,358,740 12.787% 55,797,192
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 1,529,648,992$ 238,020,151$
DIRECT & OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations 273,220,000$ 2.050% 5,601,010$
San Diego County Pension Obligations 558,525,000 2.050% 11,449,763
San Diego County Superintendent of Schools General Fund Obligations 10,785,000 2.050% 221,093
Palomar Community College District Certificates of Participation 2,720,000 8.764% 238,381
Escondido Union High School District Certificates of Participation 55,510,000 0.077% 42,743
Poway Unified School District Certificates of Participation 61,718,869 23.811% 14,695,880
City of Poway Certificates of Participation 13,195,977 100.000% 13,195,977
TOTAL OVERLAPPING GENERAL FUND DEBT 975,674,846$ 45,444,847$
OVERLAPPING TAX INCREMENT DEBT (Successor Agency):
Tax Allocation Bonds 138,200,000$ 100.000% 138,200,000$
Certificates of Participation - 100.000% -
TOTAL OVERLAPPING TAX INCREMENT DEBT 138,200,000$ 138,200,000$
TOTAL DIRECT DEBT 13,195,977$
TOTAL OVERLAPPING DEBT 408,469,021$
COMBINED TOTAL DEBT 421,664,998$ (2)
Ratios to 2017-18 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 2.34%
Total Direct Debt 0.13%
Combined Total Debt 4.15%
Ratios to Redevelopment Successor Agency Incremental Valuation ($4,721,148,949):
Total Overlapping Tax Increment Debt 2.93%
Notes:
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Source: California Municipal Statistics, Inc. and City of Poway Finance Department
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the
outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when
considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into
account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping
government.
(1) The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable percentages were
estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the City divided by the district's total
taxable assessed value.
City of Poway
Legal Debt Margin Information
Last Ten Fiscal Years
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2018 2017 2016 2015 2014
Assessed valuation 5,443,613,176$ 5,227,958,736$ 5,024,927,288$ 4,789,751,105$ 4,567,470,473$
Conversion percentage 25% 25% 25% 25% 25%
Adjusted assessed valuation 1,360,903,294 1,306,989,684 1,256,231,822 1,197,437,776 1,141,867,618
Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 204,135,494 196,048,453 188,434,773 179,615,666 171,280,143
Total net debt applicable to limit:
General obligation bonds - - - - -
Legal debt margin 0.00% 0.00% 0.00% 0.00% 0.00%
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
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.
FISCAL YEAR
City of Poway
Legal Debt Margin Information
Last Ten Fiscal Years (Continued)
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2013 2012 2011 2010 2009
4,408,143,750$ 4,437,851,067$ 4,340,755,570$ 4,350,898,397$ 4,394,570,216$
25% 25% 25% 25% 25%
1,102,035,938 1,109,462,767 1,085,188,893 1,087,724,599 1,098,642,554
15% 15% 15% 15% 15%
165,305,391 166,419,415 162,778,334 163,158,690 164,796,383
- - - - -
0.00% 0.00% 0.00% 0.00% 0.00%
FISCAL YEAR
City of Poway
Pledged Revenue Coverage
Last Ten Fiscal Years
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Tax Allocation Bonds
Fiscal Year Debt Service
Ended Tax RPTTF
June 30, Increment Distribution Principal Interest Total Coverage
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 - 40,907,420 7,020,000 10,889,354 17,909,354 2.28
2015 - 42,495,591 7,450,000 10,565,336 18,015,336 2.36
2016 - 44,786,412 7,440,000 6,558,087 13,998,087 3.20
2017 - 46,953,802 7,110,000 6,895,377 14,005,377 3.35
2018 - 47,750,166 7,205,000 6,802,425 14,007,425 3.41
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
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Per
Capita
Calendar Personal Personal Labor Unemployment
Year Population Income Income Force Rate
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%
2015 49,041 2,530,249,449 51,595 26,000 3.2%
2016 50,103 2,723,859,688 54,365 25,900 3.3%
2017 50,253 2,832,825,802 56,371 25,500 2.8%
2018 50,207 2,934,102,264 58,440 26,000 3.2%
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 Nine Years Prior
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2018 2009
Percent of Percent of
Number of Total Number of Total
Employer Employees Rank Employment Employees Rank Employment
General Atomics Aeronautical Systems 4,571 1 17.58%
Geico Direct 1,720 2 6.62% 1,500 1 5.34%
Poway Unified School District 1,366 3 5.25% 1,462 2 5.20%
Delta Design, Inc. 750 4 2.88%
Pomerado Hospital 738 5 2.84% 743 3 2.64%
A.O. Reed & Co. 450 6 1.73%
Sysco Food Services of SD 385 7 1.48% 456 5 1.62%
Walmart 367 8 1.41% 340 8 1.21%
H M Electronics, Inc 300 9 1.15%
Arch Health Partners 300 10 1.15%
Cohu Inc.650 4 2.31%
Digirad Corporation 434 6 1.54%
First American Credco 416 7 1.48%
City of Poway 310 9 1.10%
Mitchell Repair Information Company 265 10 0.94%
Total 10,947 42.10% 6,576 23.40%
Total City Labor Force 26,000 28,100
Sources:
City of Poway Economic Development Division-by Employer
State of California Employment Development Department-Total City Labor Force
City of Poway
Full-Time-Equivalent City Employees by Function
Last Ten Fiscal Years
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Function 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
General government 30 31 31 29 28 27 31 33 40 35
Public Safety (a) 58 56 56 55 54 54 54 54 54 57
Public works 82 85 84 81 79 81 85 84 83 92
Redevelopment Services - - - - - - - 9 9 9
Community Services 20 20 20 20 20 20 20 20 20 27
Development Services 25 22 22 21 22 23 30 29 29 37
215 214 213 206 203 205 220 229 235 257
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.
Source: City of Poway Financial Plan
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.
City of Poway
Operating Indicators
Current and Prior Nine Years
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Function 2018 2017 2016 2015 2014
General government:
Business registrations issued 1,859 1,987 1,509 1,510 1,285
Vendor payments processed 6,203 6,689 6,623 6,705 6,426
Public Safety:
Arrests made 900 900 1,079 1,214 1,069
Fire emergency responses 5,146 4,755 4,564 4,229 4,099
Safety Inspections 2,451 2,652 2,587 3,069 2,899
Development Services:
Building permits issued (1) 2,465 2,013 2,444 2,070 1,504
Building inspections 9,023 9,600 9,162 12,488 8,221
Culture and recreation:
Performing arts center attendance 56,573 56,637 57,908 60,276 55,652
Library-number of holdings in collection (3) (3) (3) (3) 93,951
Library-number of holdings circulated 897,531 863,874 782,599 733,689 709,823
Athletic field permits issued 335 285 225 232 282
Highways and streets:
Roads resurfaced in square feet 204,000 306,543 306,000 237,024 299,038
Roads slurry sealed in square feet 4,231,308 4,627,262 4,933,522 4,378,483 4,379,695
Pot holes repaired/work orders (2) 189 191 213 193 175
Water:
Residential water customers 12,662 12,631 12,625 12,765 12,674
Commercial water customers 500 495 493 658 645
All other water customers 816 812 811 ----------------------------------------
Average daily consumption (mg) 9.47 8.13 7.39 8.21 10.66
Sewer:
Residential sewer customers 11,410 11,391 11,381 11,530 11,498
Commercial sewer customers 480 475 472 630 627
All other sewer customers 328 329 329 ----------------------------------------
Average daily treatment (mg) 2.35 2.68 2.48 2.53 2.73
Source:
City of Poway
Notes:
(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.
(3) Because of County-wide interbranch loan program this statistic is no longer tracked.
City of Poway
Operating Indicators
Current and Prior Nine Years (Continued)
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2013 2012 2011 2010 2009
1,522 1,418 1,317 1,192 942
6,770 7,020 7,063 7,804 8,936
1,038 1,123 1,145 1,334 1,015
3,846 3,638 3,811 3,691 3,711
2,687 2,474 2,863 1,606 2,104
1,345 1,237 1,176 1,144 1,157
8,349 5,981 6,126 6,580 7,417
59,389 59,897 53,249 61,214 68,993
75,000 96,000 104,367 125,977 124,977
782,288 693,783 765,704 638,494 562,865
156 161 152 148 144
188,561 201,968 207,968 290,877 600,000
3,928,425 4,563,496 4,369,160 4,369,503 4,980,000
644 1,323 571 193 147
12,509 12,523 12,439 12,492 12,458
529 464 496 514 514
----------------------not reported-------------------------------------------------------------
10.16 9.36 8.99 9.57 11.61
11,474 11,383 11,241 11,225 11,191
623 782 770 774 770
----------------------not reported-------------------------------------------------------------
2.86 3.01 3.27 3.15 3.43
City of Poway
Capital Assets Statistics
Current and Prior Nine Years
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Function 2018 2017 2016 2015 2014
Public Safety:
Number of fire stations 3 3 3 3 3
Number of sheriff stations 1 1 1 1 1
Public works:
Total number of streetlights 3,059 3,059 3,059 3,059 3,059
Signal controlled intersections 56 56 56 56 56
Health and welfare:
Senior center facilities 1 1 1 1 1
Culture and recreation:
Number of Libraries 1 1 1 1 1
Number of Performing Arts Centers 1 1 1 1 1
Number of Parks 19 19 19 19 19
Acres of developed parks 232 232 232 232 232
Number of reserves/preserves 2 2 2 2 2
Acres of reserves/preserves 2,400 2,400 2,400 2,400 2,400
Miles of trails 56 56 56 56 56
Highways and streets:
Miles of roadway 165 165 165 165 165
Water:
Miles of water lines 289 289 289 289 289
Water storage capacity (billon/gallons) 1.11 1.11 1.11 1.11 1.11
Sewer:
Miles of sewer lines 186 186 186 186 186
Miles of storm sewers 64 64 64 64 64
Source:
City of Poway
City of Poway
Capital Assets Statistics
Current and Prior Nine Years (Continued)
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2013 2012 2011 2010 2009
3 3 3 3 3
1 1 1 1 1
3,059 3,073 3,073 3,045 3,045
55 55 55 55 55
1 1 1 1 1
1 1 1 1 1
1 1 1 1 1
19 19 19 18 18
232 232 232 232 232
2 2 2 2 2
2,400 2,400 2,400 2,400 2,400
56 56 56 56 56
165 165 165 165 165
289 289 289 253 253
1.11 1.11 1.11 1.11 1.11
186 186 186 175 175
64 64 64 64 64
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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.
San Bernardino, California
January 28, 2019