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City of Poway
Poway, California
Comprehensive Annual Financial Report
For the year ended June 30, 2007
PREPARED BY THE CITY OF POWAY, CALIFORNIA
FINANCE DEPARTMENT
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City of Poway
Basic Financial Statements
For the year ended June 30, 2007
ITable of Contents
Page
INTRODUCTORY SECTION
Tableof Contents ........................................................................................................................ ............................... i
Letterof TransmittaI ................................................................................................................. ............................... v
Principal Officials .................
OrganizationalChart ............................................................................................................. ............................... xiv
GFOA Certificate of Achievement for Excellence in Financial Reporting ...................... ............................... xv
FINANCIAL SECTION
IndependentAuditors' Report ............................................................................................... ............................... 1
Management's Discussion and Analysis (Required Supplementary Information) .... ............................... 3
Basic Financial Statements:
Government - Wide Financial Statements:
Statementof Net Assets ............................................................................................. ............................... 16
Statement of Activities and Changes in Net Assets ............................................... ............................... 18
Fund Financial Statements:
Governmental Fund Financial Statements:
BalanceSheet ........................................................................................................ ............................... 24
Reconciliation of Governmental Funds Balances Sheet to the
Government -Wide Statement of Net Assets .............................................. ............................... 27
Statement of Revenues, Expenditures
andChanges in Fund Balances .................................................................... ............................... 28
Reconciliation of Governmental Statement of Revenues, Expenditures,
and Changes in Fund Balances to the Government -Wide Statement
of Activities and Changes in Net Assets .................................................... ............................... 30
Proprietary Fund Financial Statements:
Statementof Net Assets ...................................................................................... ............................... 32
Statement of Revenues, Expenses and Changes in Fund Net Assets ........... ............................... 33
Statementof Cash Flows ..................................................................................... ............................... 34
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Assets .................................................................... ............................... 36
Notes to Basic Financial Statements ............................................................................. ............................... 37
City of Poway
Basic Financial Statements
For the year ended June 30, 2007
Table of Contents, Continued
Page
FINANCIAL SECTION, Continued
Required Supplementary Information:
BudgetaryInformation .............................................................................................. ............................... 76
Budgetary Comparison Schedule - General Fund ................................................ ............................... 77
Budgetary Comparison Schedule - Low /Moderate Income Housing Special Revenue Fund...... 78
Defined Benefit Pension Plans .................................................................................. ............................... 79
Supplementary Information:
Non -Major Governmental Funds:
CombiningBalance Sheet .......................................................................................... ............................... 86
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................ 90
Non -Major Special Revenue Funds:
City of Poway RDA Debt Service Fund ..................................................... ............................... 94
FireProtection ................................................................................................ ............................... 95
800 MHz Communication System .............................................................. ............................... 96
GasTax ............................................................................................................ ............................... 97
StreetImprovement ...................................................................................... ............................... 98
DrainageSpecial ............................................................................................ ............................... 99
MaintenanceDistricts .................................................... ............................... ............................100
MiscellaneousGrants ...................................................... ............................... ............................101
Community Development Block Grant ....................... ............................... ............................102
Transportation Development Act ................................. ............................... ............................103
PropositionA Special ..................................................... ............................... ............................104
Royal Mobilehome Park Administration ..................... ............................... ............................105
Traffic Congestion AB 2928 ............................................ ............................... ............................106
BetteBendixen ................................................................ ............................... ............................107
PowayRoad Beautification ............................................ ............................... ............................108
Poway Valley Senior Center Endowment .................... ............................... ............................109
OldPoway Park Tree ...................................................... ............................... ............................110
Poway Public Arts Special Revenue Fund ................... ............................... ............................111
KumeyaayEndowment ................................................. ............................... ............................112
PowayFine Arts Center ................................................. ............................... ............................113
Senior Volunteer Patrol .................................................. ............................... ............................114
MaryPatricia Ross ........................................................... ............................... ............................115
LibraryPermanent ............................................................................... ............................... .......116
CityDebt Service Fund ................................................... ............................... ............................117
Internal Service Funds:
Combining Statement of Net Assets .......................................... ............................... ............................120
Combining Statement of Revenues, Expenses and Changes in Net Assets ........ ............................121
Combining Statement of Cash Flows ........................................ ............................... ............................122
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City of Poway
Basic Financial Statements
For the year ended June 30, 2007
Table of Contents, Continued
Page
FINANCIAL SECTION, Continued
Agency Funds:
CombiningBalance Sheet ............................................................ ............................... ............................
124
Statement of Changes in Net Assets .......................................... ............................... ............................125
STATISTICAL SECTION (Unaudited)
Net Assets by Component - Last Five Fiscal Years .............................. ...............................
............................128
Changes in Net Assets for Governmental Activities - Last Five Fiscal Years ................. ............................129
Changes in Net Assets for Business -Type Activities - Last Five Fiscal Years ................. ............................131
Fund Balances, Governmental Funds - Last Ten Fiscal Years ............ ............................... ............................132
Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years ...................... ............................134
Assessed Value of Taxable Property General Property Tax - Last Ten Fiscal Years ...... ............................136
Direct and Overlapping Property Tax Rates General Property Tax - Last Ten Fiscal Years ....................138
Principal Secured Property Tax Payers General Property Tax
- Current Year and Nine Years Ago
................................................. ............................... ............................139
Assessed Value of Taxable Property Redevelopment Tax Increment
Property Tax - Last Ten Fiscal Years ............................................... ............................... ............................140
Redevelopment Property Tax Levies Collections
and ......................... ............................... ............................142
General Property Tax Levies and Collections - Last Ten Fiscal Years ............................. ............................143
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ..............
............................... ............................144
Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years .............................. ............................146
Direct and Overlapping Debt as of June 30, 2006 ................................. ...............................
............................147
Legal Debt Margin Information - Last Ten Fiscal Years ...................... ...............................
............................148
Pledged Revenue Coverage - Last Ten Fiscal Years ............................ ............................... ............................150
Demographic and Economic Statistics - Last Ten Calendar Years .... ............................... ............................151
Principal Employers - Current Year and Nine Years Ago .................. ............................... ............................152
Full- Time - Equivalent City Employees by Function - Last Ten Fiscal Years ................... ............................153
Operating Indicators - Current Fiscal Year ........................................... ............................... ............................154
Capital Assets Statistics - Current Fiscal Year ...................................... ............................... ............................155
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MICKEY CAFAGNA, Mayor CITY OF POWAY
MERRILEE BOYACK, Deputy Mayor
BOB EMERY, Councilmember
DON HIGGINSON Councilmember
BETTY REXFORD, Councilmember
December 1, 2007
Honorable Mayor and Members of the City Council
Poway, California
This Comprehensive Annual Financial Report (CAFR) is prepared in order to provide you and the
community with a report of the financial transactions of the City of Poway as of and for the year
ended June 30, 2007. Responsibility for the accuracy, completeness, and fairness of the report rests
with the City.
We believe that the data, as presented, is accurate in all material aspects; that it is presented in a
manner designed to fairly set forth the financial position and results of operations of the City as
measured by the financial activity of its various fund types, and that all disclosures necessary to
enable the reader to gain the maximum understanding of the City's financial affairs have been
included.
The significant accounting policies of the City are described in the Notes to Financial Statements.
These accounting policies have been approved by the City's independent certified public
accountants, and are in conformance with the recommendations of the American Institute of
Certified Public Accountants and the Governmental Accounting Standards Board.
This report is prepared following the guidelines set forth by the Government Finance Officers
Association of the United States and Canada and the California Society of Municipal Finance
Officers.
In accordance with the above - mentioned guidelines, the report is divided into three sections:
Introductory Section - including this letter of transmittal, the City's organizational
chart, and the list of principal officers.
2. Financial Section - including the independent report from the City's certified
public accountants, management's discussion and analysis, basic financial
statements, notes to financial statements, and required supplementary information.
3. Statistical Section - including other pertinent unaudited financial tables and
information that presents historical trends, demographics, and miscellaneous data
about the City.
Management's discussion and analysis (MD &A) immediately follows the independent auditor's
report and provides a narrative introduction, overview, and analysis of the basic financial
statements. MD &A complement this letter of transmittal and should be read in conjunction with it.
City Hall Located at 13325 Civic Center Drive
Mailing Address: P.O. Box 789, Poway, California 92074 -0789 • (858) 668 -4400
FAX (858) 668 -1200
Annual Financial Report
December 1, 2007
Page vi
The Reporting Entity and Its Services
Included within the City's financial statements is the financial information of the Poway Redevelopment
Agency and the Poway Public Financing Authority. Although the entities are legally separate from the City,
their financial operations are closely related. Their activities are included with the activities of the City,
because the City Council serves as the Board of Directors and is able to impose its will on both entities.
There is, therefore, a financial benefit/burden relationship. This financial presentation is in accordance with
GASB Codification, Section 2100.
The City of Poway was incorporated December 1, 1980, under the general laws of the State of California.
The City operates under a Council- Manager form of government and provides the following services: public
safety (police and fire), community services, development services, public works, general administrative
services, and capital improvements.
The Poway Redevelopment Agency was established April 26, 1983, pursuant to the State of California
Health and Safety Codes, Section 33000 entitled "Community Redevelopment Law." Its purpose is to
eliminate blighted areas by encouraging the development of residential, commercial, industrial, recreational,
and public facilities.
The Poway Public Financing Authority is a joint powers authority organized pursuant to the State of
California Government Code, Section 6500. The authority exists under a Joint Exercise of Power Agreement
dated October 8, 1991, between the City of Poway and the Poway Redevelopment Agency. Its purpose is to
assist in financing and refinancing projects for the benefit of the City and the Agency.
Economic Condition and Outlook
Poway, from Indian words meaning "where the waters meet," first gained prominence in the 1800s as an
important link in Southern California's stagecoach network. Now the City, a thriving, civic - spirited
community, is located in the coastal foothills of San Diego County just twenty miles north of downtown San
Diego and three miles east of Interstate 15.
The City of Poway flourishes with a family- oriented population of 50,830 and covers 39 square miles with
elevations ranging from 450 to 2,250 feet above sea level. Poway is a full- service general law city governed
by a council of five members -at -large serving staggered four -year terms. In 1990 the City had its first mayor
directly elected by the voters. The City absorbed existing special districts as of February 1, 1981. Water,
sewage collection, fire, paramedic, parks and recreation, planning and building, street maintenance, and
redevelopment services are provided by the City. Law enforcement services are contracted through the San
Diego County Sheriff's Department, and wastewater treatment is provided by the City of San Diego.
Poway has been popularly dubbed the "City in the Country." Poway has set aside over 65 percent of total
land use as open space, nearly 3,000 acres of dedicated public open space, 568 acres of developed parkland
featuring community parks and centers, and 82 miles of riding and hiking trails. Poway has the third highest
median household income in San Diego County, at $99,889 for 2007. Home lots are often larger than in most
other areas, with a median sales price of $659,000 in June 2007. The June 2007 median sales price does
represent a minor 1.2% decrease from the revised June 2006 median sales price of $666,750. Poway is
predominately a single - family community, and the Poway Unified School District - -a top performer in the
state and nation - -is a source of great pride, as is the fact that the City has the lowest crime rate in the county.
As part of San Diego County, Poway has a relatively dry climate with frost -free temperatures over 300 days
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Annual Financial Report
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per year, and rainfall of about 10 inches, which falls principally between October and April. The average
daytime temperature in Poway is about 74° F. The expected population at build out is 55,000.
Poway's local economy is based primarily on automobile and transportation related sales, general consumer
' goods, and business and industry. New retail development in the Poway Business Park in recent years has
generated substantial growth in sales tax. While automobile sales have traditionally led the way, with the
development of the Business Park, other sectors such as business and industry and general consumer goods
' have helped to diversify the City's sales tax base. Though in Fiscal Year 2007, consistent with the
nationwide slowing of consumer spending, Poway's sales tax revenue did decrease and is expected to be flat
in Fiscal Year 2008.
The Poway Business Park remains a strong component of the local and regional economy. The Business
Park now represents approximately 8.9 million square feet of developed space, with an average vacancy rate
' of 6.8 %. In addition, the Park is comprised of 500 businesses, a workforce of more than 19,000 people, and
generates combined annual sales of an estimated $2 billion. In Fiscal Year 2008, the Business Park will
continue to increase its amount of commercial and industrial space, providing additional corporate
headquarters opportunities, distribution centers, and professional offices. A major national defense
contractor will begin occupying one million square feet in the Business Park later this year, bringing more
than 2,000 professional positions to the City. The Poway Business Park will continue to be a major growth
center for San Diego County.
Despite a strong and diverse economy, now that the community is nearly built -out, the City of Poway has
reached a new era financially. As the City grew rapidly over the past 25 years, revenues such as sales tax
and property tax also grew quickly. With minimal development on the horizon, new major sources of
property and sales tax are not anticipated. Additionally, as the national and state economies slow,
particularly real estate and consumer spending, the impact is felt locally. Poway must focus on long -term
financial sustainability. This requires assessing the organization as a whole for opportunities to reduce costs,
while maintaining high service levels.
' In adopting the Fiscal Year 2008 budget, several vacant positions and one staffed part-time position were
eliminated. Cost savings were also achieved through steps such as eliminating the non - emergency
receptionists at the Poway Sheriff's Station and reducing funds budgeted for operations and maintenance.
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Additionally, as set forth by the City's Financial Policy, over the past year, the City has comprehensively
reviewed all fees, charges, and overhead costs. The overhead cost allocation study, completed in Spring
2007, ensured all internal costs were charged to the appropriate fund, such as the General Fund, Water, or
Redevelopment. In Fall 2007, the City Council will consider comprehensive changes to the City's user fees,
which are charged for elective services, such as recreation programs and development permits. Staff is also
currently evaluating the City's development impact fees and anticipates presenting recommendations to the
City Council in Spring 2008. The purpose of development impact fees is to offset the financial cost of new
development to the community, such as parks, fire services, and traffic impacts. The City will adopt a
comprehensive fee and charge schedule annually each December.
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Annual Financial Report
December 1, 2007
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Major Initiatives
For the Year:
Redevelopment: In August 2006, the City Council directed staff to explore creating a Town Center for
Poway in a 53 -acre area along the south side of Poway Road that includes Community Park. The Town
Center would be pedestrian- oriented with retail, dining, housing, and recreation. Public outreach occurred
between August and November 2006 to identify community visions and concerns about the Town Center
concept. Over 300 individuals participated at more than twenty venues. In March 2007, the City Council
received a summary report of the public outreach process and authorized staff to further pursue development
of the Town Center. Between Spring and Summer 2007, the housing component and market feasibility of
the project were further explored, followed by a report to the City Council in October 2007. Next steps
include preparing a Request for Interest (RFI) for the project to be used to help market the project to private
developers.
Public Improvements: In January 2007, the City Council adopted a Capital Improvement Program
encompassing 71 projects priced at $45 million for completion in the next two years. Project examples
include improvements for Old Poway and the Oak Knoll neighborhood, water and sewer system
rehabilitation projects, roadway maintenance work, and facility upgrades.
In Summer 2007, work began to develop a Master Plan for Community Park, which was designed and built
by the County of San Diego prior to Poway's incorporation. Because of the Park's proximity to the Town
Center area, planning for both projects is being done concurrently.
Housing: Solara, the City's newest affordable workforce housing development, was completed in March
2007, featuring state -of -the -art environmentally - conscious building techniques. Solara is the first
environmentally sustainable affordable housing development in the United States and has won multiple
awards. Located on the west side of Community Road, the complex includes 56 one -, two -, and three -
bedroom garden apartments, with a 2,100 square foot community building, a learning center, laundry
facilities, kitchen, and offices. Over 700 families applied to move into the complex. The complex is owned
by Community HousingWorks, a nonprofit organization that specializes in affordable housing. The
Redevelopment Agency's funding contribution of approximately $4 million was highly leveraged using state
and federal funds to offset the total project cost of nearly $20 million.
Also during Fiscal Year 2007, design work continued on the City's first single - family "for sale" affordable
housing development and a multifamily rental development in Old Poway. The Meadows, located off Metate
Lane, will offer 30 attached homes available for purchase to qualified buyers. Four additional homes are
proposed in the York Avenue area as part of the same project.
The City continued the process of updating the Housing Element, which is focused on Poway's housing
needs, constraints, and opportunities. The Housing Element is required by state law and must be updated
every five years.
Technology: In March 2007, the City began televising City Council meetings. Meetings are video - recorded
and replayed on the local government access channels several times each week. Additionally, the City
implemented a new geographic information system (GIS), enabling the City to create custom maps, query
specific geographic data (such as locations of sewer lines, fire hydrants, traffic signals, and more), analyze
spatial relationships, and edit attributes on a map. This database is useful to City staff and residents pursuing
development projects or seeking information on boundaries, land elevation, or land use.
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Annual Financial Report
December 1, 2007
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Another technology focus of Fiscal Year 2007 was creation of the City's new Web site, which launched in
early October 2007. The site features a new look and address, with greatly expanded content, improved
navigation, and more interactive services such as an online service request form and a subscription option for
e -mail updates on certain topics.
Public Safety: The Fire Department's new aerial ladder truck went into service January 1, 2007, which includes
four additional personnel on duty at all times. This translates into faster response times and improved service
levels. The truck's ladder extends 100 -feet up into the air and is capable of reaching buildings that are tall, wide,
and set back from the street, such as those at the Hospital and in the Business Park. Additionally during Fiscal
Year 2007, construction of the state -of -the -art fire training tower was completed in the Business Park.
Disaster Preparedness: During Fiscal Year 2007, several projects were completed to improve the City's
capability to respond to a disaster, whether an earthquake, fire, flood, or other cause. The City's Emergency
Operations Plan was revamped according to national and state standardized emergency management
systems. The detailed plan identifies how non - emergency responders should function in response to an
emergency situation in Poway. All employees, particularly those assigned roles in the Emergency
Operations Center (EOC), went through extensive training and several drills. Outfitting of the City Council
Chambers to function as the EOC was also completed (replacing the Fire Station 1 classroom), including
necessary technology and supplies. A Citizens Emergency Response Team (CERT) for Poway was also
launched during Fiscal Year 2007. To date, sixty individuals have been trained as CERT volunteers to
provide assistance during an emergency.
For the Future:
Redevelopment and Economic Development: Groundbreaking for the Hampton Inn & Suites hotel in the
Poway Business Park is scheduled for November 2007. The 103 -room hotel is anticipated to generate nearly
$300,000 in transient occupancy tax for the City of Poway's General Fund. The hotel will also support
Poway's strong and diverse economy by serving local businesses that frequently require corporate travel for
their ongoing success.
Redevelopment Services is preparing a Request for Interest (RFI) regarding the Town Center project to
release to the development community in Winter 2008, following approval of the City Council. Through the
RFI, developers interested in the project will submit design ideas and information on their experience and
financial readiness for this type of project. The goal of the RFI process is for the City to select a
development partner.
Partnering with the Chamber of Commerce, the City has launched the "Poway: Your First Choice" campaign
to promote the importance of shopping locally. The project includes a shopping habits survey that was
conducted in the Fall 2007.
Public Improvements: Construction will begin in Winter 2008 on the $10 million Oak Knoll roadway and
sewer projects, which includes upgrading the sewer line, adding sidewalks and streetlights, removing the
utility poles, and increasing parking, along Oak Knoll Road between Poway Road and Carriage Road.
Additionally, the City of Poway, in partnership with a nonprofit affordable housing developer, is pursuing
acquisition and rehabilitation of an 88 -unit apartment complex located on Oak Knoll Road. The complex
will be purchased, renovated, and the units will then be available as affordable housing.
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Annual Financial Report
December 1, 2007
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Preparation of the Master Plan for Community Park continues. Over 400 individuals participated in a survey
about current and future uses for the Park. Sixty people attended two workshops in September to discuss the
types of amenities they would like the Park to include. A summary report will be provided to the City
Council in December 2007.
Technology: With the launch of the City's new Web site complete, work will now focus on adding more
interactive services, such as online facility rentals and water and sewer bill payment, as well as video
archiving of City Council meetings. Another focus is adding more layers of information to the geographic
information system (GIS) to increase its effectiveness, and to make elements of the system accessible to the
public via the City's Web site.
Accounting System and Budgetary Control
The City's accounting records for governmental fund types and the agency funds are maintained on the
modified accrual basis of accounting. The modifications to the accrual basis of accounting are described in
the Notes to Financial Statements. The accounting records for proprietary funds (water and sewer) and the
internal service funds are maintained on the full accrual basis of accounting. Accordingly, revenues are
recognized in the accounting period earned, and expenses are recognized in the period incurred.
In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal
accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute,
assurance regarding (1) the safeguarding of assets against loss from unauthorized use or disposition, and (2)
the reliability of financial records for preparing financial statements and maintaining accountability of assets.
The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits
likely to be derived. The evaluation of this cost/benefit relationship requires estimates and judgments by
management.
All internal control evaluations occur within the above framework. We believe that the City's internal
accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of
financial transactions.
Financial transactions are continuously updated in the City's computerized financial reporting system, and all
managers have instant access to the current budget information for which they are responsible. These financial
reports compare the budgeted figures to the recorded transactions and compute the resulting variance. These
reports form the basis of the budgetary control system that allows for the timely review and continuous
assessment of the financial position and results of operations.
Additionally, an encumbrance system is employed as an extension of the formal budget integration. The
estimated purchase order amounts are encumbered prior to releasing the order to a vendor. Purchase orders,
which would result in an overrun of balances at the functional level, are normally not released until budget
transfers are approved by the City Manager or additional appropriations are authorized by the City Council. Open
encumbrances are reported as annual reservations of fund balances at year -end. The level of budgetary control
(the level on which expenditures may not legally exceed appropriations) is the individual fund level.
Other financial reports available for management and legislative review include quarterly reports of
investments and capital improvement projects. At the end of six months, a midyear report is distributed,
which assesses the City's financial position and results of operations and projects activity for the remainder
of the fiscal year. The interim report forms the basis for the budget projections for the upcoming fiscal year's
budget. A budget review committee consisting of five council- designated citizens annually reviews the
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Annual Financial Report
December 1, 2007
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City's financial operations and budget controls. During Fiscal Year 2006 -07, the City, for the sixth time,
adopted a two -year budget covering Fiscal Years 2007 -08 and 2008 -09.
The City's investment policy is reviewed annually for changes in state regulations and is approved by the
City Council. Since Fiscal Year 1996 -97, the City has had an investment management agreement with
Metropolitan West Securities, Inc. Metropolitan West Securities, Inc., actively monitors the portfolio and
advises the City of various investment strategies that assist the City in meeting its stated investment goals of
(1) safety of principal, (2) liquidity, and (3) return on investment.
Risk Management
The City of Poway is a member of the California Joint Powers Insurance Authority (Authority), a consortium
of approximately 114 public entities. The Authority's governing board consists of one member from each
participating entity and is responsible for the selection of management as well as budgeting and finance.
Insurance activities are financed by charges to members, and no long -term debt has been incurred. Actual
annual premiums are determined using a retrospective method.
At June 30, 2007, for general liability, the City is self - insured for each loss to the extent of $30,000. Losses
between $30,001 and $10,000,000 are shared by the participating entities. Costs of covered claims between
$10,000,001 and $50,000,000 are paid by excess insurance. As for workers compensation, the City is responsible
for the first $50,000 of each claim. Costs between $50,001 and $2,000,000 are shared by the participating
entities. Costs between $2,000,001 and $200,000,000 are paid by excess insurance purchased by the Authority.
The Authority does maintain reserves, which are regularly reviewed by an independent third party. Because of
the low deductible amounts of the self - insurance program, the City does not maintain reserves or a sinking fund
for its unpaid claims and judgments. They are expended as they occur, and the City intends to pay all of its
unpaid claims and judgments from available resources.
Independent Audit
The Government Code of the State of California requires general law cities such as Poway to be audited
annually by independent certified public accountants selected by the City Council. This requirement has
been met and the auditors' independent report is included in this report. Also, please refer to the
Management Discussion and Analysis section for an in -depth review of this year's Financial Statements.
GFOA Certificate of Achievement for
Excellence in Financial Reportine
The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Poway, California, for its
comprehensive annual financial report for the fiscal year ended June 30, 2006. In order to be awarded a
Certificate of Achievement for Excellence in Financial Reporting, a government must publish an easily
readable, efficiently organized comprehensive annual financial report whose contents conform to program
standards. Such reports must satisfy both generally accepted accounting principles and applicable legal
requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our
current report conforms to the program requirements, and we are submitting it to GFOA to determine its
eligibility for the certificate.
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Annual Financial Report
December 1, 2007
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CSMFO Certificate of Award for
OutstandinE Financial Reporting
The California Society of Municipal Finance Officers ( CSMFO) has modified its submission requirements and is
no longer reviewing comprehensive annual financial reports that have also been submitted to the GFOA.
Therefore, the City of Poway's Fiscal Year 2005 -06 comprehensive annual financial report was not submitted to
the CSMFO.
Acknowledtments
Preparation of the City's Comprehensive Annual Financial Report is an undertaking of the Administrative
Services Department. Special credit is due to Andrew White, Finance Manager; Al Kohn, Senior
Accountant; and Maria Weston, Accountant; and the entire staff in the Finance Division. Their yearlong
hard work and dedication have made this report possible.
We also thank the City Council for their interest and support in planning and conducting the financial
operations of the City in a responsible and progressive manner.
Respectfully submitted,
Rod Gould
City Manager
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Tina M. White
Director of Administrative Services
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City Manager
Assistant City Manager
City Attorney
City Clerk
PRINCIPAL OFFICIALS
AT
JUNE 30, 2007
CITY COUNCIL
Mickey Cafagna, Mayor
Merrilee Boyack, Deputy Mayor
Bob Emery, Council Member
Don Higginson, Council Member
Betty Rexford, Council Member
APPOINTED OFFICIALS
ADMINISTRATIVE PERSONNEL
Director of Administrative Services
Director of Community Services
Director of Development Services
Director of Public Works
Director of Redevelopment Services
Director of Safety Services
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Rod Gould
Penny Riley
Lisa Foster
L. Diane Shea
Tina M. White
Robert A. Clark
Niall S. Fritz
James R. Howell
Dena L. Fuentes
Mark A. Sanchez
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CITY OF POWAY
ORGANIZATION CHART
Redevelopment
and Housing Services
Citizens
City Council
Planning Commission
Redevelopment Agency
City Manager/
Executive Director
Administrative' I Community
Services Services
1. Human Resources
1.
Leisure Services
2. Customer Services
2.
Lake Operations
3. Finance
3.
Aquatics Center
4. Information
4.
Performing Arts
Technology
Maintenance Control
Center
5. Support Services
5.
Old Poway Park
6. Risk Management
6.
Library
7. Capital Management
7.
Interpretive Services
Development
Services
City Clerk ' I City
Attorney
1. Planning
2. Building Inspection
3. Capital Projects
4. Land Development
5. Engineering Inspection
6. Traffic Engineering
Public
Works
1.
Fleet Maintenance
2.
Water Supply
3.
Sewer Pumping &
Disposal
4.
Water Distribution
5.
Wastewater Collection
6.
Maintenance Control
7.
Street Maintenance
S.
Drainage Maintenance
9.
Facilities Maintenance
10.
Trails & Open Space
11.
Park & Landscape
Maintenance
12.
Storm Water Mgmt
13.
Reclaimed Water
14.
Special District
Administration
Council
Committees
Safety
Services
1. Fire Suppression
2. Fire Prevention
3. Paramedics
4. Law Enforcement
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Poway
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2006
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
An
MWA
� President
Stu
CKAP
�y
Executive Director
XV
1
This page intentionally left blank. l
l
L
xvi I
INDEPENDENT AUDITORS' REPORT
To the
Honorable Mayor and Members of the City Council
' of the City of Poway
Poway, California
' We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of Poway,
California (City), as of and for the year ended June 30, 2007, which collectively comprise the City's
1 basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
1 We conducted our audit in accordance with generally accepted auditing standards in the States and the standards applicable to financial audits cont fined in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
1 amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
basic financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects,
1 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, 2007, and the
respective changes in financial position and cash flows, where applicable, thereof for the year then
ended in conformity with generally accepted accounting principles in the United States.
In accordance with Government Auditing tandards we have
S also Issued our report dated December 11,
2007, 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 the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
As described in Note 1, 4, and 17, the City in 2007 has fully implemented Governmental Accounting
Standards Board Statement No. 34 and recorded infrastructure capital assets acquired prior to fiscal
1 year 2002-2003 in the amount of $113,132,113, less accumulated depreciation of $66,492,810, for an
increase in net assets of $46,639,303.
Toll Free Ph: (877) 862 -2200
Oakland Orange County
180 Grand Ave., Suite 1365 9 Corporate Park, Suite 100
Oakland. California 94612 Irvine, California 92606
Toll Free Fax: (866) 436 -0927
Sacramento San Diego
777 Campus Commons Rd., Suite 200 4858 Mercury, Suite 106
Sacramento, California 95825 San Diego, California 92111
CAL
Caporlcci & Larson
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the
Honorable Mayor and Members of the City Council
' of the City of Poway
Poway, California
' We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of Poway,
California (City), as of and for the year ended June 30, 2007, which collectively comprise the City's
1 basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
1 We conducted our audit in accordance with generally accepted auditing standards in the States and the standards applicable to financial audits cont fined in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
1 amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
basic financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects,
1 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, 2007, and the
respective changes in financial position and cash flows, where applicable, thereof for the year then
ended in conformity with generally accepted accounting principles in the United States.
In accordance with Government Auditing tandards we have
S also Issued our report dated December 11,
2007, 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 the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
As described in Note 1, 4, and 17, the City in 2007 has fully implemented Governmental Accounting
Standards Board Statement No. 34 and recorded infrastructure capital assets acquired prior to fiscal
1 year 2002-2003 in the amount of $113,132,113, less accumulated depreciation of $66,492,810, for an
increase in net assets of $46,639,303.
Toll Free Ph: (877) 862 -2200
Oakland Orange County
180 Grand Ave., Suite 1365 9 Corporate Park, Suite 100
Oakland. California 94612 Irvine, California 92606
Toll Free Fax: (866) 436 -0927
Sacramento San Diego
777 Campus Commons Rd., Suite 200 4858 Mercury, Suite 106
Sacramento, California 95825 San Diego, California 92111
To the Honorable Mayor and Members of the City Council
of the City of Poway
Poway, California
Page 2
The accompanying Required Supplementary Information, such as Management's Discussion and
Analysis, budgetary comparison information and Schedule of Funding Progress of Defined Benefit
Pension Plans as listed in the table of contents, is not a required part of the basic financial statements
but is supplementary information required by the Governmental Accounting Standards Board. We
have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the Required Supplementary
Information. However, we did not audit the information and express no opinion on the Required
Supplementary 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 accompanying Supplementary
Information is presented for purpose of additional analysis and is not a required part of the basic
financial statements. The Supplementary Information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole. The Introductory and Statistical
Sections have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we express no opinion on them.
San Diego, California
December 11, 2007
1
I
0
t
1
MANAGEMENT'S DISCUSSION AND ANALYSIS
1
As management of the City of Poway (City), we offer reader '
y ( y), s 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, 2007. 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
0 The City's net assets increased by 122% to $115,784 as a result of this year's operations and
the inclusion of infrastructure assets.
• During the year, the City's taxes, other governmental revenues and business activity revenues
exceeded expenses by $17,096.
0 Governmental net assets were $50,332.
• The total revenues from all sources were $125,860.
• The total cost of all City programs was $108,764.
• The General Fund reported excess revenues over expenditures and other financing uses of
$2,985.
• Actual resources received in the General Fund exceeded final budget by $2,002 while actual
expenditures were $6,412 less than final budget before other financing sources and uses.
• At the end of the fiscal year, unreserved fund balance for the General Fund was $30,375 or
79% of total General Fund expenditures (excluding other financing uses).
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The three components of the
financial statements are: (1) Government -wide financial statements, which include the Statement
of Net Assets and the Statement of Activities. These statements provide information about the
activities of the City as a whole. (2) Fund financial statements describe how City services are
financed in the short term as well as what resources are available for future spending. Fund
financial statements also report the City's operations in more detail than the government -wide
statements by providing information about the City's most significant funds. (3) Notes to the
financial statements.
Reporting the City as a Whole
The Statement of Net Assets and the Statement of Activities (Government -wide)
A frequently asked question regarding the City's financial health is whether the year's activities
contributed positively to the overall financial well- being. The Statement of Net Assets and the
Statement of Activities report information about the City as
a whole and about its activities in a
way that helps answer this question. These statements include all assets and liabilities using the
basis
accrual 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.
I
These two statements report the City's net assets and changes thereto. Net assets, the difference
between assets and liabilities, are one way to measure the City's financial health, or financial
position. Over time, increases or decreases in net assets are an indicator of whether the financial
health is improving or deteriorating. However, it is important to consider other nonfinancial
factors such as changes in the City's property tax base or condition of the City's roads to
accurately assess the overall health of the City.
The Statement of Net Assets and the Statement of Activities present information about the
following: !
• Governmental activities - All of the City's basic services are considered to be governmental
activities, including general government, public safety, public works, and community
services. Property taxes, sales taxes, motor vehicle license fees and franchise fees finance
most of these activities.
• Proprietary activities /Business -type activities - The City charges a fee to customers to cover
all or most of the cost of the services provided. The City's Water and Sewer systems are ,
reported in this category.
• Component unit - The City's governmental activities include the blending of one separate
legal entity: the Poway Redevelopment Agency. Although legally separate, this "component
unit" is important because the City is financially accountable for it.
Reporting the City's Most Significant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds - not
the City as a whole. Some funds are required to be established by State law and by bond ,
covenants. However, management establishes many other funds that aid in the administration of
resources for particular purposes or to meet legal responsibilities associated with the usage of
certain taxes, grants, and other money. The City's two kinds of funds, governmental and
proprietary, use different accounting approaches as explained below.
Governmental funds - Most of the City's basic services are reported in governmental funds.
Governmental funds focus on how resources flow in and out with the balances remaining at !
year -end that are available for spending. These funds are reported using an accounting
method called modified accrual, which measures cash and all other financial assets that can
readily be converted to cash. The governmental fund statements provide a detailed short -
term view of the City's general government operations and the basic services it provides.
Governmental fund information shows whether there are more or fewer financial resources
that can be spent in the near future to finance the City's programs. We describe the
relationship (or differences) between governmental activities (reported in the Statement of '
Net Assets and the Statement of Activities) and governmental funds through a reconciliation
in Note 1 in the Notes To Basic Financial Statements.
• Proprietary funds - When the City charges customers for the services it provides, these
services are generally reported in proprietary funds. Proprietary funds are reported in the
same way that all activities are reported in the Statement of Net Assets and the Statement of
Activities.
The City as Trustee
Reporting the City's Fiduciary Responsibilities
The City is the trustee, or fiduciary, for certain amounts held on behalf of developers, property
owners, and others. These fiduciary activities are reported in separate Statements of Fiduciary
Net Assets and Changes in Fiduciary Net Assets. The City is responsible for ensuring that the
assets are used for their intended purposes. Therefore, fiduciary activities are excluded from the
City's other financial statements because the assets cannot be used to finance operations.
11
1
The City's combined net assets for the fiscal year ended June 30, 2007, were $115,784. The City
has chosen to account for its water and sewer operations as enterprise funds, which is shown as
Business Activities on Table 1. The City's net assets for governmental activities increased
38% from $36,344 to $50,332. The following is an explanation of the governmental activity
changes between fiscal years as shown in Table 1:
■ Current and other assets increased $5,946 or 3.6% principally due to increased cash and
investments.
■ Capital assets increased $51,713 (net of depreciation and disposition) as detailed in
Table 4. During fiscal year 2006 -07, approximately $46.6 was added for inclusion of the
City's infrastructure, net construction in process decreased by approximately $4.6 which
was related to the completion of the $4.9 fire- training tower, and the machinery and
equipment included increases for two fire- fighting apparatuses and one vactor truck for
storm drain maintenance.
■ Governmental long -term debt decreased $4,284. The decrease is primarily due to the
scheduled principal payments. (See Table 5 for additional detail.)
n
Wi
THE CITY AS A WHOLE
Our analysis focuses on the net assets (Table 1)
and changes in net assets (Table 2) of the City's
governmental and business activities.
Governmental
Business
Activities
Activities
Total
2007 2006
2007
2006
2007
2006
Assets
Current and
other assets $ 174,183 $ 168,237 $
32,324
$
28,081
$ 206,507
$ 196,318
Capital assets 196,246 191,172
36,986
38,567
233,232
229,739
Total assets 370,429 359,409
69,310
66,648
439,739
426,057
Liabilities:
Long -term
'
debt outstanding 301,308 306,162
1,966
2,157
303,274
308,319
Other liabilities 18,789 16,903
1,892
2,148
20,681
19,051
Total liabilities 320,097 323,065
3,858
4,305
323,955
327,370
Net assets:
Invested in capital
assets, net of debt 21,676 16,728
35,055
36,472
56,731
53,200
Restricted 99,518 98,416
284
284
99,802
98,700
Unrestricted - restated (70,862) (78,800)
30113
25,587
(40,749)
(53,213)
Total net assets $ 50,332 $ 36,344 $
65,452 $
62,343
$ 115,784
$ 98,687
1
The City's combined net assets for the fiscal year ended June 30, 2007, were $115,784. The City
has chosen to account for its water and sewer operations as enterprise funds, which is shown as
Business Activities on Table 1. The City's net assets for governmental activities increased
38% from $36,344 to $50,332. The following is an explanation of the governmental activity
changes between fiscal years as shown in Table 1:
■ Current and other assets increased $5,946 or 3.6% principally due to increased cash and
investments.
■ Capital assets increased $51,713 (net of depreciation and disposition) as detailed in
Table 4. During fiscal year 2006 -07, approximately $46.6 was added for inclusion of the
City's infrastructure, net construction in process decreased by approximately $4.6 which
was related to the completion of the $4.9 fire- training tower, and the machinery and
equipment included increases for two fire- fighting apparatuses and one vactor truck for
storm drain maintenance.
■ Governmental long -term debt decreased $4,284. The decrease is primarily due to the
scheduled principal payments. (See Table 5 for additional detail.)
n
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The cost of all Governmental activities this year was $83,421 as shown on Table 2 and 2.1. Of
this cost, $10,716 was paid for by those who directly benefited from the programs, $9,043 was
subsidized by grants received from other governmental organizations for both capital and
operating activities, and $77,662 was financed through general City revenues. Overall '
governmental program revenues, including intergovernmental aid and fees for services were
$19,760. Items of significance within Table 2 are:
Revenues: '
Charges for services increased by 10.8% due to increases in solid waste fees,
telecommunication leases and ambulance fees.
Grants and contributions decreased but remained stable with a slight (2.6)% decrease.
The General Revenue category increased 5.5 %. This was driven by increases in property
taxes, investment earnings, and franchise fees, with the increase being partially reduced
by decreased sales taxes. Much of the property tax increases continued to be as a result
of development and turnover in the City's business park that falls within the Poway
Redevelopment Agency, as well as the turnover of citywide residential properties.
Interest earnings increased as a result of both larger balances and higher interest rates.
The sales tax decrease was primarily related to the automotive sector.
Expenses:
• Other liabilities increased by a net $1.7 million. Approximately $1,000,000 of the
increase was due to larger pass through payments in the Redevelopment Agency's debt
service fund that were related to its higher tax increment revenue, $370,000 was related
to the current portion of long -term debt being higher, and the remainder of the net
increase was primarily due to the timing of payments. There were no unusual items.
• Invested in capital assets net of debt increased $4.9 primarily related to the addition of
infrastructure, net of depreciation.
'
• Restricted net assets remained relatively unchanged, increasing by $1,109, or 1.1 %.
• Unrestricted net assets, the part of net assets that can be used to finance day -to -day
operations without constraints established by debt covenants or other legal requirements,
increased by $54,571. This increase was primarily due to the inclusion of infrastructure
assets and also from operations.
Governmental Activities
The cost of all Governmental activities this year was $83,421 as shown on Table 2 and 2.1. Of
this cost, $10,716 was paid for by those who directly benefited from the programs, $9,043 was
subsidized by grants received from other governmental organizations for both capital and
operating activities, and $77,662 was financed through general City revenues. Overall '
governmental program revenues, including intergovernmental aid and fees for services were
$19,760. Items of significance within Table 2 are:
Revenues: '
Charges for services increased by 10.8% due to increases in solid waste fees,
telecommunication leases and ambulance fees.
Grants and contributions decreased but remained stable with a slight (2.6)% decrease.
The General Revenue category increased 5.5 %. This was driven by increases in property
taxes, investment earnings, and franchise fees, with the increase being partially reduced
by decreased sales taxes. Much of the property tax increases continued to be as a result
of development and turnover in the City's business park that falls within the Poway
Redevelopment Agency, as well as the turnover of citywide residential properties.
Interest earnings increased as a result of both larger balances and higher interest rates.
The sales tax decrease was primarily related to the automotive sector.
Expenses:
• General Government Expenses decreased $1,130 or 7.2 %. The decrease was the result of
less spending on projects for which financial assistance was provided, but that were not
capitalized.
• .7 %. This was the result of increases for law
The Public Safety line increased by 4
enforcement services, costs for the City's third fire station that was operational for the
full year, and for salaries and benefits as the City approached full firefighter staffing.
• Public Works had a 30.1% decrease in expenses. This decrease was caused because the
'
City's Development Services department was broken out for financial statement purposes
as it has been for the City's budget purposes.
• The Development Services activity was broken out for the first time for financial
statement purposes. This department includes planning and engineering services and has
been broken out by the City for budget purposes for many years. If this activity had been
broken out in the prior year, the fiscal year 2006 -07 increase would have been 1.4 %.
• Community Services decreased 13.1 % because of a $617 net decrease in tax shift and tax
increment payments and a decrease of $1,925 for noncapitalizable projects.
■ Interest and fiscal charges increased by 15.9 %, primarily related to the inclusion of
$1,839 of expenses related to the partial refunding of the 2000 Tax Allocation Bonds, an
increase of $1,171 for interest on Redevelopment Agency loan repayments as compared
to prior year repayments, net of the slightly lower interest expense on the remaining
bonds due of the normal pay down of bond principal.
Table 2
City of Poway Changes in Net Assets
(in Thousands)
7
Governmental
Business
Activities
Activities
Total
2007
2006
2007
2006
2007
2006
Revenues:
Program revenues:
Charges for services $
10,716 $
9,699
$ 24,582
22,661
$ 35,298 $
32,360
Operating grants
and contributions
6,103
6,199
6,103
6,199
Capital grants
and contributions
2,940
3,088
64
67
3,004
3,155
General revenues:
Property taxes
48,048
45,726
-
309
48,048
46,035
Othertaxes
15,695
16,511
-
15,695
16,511
Other
13,919
11,391
3,793
1,896
17,712
13,287
Total revenues
97,421
92,614
28,439
24,933
125,860
117,547
Expenses:
General government
14,559
15,689
14,559
15,689
Public safety
18,121
17,313
18,121
17,313
Public works
9,101
13,024
9,101
13,024
Development Svcs
4,978
4,978
-
Community Svcs
16,965
19,510
16,965
19,510
Interest and charges
19,697
16,987
19,697
16,987
Water
17,372
16,009
17,372
16,009
Sewer
7,971
8,730
7,971
8,730
Total expenses
83,421
82,523
25,343
24,739
108,764
107,262
Change in net assets
before transfers
14,000
10,091
3,096
194
17,096
10,285
Transfers
(13)
461
13
(461)
-
-
Change in net assets
after tra nsfe rs
13,987
10,552
3,109
(267)
17,096
10,285
Net assets -7/1- restated
36,344
25,792
62,343
62,610
98,687
88,402
Net assets -6/30 $
50,331 $
36,344
$ 65,452
$ 62,343
$ 115,783 $
98,687
7
Capital
Grants
3%
Fiscal Year 2007
Governmental Activities
(Graphic representation of Table 2 in percentages)
Revenue Program Expenses
Operating
Grants
6%
Other
_4%
Charges for
Services
11%
Net Cost of Governmental Activities
Development
Services
6%
Interest on
LT Debt Public
24% Works
11%
i
%ral
ut ,YO
The City's programs include: General Government, Public Safety, Public Works, 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.
Table 2.1
Net Cost of Governmental Activities
(in Thousands)
8
Total Cost
Program
Net Cost
of Services
Revenues
of Services
2007 2006
2007
2006
2007
2006
General government
$ 14,559 $
15,689
$ 783 $
1,487
$ (13,776) $
(14,202)
Public safety
18,121
17,313
2,517
2,220
(15,604)
(15,093)
Public works
9,101
13,024
7,754
8,322
(1,347)
(4,702)
Development services
4,978
2,702
(2,276)
-
Community services
16,965
19,510
6,004
6,958
(10,961)
(12,552)
Interest and fiscal chgs
19,697
16,987
-
-
(19,697)
(16,987)
Totals
$ 83,421 $
82,523
$ 19,760 $
18,987
$ (63,661) $
(63,536)
8
t
d
$44,000
$36,000
$28,000
$20,000
$12,000
$4,000
($4,000)
($12,000)
($20,000)
($28,000)
($36,000)
Total Cost of Services, Program Revenues & Net Cost
Governmental Activities (in Thousands)
Total resources available during the year to finance governmental operations were $133,753
consisting of Net Assets at July 1, 2006, of $36,344, program revenues of $19,760, General
Revenues of $77,662, and Transfers of $(13). Total Governmental Activities during the year
were $83,421; thus Net Assets increased by $13,987 to $50,332. There were no unusual items
that contributed to this increase. As discussed previously, property taxes, investment earnings
and franchise taxes had increases that did contribute to the growth in Net Assets.
Business -Type Activities
Net assets of the Proprietary Funds (Business -Type activities) at June 30, 2007, as reflected in
Table 1 were $65,452. As shown in Table 2, program revenues were $24,646, while the cost of
providing all Proprietary (Business -Type) Activities this year was $25,343 resulting in a loss of
$697. The additional $3,806 of general and other revenues resulted in a Net Assets increase of
$3,109 or 5 %.
Fiscal Year 2007
Total Cost of Services, Program Revenues & Net Cost — Business Activities (in thousands)
20,000
15,000
10,000
5,000
(5,000)
9
Table 2.2
Net Cost
of Business Activities
(in Thousands)
Total Cost
Program
Net Cost
of Services
Revenue
of Services
2007 2006
2007
2006
2007 2006
Water $ 17,372 $ 16,009
$ 16,702 $
15,249
$ (670) $ (760)
Sewer 7,971 8,730
7,944
7,479
(27) (1,251)
Totals $ 25,343 $ 24,739
$ 24,646 $
22,728
$ (697) $ (2,011)
Fiscal Year 2007
Total Cost of Services, Program Revenues & Net Cost — Business Activities (in thousands)
20,000
15,000
10,000
5,000
(5,000)
9
General Fund Budgetary Highlights
The final appropriations for the City's General Fund at year -end were $8,414 more than actual
expenditures prior to other financing uses. The budget to actual variance in appropriations was
principally in the Capital Expenditure category where several projects were budgeted but were
still in the design phase. Several factors account for the remaining variance, including in the
General Government activity the delay in purchasing replacement equipment such as an
ambulance and computer equipment as the City was evaluating computer hardware alternatives.
In Development services the variance was caused by unfilled positions and the delay in the
transportation element study. Community services savings were primarily a combination of
needing fewer hourly part-time employees than anticipated as well as gas and electric costs being
less than budgeted. Actual revenues compared favorably to the final budget resulting in a $2,002
excess (excluding other financing sources). The major variances were in Use of money and
property and Other revenue. As mentioned before, the Use of money and property category was
higher because of a combination of higher than expected investment balances and increasing
interest rates. The Other revenue category was again driven by one -time higher than expected
revenues such as general liability and worker's compensation refunds, mutual aid
reimbursements and state - mandated cost reimbursements. Budget amendments and
supplemental appropriations were made during the normal course of business to increase
appropriations for unanticipated expenditures after adoption of the original budget. Significant
supplemental appropriations were $1,500 for the equipment replacement, $200 for the increased
amount due under an economic development incentive agreement, and various other increases
for contracts and other items. As for revenue adjustments, the budget for taxes was increased by
$400 for the sales taxes and $180 for increased building inspection revenue.
Other funds with significant changes in fund balance include the Low and Moderate Income
Housing fund and the City Debt Service fund. The increase in the Low and Moderate Income
Housing fund was primarily related to no major land purchases being made during this fiscal
year. The Redevelopment Agency is updating its five -year plan and that will include projects
that will utilize the Low and Moderate Income Housing fund's fund balance. The decrease in the
City's Debt Service fund was due to an analysis of its balance and the balance necessary for its
current outstanding debt. It was determined that some of its existing balance was related to
retired debt and that some of the balances could be returned to the original sources for the
payment of the retired debt.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The capital assets of the City are those assets that are used in performance of City functions
including infrastructure assets. Capital Assets include equipment, buildings, land, park facilities,
and roads. The City completed its inventory of infrastructure assets and its streets and highways
and storm drain infrastructure networks included in their values for the fiscal year ended June 30,
2007. This accounted for an increase of depreciable assets of $113,132, with an increase net of
depreciation of $46,639. The Governmental Construction in Progress decreased by $4.6,
primarily because of the completion of the Fire Training Tower. Business Construction in
Process included reductions for the completion of the Community Road and Camino de Valle
sewer lines, the Skyridge #2 Reservoir improvements and the utility billing system.
Depreciation on capital assets is recognized in the Government -Wide financial statements. (See
Table 4 & Note III, C to the financial statements)
10
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Table 4
City of Poway Capital Assets at Year -End
(Net of Depreciation)
(In Thousands)
Governmental Business
Activities Activities
Total
Debt
At year -end, the City had $308,352 in governmental -type debt and $2,173 in Proprietary debt.
During the year there was a partial refunding of the 2000 Tax Allocation Bonds with the 2007
Tax Allocation Bonds in order to take advantage of favorable interest rates. The Loans Payable
increased because accrued interest related to the $1.9 million operating covenant with AZ
Poway, LLC (dba Mossy Nissan) was greater than the payment made under the covenant.
Table 5
City of Poway Outstanding Debt at Year -End
(!n Thousands)
2007
2006
2007
2006
2007
2006
Activities
Land $
71,840
$ 71,610 $
77
$ 77
$ 71,917
$ 71,687
Buildings
42,790
41,350
7,376
7,897
50,166
49,247
Improvements
5,561
14,219
28,020
26,071
33,581
40,290
Infrastucture -not restated
61,966
-
-
61,966
-
Equip & Vehicles
6,391
5,085
895
389
7,286
5,474
Construction in Prog
7,698
12,268
618
4,133
8,316
16,401
$
196,246
$ 144,532 $
36,986
$ 38,567
$ 233,232
$ 183,099
38
Comp Absences
1,297
1,179
Debt
At year -end, the City had $308,352 in governmental -type debt and $2,173 in Proprietary debt.
During the year there was a partial refunding of the 2000 Tax Allocation Bonds with the 2007
Tax Allocation Bonds in order to take advantage of favorable interest rates. The Loans Payable
increased because accrued interest related to the $1.9 million operating covenant with AZ
Poway, LLC (dba Mossy Nissan) was greater than the payment made under the covenant.
Table 5
City of Poway Outstanding Debt at Year -End
(!n Thousands)
Governmental
Business
Activities
Activities
Total
2007
2006
2007 2006
2007
2006
Tax Allocation Bonds
$ 251,784 $
254,812
$ 251,784 $
254,812
Certificates of Participation
53,069
54,475
53,069
54,475
General Obligation Bonds
Revenue Bonds
$ 1,914 $ 2,076
1,914
2,076
Loans Payable
2,165
2,132
- -
2,165
2,132
Lease Payable
_
-
Contract Payable
37
38
37
38
Comp Absences
1,297
1,179
259 243
1,556
1,422
Total
$ 308,352 $
312,636
$ 2,173 $ 2,319
$ 310,525 $
314,955
1
NEXT YEAR'S BUDGET AND ECONOMIC FACTORS
In considering the City Budget for fiscal year 2007 -2008, the City Council and management
'
continued to be cautious because of a slowing housing market, lower sales tax receipts and a
continued concern over the State's long -term budget situation. During fiscal year 2006 -2007 the
City undertook the development of a new cost allocation plan. As a result of the implementation
'
of this plan for fiscal year 2007 -08, total general fund revenues are projected to decrease, while
the growth in general fund expenditures will be small. This is primarily the result of
administrative charges to the Redevelopment Agency that were previously recorded as revenue
in the general fund and will now be charged directly to the Agency. When adjusted for the new
method, General Fund revenue growth is estimated at approximately 3.1 %. This increase mainly
occurred because of increases in franchise fees and interest earnings. Also as adjusted from the
new allocation method, General Fund expenditures are budgeted to increase 6.7 %. Higher
,
retirement costs contributed to increases in all departments. Additionally, the Public Works
budget includes increased funding for street maintenance. The City initially anticipated using
approximately $700,000 from its Reserve for Economic Uncertainty to balance the fiscal year
2007 -2008 budget. However, in addition to the cost allocation plan update, a review of City fees
'
was also performed. In December 2007 the City adopted new fee schedules for community
services programs, ambulance services, and development fees. It is expected that the net result
of these updated fee schedules will be to eliminate the need to draw from the Reserve for
,
Economic Uncertainty in fiscal year 2007 -2008, as well as help stabilize the City's financial
future over the next several fiscal years.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the City's finances and to show the City's fiduciary
responsibility for the funds it receives. If you have questions about this report or need additional
financial information, contact the City's Finance Department, at the City of Poway, 13325 Civic
Center Drive, Poway, California 92064 or online: http: / /www.ci.poway.ca.us. I
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BASIC FINANCIAL STATEMENTS
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� GOVERNMENT -WIDE
' FINANCIAL STATEMENTS
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City of Poway
Statement of Net Assets
June 30, 2007
ASSETS
Current assets:
Cash and investments
Cash and investments with fiscal agents
Receivables:
Taxes
Accounts
Interest
Due from other governments and agencies
Prepaid items
Inventories
Total current assets
Noncurrent assets:
Lease receivable
Notes receivable
Internal balances
Loans to Business Park Fiduciary Fund
Deferred charges, net
Land held for resale
Capital assets:
Nondepreciable assets
Depreciable assets, net
Total capital assets
Total noncurrent assets
Total assets
16
Primary Government
Governmental
Activities
$ 116,794,981 $
23,162,604
3,008,576
1,219,049
1,489,492
845,166
1,356,508
1Y/17J0,70J
28,930,000
6,292,962
(11,968,034)
618,685
2,352,833
79,537,730
196,245,698
222,472,144
Business -Type
Activities Total
12,820,161 $
129,615,142
283,938
23,446,542
498
3,009,074
4,038,389
5,257,438
1,051
1,490,543
688,918
1,534,084
-
1,356,508
19,196,043 167,153,028
36,986,297 233,231,995
370,429,129 69,310,280 439,739,409
28,930,000
-
6,292,962
11,968,034
-
1,106,268
1,106,268
53,638
672,323
-
2,352,833
694,867
80,232,597
36,291,430
152,999,398
36,986,297 233,231,995
370,429,129 69,310,280 439,739,409
City of Poway
Statement of Net Assets, Continued
June 30, 2007
LIABILITIES
Current liabilities:
Accounts payable
Accrued liabilities
Accrued interest payable
Deposits
Due to other governments and agencies
Compensated absences - due within one year
Long -term debt - due within one year
Total current liabilities
Noncurrent liabilities:
Compensated absences
Long -term debt - due in more than one year
Total noncurrent liabilities
Total liabilities
NET ASSETS (DEFICIT)
Investments in capital assets, net of related debt
Restricted for:
General Fund
Affordable housing
Debt service
Capital improvement projects
Special revenue funds
Permanent funds
Total restricted
Unrestricted (deficit)
Total net assets (deficit)
See accompanying Notes to Basic Financial Statements.
17
Primary Government
Governmental
Business -Type
1,321,765
Activities
Activities
Total
$ 8,982,565
$ 1,625,307 $
10,607,872
1,006,716
-
1,006,716
1,755,001
17,330
1,772,331
-
42,372
42,372
2,231
-
2,231
194,515
39,914
234,429
6,848,194
167,588
7,015,782
18,789,222
1,892,511
20,681,733
1,102,252
219,513
1,321,765
300,206,038
1,746,327
301,952,365
301,308,290
1,965,840
303,274,130
320,097,512
3,858,351
323,955,863
21,675,540
35,055,052
56,730,592
7,538,564
-
7,538,564
11,377,077
-
11,377,077
14,894,846
283,938
15,178,784
45,501,806
-
45,501,806
19,248,865
19,248,865
99,518,581 283,938 99,802,519
a �i 65,451,929 $ 115,783,546
City of Poway
Statement of Activities and Changes in Net Assets
For the year ended June 30, 2007
See accompanying Notes to Basic Financial Statements.
18
Program Revenues
Charges
Operating
Capital
Total
for
Grants and
Grants and
Program
Functions/Programs
Expenses
Services
Contributions
Contributions
Revenues
Primary government:
Governmental activities:
General government
$ 14,559,177
$ 176,938
$ 517,362
$ 88,276
$ 782,576
Public safety
18,121,264
2,181,971
335,090
-
2,517,061
Public works
9,100,534
4,011,644
3,732,910
9,619
7,754,173
Development services
4,978,301
1,451,489
1,250,684
-
2,702,173
Community services
16,964,745
2,894,396
266,999
2,842,378
6,003,773
Interest and fiscal charges
19,697,044
-
-
-
-
Total governmental activities
83,421,065
10,716,438
6,103,045
2,940,273
19,759,756
Business -type activities:
Water
17,371,707
16,637,705
-
63,604
16,701,309
Sewer
7,970,848
7,943,890
-
7,943,890
Total business -type activities
25,342,555
24,581,595
-
63,604
24,645,199
Total primary government
$ 108,763,620
$ 35,298,033
$ 6,103,045
$ 3,003,877
$ 44,404,955
See accompanying Notes to Basic Financial Statements.
18
City of Poway
Statement of Activities and Changes in Net Assets, Continued
For the year ended June 30, 2007
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Governmental Business -type
Functions/Programs Activities Activities Total
Primary government:
Governmental activities:
General government
Public safety
Public works
Development services
Community services
Interest and fiscal charges
Total governmental activities
Business -type activities:
Water
Sewer
Total business -type activities
Total primary government
General revenues:
Taxes:
Property taxes
Sales taxes
Motor vehicle license taxes
Transit occupancy taxes
Franchise taxes
Other taxes
Total taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning of year, as restated (Note 17)
Net assets - end of year
19
$ (13,776,601) $
$ (13,776,601)
(15,604,203)
(15,604,203)
(1,346,361)
(1,346,361)
(2,276,128)
(2,276,128)
(10,960,972)
(10,960,972)
(19,697,044)
(19,697,044)
(63,661,309) - (63,661,309)
(670,398)
(670,398)
(26,958)
(26,958)
(697,356)
(697,356)
(63,661,309) (697,356)
(64,358,665)
48,048,249
48,048,249
13,032,518
13,032,518
273,727
273,727
202,767
202,767
1,588,677
1,588,677
596,868
-
596,868
63,742,806
-
63,742,806
10,569,205
3,038,852
13,608,057
3,349,606
754,566
4,104,172
(12,808)
12,808
-
77,648,809
3,806,226
81,455,035
13,987,500
3,108,870
17,096,370
36,344,117
62,343,059
98,687,176
$ 50,331,617
$ 65,451,929
$ 115,783,546
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FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
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� GOVERNMENTAL FUND
I FINANCIAL STATEMENTS
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City of Poway
Balance Sheet
Governmental Funds
June 30, 2007
Major Funds
Low and
Moderate
City of
Redevelopment
Income Housing
Poway RDA
Area
Special Revenue
Debt Service
Capital Projects
General
Fund
Fund
Fund
ASSETS
Cash and investments
$
28,664,072
$ 11,712,712
$
12,214,118
$ 37,938,985
Receivables:
Taxes
2,292,840
-
695,942
-
Notes
529,170
-
5,763,792
Accounts
933,396
-
-
7,828
Interest
1,070,766
-
66,093
346,604
Lease
-
-
28,930,000
-
Due from other funds
327,309
-
-
Due from other governments
354,505
-
Prepaid items
1,356,508
-
-
Inventories, at cost
80,609
-
-
-
Land held for resale
-
2,352,833
Advances to other funds
5,599,757
-
-
-
Restricted assets:
Cash and investments with fiscal agents
-
-
21,632,002
-
Total assets
$
41,208,932
$ 11,712,712
$
63,538,155
$ 46,410,042
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable
$
2,178,431
$ 335,635
$
4,430,549
$ 1,486,933
Accrued liabilities
1,006,716
-
-
-
Due to other funds
-
-
Deposits
2,231
-
-
Deferred revenue
107,739
-
28,930,000
-
Advances from other funds
-
-
20,275,092
-
Total liabilities
3,295,117
335,635
53,635,641
1,486,933
Fund Balances:
Reserved
7,538,564
11,377,077
9,902,514
10,452,581
Unreserved:
Designated for:
General fund
30,375,251
-
-
-
Special revenue funds
-
-
-
Capital projects funds
-
34,470,528
Undesignated
Special revenue funds
-
-
-
-
Total fund balances
37,913,815
11,377,077
9,902,514
44,923,109
Total liabilities and fund balances
$
41,208,932
$ 11,712,712
$
63,538,155
$ 46,410,042
See accompanying Notes to Basic Financial Statements.
24
Other Total
Governmental Governmental
$ 21,669,751 $ 112,199,638
19,794
3,008,576
-
6,292,962
277,825
1,219,049
6,029
1,489,492
-
28,930,000
-
327,309
490,661
845,166
-
1,356,508
-
80,609
-
2,352,833
3,737,676
9,337,433
1,530,602
23,162,604
$ 27,732,338 $
190,602,179
$ 525,801 $ 8,957,349
- 1,006,716
327,309 327,309
- 2,231
71,536 29,109,275
1,7JJ,UL1 bU, /UZ5,J41
11,931,567 51,202,303
30,375,251
8,567,130 43,037,658
5,278,620 5,278,620
25,777,317 129,893,832
y G /, /JL,JJb y l7V,bVL,1 /7
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City of Poway
Reconciliation of the Governmental Funds Balance Sheet
to the Government -Wide Statement of Net Assets
June 30, 2007
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See accompanying Notes to Basic Financial Statements.
1 27
Total Fund Balances - Total Governmental Funds
$ 129,893,832
Amounts reported for governmental activities in the Statement of Net Assets are differently because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental
funds.
Nondepreciable
79,537,730
Depreciable, net of accumulated depreciation
116,707,968
1
Total capital assets
196,245,698
Deferred charges, such as issuance costs from issuing debt, were expenditures in the fund financial statements but are
deferred and subject to capitalization and amortization on the Government -Wide Statement of Net Assets.
Originated during the year
627,623
Accumulated amortization of costs
(8,938)
Total issuance costs
618,685
Long -term liabilities are not due and payable in the current period and therefore are not reported in the governmental
funds.
Compensated absences (net of $35,401 reported in Internal Service Funds)
(1,261,366)
Long -term liabilities - due within one year
(6,848,194)
Long -term liabilities - due in more than one year
(300,206,038)
Total long -term liabilities
(308,315,598)
Interest payable on long -term debt does not require current financial resources. Therefore, interest payable is not reported
as a liability in Governmental Funds Balance Sheet.
(1,755,001)
'
Deferred revenues recorded in governmental fund financial statements resulting from activities in which revenues were
earned but funds were not available are recognized as revenues in the Government -Wide Financial Statements.
29,109,275
Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and
liabilities of the internal service funds are included in governmental activities in the Government -Wide Statement of Net
Assets.
4,534,726
Net Assets of Governmental Activities
$ 50,331,617
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1 27
City of Poway
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the year ended June 30, 2007
REVENUES:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Developer fees
Assessment levied
Other revenues
Total revenues
EXPENDITURES:
Current:
General government
Public safety
Public works
Development Services
Community services
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Tax increment reimbursement
Total expenditures
REVENUES OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Proceeds from loans
Refunding bonds issued
Payments to escrow agent trust
Bond issuance costs
Transfers in
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCES:
Beginning of year
End of year
See accompanying Notes to Basic Financial Statements.
Major Funds
Low and
Moderate City of Redevelopment
Income Housing Poway RDA Area
Special Revenue Debt Service Capital Projects
$ 26,860,347 $ - $ 36,011,865 $ -
330,755 - -
776,669 -
3,667,970 -
720,949 - -
2,880,459 478,133 4,233,548 2,244,376
3,338,546 - - -
1,204,803 32,076 21,792
39,780,498 510,209 40,245,413 2,266,168
5,616,332 3,997,777
17,751,705 _
3,685,854 -
5,028,405 -
5,443,838 - -
868,710 979,189 9,132,660
28
-
5,740,000
-
16,768,897
-
-
4,889,025
-
38,394,844
979,189
27,397,922
13,130,437
1,385,654
(468,980)
12,847,491
(10,864,269)
-
148,273
-
26,442,450
(25,999,413)
-
-
(627,623)
-
2,383,704
7,224,350
2,916,729
10,076,519
(784,730)
(2,148,343)
(17,211,509)
(7,080)
1,598,974
5,076,007
(14,331,093)
10,069,439
2,984,628
4,607,027
(1,483,602)
(794,830)
34,929,187
6,770,050
11,386,116
45,717,939
$ 37,913,815 $
11,377,077 $
9,902,514 $
44,923,109
28
Other Total
Governmental Governmental
Funds Funds
$ 938,029 $
63,810,241
-
330,755
3,560,098
4,336,767
751,694
4,419,664
-
720,949
6,283,927
16,120,443
1,171,195
4,509,741
1,868,567
1,868,567
131,091
1,389,762
14,704,601
97,506,889
-
9,614,109
146,106
17,897,811
2,870,942
6,556,796
5,028,405
6,433,587
11,877,425
3,225,403
14,205,962
730,000
6,470,000
1,127,733
17,896,630
-
4,889,025
14,533,771
94,436,163
170,830
3,070,726
-
148,273
26,442,450
(25,999,413)
-
(627,623)
1,167,197
23,768,499
(2,709,354)
(22,861,016)
(1,542,157)
871,170
(1,371,327)
3,941,896
27,148,644 125,951,936
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City of Poway
Reconciliation of the Governmental Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Government -Wide Statement of Activities and Changes in Net Assets
For the year ended June 30, 2007
Net Change in Fund Balances - Total Governmental Funds $ 3,941,896
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlay as expenditures. However, in the Government -Wide Statement of Activities and
Changes in Net Assets, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the
amount of capital assets recorded in the current period.
10,742,823
Depreciation is reported in the Government -Wide Statement of Activities and Changes in Net Assets, but they do not require
18,695
the use of current financial resources. Therefore, depreciation and amortization expense is not reported as expenditures in
9,892
governmental funds.
(5,668,972)
Long -term compensated absences are reported in the Government -Wide Statement of Activities and Changes in Net Assets,
but it did not require the use of current financial resources. Therefore, long -term compensated absences are not reported as
expenditures in governmental funds. This amount represent the change in compensated absences from prior year.
(114,201)
Issuance costs from issuing debt are expenditures at the fund level but are deferred and subject to capitalization and
amortization on the statement of net assets.
(513,883)
Originated during the year
627,623
Amortization of bond issuance costs
(8,938)
Proceeds from long -term debt provide current financial resources to governmental funds, but issuing debt increases long -term
13,987,500
liabilities in the Government -Wide Statement of Net Assets. Repayment of bond principal is an expenditure in governmental
funds, but the repayment reduces long -term liabilities in the Government -Wide Statement of Net Assets.
Proceeds from loans
(148,273)
Refunding bonds issued
(26,442,450)
Repayment of contract and notes payable
116,132
Principal payment
6,470,000
Payments to escrow agent
25,999,413
Interest and fiscal changes on refunding of TAB
(1,839,413)
Amortization on bond premium was reported in the Government -Wide Statement of Activities and Changes in Net Assets, but
it did not require the use of current financial resources. Therefore, amortization was not reported as expenditures in
governmental funds.
2003 Tax Allocation Bonds
206,611
2007 Tax Allocation Bonds
18,695
2003 Certificates of Participation
9,892
2005 Certificates of Participation
11,317
Interest expense on long -term debt is reported in the Government -Wide Statement of Activities and Changes in Net Assets, but
they do not require the use of current financial resources. This amount represents the change in accrued interest from prior
year.
39,000
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the
funds.
(513,883)
Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet
management, to individual funds. The net revenue of the internal service funds is reported with governmental activities.
540,228
Change in Net Assets of Governmental Activities $
13,987,500
See accompanying Notes to Basic Financial Statements.
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PROPRIETARY FUND
FINANCIAL STATEMENTS
31
City of Poway
Statement of Net Assets
Proprietary Funds
June 30, 2007
See accompanying Notes to Basic Financial Statements.
32
Governmental
Activities
Major Funds
Internal
Water
Sewer
Total
Service Funds
ASSETS
Current assets:
Cash and investments
$ 6,865,716
$ 5,954,445
$ 12,820,161
$ 4,595,343
Cash and investments with fiscal agents
283,938
-
283,938
-
Receivables:
Taxes
498
-
498
-
Accounts
2,683,549
1,354,840
4,038,389
-
Interest
1,051
-
1,051
Due from other governments
18,847
670,071
688,918
-
Inventories
1,359,036
4,052
1,363,088
-
Total current assets
11,212,635
7,983,408
19,196,043
4,595,343
Noncurrent assets:
Advances to other funds
3,804,911
8,163,123
11,968,034
-
Advances to Fiduciary Fund - Business Park
-
1,106,268
1,106,268
-
Deferred charges
53,638
-
53,638
-
Capital assets:
Nondepreciable
137,029
557,838
694,867
-
Depreciable
47,249,751
28,956,030
76,205,781
-
Less accumulated depreciation
(26,719,145)
(13,195,206)
(39,914,351)
-
Total net capital assets
20,667,635
16,318,662
36,986,297
-
Total noncurrent assets
24,526,184
25,588,053
50,114,237
Total assets
35,738,819
33,571,461
69,310,280
4,595,343
LIABILITIES
Current liabilities:
Accounts payable
1,131,253
494,054
1,625,307
25,216
Deposits
42,293
79
42,372
-
Accrued interest payable
17,330
-
17,330
-
Compensated absences due within one year
31,210
8,704
39,914
-
Long -term debt due within one year
167,588
-
167,588
-
Total current liabilities
1,389,674
502,837
1,892,511
25,216
Noncurrent liabilities:
Compensated absences
176,857
42,656
219,513
35,401
Long -term debt due in more than one year
1,746,327
-
1,746,327
-
Total noncurrent liabilities
1,923,184
42,656
1,965,840
35,401
Total liabilities
3,312,858
545,493
3,858,351
60,617
NET ASSETS
Invested in capital assets, net of related debt
18,736,390
16,318,662
35,055,052
-
Restricted for debt service
283,938
-
283,938
-
Unrestricted
13,405,633
16,707,306
30,112,939
4,534,726
Total net assets
$ 32,425,961
$ 33,025,968
$ 65,451,929
$ 4,534,726
See accompanying Notes to Basic Financial Statements.
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City of Poway
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Funds
For the year ended June 30, 2007
OPERATING REVENUES:
Charges for services
Connection fees
Other
Total operating revenues
OPERATING EXPENSES:
Personnel services
Maintenance and operations
Cost of purchased water
Depreciation
Total operating expenses
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES):
Taxes
Intergovernmental
Interest revenue
Interest expense and fiscal charges
Total nonoperating revenues (expenses)
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS
TRANSFERS:
Transfers in
Transfers out
Total transfers
Change in net assets
NET ASSETS:
Beginning of year
End of year
See accompanying Notes to Basic Financial Statements.
Major Funds
Water
Sewer
Governmental
Activities
Internal
Total Service Funds
$ 16,476,605 $ 7,536,728 $ 24,013,333 $ 2,193,310
161,100 407,162 568,262 -
79,990 674,576 754,566 4,695
16,717,695 8,618,466 25,336,161 2,198,005
2,919,792
692,664
4,464,783
6,534,072
8,819,844
-
1,167,288
744,112
17,371,707
7,970,848
(654,012) 647,618
63,604 -
1,364,884 1,793,705
(119,737) -
1,308,751 1,793,705
654,739 2,441,323
341,849
(191,275) (137,766)
150,574 (137,766)
805,313 2,303,557
3,612,456 330,599
10,998,855 605,336
8,819,844 -
(6,394) 1,262,070
63,604 -
3,158,589 198,449
(119,737) -
3,102,456 198,449
341,849
3,108,870 540,228
31,620,648 30,722,411 62,343,059 3,994,498
$ 32,425,961 $ 33,025,968 $ 65,451,929 $ 4,534,726
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City of Poway
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash receipts from customers
Cash paid to employees for services
Cash paid to suppliers for goods or services
Others
Net cash provided (used) by operating activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Taxes
Intergovernmental
Transfers in
Transfers out
Net cash provided (used) by noncapital financing activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Governmental
Activities
Major Funds Internal
Water Sewer Total Service Funds
$ 16,279,188 $ 7,837,848 $ 24,117,036 $ 2,198,005
(2,899,567) (696,739) (3,596,306) (327,334)
(13,907,155) (6,242,176) (20,149,331) (723,089)
61,143 (3,303,739) (3,242,596) -
(466,391) (2,404,806) (2,871,197) 1,147,582
1,818 1,818 -
63,604 63,604
341,849 - 341,849 (920,291)
(191,275) (137,766) (329,041) -
215,996 (137,766) 78,230 (920,291)
Net changes in capital assets
(181,179)
(149,312) (330,491) -
Principal paid on long -term debt
(162,400)
- (162,400) -
Payment of interest and fees
(121,085)
- (121,085) 198,449
Net cash provided (used) by capital and related financing activities
(464,664)
(149,312) (613,976) 198,449
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income
Net cash provided (used) by investing activities
Net increase (decrease) in cash and cash equivalents
CASH AND CASH EQUIVALENTS:
Beginning of year
End of year
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation
Changes in operating assets and liabilities:
Accounts receivable
Inventories
Deferred charges
Due from other governments
Advances to other funds
Accounts payable
Deposits
Compensated absences
Total adjustments
Net cash provided (used) by operating activities
See accompanying Notes to Basic Financial Statements.
1,364,852 1,793,705 3,158,557
1,364,852 1,793,705 3,158,557 -
649,793 (898,179) (248,386) 425,740
6,499,861 6,852,624 13,352,485 4,169,603
$ 7,149,654 $ 5,954,445 $ 13,104,099 $ 4,595,343
$ (654,012) $ 647,618 $ (6,394) $ 1,262,070
1,167,288 744,112 1,911,400
(361,060)
(106,121)
(467,181)
(36,966)
1,873
(35,093)
6,437
-
6,437
(18,847)
(670,071)
(688,918)
-
(3,308,244)
(3,308,244)
(591,999)
290,023
(301,976)
(117,753)
2,543
79
2,622
-
20,225
(4,075)
16,150
3,265
187,621
(3,052,424)
(2,864,803)
(114,488)
$ (466,391)
$ (2,404,806)
$ (2,871,197)
$ 1,147,582
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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.
35
City of Poway
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2007
ASSETS
Cash and investments
Receivables:
Taxes
Advance to City of Poway
Interest
Cash and investments with fiscal agent
Total assets
LIABILITIES
Accounts payable
Deposits
Due to bondholders
Advances from City of Poway
Total liabilities
See accompanying Notes to Basic Financial Statements.
36
Agency
$ 8,359,177
23,875
1,106,268
141,662
$ 14,958,825
$ 114,574
3,655,744
10,082,239
14,NStS,tS25
NOTES TO BASIC
FINANCIAL STATEMENTS
37
City of Poway
Notes to Basic Financial Statements
For the year ended June 30, 2007
,
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Poway, California, (City) have been prepared in conformity
I
with generally accepted accounting principles (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 generally accepted accounting principles in the United States, 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 Redevelopment Agency
The Poway Redevelopment Agency (Agency) was established on April 26, 1983 pursuant to the
State of California Health and Safety Code, Section 33000 entitled "Community Redevelopment
Law ". Its purpose is to eliminate blighted areas by encouraging the development of residential,
commercial, industrial, recreational and public facilities. The Agency 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 Poway Finance
Department located at Poway City Hall.
Poway Public Financing AuthoiL h
The Poway Public Financing Authority (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 Agency. Its purpose
is to assist in financing and refinancing projects for the benefit of the City and the Agency. Separate
financial statements are not prepared.
38 1
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
' B. Basis of Accounting and Measurement Focus
The accounting policies of the City conform to generally accepted accounting principles in the United
States for local governmental units. 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.
' Government - Wide and Fund Financial Statements
The City's Government -Wide Financial Statements include a Statement of Net Assets and a Statement of
Activities and Changes in Net Assets. These statements present summaries of governmental and
business -type activities for the City accompanied by a total column.
I 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 Assets. The Statement of Activities presents changes in net assets. 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.
1 Certain types of transactions are reported as program revenues for the City in three categories:
• Charges for services
' • Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, payables and receivables. All internal balances in the Statement of Net Assets 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
The City applies all applicable GASB pronouncements (including all NCGA Statements and
Interpretations currently in effect) as well as the following pronouncements issued on or before
November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements:
Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles
Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the committee on Accounting
Procedure. The City applies all applicable FASB Statements and Interpretations issued after November
30, 1989, except those that conflict with or contradict GASB pronouncements.
' 39
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
1
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, t
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 assets 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.
Deferred revenues arise when potential revenues do not meet both the "measurable" and "available'
criteria for recognition in the current period. Deferred revenues also 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 deferred 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.
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 Low and Moderate Income Housing Special Revenue Fund is used to account for funds
restricted for low and moderate income housing financial activity.
The City of Poway Redevelopment Agency Debt Services Fund is used to account for the
accumulation of resources for, and the payment of principal, interest, and related costs of the debt.
The Redevelopment Agency Capital Projects Fund is used to account for the financial resources to
be used for the acquisitioned construction of major capital facilities (other than those financed by
proprietary funds).
40
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
' B. Basis of Accounting and Measurement Focus, Continued
Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues,
Expenses and Changes in Net Assets, and a Statement of Cash Flows for all proprietary funds.
1 A separate column representing nternal service funds is also resented
g p 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 Assets. The Statement of Revenues, Expenses and Change in Fund Net Assets
presents increases (revenues) and decreases (expenses) in total net assets. 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 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 nonoperating revenues. Operating expenses
are those expenses that are essential to the primary operations of the fund. All other expenses are
reported as nonoperating expenses.
The City reports the following major proprietary funds:
The Water Enterprise Fund is used to account for the provision of water services to the residents of
the City. All activities necessary to provide such services are accounted for in this fund, including,
but not limited to administration, operations, maintenance, financing and related debt service, and
billing and collection.
The Sewer Enterprise Fund is used to account for the provision of sewer services to the residents of
the City. All activities necessary to provide such services are accounted for in this fund, including,
but not limited to administration, operations, maintenance, financing and related debt service, and
billing and collection.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Assets. The City's fiduciary funds
represent agency funds. Agency funds are custodial in nature (assets equal liabilities) and do not
involve measurement of results of operations.
I
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City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
C. Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is
employed as an extension of formal budgetary integration. Encumbrances outstanding at year -end are
reported as reservations of fund balances and do not constitute GAAP basis expenditures or liabilities
because the commitments will be honored during the subsequent year. The commitments will be re-
appropriated and honored in the subsequent year.
D. Cash, Cash Equivalents and Investments I
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.
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and
for External Investment Pools, highly liquid market investments with maturities of one year or less at time
of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is
used as fair value for those securities for which market quotations are readily available.
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 as to change in interest rates.
In accordance with GASB Statement No. 40, Deposit and Investment Risk Disclosures (Amendment of GASB
Statement No. 3), certain disclosure requirements, if applicable for deposit and investment risk are specified
for the following areas:
Interest Rate Risk
Credit Risk
Overall
Custodial Credit Risk
Concentration of Credit Risk
Foreign Currency Risk
E. Interfund Transactions I
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."
42 1
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
F. Inventories
Inventories within the various fund types consist of materials and supplies which are valued at cost on
a first -in, first -out basis. Reported expenditures reflecting the purchase of supplies have been restated
to reflect the consumption method of recognizing inventory- related expenditures. A reservation of
fund balance has been reported in the governmental funds to show that inventories do not constitute
"available spendable resources," even though they are a component of net current assets.
G. Land Heldfor Resale
Land held for resale is carried at lower of cost or market, but not greater than the net realizable value.
An amount equal to the carrying value of land is reserved in fund balance because such assets are not
available to finance current operation.
H. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, streets,
sidewalks, medians and storm drains), are reported in the applicable governmental or business -type
activities in the Government -Wide Financial Statements. City policy has set the capitalization threshold
for reporting capital assets at $5,000. Capital assets are valued at historical cost or estimated historical
cost if actual historical cost was not available. Donated assets are valued at their estimated fair market
value on the date donated.
Depreciation is recorded on a straight -line basis over estimated useful lives of the assets as follows:
Buildings 10 -50 years
Buildings improvements 10 -100 years
Furniture and Equipment 5 -20 years
Infrastructure 20 -50 years
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In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic
Financial Statements and Management's Discussion and Analysis for State and Local Government,
which requires the inclusion of infrastructure capital assets in local governments' basic financial
statements. In accordance with GASB Statement No. 34, the City has included the value of all
infrastructure in its Basic Financial Statements.
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.
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.
43
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
H. Capital Assets, Continued
For infrastructure systems, the City elected to use the "Basic Approach" as defined by GASB Statement
No. 34 for infrastructure reporting. The City commissioned an appraisal of City owned infrastructure
and property as of June 30, 2006. This appraisal determined the original costs, which are defined as the
actual cost to acquire new property in accordance with market prices at the time of first
construction/ acquisition. Original costs were developed in one of three ways: (1) historical records;
(2) standard unit costs appropriate for the construction/ acquisition date; or (3) present cost indexed by
a reciprocal factor of the price increase from the construction/ acquisition date to the current date. The
accumulated depreciation, defined as the total depreciation from the date of construction/ acquisition to
the current date on a straight line, unrecovered cost method was computed using industry accepted life
expectancies for each infrastructure subsystem. The book value was then computed by deducting the
accumulated depreciation from the original cost.
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.
L 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.
J. Long -Term Debt
Government -Wide Financial Statements
Long -term debt and other long -term obligations are reported as liabilities in the appropriate activities.
Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the
bonds using the effective interest method. Bonds payable are reported net of applicable premium or
discount. Issuance costs are reported as deferred charges.
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
Assets.
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City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued
K. Net Assets
Government -Wide Financial Statements
Invested in Capital Assets, Net of Related Debt - This amount consists of capital assets net of accumulated
depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or
improvement of the assets.
Restricted Net Assets - This amount is restricted by external creditors, grantors, contributors, or laws or
regulations of other governments.
Unrestricted Net Assets - This amount is all net assets that do not meet the definition of "invested in
capital assets, net of related debt" or "restricted net assets."
Fund Financial Statements
tReservations represent those portions of fund equity which are not appropriable for expenditure or
which are legally segregated for specific future use. Designated fund balances represent tentative plans
for future use of financial resources. Undesignated fund balance indicates that portion of the fund
balance which is available for appropriation in future periods.
L. Use of Restricted and Unrestricted Net Assets
When an expense is incurred for purposes for which both restricted and unrestricted net assets are
available, the City's policy is to apply restricted net assets first.
1 M. Use of Estimates
The preparation of the basic financial statements in conformity with generally accepted accounting
principles in the United States (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.
tN. Recording of Infrastructure Capital Assets acquired prior to FY 2002 -2003
In fiscal year 2007, the City has fully implemented Governmental Accounting Standards Board
Statement No. 34 and record infrastructure capital assets acquired prior to 2002 -2003. The City
commissioned an appraisal of City owned infrastructure and property as of June 30, 2006. At July 1,
' 2006, the total infrastructure capital assets acquired prior to FY 2002 -2003 has a historical cost of
$113,132,113 with accumulated depreciation of $66,492,810. As a result of the inclusion of the
infrastructure capital assets, a retroactive adjustment in the amount of $46,639,303 was made to the
beginning net assets of the Governmental activities.
1 45
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
2. CASH, CASH EQUIVALENTS AND INVESTMENTS 1
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 investment at June 30, 2007:
Government -Wide
Statement of Net Assets
Business
Fiduciary Funds
Governmental Type
Statement of
'
Activities Activities
Net Assets
Total
Cash and investments $ 116,794,981 $ 12,820,161
Cash and investments with fiscal agents 23,162,604 283,938
$ 8,359,177
5,327,843
$ 137,974,319
28,774,385
'
Total $ 139,957,585 $ 13,104,099
$ 13,687,020
$ 166,748,704
Cash,
'
cash equivalents, and investments consisted of the following at June 30, 2007:
Cash on hand $ 8,910
'
Demand deposits 558,726
Investments 166,181,068
Total cash and investments $ 166,748,704
A. Cash Deposits '
The carrying amounts of the City's demand deposits were $558,726 at June 30, 2007. Bank balances at
June 30, 2007, were $1,748,819 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 Ieast 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 up to $100,000 by the Federal Deposit Insurance Corporation. The
City, however, has not waived the collateral ization 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.
46 1
r�
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
2. CASH, CASH EQUIVALENTS AND INVESTMENTS, Continued
B. Investments
The table below identifies the investment types that are authorized for the City by the California
Government Code (or the City's investment policy, where more restrictive). The table also identifies
certain provisions of the California Government Code (or the City's investment policy, where more
restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does
not address investments of debt proceeds held by bond trustee that are governed by the provisions of
debt agreements of the City, rather than the general provisions of the California Government Code or
the City's investment policy.
Maximum
Authorized Maximum Percentage of
Investment Type Maturity Portfolio*
U.S. Treasury Obligation
5 years
None
U.S. Agency Securities
5 years
75%
Bankers' Acceptances
180 days
40%
Medium -Term and Corporate Notes
5 years
30%
Money Market Mutual Funds
N/A
20%
Mortgage Backed Securities
5 years
20%
Asset Back Securities
5 years
20%
Commercial Paper
270 days
25%
Certificates of Deposit
5 years
30%
Local Agency Investment Fund (LAIF)
N/A
None
County of San Diego Investment Pool
N/A
None
Maximum
Investment in
One Issuer
None
25%
5%
5%
10%
None
None
3%
5%
None
None
* Excluding amounts held by bond trustee that are not subject to California Government Code restriction.
C. Investment Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee 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
Authorized Maximum Percentage of Investment in
' Investment Type Maturity Portfolio* One Issuer
Repurhase Agreements 1 year None 30%
Money Market Mutual Funds N/A 15% None
1 U.S. Agency Securities 5 years 75% 25%
Investment Contracts 30 years None None
Local Agency Investment Fund (LAIF) N/A None None
47
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
2. CASH, CASH EQUIVALENTS AND INVESTMENTS, Continued
D. Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair
value 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:
48
Remaining Maturity
12 Months
13 to 24
25 to 60
More than
Investment Type
Amounts
or Less
Months
Months
60 Months
U.S. Treasuries
$ 5,376,563
$ 2,472,657
$ -
$ 2,903,906
$
U.S. Agencies
24,076,582
21,542,341
2,534,241
-
Other Government
22,313,183
22,313,183
-
-
-
Asset Backed Securities
12,791,295
1,958,221
6,859,366
3,973,708
-
Mortgage Backed Securities
2,529,060
-
-
2,529,060
-
Medium -Term and Corporate Notes
18,786,754
10,105,750
3,037,757
5,643,247
-
Local Agency Investment Fund (LAIF)
51,156,090
51,156,090
-
-
San Diego County Investment Pool
58,117
58,117
-
-
-
LOI Bond AD #2001 -1
219,039
16,814
17,781
59,716
124,728
Certificates of Deposit
100,000
100,000
-
-
-
Held by bond trustee:
Money Market Funds
4,941,037
4,941,037
Uninvested Cash
29,706
29,706
-
-
Investment Contracts
21,016,158
1,726,022
6,397,726
12,892,410
Federal National Mortgage Association
1,572,153
1,572,153
-
-
Federal Home Loan Mortgage Corporation
1,215,331
1,215,331
-
-
-
$ 166,181,068
$ 119,207,422
$ 12,449,145
$ 21,507,363
$ 13,017,138
48
City of Poway
INotes to Basic Financial Statements, Continued
For the year ended June 30, 2007
2
CASH, CASH EQUIVALENTS AND INVESTMENTS, Continued
jD. Risk Disclosures, Continued
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder
of the investment. This is measured by the assignment of a rating by a nationally recognized statistical
' rating organization. The following presentation is the minimum rating required by (where applicable)
the California Government Code, the City's investment policy, or debt agreements, and the actual
rating as of year end for each investment type:
1 Minimum
Investment Type Amounts Rating Exempt AAA/A- AAA/A.1 AA/A.2 A+ /Aa3 A + /Al A /Al A /A2 AA-/A.3 AA /NR
U.S. Treasuries $ 5,376,563 Aaa $ - $ 5,376563 $ - $ - $ - $ _ $ _ $ _ $ $
U.S. geraies 24,076,582 Aaa - 29,076582 - - - - - -
Othergovemment 22,373,783 Aaa 22,373,183
Asset Backed Securities 12,791,295 Aaa 12,791,295
Mortgage Backed Securities 2,529,060 Aaa - 2529,060
Medium -Term and Cor —w Notes 18,786,754 Al - 1,043,161 2,006,738 2,973,873 2,651,069 4,125,136 1,061,635 2,947,404 1,977,738
Local Agency Investment Fund (LAIP) 51,156,090 N/A 51,156,090 - _ _ _
San Diego County Investment Pont 58,117 58,117
LOI Bond AD 42001 -1 219,039 219,039 -
Certificates of Deposit 100,000 100,000
Held by bond trustee:
Money Market Funds 4,941,037 - 4,941,037
' 11 -11led Cash 29,706 29,706
Investment Contracts 21,016,158 21,016,158
Federal National Mortgage Association 1,572,153 1,572,153
Federal Home I.— Banks 1,215,331 1,215,331
$ 166,181,068 $ 75,266594 $ 50,857,698 $ 2,006,738 $ 2,973,873 $ 2,651,069 $ 4,125,136 $ 1,061,635 $ 2,947,404 $ 7,977,738 5 22,313,183
1 Concentration of Credit Risk
' The City's Policy states that not more than 20% of the portfolio shall be invested in any one entity or
any one instrument to protect the District from concentration of credit risk, with the following
exceptions: U.S. Treasury Obligations and investments pools (State of California - Local Agency
Investment Fund and California Asset Management Program). In addition, purchases of commercial
paper must not exceed 20% of the value of the portfolio at any time and single issuer holdings must not
exceed 3 percent per issuer. The City is in compliance with these provisions of the Policy.
The following is a chart of City's investment portfolio:
1 49
Investment
Reported
Trustee /Custodian
Type
Amount
Union Bank /U.S. Bank
U.S. Treasuries
$ 5,376,563
Union Bank /U.S. Bank
U.S. Agencies
24,076,582
Union Bank /U.S. Bank
Other government
22,313,183
I
Union Bank
State Treasurer Office
Corporates
LAIF
18,786,754
51,156,090
Societe Generale
Investment Contract
3,544,500
AMBAC Capital Funding
Investment Contract
6,397,726
FSA Capital
Investment Contract
11,073,932
1 49
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
2. CASH, CASH EQUIVALENTS AND INVESTMENTS, Continued
E. Investment in Local Agency Investment Funds
The City invests in the Local Agency Investment Fund (LAIF), a State of California investment pool.
LAIF determines fair value on its investment portfolio based on market quotations for those securities
where market quotations are readily available and based on amortized cost or best estimate for those
securities where market value is not readily available.
The City valued its investments in LAIF as of June 30, 2007, at fair value. The fair value is calculated by
multiplying the account balance with LAIF times a fair value factor of 0.999545022 which is determined
by LAIF. This fair value factor was determined by dividing total value by all LAIF participants' total
cost.
The City's investments with Local Agency Investment Funds (LAIF) at June 30, 2007, included a portion
of the pooled funds invested in 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.
As of June 30, 2007, the City had $51,156,090 invested in LAIF, which had invested 3.466% of the pooled
investment funds in Structured Notes and Asset - Backed Securities.
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 -rate a
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, 2007, the City had $58,117 invested in the San Diego County Investment Pool.
50
t
1
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
3. INTERFUND TRANSACTIONS
A. Due To and Due From Other Funds
As of June 30, 2007, balances were as follows:
Due to other funds
Govemmental Activities:
Non -major Governmental Funds
Total
Due from other funds
General
Fnnd Total
$ 327,309 $ 327,309
$ 327,309 $ 327,309
These balances resulted from loans to cover negative cash balances as of June 30, 2007.
B. Advance To and Advances From Other Funds
Advance to other funds
Governmental Activities:
General Fund
Non -major Governmental Funds
Business -Type Activities:
Water
Sewer
Total
$ 4,801,458 $ 798,299 $ - $ 5,599,757
3,720,100 17,576 - 3,737,676
3,804,911 - - 3,804,911
7,948,623 214,500 1,106,268 9,269,391
$ 20,275,092 $ 1,030,375 $ 1,106,268 $ 22,411,735
The advances were primarily used for the following:
The City Council authorized various loans to the Redevelopment Agency totaling $20,275,092 and
to other Non -major Governmental funds totaling $1,030,375 at various interest rates. The terms of
the loans are indefinite. Accrued interest on the loans of $5,667,524 and $934,779 respectively, are
not reflected in the accompanying basic financial statements as payment is contingent upon the
availability of tax increment. Interest is recorded when it becomes payable from available
spendable resources.
The City's Sewer Fund loaned to the Parkway Business Center CFD No. 881- Bond Deposit
Fiduciary Agency Fund $1,106,268. Interest on this loan is paid on an annual basis and the
outstanding principal balance will be paid with the final assessment in 2014 -2015.
51
Advance from other funds
City of
Poway RDA
Non -major Fiduciary
Debt Service
Governmental Agency
Fund
Funds Funds Total
$ 4,801,458 $ 798,299 $ - $ 5,599,757
3,720,100 17,576 - 3,737,676
3,804,911 - - 3,804,911
7,948,623 214,500 1,106,268 9,269,391
$ 20,275,092 $ 1,030,375 $ 1,106,268 $ 22,411,735
The advances were primarily used for the following:
The City Council authorized various loans to the Redevelopment Agency totaling $20,275,092 and
to other Non -major Governmental funds totaling $1,030,375 at various interest rates. The terms of
the loans are indefinite. Accrued interest on the loans of $5,667,524 and $934,779 respectively, are
not reflected in the accompanying basic financial statements as payment is contingent upon the
availability of tax increment. Interest is recorded when it becomes payable from available
spendable resources.
The City's Sewer Fund loaned to the Parkway Business Center CFD No. 881- Bond Deposit
Fiduciary Agency Fund $1,106,268. Interest on this loan is paid on an annual basis and the
outstanding principal balance will be paid with the final assessment in 2014 -2015.
51
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
3. INTERFUND TRANSACTIONS, Continued
C. Transfers To and From Other Funds
Transfers for the year ended June 30, 2007, were as follows:
'
Transfers Out
'
Low and Moderate
City of Poway
Redevelopment
Income Housing
RDA
Area
Non -major
Water
sewer
Internal
Special Revenue
Debt Service
Capital Projects
Governmental
Enterprise
Enterprise
Service
Transfers In
General
Fund
Fund
Funds
Funds
Fund
Fund
Funds
Total
General Fund $
271,060
$ -
$ -
$ 7,080
$ 1,065,483
$ 86,650
$ 33,140
$ 920,291
$ 2,383,704
Low and Moderate Income Housing
Special Revenue Fund
-
-
7,224,350
-
-
-
-
-
7,224,350
City of Poway RDA
Debt Service Fund
-
1,614,707
-
-
1,302,022
-
-
-
2,916,729
Redevelopment Area
Capital Projects Fund
-
533,636
9,542,883
-
-
-
-
-
10,076,519
Non -major Governmental
Funds
513,670
-
444,276
-
-
104,625
104,626
-
1,167,197
Enterprise Fund
Water
-
-
-
-
341,849
-
-
-
341,849
Total $
784,730
$ 2,148,343
$ 17,211,509
$ 7,080
$ 2,709,354
$ 191,275
$ 137,766
$ 920,291
$ 24,110,348
Transfers are primary 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.
52
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
4
CAPITAL ASSETS
' A. Government -Wide Financial Statements
The following is a summary of capital assets for governmental activities:
Balance
Balance
July 1, 2006 Adjustments Additions Deletions Reclassification June 30, 2007
' Non - depreciable Assets:
Land $ 71,610,337 $ $ 229,588 $ $
$ 71,839,925
Construction in progress 12,268,405 _ 8,290,288
- (12,860,888) 7,697,805
Total non - depreciable assets 83,878,742 8,519,876 (12,860,888) 79,537,730
Depreciable Assets:
Buildings 57,319,805 117,053
5,391,366 62,828,224
' Improvements other than buildings 17,313,316 21,685
(11,332,372) 6,002,629
Infrastructure 113,132,113 746,124
17,939,093 131,817,330
Machinery and equipment 10,591,695 - 1,338,085
- 862,801 12,792,581
Total depreciable assets,
at cost 85,224,816 113,132,113 2,222,947 12860,888 213,440,764
Less accumulated depreciation:
Buildings (15,969,590) 1,611,558
Improvements other than buildings (3 094 584 ( ) _ (2,457,221) (20,038,369)
(220,350) 2,873,367 (441,567)
Infrastructure (66,492,810) (2,942,265
Machinery and equipment 5,506,540 ) (416,146) ( (6,851,221)
( ) - (894,799) - - (6,401,639)
Total accumulated depreciation (24,571,014) (66,492,810) (5,668,972)
1 (96,732,796)
Total depreciable assets, net 60,653,802 46,639,303 3,446,025
( ) 12,860,888 116,707,968
Total governmental
activities $ 144,532,544 $ 46,639,303 $ 5,073,851 $ $
' - $ 196,245,698
Governmental activities depreciation expenses for capital assets for the year ended June 30, 2007 are as
follows:
n
I
11
General government
$ 1,410,725
Public safety
589,075
Public works
3,314,106
'
Community services
355,066
Total depreciation expense
$ 5,668,972
n
I
11
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
4. CAPITAL ASSETS, Continued
A. Government -Wide Financial Statements, Continued
The following is a summary of capital assets for business -type activities:
Non - depreciable Assets:
Land
Construction in progress
Total non - depreciable assets
Depreciable Assets:
Buildings
Improvements other than buildings
Machinery and equipment
Total depreciable assets, at cost
Less accumulated depreciation:
Buildings
Improvements other than buildings
Machinery and equipment
Total accumulated depreciation
Total depreciable assets, net
Total business -type activities
Balance Balance
July 1, 2006 Additions Deletions Reclassification June 30, 2007
$ 76,797 $ - $ - $ - $ 76,797
4,132,559 172,121 (7,084) (3,679,526) 618,070
4,209,356 172,121 (7,084) (3,679,526) 694,867
21,076,441
- - - 21,076,441
49,413,039
35,660 - 3,207,925 52,656,624
2,015,122
129,794 (143,801) 471,601 2,472,716
(1,625,956)
(95,640)
72,504,602
165,454 (143,801) 3,679,526 76,205,781
(13,179,262)
(520,604)
- - (13,699,866)
(23,341,534)
(1,295,156)
- - (24,636,690)
(1,625,956)
(95,640)
143,801 - (1,577,795)
(38,146,752)
(1,911,400)
143,801 - (39,914,351)
34,357,850
(1,745,946)
3,679,526 36,291,430
$ 38,567,206
$ (1,573,825) $
(7,084) $ - $ 36,986,297
Business -type activities depreciation expenses for capital assets for the year ended June 30, 2007 are as
follows:
Water $ 1,167,288
Sewer 744,112
Total depreciation expense $ 1,911,400
B. Fund Financial Statements
The fund financial statements do not present general government capital assets but are shown in the
Reconciliation of the Governmental Funds Balance Sheet to the Government -Wide Statement of Net
Assets.
54
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT
The following is a summary of long -term debt for the year ended June 30, 2007:
Governmental Activities:
Tax Allocation Bonds
Certificates of Participation
Contract payable
Notes payable
Compensated absences
Total governmental activities
Business -Type Activities:
Revenue Bonds
Compensated absences
Total business -type activities
Classification
Balance Debt Debt Balance Due in Due in more
July 1, 2006 Issued Retired June 30, 2007 One Year than One Year
$ 254,811,734 $ 26,442,450 $ (29,470,306) $ 251,783,878 $ 5,381,426 $ 246,402,452
54,474,776
(1,406,209)
53,068,567
1,465,583
51,602,984
37,665
(1,108)
36,557
1,185
35,372
2,131,982
148,273 (115,024)
2,165,230
-
2,165,230
1,179,301
270,136 (152,670)
1,296,767
194,515
1,102,252
$ 312,635,458
$ 26,860,859 $ (31,145,317)
$ 308,350,999 $
7,042,709
$ 301,308,290
$ 2,076,315 $
- $ (162,400) $
1,913,915 $
167,588 $
1,746,327
243,277
50,324 (34,174)
259,427
39,914
219,513
$ 2,319,592 $
- $ (196,574) $
2,173,342 $
207,502 $
1,965,840
A. Governmental Activities Long -Term Debt
Tax Allocation Bonds
Tax Allocation Bonds at June 30, 2007, consisted of the following:
55
Amount Due
Amount Due
Balance
Balance
Within
More Than
July 1, 2006
Additions
Deletions
June 30, 2007
One Year
One Year
2000 Tax allocation bonds
$ 37,190,000
$
$ (25,335,000)
$ 11,855,000
$ 1,230,000
$ 10,625,000
2001 Tax allocation bonds
74,450,000
(455,000)
73,995,000
470,000
73,525,000
2003 Tax allocation bonds
140,035,000
-
(3,230,000)
136,805,000
3,385,000
133,420,000
Bond premium
3,136,734
-
(206,611)
2,930,123
202,746
2,727,377
2007 Tax allocation bonds
-
24,965,000
(225,000)
24,740,000
30,000
24,710,000
Bond premium
-
1,477,450
(18,695)
1,458,755
63,680
1,395,075
Total Tax Allocation Bonds
$ 254,811,734
$ 26,442,450
$ (29,470,306)
$ 251,783,878
$ 5,381,426
$ 246,402,452
55
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Tax Allocation Bonds, Continued
2000 Tax Allocation Bonds
In March 2000, the Agency issued the 2000 Tax Allocation Refunding Bonds in the amount of
$39,915,000. The bonds were issued on a subordinate basis to the portion of the Agency's previously
issued $21,595,000 Paguay Redevelopment Project, Tax Allocation Refunding Bonds, Series 1990A, of
which $5,855,000 were not refunded and $0 is currently outstanding. In addition to partially refunding
the 1990A Tax Allocation Bonds, these bonds were issued to pay amounts owed under three owner
participation agreements. The bonds consisted of serial bonds of $9,940,000 maturing from 2000 to 2011
in semi - annual installments of $45,000 to $785,000 and term bonds of $29,975,000 maturing in 2033.
Interest is paid semiannually on June 15 and December 15 at rates ranging from 3.75% to 5.75 %.
Bonds maturing on or after June 11, 2011 are subject to optional redemption in whole or in part on any
interest payment date. Bonds maturing on June 15, 2033 are subject to mandatory redemption on each
interest payment date beginning June 15, 2027. The outstanding balance of the bonds at June 30, 2007
was $11,855,000.
The annual requirements to amortize the bonds outstanding at June 30, 2007, are as follows:
Year Ending
June 30,
Principal
Interest
Total
2008
$ 1,230,000
$ 613,868 $
1,843,868
2009
1,290,000
554,881
1,844,881
2010
1,355,000
492,775
1,847,775
2011
1,425,000
424,987
1,849,987
2012
740,000
352,862
1,092,862
2013 -2017
-
1,671,810
1,671,810
2018 -2022
-
1,671,810
1,671,810
2023 -2027
375,000
1,671,810
2,046,810
2028 -2032
4,405,000
1,023,788
5,428,788
2033
1,035,000
44,850
1,079,850
Total
$ 11,855,000
$ 8,523,441 $
20,378,441
56
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Tax Allocation Bonds, Continued
' 2001 Tax Allocation Bonds
' In July 2001, the Agency issued the 2001 Tax Allocation Bonds in the amount of $76,395,000 for the
purpose of refinancing the Agency's outstanding Paguay Redevelopment Project, Subordinate Tax
Allocation Bonds of 1999, financing certain improvements, including low and moderate income housing
improvements in the Paguay Redevelopment Project Area, funding an escrow for future capital
improvement, funding a reserve account and paying the bond issuance cost. The bonds bear interest
from 3% to 5.25 %, payable semi - annually on June 15 and December 15 through 2033. Payments of the
bonds collateralized by a pledge of tax revenues to be received by the Agency. The bonds maturing on
or after June 15, 2012 are subject to redemption prior to maturity at the option of the Agency. The
outstanding balance of the bonds at June 30, 2007 was $73,995,000.
1 The annual requirements to amortize the bonds outstanding at June 30, 2007, are as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 470,000 $ 3,780,346 $ 4,250,346
2009 500,000 3,759,352 4,259,352
2010 550,000 3,736,790 4,286,790
2011 580,000 3,712,424 4,292,424
2012 1,360,000 3,712,424 5,072,424
2013 -2017 11,475,000 17,459,346 28,934,346
2018 -2022 12,235,000 14,484,572 26,719,572
2023 -2027 20,330,000 11,117,070 31,447,070
2028 -2032 22,405,000 5,485,092 27,890,092
2033 4,090,000 523,466 4,613,466
Total $ 73,995,000 $ 67,770,882 $ 141,765,882
2003 Tax Allocation Bonds
iIn October 2003, the Agency issued the 2003 Series A Tax Allocation Bonds in the amount of
$150,300,000 for the purpose of refinancing the outstanding 1993 Tax Allocation Refunding Bonds in the
amount of $94,740,000, paying approximately $10,983,000 owed under two owner participation
agreements related to the properties located in the City's business parks, with one being paid in full,
providing financing for certain improvements in the Paguay Redevelopment Area, funding a reserve
account and paying the bond issuance costs. The bonds bear interest from 2.0% to 5.25% and payable
semi - annually on June 15 and December 15 through 2033. Payment of the bonds is collateralized by a
pledge of tax revenues to be received by the Agency. The bonds maturing on or after June 15, 2028 are
subject to redemption prior to maturity at the option of the Agency. The outstanding balance of the
bonds at June 30, 2007 was $136,805,000.
57
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Tax Allocation Bonds, Continued
2003 Tax Allocation Bonds, Continued
The annual requirements to amortize the bonds outstanding at June 30, 2007, are as follows:
,
Year Ending Amortization of
June 30, Principal Interest Total Bond Premium
2008 $ 3,385,000 $ 6,803,626 $ 10,188,626 $ 202,746
2009 3,520,000 6,676,362 10,196,362 198,189
2010 3,620,000 6,526,288 10,146,288 194,994
2011 3,740,000 6,421,100 10,161,100 191,162
2012 4,050,000 6,294,900 10,344,900 186,915
2013 -2017 24,885,000 28,950,076 53,835,076 846,481
'
2018 -2022 32,110,000 22,367,466 54,477,466 630,761
2023 -2027 35,940,000 13,295,956 49,235,956 340,252
2028 -2032 19,850,000 5,262,878 25,112,878 132,128
2033 5,705,000 693,002 6,398,002 6,495
Total $ 136,805,000 $ 103,291,654 $ 240,096,654 $ 2,930,123
2007 Tax Allocation Bonds
$24,965,000 for the
In February 2007, the Agency issued the 2007 Tax Allocation Bonds in the amount of
purpose of refinancing a portion of the 2000 Tax Allocation Refunding Bonds, originally issued in the
principal amount of $39,915,000, of which $36,610,000 is currently outstanding (and of which
$12,450,000 will remain outstanding upon issuance of the Bonds), finance and refinance certain
improvements in the Paguay Redevelopment Project Area and paying the bond issuance cost. The
bonds bear interest from 3.5% to 4.125% and are payable semi - annually on June 15 and December 15
through 2033. Payments of the bonds collateralized by a pledge of tax revenues to be received by the
Agency. The bonds maturing on or before June 15, 2017 are not subject to call and optional redemption
prior to maturity. Bonds maturing on or after December 15, 2017 are subject to redemption prior to
maturity at the option of the Agency. The outstanding balance of the bonds at June 30, 2007 was
'
$24,740,000.
n
11
58 11
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Tax Allocation Bonds, Continued
2007 Tax Allocation Bonds, Continued
The annual requirements to amortize the bonds outstanding at June 30, 2007, are as follows:
Year Ending Amortization of
June 30,
Principal
Interest
Total
Bond Premium
2008
$ 30,000
$ 1,228,980 $
1,258,980
$ 63,680
2009
30,000
1,227,930
1,257,930
63,626
2010
30,000
1,226,880
1,256,880
63,571
2011
30,000
1,225,830
1,255,830
63,517
2012
30,000
1,224,780
1,254,780
63,462
2013 -2017
160,000
6,107,464
6,267,464
348,015
2018 -2022
200,000
6,072,569
6,272,569
283,095
2023 -2027
1,805,000
6,027,145
7,832,145
312,299
2028 -2032
18,200,000
3,652,125
21,852,125
189,236
2033
4,225,000
159,125
4,384,125
8,254
Total
$ 24,740,000
$ 28,152,828 $
52,892,828
$ 1,458,755
Certificates of Participation
Certificates of Participation at June 30, 2007, consisted of the following:
59
Amount Due
Amount Due
Balance
Balance
Within
More Than
July 1, 2006 Additions
Deletions
June 30, 2007
One Year
One Year
1995 Certificates of Participation
$ 29,585,000 $
$ (655,000)
$ 28,930,000
$ 695,000
$ 28,235,000
2003 Certificates of Participation
16,670,000 -
(330,000)
16,340,000
340,000
16,000,000
Bond premium
171,446 -
(9,892)
161,554
9,770
151,784
2005 Certificates of Participation
7,940,000 -
(400,000)
7,540,000
410,000
7,130,000
Bond premium
108,330 -
(11,317)
97,013
10,813
86,200
Total certificates of participation
$ 54,474,776 $
$ (1,406,209)
$ 53,068,567
$ 1,465,583
$ 51,602,984
59
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Certificates of Participation, Continued
1995 Certificates of Participation
In September 1995, The City issued the 1995 Refunding Certificates of Participation in the amount of
$31,770,000 to defease the City's outstanding 1991 Certificates of Participation - Capital Improvement
Project - Poway Royal Mobilehome Park. The original bonds were issued to purchase the Poway Royal
Mobilehome Park. The 1995 Refunding Certificates of Participation consisted of $3,895,000 serial
certificates maturing from 1996 to 2008 in semi - annual installments of $10,000 to $360,000 and term
certificates of $6,335,000, $6,405,000 and $15,135,000 maturing in 2015, 2020, and 2028, respectively.
Interest is payable semi - annually on February 1 and August 1 at rates ranging from 3.65% to 6.15 %.
Certificates maturing on or after February 1, 2006 are subject to optional prepayment in whole or in part
on any interest payment date on or after August 1, 2005. Certificates maturing on August 1, 2015, 2020,
and 2028 are subject to mandatory prepayment by lot on any interest payment date beginning February
1, 2009, 2016 and 2021, respectively. At June 30, 2007, the outstanding balance of the 1995 Refunding
Certificates of Participation was $28,930,000.
The annual debt service requirements for the 1995 Refunding Certificates of Participation outstanding at
June 30, 2007, are as follows:
11
11
11
u
n
u
u
Year Ending
'
June 30,
Principal
Interest
Total
2008
$ 695,000
$ 1,713,444 $
2,408,444
2009
735,000
1,674,572
2,409,572
'
2010
780,000
1,631,388
2,411,388
2011
825,000
1,584,976
2,409,976
2012
870,000
1,584,976
2,454,976
2012 -2016
5,225,000
7,126,610
12,351,610
2017 -2021
2022 -2026
6,995,000
9,415,000
5,450,250
3,181,650
12,445,250
12,596,650
2027 -2029
3,390,000
505,050
3,895,050
Total
$ 28,930,000
$ 24,452,916 $
53,382,916
60 1
f
�J
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
I5. LONG-TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Certificates of Participation, Continued
2003 Certificates of Participation
In January 2003, the City issued 2003 Certificates of Participation in the amount of 17,655,000 for the
construction of a City office building. The 2003 Certificates of Participation consisted of $5,930,000 serial
certificates maturing from 2004 through 2011 in annual installment of $350,000 to $515,000 and term
certificates of $3,005,000, $3,830,000 and $4,890,000 maturing in 2023, 2028 and 2033, respectively.
Interest is payable semi - annually on July 1 and January 1 at rates ranging from 3.00% to 5.00 %.
Certificates maturing on or after January 1, 2018 are subject to optional redemption in whole or in part,
on or after January 1, 2017. Certificates maturing on January 1, 2033 are subject to mandatory
redemption, without premium, on January 1, 2019. At June 30, 2007, the outstanding balance of the
2003 Certificates of Participation was $16,340,000.
Year Ending Amortization of
June 30, Principal Interest Total Bond Premium
II
II
2008
2009
2010
2011
2012
2013 -2017
2018 -2022
2023 -2027
2028 -2032
2033
Total
$ 340,000
355,000
370,000
385,000
400,000
2,250,000
2,860,000
3,650,000
4,655,000
1,075,000
$ 16,340,000
2005 Certificates of Participation
$ 787,616
774,016
759,816
745,016
3,492,768
3,492,768
2,923,262
2,171,500
1,211,500
158,750
$ 1,127,616
1,129,016
1,129,816
1,130,016
3,892,768
5,742,768
5,783,262
5,821,500
5,866,500
1,233,750
$ 9,770
9,601
9,425
9,241
9,074
42,133
34,586
24,776
12,281
667
$ 16,517,012 $ 32,857,012 $ 161,554
In April 2005, the City issued 2005 Refunding Certificates of Participation in the amount of $8,245,000 to
refund and defease the City's outstanding 1995 Certificates of Participation and the 1996 Certificates of
Participation. The original 1995 Certificates of Participation were used for several projects such as the
City's pool and Performing Arts Center, while the 1996 Certificates of Participation were used to build
the City's Sheriff Substation. The 2005 Refunding Certificates of Participation consisted of $6,830,000
serial certificates maturing from 2005 through 2020 in annual installments of $305,000 to $610,000 and
term certificates of $1,415,000 maturing in 2026. Interest is payable semi - annually on February 1 and
August 1 at rates ranging from 3.00% to 4.50 %. Certificates maturing on or after August 1, 2016 are
subject to optional redemption in whole or in part, on any date beginning August 1, 2015. Certificates
maturing on August 1, 2026 are subject to mandatory redemption in part of August 1 of each year
beginning August 1, 2021. At June 30, 2007, the outstanding balance of the 2005 Certificates of
Participation was $7,540,000.
61
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Certificates of Participation, Continued
2005 Certificates of Participation, Continued
Year Ending
Amount Due
Amount Due
Amortization of
June 30,
Principal
Interest
Total
Bond Premium
2008
$ 410,000
$ 304,662
$ 714,662
$ 10,813
2009
425,000
287,962
712,962
10,220
2010
445,000
271,675
716,675
9,642
2011
460,000
254,113
714,113
9,019
2012
480,000
480,000
8,289
2013 -2017
2,710,000
962,606
3,672,606
30,317
2018 -2022
1,405,000
452,848
1,857,848
13,724
2023 -2027
1,205,000
193,505
1,398,505
4,989
Total
$ 7,540,000
$ 2,727,371
$ 10,267,371
$ 97,013
Contract Payable
Contract payable at June 30, 2007, consisted of the following:
Contract Payable - Pomerado Cemetery District
On October 23, 1984, the Agency entered into a settlement agreement with Pomerado Cemetery
District. The purpose of the agreement is to alleviate any financial burden or detriment caused to the
District by the Redevelopment Plan.
Payments by the Agency to the Pomerado Cemetery District are as follows:
For the first fiscal year in which the Agency receives tax revenues at least equal to two - hundred -fifty
dollars ($250) plus an additional twenty percent (20 %) pursuant to Section 33334.2 of the Health and
Safety Code, the Agency shall pay to the District the sum of two hundred fifty dollars ($250).
62
Amount Due
Amount Due
Balance
Balance
Within
More Than
July 1, 2006 Additions
Deletions June 30, 2007
One Year
One Year
Pomerado Cemetery District $ 37,665 $
$ (1,108) $ 36,557
$ 1,185
$ 35,372
Total contract payable $ 37,665 $
$ (1,108) $ 36,557
$ 1,185
$ 35,372
Contract Payable - Pomerado Cemetery District
On October 23, 1984, the Agency entered into a settlement agreement with Pomerado Cemetery
District. The purpose of the agreement is to alleviate any financial burden or detriment caused to the
District by the Redevelopment Plan.
Payments by the Agency to the Pomerado Cemetery District are as follows:
For the first fiscal year in which the Agency receives tax revenues at least equal to two - hundred -fifty
dollars ($250) plus an additional twenty percent (20 %) pursuant to Section 33334.2 of the Health and
Safety Code, the Agency shall pay to the District the sum of two hundred fifty dollars ($250).
62
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
A. Governmental Activities Long -Term Debt, Continued
Contract Payable, Continued
Contract Payable - Pomerado Cemetery District Continued
For each fiscal year during which the Redevelopment Plan remains in effect after the fiscal year referred
to in the preceding paragraph, the Agency shall pay to the District from tax revenues an amount equal
to the amount of tax revenues paid by the Agency to the District during the fiscal year immediately
preceding the fiscal year for which the calculation is being made, multiplied by one and seven one -
hundredths (1.07).
The annual requirements to amortize the bonds outstanding at June 30, 2007 are as follows:
Year Ending
June 30,
Principal
Total
2008
$ 1,185 $
1,185
2009
1,268
1,268
2010
1,357
1,357
2011
1,452
1,452
2012
1,553
1,553
2013 -2017
9,559
9,559
2018 -2022
13,406
13,406
2023 -2024
6,777
6,777
Total
$ 36,557 $
36,557
Notes Payable
Notes payable at June 30, 2007, consisted of the following:
Amount Due Amount Due
Balance Balance Within More Than
July 1, 2006 Additions Deletions June 30, 2007 One Year One Year
Mossy Nissan $ 2,131,982 $ 148,273 $ (115,024) $ 2,165,230 $ $ 2,165,230
Total contract payable $ 2,131,982 $ 148,273 $ (115,024) $ 2,165,230 $ $ 2,165,230
Mossy Nissan Notes Payable
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
balance outstanding at June 30, 2007 was $2,165,230.
63
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
B. Business -Type Activities Long -Term Debt
Revenue Bonds
Revenue Bonds at June 30, 2007, consisted of the following:
1995 Revenue Bonds
In November 1995, the Poway Public Financing Authority issued the 1995 Revenue Bonds in the
amount of $3,380,000 to provide funds to construct certain water facility improvements. The bonds
consist of $2,190,000 serial bonds maturing from 1996 to 2010 in annual installments of $105,000 to
$200,000 and $1,190,000 term bonds maturing in 2015.
Interest is payable semi - annually on May 1 and November 1 with rates ranging from 3.70% to 5.75 %.
Bonds maturing on or after November 1, 2006 are subject to optional redemption prior to maturity, in
whole or in part, on any date on or after November 1, 2005. The term bonds are subject to mandatory
redemption in part on November 1, 2011 to 2015 in the amounts ranging from $215,000 to $265,000. At
June 30, 2007, the outstanding balance of the 1995 Revenue Bonds was $1,930,000.
The annual requirements to amortize the bonds outstanding at June 30, 2007 are as follows:
Year Ending
Amount Due
Amount Due
Balance
Principal
Balance
Within
More Than
July 1, 2006 Additions
Deletions
June 30, 2007
One Year
One Year
1995 Revenue Bonds $ 2,095,000 $
$ (165,000)
$ 1,930,000
$ 170,000
$ 1,760,000
Bond discounts (18,685)
2,600
(16,085)
(2,412)
(13,673)
Total contract payable $ 2,076,315 $ -
$ (162,400)
$ 1,913,915
$ 167,588
$ 1,746,327
1995 Revenue Bonds
In November 1995, the Poway Public Financing Authority issued the 1995 Revenue Bonds in the
amount of $3,380,000 to provide funds to construct certain water facility improvements. The bonds
consist of $2,190,000 serial bonds maturing from 1996 to 2010 in annual installments of $105,000 to
$200,000 and $1,190,000 term bonds maturing in 2015.
Interest is payable semi - annually on May 1 and November 1 with rates ranging from 3.70% to 5.75 %.
Bonds maturing on or after November 1, 2006 are subject to optional redemption prior to maturity, in
whole or in part, on any date on or after November 1, 2005. The term bonds are subject to mandatory
redemption in part on November 1, 2011 to 2015 in the amounts ranging from $215,000 to $265,000. At
June 30, 2007, the outstanding balance of the 1995 Revenue Bonds was $1,930,000.
The annual requirements to amortize the bonds outstanding at June 30, 2007 are as follows:
Year Ending
Amortization of
June 30,
Principal
Interest
Total
Bond Discount
2008
$ 170,000
$ 99,688
$ 269,688
$ (2,412)
2009
180,000
90,760
270,760
(2,220)
2010
190,000
81,137
271,137
(2,024)
2011
200,000
70,800
270,800
(1,823)
2012
215,000
65,450
280,450
(1,755)
2013 -2016
975,000
137,775
1,112,775
(5,851)
Total
$ 1,930,000
$ 545,610
$ 2,475,610
$ (16,085)
64
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
5. LONG -TERM DEBT, Continued
' C. Defeasance of Long -Term Debt
In April 2005, the City refunded the 1995 Certificates of Participation in the amount of $9,315,000 and the
' 1996 Certificates of Participation in the amount of $4,375,000 with the $8,245,000 2005 Refunding
Certificates of Participation. The net proceeds of $8,102,243 plus amounts relating to the prior
obligations of $1,198,878 were used to purchase direct obligations of the United States of America or
' certain other obligations for which the full faith and credit of the United States are pledged. These
securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt
service payments of the refunded debt. As a result, these bonds were considered defeased and removed
' from the City's long -term debt. At June 30, 2006, the outstanding balance of the 1995 Certificates of
Participation and 1996 Certificates of Participation were $0 and $0, respectively.
These bonds were refunded to reduce total debt service by $1,161,350 over the next 21 years and to
obtain an economic gain (difference between the present value of the debt service payments on the old
and new debt) of $243,111.
' In February 2007, the City refunded a portion of the 2000 Tax Allocation Refunding Bonds in the amount
of $39,915,000 with the $24,965,000 2007 Tax Allocation Refunding Bonds. The net proceeds of
$25,999,413 were used to purchase direct obligations for which the full faith and credit of the United
' States are pledged. These securities were deposited in an irrevocable trust with an escrow agent to
provide for all future debt service payments of the refunded debt. As a result, a portion of these bonds
were considered defeased and removed from the City's long -term debt. At June 30, 2007, the
outstanding balance of the non - defeased portion 2000 Tax Allocation Refunding Bonds was $11,855,000,
and the outstanding balance of the defeased portion was $24,160,000.
These bonds were refunded to reduce total debt service by $3,597,684 over the next 27 years and to
obtain an economic gain (difference between the present value of the debt service payments on the old
and new debt) of $1,866,640.
6. ASSESSMENT DISTRICT AND COMMUNITY FACILITIES DISTRICTS BONDS ISSUES
Community Facilities District Special Refunding Bonds
In November 1998, the City issued $26,090,000 in Special Refunding Bonds, Series A and B to refund the
outstanding portion of the $32,800,000 South Poway Community Facilities District No. 1 1987 Special Tax
Refunding Bonds. In April 2004, the City issued $3,775,000 in Special Tax Refunding Bonds to refund the
outstanding portion of the $26,090,000 South Poway Community Facilities District No. 1 1998 Special Tax
Refunding Bonds, Series B. In May 1998, the City issued $35,445,000 in Special Tax Refunding Bonds to
refund the outstanding portion of the $30,000,000 and $8,000,000 Community Facilities District No. 88 -1
(Parkway Business Centre) Special Tax Bonds, Series 1990, respectively. The bonds are authorized pursuant
to the Mello -Roos Community Facilities Act of 1982 and are secured by and payable from the proceeds of
annual special assessment taxes levied and collected on the property within the District. The Bonds are not
general or special obligations of the City. The City is acting as agent only for the property owners in
collecting the special assessments and forwarding the collections to the fiscal agents. Neither faith and
credit nor the taxing power of the City is pledged to the payment of these bonds. At June 30, 2007, the
outstanding balances of the November 1998, April 2004 and May 1998 issuances were $6,730,000, $2,200,000,
and $24,070,000, respectively.
65
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
6. ASSESSMENT DISTRICT AND COMMUNITY FACILITIES DISTRICTS BONDS ISSUES,
Continued
Integrated Financing Assessment District No. 96 -1 Limited Obligation Improvement Bonds
In June 1996, the City issued $586,470 Integrated Financing Assessment District No. 96 -1 (High Valley
Roads) Limited Obligation Improvement Bonds to finance the cost of acquisition and construction of certain
public infrastructure improvement benefiting properties within the boundaries of the assessment district.
The bonds are authorized pursuant to the Improvement Bond Act of 1915 and are secured by and payable
from the proceeds of annual special assessment taxes levied and collected on the property within the
District. The Bonds are not general or special obligations of the City. The City is acting as agent only for the
property owners in collecting the special assessments and forwarding the collections to the fiscal agents.
Neither faith and credit nor the taxing power of the City is pledged to the payment of these bonds. At June
30, 2007, the outstanding balance of the bonds was $380,000.
Old Coach Water Line Assessment District No. 2001 -01 Limited Obligation Improvement Bonds
In July 2001, the City issued $290,350 Old Coach Water Line Assessment District No. 2001 -01 Limited
Obligation Improvement Bonds to finance the cost of acquisition and construction of certain public
infrastructure improvement benefiting properties within the boundaries of the assessment district. The
bonds are authorized pursuant to the Improvement Bond Act of 1915 and are secured by and payable from
the proceeds of annual special assessment taxes levied and collected on the property within the District. The
Bonds are not general or special obligations of the City. The City is acting as agent only for the property
owners in collecting the special assessments and forwarding the collections to the fiscal agents. Neither
faith and credit nor the taxing power of the City is pledged to the payment of these bonds. At June 30, 2007,
the outstanding balance of the bonds was $219,039.
7. RETIREMENT BENEFITS
A. California Public Employees' Retirement Plan (PERS)
Plan Description
The City contributes to the California Public Employees' Retirement System (PERS), an agent multiple -
employer public employee defined benefit pension plan. PERS provides retirement and disability
benefits, annual cost -of- living adjustments, and death benefits to plan members and beneficiaries. PERS
acts as a common investment and administrative agent for participating public entities within the State
of California. Benefit provisions and all other requirements are established by state statute and city
ordinance. Copies of PERS' annual financial report may be obtained from their Executive Office located
at 400 P Street, Sacramento, California 95814.
Funding Policy
Active members are required by State statute to contribute 7% if a Miscellaneous member, and 9% if a
Safety member, of their annual covered salary. The City pays 7% employee contributions for all
Miscellaneous employees and 9% for Safety employees (Fire, Fire Management, and the Fire Chief),
which amounted to $1,277,296 for the year ended June 30, 2007. The City's employer required
contribution rate was 23.044% for Safety employees and 10.969% for Miscellaneous employees for the
fiscal year.
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City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
7. RETIREMENT BENEFITS, Continued
' A. California Public Employees' Retirement Plan (PERS), Continued
' Annual Pension Cost
For 2006 -2007, the City's annual pension cost of $2,376,855 for PERS, was equal to the City's required
and actual contributions. The required contribution was determined as part of the June 30, 2004,
' actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions
included (a) 7.75% investment rate of return (net of administrative expenses), (b) projected salary
increases range from 3.25% to 14.45% for miscellaneous employees and 3.25% to 14.45% for safety
1 employees depending on age, service, and type of employment, and (c) 3.25% per year cost -of- living
adjustments. Both (a) and (b) included an inflation component of 3 %. The actuarial value of PERS
assets was determined using techniques that smooth the effects of short -term volatility in the market
value of investments over a three year period. PERS unfunded actuarial accrued liability (or surplus) is
being amortized as a level percentage of projected payroll on a closed basis. The amortization period at
June 30, 2004, was 20 years for miscellaneous employees and 10 years for safety employees for prior and
' current service unfunded liability.
THREE -YEAR TREND INFORMATION FOR PERS ($ Amounts in Thousands)
Annual Percentage of
Pension Cost APC Net Pension
Fiscal Yeaz AP
( C) Contributed Obligation
6/30/2005 $ 1,683 100% $ _
6/30/2006 2,204 100% _
6/30/2007 2,377 100% _
B. Public Agency Retirement Services (PARS)
IPlan Description
1 The City sponsors the PARS Retirement Enhancement Plan. The plan provides a benefit equal to the
2.7% at 55 plan factor, less the CAPERS 2% at 55 plan factors for all years of City service and prior
Ca1PERS service. Sample rates are as follows:
Net Net Net
Age Factor Age Factor Age Factor
50 1.426% 55 2.000% 60 2.262%
51 1.522% 56 2.052% 61 2.314%
52 1.628% 57 2.104% 62 2.366%
' 53 1.742% 58 2.156% 63 2.418%
54 1.866% 59 2.210% 64+ 2.418%
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City of Poway ,
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
7. RETIREMENT BENEFITS, Continued
B. Public Agency Retirement Services (PARS), Continued 1
Funding Policy I
The City's funding policy is to contribute the annual required contribution. The annual required
contribution equals the sum of: '
➢ Normal cost
➢ Amortization of the unfunded actuarial accrued liability
Annual Pension Cost
For the year ending June 30, 2007, the City's annual required contribution is $805,498. The required '
contribution was based on the July 1, 2007 actuarial valuation using the entry age normal actuarial cost
method. The actuarial assumptions included (a) 7.0% investment return (net of administrative
expenses), (b) the CalPERS 1997 - 2002 Experience Study table for Males and Females, (c) projected ,
annual payroll increases of 3.25% a year plus merit, and (d) cost -of- living adjustment of 2% per year.
Both (a) and (c) included an inflation component of 33.5 %. The unfunded actuarial accrued liability is
being fresh started and amortization payments are increasing by 3.25% per year over 20 years, with 17 ,
remaining at June 30, 2007.
TWO -YEAR TREND INFORMATION FOR PARS ($ Amounts in Thousands)
Annual Percentage of
Pension Cost APC Net Pension
Fiscal Year (APC) Contributed Obligation
,
6/30/2006 $ 774 100% $ -
6/30/2007 805 100% -
C. Defined Contribution Pension Plan
The City provides pension benefits for all of its part -time employees through a defined contribution t
plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus
investment earnings. The plan is administered as part of the Public Agency Retirement System (PARS). '
All part -time employees are eligible to participate from the date of employment. Federal legislation
requires contributions of at least 7.5% to a retirement plan, and City Council resolved to match the
employees' contribution of 3.75% for employees hired prior to July 1, 1996. Employees hired after July
1, 1996 pay 7.5% of the contributions. The City's contributions for each employee (and interest earned '
by the accounts) are fully vested immediately.
For the year ended June 30, 2007, the City's payroll covered by the plan was $716,514. The City made '
employer contributions of $771 (0.1076% of current covered payroll), and employees contributed
$52,968 (7.3925% of current covered payroll).
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City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
8. REHABILITATION LOAN PROGRAM
The City has made various non - interest bearing loans to property owners for the rehabilitation of property
within the City. In accordance with the Affordable Housing Rehabilitation Loan Program, ten percent of
each loan is forgiven each year on the Ioan anniversary. A portion of the loans are repayable only upon the
sale of the property within ten years of the loan origination date or upon the death of the current property
owner. Due to the contingent repayment schedule of these loans, the Agency records an expenditure when
a loan is made and no receivable is included in the accompanying basic financial statements. The balance of
the loans outstanding at June 30, 2007 was $34,632.
9. OTHER REQUIRED DISCLOSURES
Government -Wide Financial Statements
The unrestricted net assets had a deficit balance of $(70,862,504) for governmental activities at June 30, 2007
because long -term debt is in excess of assets owned by the City. The deficit is caused by such things as pass
through payments and other non - capitalizable expenditures from bond proceeds.
10. RISK MANAGEMENT
The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is
composed of 114 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.
IA. General Liabilities
Each member government pays a primary deposit to cover estimated losses for a fiscal year (claim year).
Six months after the close of a fiscal year, outstanding claims are valued. A retrospective deposit
computation is then made for each open claims year. Claims are pooled separately between policed and
non - police. Costs are spread to member as follows: the first $30,000 of each occurrence is charged
i directly to the member's primary deposit, costs from $30,000 to $750,000 and the loss development
reserves associated losses up to $750,000 are pooled based on a member's share of losses under $30,000.
Losses from $750,000 to $10,000,000, $18,000,000 to $23,000,000, and $45,000,000 to $50,000,000 and the
associated loss development reserves are pooled based on payroll. Costs of covered claims from
$10,000,000 to $18,000,000 and $23,000,000 to $45,000,000 are currently paid by excess insurance. Costs
of covered claims for subsidence losses from $15,000,000 to $25,000,000 are paid by excess insurance.
The protection for each member is $50,000,000 per occurrence and $50,000,000 annual aggregate.
Administrative expenses are paid from the Authority's investment earnings.
1 69
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
10. RISK MANAGEMENT, Continued
B. Workers' Compensation
The City also participates in the workers' compensation pool administered by the Authority. Each
member pays a primary deposit to cover estimated losses for a fiscal year (claims year). Six months
after the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is
then made for each open claims year. Claims are pooled separately between public safety and non-
public safety. Each member has a retention level of $50,000 for each loss and this is charged directly to
the member's primary deposit. Losses from $50,000 to $100,000 and the loss development reserve
associated with losses up to $100,000 are pooled based on the member's share of losses under $50,000.
Losses from $100,000 to $2,000,000 and loss development reserves associated with those losses are
pooled based on payroll. Losses from $2,000,000 to $5,000,000 are pooled with California State
Association of Counties - Excess Insurance Authority members. Costs from $2,000,000 to $200,000,000
are transferred to reinsurance carriers. Costs in excess of $200,000,000 are pooled among Members
based on payroll. Protection is provided per statutory liability under California Worker's
Compensation law. Administrative expenses are paid from the Authority's investment earnings.
C. Property Insurance
The City participates in the all -risk property protection program of the Authority. This insurance
protection is underwritten by several insurance companies. The City's property is currently insured
accordingly to a schedule of covered property submitted by the City to the Authority. Total all -risk
property insurance coverage is $137,984,962. There is a $5,000 per loss deductible. Premium for the
coverage are paid annually and are not subject to retroactive adjustments.
D. Fidelity Bonds
The City purchases blanket fidelity bond 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, 2007, no liability was recorded in the accompanying financial statements.
70
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City of Poway
1 Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
11. JOINT VENTURE
The City is a member of the Regional Solid Waste Association Joint Powers Authority QPA). The JPA was
formed on September 1, 1997 by the Cities of Del Mar, Encinitas, Lemon Grove, 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. Since June 30,
2003, the City of Lemon Grove is no longer a member. Summarized audited information of the JPA for the
fiscal year ended June 30, 2007 is as follows:
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.
1 12. PROPERTY TAXES
Property taxes are levied on March 1 and are payable in two installments: November 1 and February 1 of
each year. Property taxes become delinquent on December 10 and April 10, for the first and second
installments, respectively. The lien date is January 1. The County of San Diego, California (County) bills
1 and collects property taxes and remits them to the District 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 District receives a share of this basic tax levy
proportionate to what it received during the years 1980 -1981.
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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 District
and, therefore, are not recorded as revenue until collected.
No allowance for doubtful accounts was considered necessary.
71
Total assets
$
325,376
Total liabilities
$
17,181
Fund equity
$
308,195
Total revenues
$
267,859
Total expenses
Net decrease in fund
$
292,414
equity
$
(24,555)
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.
1 12. PROPERTY TAXES
Property taxes are levied on March 1 and are payable in two installments: November 1 and February 1 of
each year. Property taxes become delinquent on December 10 and April 10, for the first and second
installments, respectively. The lien date is January 1. The County of San Diego, California (County) bills
1 and collects property taxes and remits them to the District 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 District receives a share of this basic tax levy
proportionate to what it received during the years 1980 -1981.
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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 District
and, therefore, are not recorded as revenue until collected.
No allowance for doubtful accounts was considered necessary.
71
City of Poway
Notes to Basic Financial Statements, Continued t
For the year ended June 30, 2007
13. CONTINGENT LIABILITIES AND COMMITMENTS
A. Litigation t
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.
14. COMMITMENTS UNDER DEVELOPER AGREEMENTS
On April 1, 1999, 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 shall 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.
On June 22,1999, the Agency entered into an Owner Participation Agreement with a developer with regard
to certain parcels of real estate located in the Project Area. In order to provide for the funding of certain
public improvements associated with the project, the Agency shall 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.
15. RELATED PARTY TRANSACTION I
During the fiscal year 2005 -06, the City issued a Housing Loan to the City Manager in the amount of
$500,000 for the home purchase within the City limit. The loan is secured by a note and deed of trust on the
property in the amount of $500,000. The term of the loan shall be for thirty years. The interest rate on the
loan is established at a fixed rate of 2.50% APR, payable bi- weekly through payroll deductions. The loan is
interest only for the first year then a level payment over the next 29 years. At June 30, 2007, the outstanding
balance of the loan was $497,978.
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City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
16. RESERVATION AND DESIGNATION OF FUND BALANCES
Reserved for:
Encumbrances
Prepaid items
Inventories
Land held for resale
Notes receivable
Advances to other funds
Debt service
Low and moderate income housing
Capital projects
Total reserved
Unreserved:
Designated for:
City facilities
State of California Economic downturn
Special projects
Capital projects
Miscellaneous
Total unreserved, designated
Undesignated for:
Special revenue funds
Total unreserved, undesignated
Total fund balances
Major Funds
Low and
Moderate
Income Housing City of Poway Redevelopment Other
General Special Revenue RDA Debt Area Capital Governmental
Fund Fund Service Fund Projects Fund Fund Total
$ 501,690 $ 2,000 $
$ 2,335,956
$ 699,750 $
3,539,396
1,356,508 -
-
-
1,356,508
80,609
-
80,609
-
2,352,833
2,352,833
-
- 5,763,792
-
5,763,792
5,599,757
-
3,737,676
9,337,433
- -
9,902,514
4,992,332
14,894,846
11,375,077
-
-
11,375,077
-
-
2,501,809
2,501,809
7,538,564 11,377,077
9,902,514 10,452,581
11,931,567
51,202,303
3,664,273 -
- -
-
3,664,273
3,099,013
3,099,013
768,455
-
-
768,455
-
34,470,528
8,567,130
43,037,658
22,843,510
-
-
22,843,510
30,375,251
34,470,528
8,567,130
73,412,909
5,278,620 5,278,620
5,278,620 5,278,620
$ 37,913,815 $ 11,377,077 $ 9,902,514 $ 44,923,109 $ 25,777,317 $ 129,893,832
73
City of Poway
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2007
17. PRIOR PERIOD ADJUSTMENTS
The City recorded the following prior period adjustments to record infrastructure assets acquired prior to
FY 2002 -2003 in accordance with GASB Statement No. 34. Accordingly, net assets as of July 1, 2006, have
been restated as follow:
Government -Wide Financial Statements
Governmental Activities:
Net assets
18. SUBSEQUENT EVENTS
A. Sales of Land Held for Resale
On September 25, 2007, the City sold 70.64% of the Land Held for Resale for $1,585,000 for a hotel
facility. The City retained 29.36% of the land to be developed into a restaurant.
B. San Diego Wild Fire
In October 2007, San Diego has experienced a series of wildfires that destroyed more than 300,000 acres
in the Eastern and Northern portions of the County. Some buildings, equipments, and infrastructures
owned by the City were damaged. Management is current in the process of determining the total
estimated costs to repair the damaged properties. Though not determined at this time, the costs of
repairs may be recoverable from Federal or State programs.
74
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GASB34
Net Assets
Adjustment
as Previously
Capital Net Assets
Reported
Assets as Restated
$ (10,295,186)
$ 46,639,303 $ 36,344;117
On September 25, 2007, the City sold 70.64% of the Land Held for Resale for $1,585,000 for a hotel
facility. The City retained 29.36% of the land to be developed into a restaurant.
B. San Diego Wild Fire
In October 2007, San Diego has experienced a series of wildfires that destroyed more than 300,000 acres
in the Eastern and Northern portions of the County. Some buildings, equipments, and infrastructures
owned by the City were damaged. Management is current in the process of determining the total
estimated costs to repair the damaged properties. Though not determined at this time, the costs of
repairs may be recoverable from Federal or State programs.
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REQUIRED SUPPLEMENTARY
75
INFORMATION
City of Poway
Required Supplementary Information
For the year ended June 30, 2007
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 submits a proposed budget to the City Council during early May. The City Council
holds budget hearings during May and early June. The final budget is adopted by the City County 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.
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.
76
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City of Poway
Required Supplementary Information, Continued
For the year ended June 30, 2007
1. BUDGETARY INFORMATION, Continued
The following is the budget comparison schedules for the General Fund and all major special revenue
funds.
Budget Comparison Schedule, General Fund
EXPENDITURES:
Current:
General government
3,736,597
6,627,149
5,616,332
Variance
Public safety
Budgeted Amount
18,058,675
Positive
306,970
Original
Final
Actual
(Negative)
REVENUES:
Development services
5,468,676
5,729,186
5,028,405
Taxes
$ 26,302,430
$ 26,702,430
$ 26,860,347
$ 157,917
Licenses and permits
297,350
297,350
330,755
33,405
Intergovernmental
826,620
826,620
776,669
(49,951)
Charges for services
3,754,110
3,714,160
3,667,970
(46,190)
Fines and forfeitures
582,200
582,200
720,949
138,749
Use of money and property
2,085,060
2,085,060
2,880,459
795,399
Developer fees
2,704,370
3,244,160
3,338,546
94,386
Other revenue
326,230
326,230
1,204,803
878,573
Total revenues
36,878,370
37,778,210
39,780,498
2,002,288
EXPENDITURES:
Current:
General government
3,736,597
6,627,149
5,616,332
1,010,817
Public safety
17,587,700
18,058,675
17,751,705
306,970
Public works
3,984,831
4,031,363
3,685,854
345,509
Development services
5,468,676
5,729,186
5,028,405
700,781
Community services
5,872,810
6,010,650
5,443,838
566,812
Capital outlay
-
4,349,851
868,710
3,481,141
Total expenditures
36,650,614
44,806,874
38,394,844
6,412,030
REVENUES OVER
(UNDER) EXPENDITURES
227,756
(7,028,664)
1,385,654
8,414,318
OTHER FINANCING SOURCES (USES):
Transfers in
1,328,880
2,590,981
2,383,704
(207,277)
Transfers out
(991,350)
(1,001,785)
(784,730)
217,055
Total other financing sources (uses)
337,530
1,589,196
1,598,974
9,778
Net change in fund balance
$ 565,286 $
(5,439,468)
2,984,628 $
8,424,096
FUND BALANCES:
Beginning of year
34,929,187
End of year
$ 37,913,815
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City of Poway
Required Supplementary Information, Continued
For the year ended June 30, 2007
1. BUDGETARY INFORMATION, Continued
Budget Comparison Schedule, Low and Moderate Income Housing Special Revenue Fund
REVENUES:
Interest and rental
Other revenue
Total revenues
EXPENDITURES:
Capital outlay
Total expenditures
REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCES:
Beginning of year
End of year
Variance
Budgeted Amount Positive
Original Final Actual (Negative)
236,610 236,610
- -
478,133
32,076
241,523
32,076
236,610 236,610
510,209
273,599
- 2,814,500
979,189
1,835,311
- 2,814,500
979,189
1,835,311
236,610 (2,577,890)
(468,980) 2,108,910
7,115,690
7,115,690
7,224,350
108,660
(2,478,520)
(2,478,520)
(2,148,343)
330,177
4,637,170
4,637,170
5,076,007
438,837
$ 4,873,780
$ 2,059,280
4,607,027
$ 2,547,747
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6,770,050
$ 11,377,077
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City of Poway
IRequired
Supplementary Information, Continued
For the year ended June 30, 2007
2. DEFINED BENEFIT PENSION PLANS
IA.
California Public Employees' Retirement Plan (PERS)
A schedule of funding progress for the year ended June 30, 2007 including the past three actuarial
valuations is presented below.
($ Amounts in Thousands)
Overfunded
(Unfunded)
Overfunded
Actuarial
Entry Age (Unfunded)
Liability as
Actuarial Actual Actuarial Actuarial
Percentage of
Valuation Asset Accrued Accrued Funded
Covered Covered
Date Value Liability Liability Ratio
Payroll Payroll
Miscellaneous 6/30/2004 39,609 44,484 (4,875) 89.0%
11,333 (43.02)%
Employees Group 6/30/2005 43,359 49,222 (5,863) 88.1%
12,266 (47.80)%
6/30/2006 47,546 54,224 (6,678) 87.7%
12,128 (55.06)%
1
Public Safety As of the acturial valuation date of June 30, 2003, the City's safety plan becomes part of a Ca1PERS Risk Pool for
Employees Group employers with less than 100 active plan members. As part of a cost - sharing multiple- employer defined benefit
plan, disclosure of the schedule of funding progress is not required.
B. Public Agency Retirement Services (PARS)
A schedule of funding progress for the year ended June 30, 2007 including the past two actuarial
valuation is presented below.
($ Amounts in Thousands)
'
Overfunded
(Unfunded)
Overfunded
Actuarial
Entry Age Age (Unfunded)
Liability as
Actuarial Actual Actuarial Actuarial
Percentage of
Valuation Asset Accrued Accrued Funded
Covered Covered
Date Value Liability Liability Ratio
Payroll Payroll
Miscellaneous 6/30/2004 4,821 (4,821) 0.0%
11,691 (41.24)%
Employees Group 6/30/2007 1,336 7,799 (6,463) 17.1%
13,167 (49.08)%
79
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11
SUPPLEMENTARY INFORMATION
81
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82 1
n
NON -MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS:
Fire Protection Fund - Used to account for revenues received from the Fire Protection Special Tax. Voters
approved this special tax in June 1997. It is used to pay for a portion of the costs of fire protection within the
City of Poway.
800 MHz Regional Communication System Fund - Used to account for revenues received from the 800 MHz
Regional Communication System Special Tax. Voters approved this special tax in June 1998. It is used to
pay for the City's share of the County -wide radio backbone system, and a portion of the annual maintenance
' expenses.
Gas Tax Fund - Used to account for revenues received and expenditures made for street maintenance.
Financing is provided by the City's share of State gasoline taxes made pursuant to the California State
Constitution and authorized by the State Legislature.
1 Street Improvement Fund - Used to account for revenues received and expenditures made for street
improvements. Financing is provided primarily from developer's traffic mitigation fees. City Ordinance No.
80 authorized the collection and the segregation of the funding.
Drainage Fund - Used to account for operations of the flood control and drainage division. Financing is
provided by developer's drainage fees and flood zone fees from the County. Poway Municipal Code Section
' 16.72 requires the segregation of the funding.
Maintenance Districts Fund - Used for lighting, landscape and maintenance. Costs of the districts are
' estimated and property owners are assessed their proportionate share based on an engineer's report. The
assessments are collected via the tax rolls.
Miscellaneous and 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.
' 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.
1 83
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.
Royal Mobilehome Park Administration Fund - Used to account for revenues received and expenditures
made in the administration of the Royal Mobilehome Park.
Traffic Congestion AB2928 Fund - Used to account for revenues received and expenditures made under the
State's Traffic Congestion Relief grant, AB 2928. These funds must be used for street and highway pavement
maintenance, rehabilitation and reconstruction of necessary associated facilities such as drainage and traffic
control devices.
Bette Bendixon Fund - Used to account for money provided by private donors restricted to maintenance of
riding and hiking trails.
Poway Road Beautification Fund - Used to account for money provided by donors restricted to
beautification efforts along Poway Road.
Performing Arts Center Trust Fund - Used to account for money provided by donors restricted to
Performing Arts Center construction.
Poway Valley Senior Center Endowment Fund - Used to account for money provided by the City to the
Poway Valley Senior Citizens Corporation restricted for on -going needs of the Senior Center. Interest may
be expended at the organization's direction while expenditures from principal require City Council approval.
Old Poway Park Tree Fund - Used to account for money provided by a settlement restricted to adding trees
in Old Poway Park.
Poway Public Arts Center Fund - Used to account for funds set aside to further public art in Poway.
Kumeyaay Endowment Fund - Used to account for funds that have been set aside to offer education about
the Kumeyaay Indians and eventually build a Kumeyaay Indian Interpretive Center.
Poway Fine Arts Center Fund - Used to account for funds set aside for the creation of a fine arts center.
Senior Volunteer Patrol Fund - Used to account for funds set aside to purchase supplies and equipment.
DEBT SERVICE FUNDS:
Used to account for accumulation of resources for the payment of interest and principal of long -term debt.
84
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J
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II
I
NON -MAJOR
GOVERNMENTAL FUNDS
PERMANENT FUNDS:
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.
Library Fund - Used to account for a donation to the City which is to be held in perpetual trust. The income
from the principal is to be used for library supplies and service.
CAPITAL PROTECTS FUNDS:
Park Improvement Fund - Used to account for the financing and construction of park facilities throughout
the City.
Municipal Improvement Fund - Used to account for financing and construction of major capital facilities
other than those financed by the proprietary funds. Major capital projects include construction of
government buildings, including City Hall, fire station and warehouse facilities.
85
City of Poway
Combining Balance Sheet
Non -Major Governmental Funds
June 30, 2007
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables
Taxes
Accounts
Interest
Deposits
Due from other governments and agencies
Advances to other funds
Total assets
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable
Due to other funds
Advances from other funds
Deferred revenue
Total liabilities
Fund Balances:
Reserved for:
Encumbrances
Deposits
Advances to other funds
Debt service
Capital projects
Total reserved
Unreserved:
Designated:
Capital projects
Total unreserved, designated
Undesignated
Total fund balances
Total liabilities and fund balances
Special Revenue
800 MHz
Fire Communication Gas Street
Protection System Tax Improvement Drainage
$ 3,229 $ 58,117 488,730 $ 734,263 $ 1,407,156
2,964 74 - 4,746
683 - - -
89,022 - -
- - - 1,642,944 2,094,732
$ 6,193 $ 58,874 $ 577,752 $ 2,377,207 $ 3,506,634
$ - 4,744 $ 45,167 $ $ 9,667
723,147
4,744 45,167 723,147 9,667
251,585 - 82,308
1,642,944 2,094,732
251,585 1,642,944 2,177,040
11,116 567,943
- - - 11,116 567,943
6,193 54,130 281,000 - 751,984
6,193 54,130 532,585 1,654,060 3,496,967
$ 6,193 $ 58,874 $ 577,752 $ 2,377,207 $ 3,506,634
86
if
Special Revenue
Royal
Community Transportation Mobilehome Traffic Poway
Maintenance Miscellaneous Development Development Park Congestion Bette Road
Districts Grants Block Grant Act Proposition A Administration AB 2928 Bendixon Beautification
$ 5,697,639 $ 1,422,747 $ 25,484 $ 795,038 $ 1,066,150 $ 3,542,345 $ 533,061 $ 19,004 $ 9,348
12,010 - - - - -
- 277,825 - -
331,732 69,907 - - - -
$ 5,709,649 $ 2,032,304 $ 95,391 $ 795,038 $ 1,066,150 $ 3,542,345 $ 533,061 $ 19,004 $ 9,348
$ 168,062 $ 62,093 $ 27,883 $ 4,847 $ $ 60,185 $ 142,153 $ $
- 259,801 67,508 - - - - -
- 71,536 - - - - -
168,062 393,430 95,391 4,847 - 60,185 142,153
18,813 239,727 62,333 - 24,705 -
- _ _ - 390,908 19,004 9,348
18,813 239,727 62,333 - 24,705 390,908 19,004 9,348
5,522,774 1,399,147 - 1,066,150 -
5,522,774 1,399,147 - - 1,066,150 -
- - 727,858 - 3,457,455 - - -
5,541,587 1,638,874 - 790,191 1,066,150 3,482,160 390,908 19,004 9,348
$ 5,709,649 $ 2,032,304 $ 95,391 $ 795,038 $ 1,066,150 $ 3,542,345 $ 533,061 $ 19,004 $ 9,348
87
(Continued)
City of Poway
Combining Balance Sheet
Non -Major Governmental Funds, Continued
June 30, 2007
LIABILITIES AND
Special Revenue
FUND BALANCES
Poway Valley
Poway
Poway
Liabilities:
Senior Center
Old Poway
Public Arts
Kumeyaay
Fine Arts
Accounts payable
Endowment
Park Tree
Center
Endowment
Centers
ASSETS
_
Cash and investments
$ 418,700
$ 5,405
$ 86,718
$ 45,497
$ 2,824
Cash and investments with fiscal agents
_
_
_
_
_
Receivables
_
Accounts
_
Loans
Notes
-
-
14,979
Deposits
_
Due from other governments and agencies
_
Inventories
Total assets
$ 418,700
$ 5,405
$ 86,718
$ 45,497
$ 2,824
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable
$ $
$
_ $
$
Due to other funds
_
Advances from other funds
Deferred revenue
_
Total liabilities
_
Fund Balances:
Reserved for:
Encumbrances
-
-
14,979
Deposits
Advances to other funds
_
Debt service
Capital projects
418,700
5,405
86,718
30,518
2,824
Total reserved
418,700
5,405
86,718
45,497
2,824
Unreserved:
Designated:
Capital projects
_
_
_
_
Total unreserved, designated
Undesignated
_
_
_
Total fund balances
418,700
5,405
86,718
45,497
2,824
Total liabilities and fund balances
$ 418,700 $
5,405 $
86,718 $
45,497 $
2,824
88
Special
Debt Service
Revenue
Permanent Funds
Fund
Capital Projects Funds
Total
Senior
Mary
Other
Volunteer
Patricia
Debt Service
Park Municipal
Governmental
Patrol
Ross Trust Library
Fund
Improvement Improvement
Funds
$ 7,564 $ 79,661 $ 877,762 3,456,384 $ 883,563 $ 3,362 $ 21,669,751
- - - 1,530,602 - - 1,530,602
- 19,794
- - - 277,825
5,346 - 6,029
490,661
- - - - - - 3,737,676
$ 7,564 $ 79,661 $ 877,762 $ 4,992,332 $ 883,563 $ 3,362 $ 27,732,338
$ $ $ - $ $ 1,000 $ - $ 525,801
- - 327,309
307,228 1,030,375
- - 71,536
- - 308,228 - 1,955,021
5,300 699,750
- 3,737,676
- - 4,992,332 4,992,332
7,564 79,661 877,762 - 570,035 3,362 2,501,809
7,564 79,661 877,762 4,992,332 575,335 3,362 11,931,567
8,567,130
8,567,130
5,278,620
7,564 79,661 877,762 41992,332 575,335 3,362 25,777,317
$ 7,564 $ 79,661 $ 877,762 $ 4,992,332 $ 883,563 $ 3,362 $ 27,732,338
(Concluded)
89
City of Poway
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Non -Major Governmental Funds
For the year ended June 30, 2007
90
Special Revenue
800 MHz
Fire
Communication
Gas
Street
Protection
System
Tax
Improvement
Drainage
REVENUES:
Taxes
$ -
$ -
$ -
$ -
$ 640,040
Intergovernmental
-
931,995
-
Charges for services
596,868
135,524
-
-
19,302
Development fees
-
-
-
750,551
28,238
Assessments levied
-
-
-
-
Use of money and property
2,738
34,288
33,962
86,552
Other revenues
-
-
21,350
-
3,385
Total revenues
596,868
138,262
987,633
784,513
777,517
EXPENDITURES:
Current:
Public safety
-
146,106
-
-
-
Public works
-
-
913,339
4,969
470,463
Community services
-
-
-
-
-
Capital outlay
-
-
-
663,712
455,202
Debt service:
Principal
-
-
-
-
-
Interest and fiscal charges
-
-
-
-
-
Total expenditures
-
146,106
913,339
668,681
925,665
REVENUES OVER
(UNDER) EXPENDITURES
596,868
(7,844)
74,294
115,832
(148,148)
OTHER FINANCING SOURCES (USES):
Transfers in
-
5,435
-
Transfers out
(593,525)
-
-
Total other financing sources (uses)
(593,525)
51435
REVENUES AND OTHER
FINANCING SOURCES OVER
(UNDER) EXPENDITURES AND
OTHER FINANCING USES
3,343
(7,844)
79,729
115,832
(148,148)
FUND BALANCES:
Beginning of year
2,850
61,974
452,856
1,538,228
3,645,115
End of year
$ 6,193
$ 54,130
$ 532,585
$ 1,654,060
$ 3,496,967
90
5,535,383 1,322,576 1,902 921,610 1,045,292 3,445,763 370,480 18,049 8,878
$ 57541,587 $ 1,638,874 $ - $ 790,191 $ 1,066,150 $ 3,482,160 $ 390,908 $ 19,004 $ 9,348
(Continued)
11
Special Revenue
Royal
Community
Transportation
Mobilehome
Traffic
Poway
Maintenance
Miscellaneous
Development
Development
Park
Congestion
Bette
Road
Districts
Grants
Block Grant
Act
Proposition A
Administration
AB 2928
Bendixon
Beautification
$ 297,989
$
$ -
$
$
$
$
-
725,854
212,205
5,000
1,313,000
-
372,044
_
j-
334,986
_
1,868,567
_
284,354
24,889
70,016
46,608
33,136
-
45,592
2,284
4,524,639
180
24,435
_
955
_
470
2,475,799
1,177,464
212,205
38,136
1,360,876
4,524,819
396,479
955
470
2,214,914
_
_
=
1,340,018
-
142,153
4,218,673
_
356,681
761,166
214,107
169,555
-
269,749
233,898
_
2,571,595
761,166
214,107
169,555
11340,018
4,488,422
376,051
(95,796)
416,298
(1,902)
(131,419)
20,858
36,397
20,428
955
470
102,000
_
-
(100,000)
102,000
(100,000)
6,204
316,298
(1,902)
(131,419)
20,858
36,397
20,428
955
470
5,535,383 1,322,576 1,902 921,610 1,045,292 3,445,763 370,480 18,049 8,878
$ 57541,587 $ 1,638,874 $ - $ 790,191 $ 1,066,150 $ 3,482,160 $ 390,908 $ 19,004 $ 9,348
(Continued)
11
City of Poway
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Non -Major Governmental Funds, Continued
For the year ended June 30, 2007
REVENUES:
Taxes
Intergovernmental
Charges for services
Developer fees
Assessments levied
Use of money and property
Other
Total revenues
EXPENDITURES:
Current:
Public safety
Public works
Community services
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
Total other financing sources (uses)
REVENUES AND OTHER
FINANCING SOURCES OVER
(UNDER) EXPENDITURES AND
OTHER FINANCING USES
FUND BALANCES:
Beginning of year
End of year
Special Revenue
Poway Valley
Poway
Poway
Senior Center
Old Poway
Public Arts Kumeyaay
Fine Arts
Endowment
Park Tree
Center Endowment
Centers
21,055 75 5,337 1,800 143
- - 22,197 -
21,055 75 5,337 23,997 143
35,748 21,783 -
35,748 21,783 -
21,055 75 (30,411) 2,214 143
12,625
12,625
21,055 75 (30,411) 14,839 113
397,645 5,330 117,129 30,658 2,681
$ 418,700 $ 5,405 $ 86,718 $ 45,497 $ 2,824
92
Special
Debt Service
Revenue
Permanent Funds
Fund
Capital Projects Funds
Total
Senior
Mary
Other
Volunteer
Patricia
Debt Service
Park Municipal
Governmental
Patrol
Ross Trust Library
Fund
Improvement Improvement
Funds
$ -
$ $
$ -
$ $ -
$ 938,029
-
-
3,560,098
-
-
751,694
-
-
57,420 -
1,171,195
- -
-
- -
1,868,567
-
4,006 45,667
1,052,553
11,985 169
6,283,927
10,198
- -
-
- -
131,091
10,198
4,006 45,667
1,052,553
69,405 169
14,704,601
- 146,106
- 2,870,942
- - - 6,433,587
7,634 - - 36,168 - 3,225,403
- - 730,000 - - 730,000
- - - 1,127,733 - - 1,127,733
7,634 - 1,857,733 36,168 - 14,533,771
2,564 4,006 45,667 (805,180) 33,237 169 170,830
5,000 - - 1,042,137 1,167,197
- (30,151) (1,985,678) - (2,709,354)
5,000 (30,151) (943,541) - (1,542,157)
7,564 4,006 15,516 (1,748,721) 33,237 169 (1,371,327)
- 75,655 862,246 6,741,053 542,098 3,193 27,148,644
$ 7,564 $ 79,661 $ 877,762 $ 4,992,332 $ 575,335 $ 3,362 $ 25,777,317
(Concluded)
93
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
City of Poway RDA Debt Service Fund
For the year ended June 30, 2007
94
Variance
Budgeted Amount
Positive
Original
Final
Actual
(Negative)
Fund balance, July 1, 2006
$ 11,386,116
$ 11,386,116
$ 11,386,116
$ -
Resources (inflows):
Tax increment
35,578,450
35,578,450
36,011,865
433,415
Use of money and property
3,677,550
3,677,550
4,233,548
555,998
Proceeds from bonds and loans
148,830
148,830
-
26,441,893
Bond proceeds
-
26,442,450
26,590,723
(23,525,721)
Transfers in
1,663,730
2,965,750
2,916,729
(49,021)
Amount available for appropriation
41,068,560
68,813,030
69,752,865
3,856,564
Charges to appropriation (outflows):
Debt service:
Principal
5,515,000
5,740,000
5,740,000
-
Interest and fiscal charges
17,503,490
17,176,590
16,768,897
407,693
Tax increment reimbursement
5,133,360
4,989,080
-
4,989,080
Bond refunding
-
26,642,450
26,627,036
15,414
Tax shift
-
-
4,889,025
(4,889,025)
Transfers out
11,937,920
17,799,970
17,211,509
(588,461)
Total charges to appropriations
40,089,770
72,348,090
71,236,467
(65,299)
Excess of resources over (under)
charges to appropriations
978,790
(3,535,060)
(1,483,602)
3,791,265
Fund balance, June 30, 2007
$ 12,364,906
$ 7,851,056
$ 9,902,514
$ 3,791,265
94
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fire Protection Special Revenue Fund
For the year ended June 30, 2007
95
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 2,850 $
2,850
$ 2,850
$ -
Resources (inflows):
Charges for services
600,000
600,000
596,868
(3,132)
Amount available for appropriation
600,000
600,000
596,868
(3,132)
Charges to appropriations (outflows):
Transfers out
600,000
600,000
593,525
61475
Total charges to appropriations
600,000
600,000
593,525
6,475
Excess of resources over (under)
charges to appropriations
-
-
3,343
3,343
Fund balance, June 30, 2007
$ 2,850 $
2,850
$ 6,193
$ 3,343
95
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
800 MHz Communication System Special Revenue Fund
For the year ended June 30, 2007
96
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 61,974 $
61,974
$ 61,974
$ -
Resources (inflows):
Charges for services
130,000
130,000
135,524
5,524
Use of money and property
-
-
2,738
2,738
Other
-
-
-
-
Amount available for appropriation
130,000
130,000
138,262
8,262
Charges to appropriations (outflows):
General government
57,120
57,120
146,106
(88,986)
Capital outlay
-
-
-
-
Debt service:
Principal
21,080
21,080
-
21,080
Interest and fiscal charges
66,630
66,630
-
66,630
Total charges to appropriations
144,830
144,830
146,106
(1,276)
Excess of resources over (under)
charges to appropriations
(14,830)
(14,830)
(7,844)
6,986
Fund balance, June 30, 2007
$ 47,144 $
47,144
$ 54,130
$ 6,986
96
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Gas Tax Special Revenue Fund
For the year ended June 30, 2007
97
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 452,856 $
452,856
$ 452,856
$ -
Resources (inflows):
Intergovernmental
973,810
973,810
931,995
(41,815)
Use of money and property
19,720
19,720
34,288
14,568
Other revenue
-
-
21,350
21,350
Transfers in
-
5,435
5,435
-
Amount available for appropriation
993,530
998,965
993,068
(5,897)
Charges to appropriations (outflows):
Public works
924,368
1,113,060
913,339
199,721
Total charges to appropriations
924,368
1,113,060
913,339
199,721
Excess of resources over (under)
charges to appropriations
69,162
(114,095)
79,729
193,824
Fund balance, June 30, 2007
$ 522,018 $
338,761
$ 532,585
$ 193,824
97
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Street Improvement Special Revenue Fund
For the year ended June 30, 2007
98
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 1,538,228
$ 1,538,228
$ 1,538,228
$ -
Resources (inflows):
Developers fee
34,650
34,650
750,551
715,901
Use of money and property
118,310
118,310
33,962
(84,348)
Other revenue
-
-
-
-
Amount available for appropriation
152,960
152,960
784,513
631,553
Charges to appropriations (outflows):
Public works
-
-
4,969
(4,969)
Capital outlay
-
1,188,936
663,712
525,224
Transfers out
-
-
-
-
Total charges to appropriations
-
1,188,936
668,681
520,255
Excess of resources over (under)
charges to appropriations
152,960
(1,035,976)
115,832
1,151,808
Fund balance, June 30, 2007
$ 1,691,188
$ 502,252
$ 1,654,060
$ 1,151,808
98
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Drainage Special Revenue Fund
For the year ended June 30, 2007
99
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 3,645,115 $
3,645,115
$ 3,645,115
$ -
Resources (inflows):
Taxes
658,220
658,220
640,040
(18,180)
Charges for services
14,010
14,010
19,302
5,292
Developer fees
42,000
42,000
28,238
(13,762)
Use of money and property
90,560
90,560
86,552
(4,008)
Other revenue
-
-
3,385
3,385
Amount available for appropriation
804,790
804,790
777,517
(27,273)
Charges to appropriations (outflows):
Public works
775,971
799,921
470,463
329,458
Capital outlay
-
1,672,733
455,202
1,217,531
Transfers out
_
Total charges to appropriations
775,971
2,472,653
925,665
1,546,988
Excess of resources over (under)
charges to appropriations
28,819
(1,667,863)
(148,148)
1,519,715
Fund balance, June 30, 2007
$ 3,673,934 $
1,977,252
$ 3,496,967
$ 1,519,715
99
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Maintenance Districts Special Revenue Fund
For the year ended June 30, 2007
100
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 5,535,383 $
5,535,383
$ 5,535,383
$ -
Resources (inflows):
Taxes
277,330
277,330
297,989
20,659
Assessment levied
1,855,950
1,855,950
1,868,567
12,617
Use of money and property
207,840
207,840
284,354
76,514
Other revenue
-
-
24,889
24,889
Transfers in
110,000
110,000
102,000
(8,000)
Amount available for appropriation
2,451,120
2,451,120
2,577,799
126,679
Charges to appropriations (outflows):
Community services
3,201,186
3,212,335
2,214,914
997,421
Capital outlay
-
385,554
356,681
28,873
Total charges to appropriations
3,201,186
3,597,889
2,571,595
1,026,294
Excess of resources over (under)
charges to appropriations
(750,066)
(1,146,769)
6,204
1,152,973
Fund balance, June 30, 2007
$ 4,785,317 $
4,388,614
$ 5,541,587
$ 1,152,973
100
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Miscellaneous Grant Special Revenue Fund
For the year ended June 30, 2007
101
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 1,322,576
$ 1,322,576
$ 1,322,576
$ -
Resources (inflows):
Intergovernmental
395,950
781,261
725,854
(55,407)
Developer fees
125,000
125,000
334,986
209,986
Use of money and property
8,210
8,210
70,016
61,806
Other revenue
-
-
46,608
46,608
Amount available for appropriation
529,160
914,471
1,177,464
262,993
Charges to appropriations (outflows):
Capital outlay
-
2,234,925
761,166
1,473,759
Transfers out
100,000
100,000
100,000
-
Total charges to appropriations
100,000
2,334,925
861,166
1,473,759
Excess of resources over (under)
charges to appropriations
429,160
(1,420,454)
316,298
1,736,752
Fund balance, June 30, 2007
$ 1,751,736
$ (97,878)
$ 1,638,874
$ 1,736,752
101
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Community Development Block Grant Special Revenue Fund
For the year ended June 30, 2007
102
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 1,902 $ 1,902
$ 1,902
$ -
Resources (inflows):
Intergovernmental
- -
212,205
212,205
Amount available for appropriation
- -
212,205
212,205
Charges to appropriations (outflows):
Capital outlay
- 330,125
214,107
116,018
Total charges to appropriations
- 330,125
214,107
116,018
Excess of resources over (under)
charges to appropriations
- (330,125)
(1,902)
328,223
Fund balance, June 30, 2007
$ 1,902 $ (328,223)
$ -
$ 328,223
102
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Transportation Development Act Special Revenue Fund
For the year ended June 30, 2007
103
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 921,610 $
921,610
$ 921,610
$ _
Resources (inflows):
Intergovernmental
5,000
5,000
5,000
Use of money and property
5,920
5,920
33,136
27,216
Amount available for appropriation
10,920
10,920
38,136
27,216
Charges to appropriations (outflows):
Development services
-
95,000
Capital outlay
-
95,000
-
758,651
169,555
589,096
Total charges to appropriations
-
853,651
169,555
684,096
Excess of resources over (under)
charges to appropriations
10,920
(842,731)
(131,419)
711,312
Fund balance, June 30, 2007
$ 932,530 $
78,879
$ 790,191
$ 711,312
103
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Proposition A Special Revenue Fund
For the year ended June 30, 2007
104
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 1,045,292 $
1,045,292
$ 1,045,292
$ -
Resources (inflows):
Intergovernmental
1,313,000
1,313,000
1,313,000
Use of money and property
19,720
19,720
45,592
25,872
Other revenue
-
-
2,284
2,284
Amount available for appropriation
1,332,720
1,332,720
1,360,876
28,156
Charges to appropriations (outflows):
Public works
1,822,276
1,610,912
1,340,018
270,894
Total charges to appropriations
1,822,276
1,610,912
1,340,018
270,894
Excess of resources over (under)
charges to appropriations
(489,556)
(278,192)
20,858
299,050
Fund balance, June 30, 2007
$ 555,736 $
767,100
$ 1,066,150
$ 299,050
104
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Royal Mobilehome Park Administration Special Revenue Fund
For the year ended June 30, 2007
105
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 3,445,763 $
3,445,763
$ 3,445,763
$ -
Resources (inflows):
Use of money and property
4,179,450
4,305,340
4,524,639
219,299
Other revenue
-
-
180
180
Amount available for appropriation
4,179,450
4,305,340
4,524,819
219,479
Charges to appropriations (outflows):
Community services
4,198,020
4,234,740
4,218,673
16,067
Capital outlay
-
575,000
269,749
305,251
Total charges to appropriations
4,198,020
4,809,740
4,488,422
321,318
Excess of resources over (under)
charges to appropriations
(18,570)
(504,400)
36,397
540,797
Fund balance, June 30, 2007
$ 3,427,193 $
2,941,363
$ 3,482,160
$ 540,797
105
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances
Traffic Congestion AB 2928 Special Revenue Fund
For the year ended June 30, 2007
- Budget and Actual
'
,
Variance with
'
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
'
Fund balance, July 1, 2006 $ 370,480 $
370,480
$ 370,480
$
Resources (inflows):
Assessments levied -
210,760
372,044
161,284
Use of money and property -
-
24,435
24,435
'
Amount available for appropriation -
210,760
396,479
185,719
'
Charges to appropriations (outflows):
Public works -
135,850
142,153
(6,303)
Capital outlay -
233,898
233,898
-
Total charges to appropriations -
369,748
376,051
(6,303)
Excess of resources over (under)
'
charges to appropriations -
(158,988)
20,428
179,416
Fund balance, June 30, 2007 $ 370,480 $
211,492
$ 390,908
$ 179,416
'
1
106
'
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Bette Bendixen Special Revenue Fund
For the year ended June 30, 2007
107
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 18,049 $ 18,049
$ 18,049
$ -
Resources (inflows):
Use of money and property
690 690
955
265
Amount available for appropriation
690 690
955
265
Excess of resources over (under)
charges to appropriations
690 690
955
265
Fund balance, June 30, 2007
$ 18,739 $ 18,739
$ 19,004
$ 265
107
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Poway Road Beautification Special Revenue Fund
For the year ended June 30, 2007
'
'
Variance with
'
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
'
Fund balance, July 1, 2006 $ 8,878 $
8,878
$ 8,878
$
Resources (inflows):
Use of money and property 340
340
470
130
'
Amount available for appropriation 340
340
470
130
Excess of resources over (under)
,
charges to appropriations 340
340
470
130
Fund balance, June 30, 2007 $ 9,218 $
9,218
$ 9,348
$ 130
'
t
108
'
1
1
1
1
1
1
1
1
1
i
1
1
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Poway Valley Senior Center Endowment Special Revenue Fund
For the year ended June 30, 2007
109
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 397,645 $
397,645
$ 397,645
$ -
Resources (inflows):
Use of money and property
15,770
15,770
21,055
5,285
Amount available for appropriation
15,770
15,770
21,055
51285
Charges to appropriations (outflows):
Capital outlay
-
-
-
-
Total charges to appropriations
-
-
-
-
Excess of resources over (under)
charges to appropriations
15,770
15,770
21,055
5,285
Fund balance, June 30, 2007
$ 413,415 $
413,415
$ 418,700
$ 5,285
109
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Old Poway Park Tree Special Revenue Fund
For the year ended June 30, 2007
110
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 5,330 $ 5,330
$ 5,330
$ _
Resources (inflows):
Use of money and property
- -
75
75
Amount available for appropriation
- -
75
75
Excess of resources over (under)
charges to appropriations
- -
75
75
Fund balance, June 30, 2007
$ 5,330 $ 5,330
$ 5,405
$ 75
110
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Poway Public Arts Center Special Revenue Fund
For the year ended June 30, 2007
111
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 117,129 $
-
$ 117,129
$ (117,129)
Resources (inflows):
Use of money and property
6,910
6,910
5,337
(1,573)
Amount available for appropriation
6,910
6,910
5,337
(1,573)
Charges to appropriations (outflows):
Capital outlay
-
95,167
35,748
59,419
Total charges to appropriations
-
95,167
35,748
59,419
Excess of resources over (under)
charges to appropriations
6,910
(88,257)
(30,411)
57,846
Fund balance, June 30, 2007
$ 124,039 $
(88,257)
$ 86,718
$ (59,283)
111
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Kumeyaay Endowment Special Revenue Fund
For the year ended June 30, 2007
,
'
Variance with
'
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
'
Fund balance, July 1, 2006 $ 30,658 $
30,658
$ 30,658
$ -
Resources (inflows):
Use of money and property 860
860
1,800
940
Other -
-
22,197
22,197
Transfers in -
-
12,625
12,625
Amount available for appropriation 860
860
36,622
35,762
'
Charges to appropriations (outflows):
Capital outlay -
46,624
21,783
24,841
'
Total charges to appropriations -
46,624
21,783
24,841
Excess of resources over (under)
charges to appropriations 860
(45,764)
14,839
60,603
Fund balance, June 30, 2007 $ 31,518 $
(15,106)
$ 45,497
$ 60,603
112
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Poway Fine Arts Center Special Revenue Fund
For the year ended June 30, 2007
113
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 2,681 $ 2,681
$ 2,681 $
-
Resources (inflows):
Use of money and property
- -
143
143
Amount available for appropriation
- -
143
143
Excess of resources over (under)
charges to appropriations
- -
143
143
Fund balance, June 30, 2007
$ 2,681 $ 2,681
$ 2,824 $
143
113
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Senior Volunteer Patrol Special Revenue Fund
For the year ended June 30, 2007
Variance with
'
Final Budget
Budgeted Amounts
Actual
Positive/
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006 $ - $
- $ -
$ -
Resources (inflows):
Other revenue -
- 10,198
10,198
Transfers in -
- 5,000
5,000
Amount available for appropriation -
- 15,198
15,198
,
Charges to appropriations (outflows):
Capital outlay -
- 7,634
(7,634)
Total charges to appropriations -
- 7,634
(7,634)
Excess of resources over (under)
charges to appropriations -
- 7,564
22,832
'
Fund balance, June 30, 2007 $ - $
- $ 7,564
$ 22,832
r
114
'
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Mary Patricia Ross Trust Permanent Fund
For the year ended June 30, 2007
Fund balance, July 1, 2006
Resources (inflows):
Use of money and property
Amount available for appropriation
Excess of resources over (under)
charges to appropriations
Fund balance, June 30, 2007
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
$ 75,655 $ 75,655 $ 75,655 $
2,900
2,900
2,900
2,900
4,006
1,106
4,006 1,106
2,900
2,900
4,006
1,106
78,555 $
78,555 $
79,661 $
1,106
115
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Library Permanent Fund
For the year ended June 30, 2007
,
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
'
Original Final
Amounts
(Negative)
Fund balance, July 1, 2006
$ 862,246 $
862,246
$ 862,246
$ -
Resources (inflows):
Use of money and property
34,380
34,380
45,667
11,287
Amount available for appropriation
34,380
34,380
45,667
11,287
Charges to appropriations (outflows):
Transfers out
30,950
30,950
30,151
799
Total charges to appropriations
30,950
30,950
30,151
799
Excess of resources over (under)
charges to appropriations
3,430
3,430
15,516
12,086
,
Fund balance, June 30, 2007
$ 865,676 $
865,676
$ 877,762
$ 12,086
116
'
City of Poway
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
City Debt Service Fund
For the year ended June 30, 2007
Fund balance, July 1, 2006
Resources (inflows):
Use of money and property
Transfers in
Amount available for appropriation
Charges to appropriations (outflows):
Debt service:
Principal
Interest and fiscal charges
Transfers out
Total charges to appropriations
Excess of resources over (under)
charges to appropriations
Fund balance, June 30, 2007
117
Variance with
Final Budget
Budgeted Amounts
Actual
Positive/
Original
Final
Amounts
(Negative)
$ 6,741,053 $
6,741,053
$ 6,741,053
$ -
983,760
983,760
1,052,553
68,793
1,079,200
1,079,200
1,042,137
(37,063)
2,062,960
2,062,960
2,094,690
31,730
730,000
730,000
730,000
-
1,131,680
1,131,680
1,127,733
3,947
-
1,985,680
1,985,678
2
1,861,680
3,847,360
3,843,411
3,949
201,280
(1,784,400)
(1,748,721)
35,679
$ 6,942,333 $
4,956,653
$ 4,992,332
$ 35,679
117
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118
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INTERNAL SERVICE FUNDS
1
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.
1
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1
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a
1 119
City of Poway
Statement of Net Assets
Internal Service Funds - Vehicle Maintenance Fund
June 30, 2007
ASSETS
Current assets:
Cash and investments
$ 4,595,343
Total cuff entassets
4,595,343
Total assets
4,595,343
LIABILITIES
Current liabilities:
Accounts payable
25,216
Compensated absences
35,401
Total current liabilities
60,617
Total liabilities
60,617
NET ASSETS
Unrestricted
4,534,726
Total net assets
$ 4,534,726
1
1
1
1
120
'
City of Poway
Statement of Activities and Changes in Net Assets
Internal Service Fund - Vehicle Maintenance Fund
For the year ended June 30, 2007
OPERATING REVENUES:
Charges for services
Other
Total operating revenues
OPERATING EXPENSES:
Personnel services
Maintenance and operations
Total operating expenses
OPERATING INCOME (LOSS)
NONOPERATING REVENUES:
Interest revenue
Total nonoperating revenues
INCOME (LOSS) BEFORE TRANSFERS
TRANSFERS:
Transfers in
Transfers out
Total transfers
Changes in net assets
NET ASSETS:
Beginning of year, as restated (Note 16)
End of year
121
$ 2,193,310
4,695
2,198,005
330,599
605,336
935,935
1,262,070
198,449
198,449
1,460,519
(920,291)
(920,291)
540,228
3,994,498
$ 4,534,726
City of Poway
Statement of Cash Flows
Internal Service Fund - Vehicle Maintenance Fund
For the year ended June 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash receipts from users
Cash payments to employees for services
Cash payments to suppliers of goods or services
Net cash provided (used) by operating activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers out
Net cash provided (used) by noncapital financing activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received
Net cash provided (used) by capital and related financing activities
Net increase in cash and cash equivalents
CASH AND CASH EQUIVALENTS:
Beginning of year
End of year
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating income
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Changes in operating assets and liabilities:
Accounts payable
Compensated absences
Total adjustments
Net cash provided (used) by operating activities
122
$ 2,198,005
(327,334)
(723,089)
1,147,582
(920,291)
(920,291)
198,449
198,449
425,740
4,169,603
$ 4,595,343
$ 1,262,070
(117,753)
3,265
(114,488)
$ 1,147,582
11
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t
FIDUCIARY FUNDS
AGENCY FUNDS
The agency funds are used to account for assets held by the City as an agent. Agency funds include the
following:
Developer Deposits Fund - Used to account for the collection and payments of development deposits from
and on behalf of the collective and individual developers.
South Poway CFD No. 1 Bond Deposits Fund - Used to account for debt service payments CFD No. 1 Bond
Deposits collected through property tax assessments remitted to fiscal agent - trustee for payment on bonds.
Parkway Business Center 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 Roads 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. 01 -1 Bond Deposits Fund - Used to account for debt service payments AD No.
01 -1 Bond Deposits collected through property tax assessments remitted to fiscal agent - trustee for payment
�.T, STITiT_R3
123
City of Poway
Combining Statement of Fiduciary Net Assets
All Agency Funds
June 30, 2007
ASSETS
Cash and investments
Receivables:
Taxes
Accounts
Interest
Cash and investments with fiscal agents
Total assets
LIABILITIES
Accounts payable
Deposits
Due to bondholders
Advances from City of Poway
Total liabilities
124
South
Parkway
High
Old Coach
Poway
Business
Valley
Water
CFD No.1
Center
Road
Line
Developer
Bond
CFD No. 88 -1
AD No. 96 -1
AD No. 01 -1
Total
Deposits
Deposits
Bond Deposits
Bond Deposits
Bond Deposits
Agency
Fund
Fund
Fund
Fund
Fund
Funds
$
3,734,151
$
1,377,530
$ 3,138,496
$ 53,409
$ 55,591
$
8,359,177
-
21,757
970
1,140
8
23,875
-
1,106,268
-
-
1,106,268
57,296
84,163
203
141,662
-
1,594,772
3,678,244
54,827
-
5,327,843
$
3,734,151
$
3,051,355
$ 8,008,141
$ 109,579
$ 55,599
$
14,958,825
$
78,407
$
-
$ 31,932
$ 4,235
$ -
$
114,574
3,655,744
-
-
-
-
3,655,744
-
3,051,355
6,869,941
105,344
55,599
10,082,239
-
-
1,106,268
-
-
1,106,268
$
3,734,151
$
3,051,355
$ 8,008,141
$ 109,579
$ 55,599
$
14,958,825
124
City of Poway
Combining Statement of Changes in Assets and Liabilities
All Agency Funds
For the year ended June 30, 2007
(Continued)
125
Net Changes in
Balance
Assets and
Balance
July 1, 2006
Liabilities
June 30, 2007
Developer Deposits Fund
Assets:
Cash and investments
$
3,562,156
$
171,995
$
3,734,151
Total assets
$
3,562,156
$
171,995
$
3,734,151
Liabilities:
Accounts payable
$
3,753
$
74,654
$
78,407
Deposits
3,558,403
97,341
3,655,744
Total liabilities
$
3,562,156
$
171,995
$
3,734,151
South Poway CFD No.1
Bond Deposits Fund
Assets:
Cash and investments
$
1,396,958
$
(19,428)
$
1,377,530
Taxes receivable
5,989
15,768
21,757
Interest receivable
5,231
52,065
57,296
Cash and investments with fiscal agent
1,543,521
51,251
1,594,772
Total assets
$
2,951,699
$
99,656
$
3,051,355
Liabilities:
Accounts payable
$
-
$
_
$
_
Due to bondholders
2,951,699
99,656
3,051,355
Total liabilities
$
2,951,699
$
99,656
$
3,051,355
Parkway Business Center
CFD No. 88-1 Bond Deposits Fund
Assets:
Cash and investments
$
2,985,269
$
153,227
$
3,138,496
Taxes receivable
-
970
970
Accounts receivable
1,106,268
-
1,106,268
Interest receivable
84,137
26
84,163
Cash and investments with fiscal agent
3,676,441
1,803
3,678,244
Total assets
$
7,852,115
$
156,026
$
8,008,141
Liabilities:
Accounts payable
$
12,706
$
19,226
$
31,932
Due to bondholders
6,733,141
136,800
6,869,941
Advances from City of Poway
1,106,268
-
1,106,268
Total liabilities
$
7,852,115
$
156,026
$
8,008,141
(Continued)
125
City of Poway
Combining Statement of Changes in Assets and Liabilities
All Agency Funds, Continued
For the year ended June 30, 2007
j
,
Net Changes in
,
Balance
Assets and
Balance
High Valley Roads
July 1, 2006
Liabilities
June 30, 2007
AD No. 96-1 Bond Deposits Fund
Assets:
'
Cash and investments
$
47,064
$
6,345
$
53,409
Taxes receivable
527
613
1,140
Interest receivable
196
7
203
Cash and investments with fiscal agents
54,660
167
54,827
'
Total assets
$
102,447
$
7,132
$
109,579
Liabilities:
Accounts payable
$
4,235
$
-
$
4,235
,
Due to bondholders
98,212
7,132
105,344
Total liabilities
$
102,447
$
7,132
$
109,579
,
Old Coach Waterline
AD No. 2001 -1 Bond Deposits Fund
Assets:
'
Cash and investments
$
55,480
$
111
$
55,591
Taxes receivable
_
8
8
Total assets
$
55,480
$
119
$
55,599
'
Liabilities:
Due to bondholders
$
55,480
$
119
$
55,599
Total liabilities
$
55,480
$
119
$
55,599
All Agency Funds
Assets:
Cash and investments
$
8,046,927
$
312,250
$
8,359,177
Taxes receivable
6,516
17,359
23,875
Accounts receivable
1,106,268
-
1,106,268
'
Interest receivable
89,564
52,098
141,662
Cash and investments with fiscal agents
5,274,622
53,221
5,327,843
Total assets
$
14,523,897
$
434,928
$
14,958,825
,
Liabilities:
Accounts payable
$
20,694
$
93,880
$
114,574
Deposits
3,558,403
97,341
3,655,744
,
Due to bondholders
9,838,532
243,707
10,082,239
Advances from City of Poway
1,106,268
-
1,106,268
Total liabilities
$
14,523,897
$
434,928
$
14,958,825
'
(Concluded)
'
126
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.
' Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
127
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.
127
City of Poway
Net Assets by Component,
Current and Prior Year
(accrual basis of accounting)
YearEnded June 30,
2007
Governmental activities
Invested in capital assets, net of related debt $ 21,675,540
Restricted 99,518,581
Unrestricted - as restated (70,862,504)
Total governmental activities net assets 50,331,617
Business -type activities
Invested in capital assets, net of related debt 35,055,052
Restricted 283,938
Unrestricted 30,112,939
Total business -type activities net assets 65,451,929
Primary government
Invested in capital assets, net of related debt 56,730,592
Restricted 99,802,519
Unrestricted (40,749,565)
Total primary government net assets 115,783,546
Note: The city began to report accrual information when it implemented GASB Statement 34 in
fiscal year 2003. The City will implemente the retroactive reporting of infrastructure in fiscal year 2007.
The City is reporting its ten year history with the implentation of GASB 44 in fiscal year 2006.
128
YearEnded June 30,
2006
$ 16,728,005
98,416,094
(78,799,982)
36,344,117
36,472,213
283,534
25,587,312
62,343,059
53,200,218
98,699,628
(53,212,670)
98,687,176
City of Poway
Changes in Net Assets for Governmental Activities
Current and Prior Year
(accrual basis of accounting)
129
Year Ended June 30,
2006
$ 15,689,334
17,313,198
13,023,698
19,510,067
16,986,839
82,523,136
173,484
2,104,975
3,512,623
3,908,179
6,198,885
3,088,436
18,986,582
(63,536,554)
45,725,853
13,918,879
392,240
190,097
1,399,524
609,982
62,236,575
8,508,647
2,894,418
(11,262)
460,810
74,089,188
$ 10,552,634
Year Ended June 30,
2007
Functional expenses:
General Government
$ 14,559,177
Public Safety
18,121,264
Public Works
9,100,534
Development Services
4,978,301
Community Services
16,964,745
Interest and fiscal charges
19,697,044
Total functional expenses
83,421,065
Program revenues:
Charges for services:
General Government
176,938
Public Safety
2,181,971
Public Works
4,011,644
Development Services
1,451,489
Community Services
2,894,396
Interest and fiscal charges
-
Operating grants and contributions
6,103,045
Capital grants and contributions
2,940,273
Total program revenues
19,759,756
Total governmental activities
(63,661,309)
General revenues:
Taxes:
Property taxes
48,048,249
Sales taxes
13,032,518
Motor vehicle license tax
273,727
Transient occupancy tax
202,767
Franchise taxes
1,588,677
Other Taxes
596,868
Total taxes
63,742,806
Investment earnings
10,569,205
Miscellaneous
3,349,606
Sale of capital assets
-
Transfers
(12,808)
Total general revenues and transfers
77,648,809
Change in Net Assets
$ 13,987,500
Note: The city began to report accrual information when it implemented GASB Statement 34 in
fiscal year 2003. The City will implemente the retroactive reporting of infrastructure in fiscal year 2007.
The City is reporting its ten year history with the implentation of GASB 44 in fiscal year 2006.
129
Year Ended June 30,
2006
$ 15,689,334
17,313,198
13,023,698
19,510,067
16,986,839
82,523,136
173,484
2,104,975
3,512,623
3,908,179
6,198,885
3,088,436
18,986,582
(63,536,554)
45,725,853
13,918,879
392,240
190,097
1,399,524
609,982
62,236,575
8,508,647
2,894,418
(11,262)
460,810
74,089,188
$ 10,552,634
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130
I
1
City of Poway
Changes in Net Assets for Business -Type Activities
Current and Prior Year
(accmal basis of accounting)
Note: The City is reporting its ten year history with the implentation of GASB 44 in fiscal year 2006
131
YearEnded June 30,
YearEnded June 30,
2007
2006
Functional expenses:
Water
$ 17,371,707
$ 16,009,205
Sewer
7,970,848
8,730,098
Total functional expenses
25,342,555
24,739,303
Program revenues:
Charges for services:
Water
16,637,705
15,181,771
Sewer
7,943,890
7,479,071
Captial grants and contributions
63,604
66,840
Total program revenues
24,645,199
22,727,682
Total business -type activities
(697,356)
(2,011,621)
General revenues:
Property taxes
-
309,296
Investment earnings
3,038,852
1,157,563
Miscellaneous
754,566
738,337
Sale of capital assets
-
Transfers
12,808
(460,810)
Total general revenues and transfers
3,806,226
1,744,386
Change in Net Assets
$ 3,108,870
$ (267,235)
Note: The City is reporting its ten year history with the implentation of GASB 44 in fiscal year 2006
131
City of Poway
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
General Fund
Reserved
Unreserved:
Designated
Undesignated
Total General Fund
All Other Governmental Funds
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
Total Fund Balance
June 30,
2007 2006 2005 2004 2003
$ 7,538,564 $ 7,389,245 7,885,013 7,581,391 6,907,055
30,375,251 27,539,942 25,115,075 21,827,076 12,325,729
- - - - 8,556,645
$ 37,913,815 $
34,929,187
33,000,088
29,408,467
27,789,429
$ 43,663,739 $
39,477,985
35,478,892
44,761,898
51,282,639
-
7,760,635
8,816,961
8,175,996
8,613,436
43,037,658
6,014,938
7,795,241
7,804,756
6,898,403
5,278,620
37,769,191
42,511,597
55,342,242
44,896,736
$ 91,980,017 $ 91,022,749 94,602,691 116,084,892 111,691,214
$ 129,893,832 $ 125,951,936 127,602,779 145,493,359 139,480,643
132
June 30,
2002 2001 2000 1999 1998
16,683,177 17,681,990 16,968,010 17,772,142 17,676,885
21,258,117 20,173,503 16,633,194 11,888,788 10,082,843
37,941,294
37,855,493
33,601,204
29,660,930
27,759,728
49,060,668
38,197,024
43,568,860
35,436,059
26,793,170
8,133,105
7,370,213
6,093,702
6,922,837
7,281,067
-
-
-
-
12,638
-
-
198
301
30,866
5,207,265
4,571,924
4,735,846
3,496,380
3,332,972
60,711,652
13,366,748
14,054,971
11,325,831
9,953,945
123,112,690
63,505,909
68,453,577
57,181,408
47,404,658
161,053,984
101,361,402
102,054,781
86,842,338
75,164,386
133
City of Poway
Changes In Fund Balances, Governmental Funds
Last Ten Fiscal Years
Onodified accrual basis of accounting)
Revenues
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Developer Fees
Assessment levied
Other revenues
Total revenues
2007
2006
2005
2004
$ 63,810,241 $
62,042,614 $
55,406,112 $
47,368,683
330,755
296,935
288,716
296,984
4,336,767
5,796,558
4,637,517
5,445,572
4,419,664
7,557,159
7,607,467
7,449,929
720,949
732,633
273,322
251,834
16,120,443
13,459,180
13,535,451
8,152,189
4,509,741
489,210
536,404
1,243,389
1,868,567
1,845,859
1,835,519
1,816,524
1,389,762
1,157,139
2,525,614
1,473,492
97,506,889 93,377,287 86,646,122 73,498,596
Expenditures
Current:
General government
9,614,109
9,552,247
11,114,009
10,668,972
Public safety
17,897,811
16,563,059
17,304,746
15,588,991
Public works
6,556,796
11,338,373
4,865,184
3,966,484
Development services
5,028,405
Community services
11,877,425
11,884,718
10,671,636
7,569,324
Capital outlay
14,205,962
18,802,010
31,981,651
31,743,517
Debt service:
Principal
6,470,000
5,875,000
6,706,720
7,875,000
Interest and fiscal charges
17,896,630
17,101,983
16,482,351
15,477,533
Debt Issuance Costs
-
-
255,302
2,765,590
Tax shift
4,889,025
3,831,350
2,549,564
1,357,911
Tax increment reimbursements
-
1,674,851
2,380,488
29,865,057
Total expenditures
94,436,163
96,623,591
104,311,651
126,878,379
Excess of revenues over (under) expenditures
3,070,726
(3,246,304)
(17,665,529)
(53,379,783)
Other Financing Sources (Uses)
Proceeds from issuance of debt
148,273
149,563
8,499,883
156,029,702
Refunding bond activity -net
(184,586)
-
(9,301,120)
(99,094,350)
Proceeds from sale of capital assets
-
-
232,168
1,110,603
Transfers in (out) net
907,483
1,445,898
506,234
1,346,544
Total other financing sources
871,170
1,595,461
(62,835)
59,392,499
Net change in fund balance
$ 3,941,896 $
(1,650,843) $
(17,728,364) $
6,012,716
Debt service as a percentage of noncapital expenditures
30.4%
29.5%
32.1%
24.5%
Note: The City implemented GAS13 34 beginning with the fiscal year ended June 30, 2003. Prior to that time, interfund loans where
treated as "Other Financing Sources" and classified as 'Proceeds from issuance of debt" in the fund receiving the loan.
134
Year Ended June 30,
2003
2002
2001
2000
1999
1998
$ 43,439,827 $
39,575,352 $
35,840,942 $
31,118,687 $
26,047,002 $
23,021,049
295,471
305,685
309,652
306,688
262,482
257,818
8,313,394
6,183,143
6,026,700
5,139,707
4,678,887
8,837,630
8,452,248
8,192,172
7,851,665
7,854,457
8,635,292
8,970,489
176,291
202,598
239,369
253,586
210,762
86,273
11,924,593
12,584,448
10,735,796
8,372,411
7,738,120
8,233,422
1,208,015
591,230
855,799
2,589,766
2,152,267
1,703,672
1,825,528
1,754,096
1,750,613
1,597,188
1,572,354
1,614,228
2,007,778
3,000,545
957,898
1,724,643
967,149
457,972
77,643,145
72,389,269
64,568,434
58,957,133
52,264,315
53,182,553
10,178,866
8,918,157
8,407,234
7,486,657
7,704,342
7,758,604
13,866,595
12,905,831
11,324,004
10,900,368
9,958,312
9,333,832
4,246,773
3,817,814
3,702,963
3,552,863
3,343,102
6,035,135
7,373,691
6,579,853
6,666,018
5,805,605
5,266,558
4,921,563
32,096,700
22,972,729
17,733,164
9,524,359
8,213,245
20,385,782
14,192,769
9,288,293
6,821,853
22,714,960
6,072,045
6,384,949
18,455,993
15,095,386
11,805,570
12,174,817
13,082,746
13,135,890
-
1,708,370
7,790
1,119,531
185,166
22,413
780,349
-
-
_
_
-
5,678,795
4,928,042
6,176,365
5,495,266
234,601
76,118
106,870,531
86,214,475
72,644,961
78,774,426
54,060,117
68,054,286
(29,227,386)
(13,825,206)
(8,076,527)
(19,817,293)
(1,795,802)
(14,871,733)
17,856,218
80,781,467
5,975,575
43,763,276
12,441,792
5,865,531
-
(8,005,801)
-
(9,681,371)
-
-
14,600,000
-
-
-
_
_
658,650
640,108
1,388,450
963,286
431,005
794,906
33,114,868
73,415,774
7,364,025
35,045,191
12,872,797
6,660,437
$ 3,887,482 $
59,590,568 $
(712,502) $
15,227,898 $
11,076,995 $
(8,211,296)
43.7%
38.6%
33.9%
50.4%
41.8%
41.0%
135
City of Poway
Assessed Value of Taxable Property
Last Ten Fiscal Years
Fiscal Year
Ended
June 30,
Land
1998
$ 1,276,839,000
1999
1,369,297,157
2000
1,519,814,478
2001
1,717,864,538
2002
1,921,113,526
2003
2,128,867,560
2004
2,338,197,043
2005
2,611,610,220
2006
2,991,468,898
2007
3,230,084,121
Improvments
$ 1,920,555,000
2,065,957,264
2,346,163,842
2,606,932,440
2,857,873,316
3,119,821,315
3,315,524,886
3,535,334,922
3,840,250,821
4,191,380,246
Assessed Value
Personal
$ 57,450,000
90,395,009
106,169,614
139,125,104
162,481,953
200,414,378
190,767,595
187,042,681
245,308,882
278,291,264
Total
3,254,844,000
3,525,649,430
3,972,147,934
4,463,922,082
4,941,468,795
5,449,103,253
5,844,489,524
6,333,987,823
7,077,028,601
7,699,755,631
Net Taxable
Exemptions Value
$ (113,173,000)
(124,791,527)
(131,138,106)
(132,332,496)
(118,250,152)
(145,945,106)
(171,519,517)
(214,007,737)
(217,368,560)
(229,216,072)
$ 3,141,671,000
3,400,857,903
3,841,009,828
4,331,589,586
4,823,218,643
5,303,158,147
5,672,970,007
6,119,980,086
6,859,660,041
7,470,539,559
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.
Source: San Diego County Assessors Office
136
Change
Estimated
Total
From
Tax
Direct
Prior Year
Revenues
Tax Rate
1.23%
4,244,223
0.211%
8.25%
4,477,690
0.211%
12.94%
4,831,463
0.211%
12.77%
5,155,309
0.211%
11.35%
5,616,359
0.211%
9.95%
5,954,586
0.211/
6.97%
6,399,317
0.211%
7.88%
6,895,981
0.211%
12.09%
7,615,898
0.211%
8.91%
8,358,741
0.211%
137
City of Poway
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
In 1978, California voters passed Proposition 13 which resulted in dramatic tax reform as it relates to property tax. Proposition 13 set the
property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. Because
the rate is fixed at 1.00%, the rate for each taxing agency shares within the 1.00% does not change materially from year -to -year. Rates over the
one percent are for voter approved bond indebtedness
Source: San Diego County Assessors Office
138
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
1998
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
1999
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
2000
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
2001
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
2002
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
2003
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
2004
0.211%
0.389%
0167%
0.118%
0.067%
0.047%
1.000%
2005
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
2006
0.211%
0.389%
0.167%
0.118%
0.067%
0.047%
1.000%
2007
0.211 7.
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
1998
1.000%
0.021%
0.000%
0.012%
1.033%
1999
1.000%
0.018%
0.000%
0.010%
1.028%
2000
1.000%
0.016%
0.000%
0.010%
1.026%
2001
1.000%
0.013%
0.000%
0.009%
1.022%
2002
1.000%
0.010%
0.000%
0.009%
1.019%
2003
1.000%
0.010%
0.000%
0.007%
1.018%
2004
1.000%
0.000%
0.052%
0.007%
1.059%
2005
1.000%
0.007%
0.047%
0.006%
1.060%
2006
1.000%
0.007%
0.043%
0.023%
1.072%
2007
1.000%
0.000%
0.046%
0.022%
1.069%
In 1978, California voters passed Proposition 13 which resulted in dramatic tax reform as it relates to property tax. Proposition 13 set the
property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. Because
the rate is fixed at 1.00%, the rate for each taxing agency shares within the 1.00% does not change materially from year -to -year. Rates over the
one percent are for voter approved bond indebtedness
Source: San Diego County Assessors Office
138
City of Poway
Principal Secured Property Tax Payers
Current Year and Nine Years Ago
Source: San Diego County Assessors Office
139
2007
1998
Taxable
% of Total
Taxable
% of Total
Assessed
City Assessed
Assessed
City Assessed
Secured Value
Rank
Secured Value
Secured Value
Rank
Secured Value
Slough Poway
$62,504,760
1
0.85%
$
_
Toppan Optical Products
56,801,563
2
0.78%
_
Sysco Food Services
38,685,167
3
0.53%
_
Prudential Insurance Co.
38,172,453
4
0.52%
-
Costco Wholesale Corporation
32,584,784
5
0.45%
-
_
Government Employees Insurance Company
28,975,361
6
0.40%
_
_
Resmed Corporation
28,106,978
7
0.38%
_
PCF Funding Inc
24,268,914
8
0.33%
-
Poway City SLCP
24,117,840
9
0.33%
_
Cohu Inc.
23,848,395
10
0.33%
-
Burnham Pacific Properties Inc.
-
-
23,370,000
1
0.74%
Twin Peaks Real Estate Corp
-
-
21,404,396
2
0.67%
JMP Advisors Inc.
15,694,725
3
0.49%
Braemar Properties LP
-
-
12,995,000
4
0.41%
Stoneridge Country Club Corp.
-
-
11,428,979
5
0.36%
Beecroft, Joseph N. & Lois M.
-
-
11,050,000
6
0.35%
Gateway Medical Building -JV
-
-
10,550,000
7
0.33%
Shea Homes Ltd Partnership
-
9,354,040
8
0.29%
Retail Trust III
-
-
8,334,708
9
0.26%
Tech Business Center LLC
-
-
7,696,604
10
0.24%
$ 358,066,215
789%
$ 131,878,452
4.15%
Source: San Diego County Assessors Office
139
City of Poway
Assessed Value of Taxable Property
Redevelopment Tax Increment Property Tax
Last Ten Fiscal Years
Fiscal Year
Assessed Value
Ended
Personal
Base Year
June 30,
Land
Improvments
Property
Total
Exemptions
Values
1998
$ 521,664,129
$ 777,784,811
$ 51,304,337
$ 1,350,753,277
$ (15,059,225)
$ (203,238,909)
1999
554,270,977
874,560,286
70,429,252
1,499,260,515
(14,903,002)
(203,238,909)
2000
643,337,814
1,052,147,828
63,156,922
1,758,642,564
(18,560,142)
(186,287,869)
2001
756,883,325
1,224,291,373
96,599,318
2,077,774,016
(18,937,627)
(186,287,869)
2002
874,897,982
1,373,748,814
116,806,955
2,365,453,751
(14,732,381)
(186,287,869)
2003
984,697,076
1,545,545,528
167,042,477
2,697,285,081
(26,741,073)
(186,287,869)
2004
1,069,060,617
1,644,074,499
157,368,510
2,870,503,626
(40,683,262)
(186,287,869)
2005
1,190,799,171
1,756,732,835
145,512,135
3,093,044,141
(51,334,639)
(186,287,869)
2006
1,366,315,823
1,923,849,526
205,148,011
3,495,313,360
(54,732,751)
(186,287,869)
2007
1,455,401,981
2,087,221,327
219,066,696
3,761,690,004
(61,891,980)
(186,287,869)
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.
Source: San Diego County Assessors Office
140
141
Change
Estimated
Total
Net Taxable
From
Tax
Direct
Value
Prior Year
Revenues
Tax Rate
1,132,455,143
3.39%
$ 11,934,964
1.054%
1,281,118,604
13.13%
13,227,036
1.032%
1,553,794,553
21.28%
15,887,358
1.022%
1,872,548,520
20.51%
19,213,050
1.026%
2,164,433,501
15.59%
22,171,626
1.024%
2,484,256,139
14.78%
25,377,236
1.022%
2,643,532,495
6.41%
26,732,816
1.011%
2,855,421,633
8.02%
29,031,365
1.017%
3,254,292,740
13.97%
33,064,572
1.016%
3,513,510,155
7.97%
35,445,525
1.009/
141
City of Poway
Redevelopment Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
Ended
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Within The Year of Levy
Current
Current
Secured
Secured
Tax Levy
Collected
$ 11,696,173
$ 11,718,834
13,159,421
13,011,923
15, 942, 224
15, 616, 458
19,154,296
18,918,099
22,075,411
21,850,407
25,285,115
25,033,065
26,637,504
26,397,127
28,914,339
28,583,331
32,938,833
32,397,596
35,319,838
34,426,834
Source: San Diego County Assessors Office
142
Percent
of Levy
Collected
100.19% $
98.88%
97.96%
98.77%
98.98%
99.00%
99.10%
98.86%
98.36%
97.47%
Collections
From Prior
Years'
Total
Levies
Collections
446,551
$ 12,165,385
336,587
13,348,510
298,192
15,914,649
347,741
19,265,840
370,732
22,221,139
383,654
25,416,719
419,490
26,816,617
387,359
28,970,690
494,520
32,892,116
629,698
35,056,532
City of Poway
General Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
Ended
June 30,
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Within The Year of Levy
Current
Current
Secured
Secured
Tax Levy
Collected
$ 13,052,091
$ 12,874,241
13,302,138
13,088,362
13,317,472
13,122,841
13,683,327
13,541,508
14,105,425
13,958,405
14,461,370
14,250,473
14,539,338
14,432,902
15,074,377
14,925,461
15, 924, 752
15, 669,141
16,494,681
16,171,714
Source: San Diego County Assessors Office
143
Percent
of Levy
Collected
Collections
From Prior
Years'
Levies
Total
98.64% $
225,298 $
13,099,539
98.39%
261,592
13,349,954
98.54%
269,313
13,392,154
98.96%
208,718
13,750,226
98.96%
173,832
14,132,237
98.54%
213,119
14,463,592
9927%
250,896
14,683,798
99.01%
124,804
15,050,265
98.39%
153,982
15,823,123
98.04%
269,763
16,441,477
City of Poway
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
Fiscal Year
Tax
Certificates
Obligation
Ended
Allocation
of
Capital
June 30,
Bonds
Participation
Leases
42,206
2,390,000
41,416
1998
$ 115,685,000
$ 55,810,000
$ 368,813 $
1999
113,670,000
55,000,000
330,213
2000
150,715,000
54,095,000
289,249
2001
148,375,000
53,075,000
245,775
2002
214,455,000
51,915,000
199,638
2003
211,895,000
58,740,000
150,674
2004
260,910,000
57,410,000
98,711
2005
256,350,000
55,395,000
43,565
2006
251,675,000
54,195,000
-
2007
247,395,000
52,810,000
-
Notes: Details regarding
the city's outstanding debt
can be found in the notes to the financial statements.
Source: City of Poway Finance Department
144
Loan
General
Payable
Obligation
44,279
$ 3,595,000
43,634
3,210,000
42,944
2,810,000
42,206
2,390,000
41,416
1,955,000
40,572
1,500,000
1,939,667
1,025,000
2,120,310
525,000
2,169,647
-
2,201,788
Business -type
Activities
145
Percentage
of Personal
Per
Income
Total
Revenue
Capital
Contract
Primary
Bonds
Leases
Payable
Government
$ 3,165,000 $
154,190
$ 5,407
$ 178,827,689
3,050,000
138,052
5,407
175,447,306
2,930,000
120,926
5,407
211,008,526
2,805,000
102,751
5,407
207,041,139
2,675,000
83,462
5,407
271,329,923
2,540,000
62,993
5,407
274,934,646
2,400,000
41,268
5,407
323,830,053
2,250,000
18,213
5,407
316,707,495
2,095,000
-
-
310,134,647
1,930,000
-
304,336,788
145
Percentage
of Personal
Per
Income
Capita
13.33%
$ 3,797
12.02%
3,634
13.05%
4,281
12.45%
4,218
15.74%
5,464
15.49%
5,517
16.85%
6,396
15.64%
6,250
14.77%
6,136
13.80%
5,987
r
City of Poway
Ratios of General Bonded Debt Outstanding
r
Last Ten Fiscal Years
i
Outstanding General
Bonded Debt
Fiscal Year Tax Percent of
,
Ended Allocation Assessed
Per
June 30, Bonds Value (a)
Capita
1998 $ 115,685,000
3.55% $
2,456
'
1999 113,670,000
3.22%
2,355
2000 150,715,000
3.79%
3,058
2001 148,375,000
3.32%
3,023
2002 214,455,000
4.34%
4,319
2003 211,895,000
189%
4,252
2004 260,910,000
4.46%
5,153
2005 256,350,000
4.05%
5,059
2006 251,675,000
3.56%
4,980
2007 247,395,000
3.21%
4,867
r
Notes:
Details regarding the city's outstanding debt can be found in the notes to the financial statements.
(a) Assessed value has been used because the actual value of taxable property is not readily
,
available in California.
Source: City of Poway Finance Department
r
r
r
r
r
r
r
146
r
I
City of Poway
Direct and Overlapping Debt
As of June 30, 2007
1
1
2006 -07 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed valuation:
$ 7,548,930,184
3,513,510,155
$ 4,035,420,029
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District
Poway Unified School District Facilities Improvement Dist No. 2002 -1
Palomar Community College District
Escondido Union High School District
San Pasqual Union High School District
Palomar Pomerado Hospital District
City of Poway Community Facilities District No. 88 -1
Poway Unified School District Community Improvement Dist No.1
City of Poway 1915 Act Bonds
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations
San Diego County Pension Obligations
San Diego County Superintendent of Schools General Fund Obligations
Palomar Community College District Certificates of Participation
Poway Unified School District Certificates of Participation
City of Poway Certificates of Participation
TOTAL OVERLAPPING GENERAL FUND DEBT
$ 1,793,180,416
TOTAL OVERLAPPING DEBT $ 2,690,165,385
Ratio to 2006 -07 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.18%
Ratios to Adjusted Assessed Valuation•
Combined Direct Debt ($52,810,000) 1.31%
Combined Total Debt 4.14%
Notes:
(a) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed
property values. Applicable percentages were estimated by determining the portion of another governmental unit's
taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.
(b) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds
and non - bonded capital lease obligations.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents
and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay
long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each
overlapping government.
Source: California Municipal Statistics, Inc.
1 147
� /2S,LUti.yStf
$ 167,266,753 (b)
Estimated Share
Debt
%
of Overlapping
Outstanding
Applicable (a)
Debt
$ 359,115,000
0.246%
$ 883,423
178,680,766
27.089%
48,402,833
160,000,000
5.529%
8,846,400
37,242,978
0.101%
37,615
1,221,351
2.598%
31,731
73,815,000
8.373%
6,180,530
24,070,000
100.000%
24,070,000
62,240,835
0.010%
6,224
599,039
100.000%
599,039
$ 896,984,969
$ 89,057,795
$ 351,215,000
1.277%
$ 4,485,016
1,343,747,916
1.277%
17,159,661
18,042,500
1.277%
230,403
8,065,000
5.529%
445,914
19,300,000
15.948%
3,077,964
52,810,000
100.000%
52,810,000
$ 1,793,180,416
TOTAL OVERLAPPING DEBT $ 2,690,165,385
Ratio to 2006 -07 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.18%
Ratios to Adjusted Assessed Valuation•
Combined Direct Debt ($52,810,000) 1.31%
Combined Total Debt 4.14%
Notes:
(a) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed
property values. Applicable percentages were estimated by determining the portion of another governmental unit's
taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.
(b) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds
and non - bonded capital lease obligations.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents
and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay
long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each
overlapping government.
Source: California Municipal Statistics, Inc.
1 147
� /2S,LUti.yStf
$ 167,266,753 (b)
City of Poway
Legal Debt Margin Information
Last Ten Fiscal Years
FISCAL YEAR
2005
2007
2006
Assessed valuation
$ 4,035,420,029 $
3,683,578,609 $
Conversion percentage
25%
25%
15%
Adjusted assessed valuation
1,008,855,007
920,894,652
Debt limit percentage
15%
15%
Debt limit
151,328,251
138,134,198
Total net debt applicable to limit:
General obligation bonds
-
-
2005
2004
3,341,441,046 $
3,106,118,400
25%
25%
835,360,262
776,529,600
15%
15%
125,304,039
116,479,440
243,728
491,401
Legal debt margin 0.00% 0.00% 0.19% 0.42%
The Government Code of the State of California provides for a legal debt limit of
15% of gross assessed valuation. However, this provision was enacted when
assessed valuation was based upon 25% of market value. Effective with the 1981 -82
fiscal year, each parcel is now assessed at 100% of market value (as of the most
recent change in ownership for that parcel). The computations shown above reflect
a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25% level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located
within the state.
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Source:
City of Poway Finance Department
San Diego County Assessors Office
148
FISCAL YEAR
2003
2002
2001
2000
1999
1998
$ 2,894,214,986 $
2,734,305,211 $
2,514,417,338 $
2,360,664,203 $
2,173,069,644 $
2,091,002,906
25%
25%
25%
25%
25%
25%
723,553,747
683,576,303
628,604,335
590,166,051
543,267,411
522,750,727
15%
15%
15%
15%
15%
15%
108,533,062
102,536,445
94,290,650
88,524,908
81,490,112
78,412,609
'
466,036
790,018
1,095,502
1,426,255
1,788,223
2,162,035
0.43%
0.77%
1.16%
1.61%
2.19%
2.76%
149
City of Poway
Pledged Revenue Coverage
Last Ten Fiscal Years
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Source: City of Poway Finance Department
150
Tax Allocation Bonds
Fiscal Year
Debt Service
Ended
Tax
June 30,
Increment
Principal
Interest
Total
Coverage
1998
$ 12,379,735
$ 1,210,000
$ 6,720,801 $
7,930,801
1.56
1999
14,199,118
2,015,000
6,641,386
8,656,386
1.64
2000
17,276,653
1,535,000
7,061,325
8,596,325
2.01
2001
20,881,799
2,340,000
8,334,392
10,674,392
1.96
2002
23,503,772
2,370,000
11,418,952
13,788,952
1.70
2003
26,247,819
2,560,000
11,571,940
14,131,940
1.86
2004
27,665,286
6,545,000
10,953,444
17,498,444
1.58
2005
30,428,470
4,560,000
13,740,175
18,300,175
1.66
2006
34,109,857
4,675,000
12,781,669
17,456,669
1.95
2007
36,011,865
5,085,000
12,328,271
17,413,271
2.07
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Source: City of Poway Finance Department
150
City of Poway
Demographic and Economic Statistics
Last Ten Calendar Years
Calendar
Year Population
Personal
Income
Per
Capita
Personal
Income
1998
47,098
1,341,822,020
1999
48,277
1,459,703,372
2000
49,287
1,616,761,461
2001
49,082
1,663,192,652
2002
49,658
1,724,076,102
2003
49,833
1,775,051,460
2004
50,632
1,922,243,880
2005
50,675
2,025,072,272
2006
50,542
2,099,739,722
2007
50,830
2,205,041,864
Source:
Population - State of California Department of Finance
Personal Income - State of
California Employment Development Department
Employment Information -
State of California Employment Development Department
151
28,490
30,236
32,803
33,886
34,719
35,620
37,965
39,962
41,544
43,381
Labor
Force
not available
not available
25,000
25,600
26,200
26,400
26,900
27,300
27,400
28,000
Unemployment
Rate
2.5%
2.1%
2.4%
2.4%
3.0%
3.2%
2.8%
2.5%
2.4%
2.7%
City of Poway
Principal Employers
Current Year and Prior Year
Employer
Geico Direct
Select Build
Delta Design, Inc.
Poway Unified School District
First American Credco
Pomerado Hospital
Sysco Food Services of SD
Hunter Douglas Fabrication Co.
Walmart
Neal Electric Corporation
2007 2006
HNR Framing
Disguise, Inc
Cor -O -Van
Digirad Corporation
Total 7,939
Total City Labor Force 28,000
Source:
City of Poway Economic Development Division -by employer
State of California Employment Development Department -total employment
Note:
Information on Principal Employers from nine years back is not available so
information from the year 2006 will be used for the comparison until 2016.
152
28.35%
Percent of
Number of
Total
Employees
Rank
Employment
1,800
1
6.43%
1,200
2
4.29%
1,200
3
4.29%
758
4
2.71%
750
5
2.68%
696
6
2.49%
530
7
1.89%
350
8
1.25%
350
9
1.25%
305
10
1.09%
HNR Framing
Disguise, Inc
Cor -O -Van
Digirad Corporation
Total 7,939
Total City Labor Force 28,000
Source:
City of Poway Economic Development Division -by employer
State of California Employment Development Department -total employment
Note:
Information on Principal Employers from nine years back is not available so
information from the year 2006 will be used for the comparison until 2016.
152
28.35%
2%
1,200 2
600 7
400 9
375 10
8,318
27,400
0.00%
0.00%
0.00%
4-38%
2.19%
1.46%
1.37%
30.36%
Percent of
Number of
Total
Employees
Rank
Employment
1,800
1
6.5 7%
0.0 0%
1,000
3
3.6 5%
758
5
2.7 7%
935
4
3.41
750
6
2.7 4%
500
8
1.8
2%
1,200 2
600 7
400 9
375 10
8,318
27,400
0.00%
0.00%
0.00%
4-38%
2.19%
1.46%
1.37%
30.36%
City of Poway
Full- time - Equivalent City Employees by Function
Last Three Fiscal Years
Function
2007
2006
2005
General government
38.00
38.00
40.00
Public Safety (a)
57.00
57.00
58.00
Public works
90.00
90.00
84.00
Redevelopment Services
10.00
10.00
11.00
Community Services
29.00
28.00
28.00
Development Services
37.00
37.00
36.00
261.00
260.00
257.00
Notes:
Amounts shown are the number of positions approved in each operating budget for the fiscal year
(a) Law enforcement services are provided through contract with the County of San Diego Sheriff.
Source: City of Poway Human Resources Division
153
City of Poway
Operating Indicators
Current Fiscal Year
Function
2007
Residential water customers
12,556
General government:
514
Business registrations issued
1,071
Vendor payments processed
10,562
Public Safety:
11,180
Arrests made
981
Fire emergency responses
3,460
Safety Inspections
4,024
Public works:
Building permits issued
2,740
Building inspections
11,264
Culture and recreation:
Performing arts center attendance
64,728
Library- number of volumes in collection
124,977
Library- number of volumes borrowed
492,501
Athletic field permts issued
124
Highways and streets:
Roads resurfaced in square feet
200,000
Roads slurry sealed in squar feet
5,000,000
Pot holes work orders
36
Water:
Residential water customers
12,556
Commercial water customers
514
Average daily consumption (million/ gallons)
13.83
Sewer:
Residential sewer customers
11,180
Commercial sewer customers
755
Average daily treatment (million/ gallons)
3.25
Source:
City of Poway Operating Departments
154
City of Poway
Capital Assets Statistics
Current Fiscal Year
Function 2007
Public Safety:
Number of fire stations
3
Number of sheriff stations
1
Public works:
Total number of streetlights
2,889
Signal controlled intersections
55
Health and welfare
Senior center facilities
1
Culture and recreation
Number of Libraries
1
Number of Performing Arts Centers
1
Number of Parks
18
Acres of developed parks
568
Number of reserves /preserves
2
Acres of reserves/ preserves
2,400
Miles of trails
82
Highways and streets
Miles of roadway
180
Water
Miles of water lines
253
Water storage capacity (billon /gallons)
1.11
Sewer
Miles of sewer lines 175
Miles of storm sewers 64
Source: City of Poway Operating Departments
155