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HomeMy WebLinkAbout4.7 FY 87-88 Financial Audit CITY OF DUBLIN 2 O �V� /� J AGENDA STATEMENT ` MEETING DATE: February 27, 1989 SUBJECT :June 30, 1988 Audit and Management letter. EXHIBITS ATTACHED une 30 , 1988 Audit and Management �V letter. RECOMMENDATION :Accept and file the audit, management ' letter and the Staff ' s responses to same. FINANCIAL STATEMENT :Attached items. DESCRIPTION: The City' s Audit report for. the period ending June 30, 1988 is attached as a part of this agenda statement. The City received an unqualified audit for the year ended June 30, 1988. The auditor states that the financial statements "present fairly the financial position of the City of Dublin. . .and the results of operations and the changes in financial position. . . " The City Council' s audit subcommittee met with the City' s auditor and subsequently met with the City staff to discuss the audit and the auditor ' s management letter. The concerns and comments discussed at the meetings of the Committee are incorporated herein. The management letter contains items which the auditor felt needed to be considered by the Staff and City Council. The balance of this agenda statement expresses the status of the items which the auditor enumerated in his management letter: 1. The City Staff brought to the attention of the auditor the newly, computerized, financial reports being generated in the Finance Department. The auditor expressed a desire to incorporate these reports with the final audited reports at year end. A meeting is planned between the Auditor and the Finance Director later in the year to review the interim financial reports in light of new Government Accounting Standards Board statements. 2. During the current fiscal year the City began to budget the Capital Improvements within the funding source. This process will conclude with the closing of the numerous -CIP funds. At the end of this fiscal year the various CIP funds will be closed. 3 . The conclusion of the steps identified in response to item#2 above will automatically result in the elimination of the various "due to" and "due from" accounts in the Capital Improvement Funds. 4. The audit committee disagreed with the auditor in this matter. It was felt that the monthly capitalization of the interest earnings which are held and used by the Trustee (Bank of California) to pay off the debt service can actually lead to a less clear understanding of the amounts of money actually disbursed for the construction of the Civic Center during the fiscal year. The committee and staff agreed that it would prefer to continue to capitalize interest at the end of the year. So long as the Council agrees and understands why this is being done the result will not have negative affect on the financial information being presented to Council any more than for other expenditure data which is allocated to specific accounts at year end. Yte Q. . C � 5 . The City obtained an accounts receivable software program, which is designed to produce automatic monthly billings of fees due to the City. Staff intends to activate this program as soon as time allows. The current projection is to make this software package active in fiscal year 89-90 . Once activated all billings will be generated by the Finance Department based upon internal documents received from all appropriate departments. 6. The Committee recommended that a resolution be drafted for the Council' s review and approval setting up the guidelines for allocating interest income. These guidelines will, for example, include limits for allocating interest to funds that owe money to the General Fund or have an average monthly cash balance of less than $100,000. The resolution will be presented at a subsequent Council Meeting. 7 . The Committee recommended that the Staff prepare a resolution that identified the criteria for voiding any aged outstanding check issued by the City. It is intended that the limitations identified in the California Banking Codes and/or the California Uniform Commercial Codes, which define when a check has aged beyond the point when it can be negotiated, be used to establish the criteria. 8. The- Finance Department has closed the Checking accounts previously held in the Central Bank. During the time the accounts were open the City earned an annual rate of 5. 3% compared to the annual rate of 4. 30 at Security Pacific National Bank, where the City currently has its operating account. 9. The Council approved a resolution in September 1988 which addressed the question of employee vesting in the General Leave plan. RECOMMENDATION: Staff recommends that the City Council accept, approve and file the June 30, 1988 audit and management letter along with Staff ' s response to the management letter. ti w�1 =a CITY OF DUBLIN 'a FINANCIAL STATEM ENT S YEAR ENDED JUNE 30, 1988 , ry CITY OF DUBLIN FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 1988 TABLE OF CONTENTS Pie Auditor's Opinion . . . . . . . . . . . . . . . . . . . . . . 1 � ? Combined Statements - Overview Combined Balance Sheet. - All Fund Types and '..j Account Groups . . . . . . . . . . . . . . . . . . . . . 2 _7 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types . . . . . . . . . . . . . . . . . . . . . 3 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual - General, Special Revenue and Capital Projects Fund Types. . . . . . . . . . . . . . . . . . . 4 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types . . . . . . . . . . . . . . . . . . . . . . . 5 Combined Statement of Changes in Financial Position - All Proprietary Fund Types . . . . . . . . . . . . 6 Notes to Financial Statements . . . . . . . . . . . . . . 7 Financial Statements of Individual Funds t Special Revenue Funds ' Combining Balance Sheet . . . . . . . . . . . . . . . . . 21 Combining Statement of Revenues, Expenditures and Changes in Fund Balance. . . . . . . . . . . . . . . 22 Capital Projects Funds Combining Balance Sheet . . . . . . . . . . . . . . . . . 23 Individual Funds Balance Sheet . . . . . . . . . . . . . 24 Combining Statement of Revenues, Expenditures and Changes in Fund Balances . . . . . . . . . . . . . . . . 25 Individual Funds Statement of Revenues, Expenditures -J and Changes in Fund Balances i . . . . . . . 26 4 A-ZE & - ASSOCIATES - ACCOUNTANCY CORPORATION (.: Creekside Oaks - 1470 Maria Lane - Suite 200 Walnut Creek, California 94596 I� (415) 930-0902 (916) 972-7333 AUDITOR'S OPINION ON FINANCIAL STATEMENTS i_..i To the City Council City of Dublin, California :1] We have examined the financial statements of the City of Dublin as of and for the year ended June 30, 1988 as listed in the table of contents. Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The combined and combining financial statements of the City of Dublin as of and for the year ended June 30, 1987, were examined by other auditors whose report dated November 20, 1987, expressed an unqualified opinion on those financial statements. In our opinion the financial statements referred to above present fairy the financial position of the City of Dublin at June 30, 1988 and the results of its operations and the changes in financial position of its proprietary fund types for the years then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year except for the changes, with which we concur, in accounting for special assessment funds and compensated absences as discussed in Note 2. Our examination was made for the purpose of forming an opinion on the financial statements taken as a whole. The combining and individual account group financial statements listed in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements of the City of Dublin. Such information has been subjected to the auditing procedures applied in the examination of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a - whole i November 23, 1988 ' -1- A Professional Corporation CITY OF DUBLIN COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1988 • TOTAL FIDUCIARY ACCOUNT (MEMORANDUM GOVERNMENTAL FUND TYPES PROPRIETARY FUND TYPES FUND TYPE GROUPS ONLY) ----------------------------------- ------------------------ ----------- ------------ ------------- Special Capital Internal Agency General Fixed - ASSETS General Revenue Projects Service Enterprise Fund Assets 1988 ------ ----------- ----------- ----------- ----------- ------------ ----------- ------------ ------------- Assets: Cash and investments (Note 3) $6,467,432 $1,670,123 $1,577,797 $153,186 $10,919,755 $543,500 $21,331,793 Receivables; Accounts ' 203,904 3,191 12,264 3,228 222,587 Special a;sessments 715,000 715,000 Accrued interest 50,499 50,499 Due from others 183,625 183,625 2 Due from other funds (Note 8) 142,655 2,093,695 ,236,350 Prepaid expenses 11,710 8,616 20,326 Machinery and equipment (net of accumulated depreciation)(Note 7) 153,884 $179,451 333,335 Construction in progress (Note 7) 12,824,412 12,824,412 ----------- ----------- ----------- ----------- ------------ ----------- ------------ ------------- Total Assets $7,009,326 $1,673,314 $3,683,756 $315,686 $23,797,894 $1,258,500 $179,451a 6$37,917,927 ---------- 6--666--666 --6- LIABILITIES, FUND EQUITIES -------------------------- Liabilities: Accounts payable $348,562 $46,656 $155,486 $2,681 $535,212 $1,088,597 Accrued wages 33,997 33,997 Accrued vacation 52,260 " .- 52,260 Deposits 525,102 2,20b 527,302 Due to other funds (Note 8) 121,382 2,114,968 2,236,350 Due to others $543,500 543,500 Deferred revenues 26,000 715,000 741,000 Interest payable 433,273 433,273 Certificates of participation (Note 4) 16,852,820 --16,852,820 ----------- ----------- ----------- ----------- ------------ ----------- ------------ ---------- Total Lf.abilities 959,921 196,238 2,270,454 2,681 17,821,305 1,258,500 22,509,099 ----------- ----------- ----------- ----------- ------------ ----------- ------------ ------------- Fund Equities: Investments!in general fixed assets $179,451 179,651 Retained earnings: Designated for equipment replacement 313,005 313,005 Unreserved! 5,976,589 5,976,589 Fund balances: Designated for street improvement 1,477,076 ,477,076 7 Designated for authorized expenditures 6,049,405 1,413,302 7,462,707 ----------- ----------- ----------- ----------- ------------ ----------- ------------ ------------- Total f-,,ind equities 6,049,405 1,477,076 1,413,302 313,005 5,976,589 ----179,451 -- - 15,408,828 ----------- ----------- ----------- ----------- ------------ ----------- ------ Total 1--abilities and fund equities $7,009,3266 $1,673,,3146 $3, 6 683,,756 66$315,6866 $23, 6 797 ,894 $1,,2586 66 500 $179,451 , 6 $37,917-,927 See accompanying notes to financial statements -2- F-1 CITY OF DUBLIN COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 1988 y MEMORANDUM GOVERNMENTAL FUND TYPES ONLY 'j • ------------------------------------------- ------------- :.f .; Special Capital - General Revenue Projects 1988 ' ------------- ------------- ------------- ------------- Revenues: �y Taxes $6,095,604 $83,401 $6,179,005 Licenses and permits 532,696 532,696 Intergovernmental 716,388 943,817 1,660,205 E'•� Charges for services 466,673 466,673 '.1 Use of money and property 973,800 100,360 1,074,160 Fines and forfeits 18,814 75,770 94,584 Other revenue 42,193 323,504 $227,372 593,069 �•, Special assessment 246,915 246,915 t7 ------------- ------------- ------------- ------------- Total revenue 8,846,168 1,773,767 227,372 10,847,307 ------------- ------------- ------------- ------------- Expenditures: General government 2,308,376 2,308,376 Public' safety 1,848,801 190,318 2,039,119 Hlghvays and streets 448,894 364,588 813,482 Health and velfare 8,520 8,520 Community development 1,076,768 15,133 1,091,901 Culture and leisure 499,037 17,065 516,102 Capital outlay 53,565 2,860,893 2,914,458 ' - ------------- ------------- ------------- ------------- Total expenditures 6,243,961 587,104 2,860,893 9,691,958 ------------- ------------- ------------- ------------- cess of revenue over 2,602,207 1,186,663 (2,633,521) 1,155,349 (under) expenditures ---- -- °-- ------------- ------------- ------------- J Other financing sources: Operating transfers in (Note 9) 955 4,288,295 4,289,250 Operating transfers out (Note 9) (3,593,621) (1,538,949) (62,715) (5,195,285) ------------- ------------- ------------- ------------- -= Total other financing sources (uses) (3,593,621) (1,537,994) 4,225,580 (906,035) ------------- ------------- ------------- ------------- Excess of revenus and other financing sources over (under) expenditures and other financing uses (991,414) (351,331) 1,592,059 249,314 ------------- ------------- ------------- ------------- Fund balance (deficit) - beginning of year 7,687,697 1,758,736 (178,757) 9,267,676 Restatement (Note 2) (646,878) 69,671 (577,207) ------------- ------------- ------------- ------------- ` Fund balance (deficit) - beginning of year as restated 7,040,819 1,828,407 (178,757) 8,690,469 ----------- ------------- ------------- ------------- Fund balance - end of year $6,049,405 $1,477,076 $1,413,302 $8,939,783 i { See accompanying notes to financial statements i 1 i -3- CITY OF DUBLIN COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND-BALANCE - BUDGET AND ACTUALa GENERAL, SPECIAL REVENUE AND CAPITAL PROJECTS FUND TYPES FOR THE YEAR ENDED JUNE 30, 1988 f General Fund Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes $6,239,700 $6,095,604 ($144,096) Licenses and permits 547,350 532,696 (14,654) - Intergovernmental 755,800 716,388 (39,412) Interest Charges for services 729,740 466,673 (263,067) Use of money and property 636,970 973,800 336,830 Fines and forfeits 16,500 18,814 2,314 Other revenue 59,700 42,193 (17,507) Special assessment ----------- ------------ ------------- Total revenue 8,985,760 8,846,168 (139,592) Expenditures: General government 2,387,555 2,308,376 79,179 _ Public safety 1,933,344 1,848,801 84,543 Highways and streets 612,204 448,894 163,310 Health and welfare 15,500 8,520 6,980 Community development 1,315,932 1,076,768 239,164 Culture and leisure 580,360 499,037 81,323 Capital outlay 44,840 53,565 (8,725) ----------- ------------ ------------- Total expenditures 6,889,735 6,243,961 645,774 ----------- ------------ ------------- Excess of revenues over (under) expenditures 2,096,025 2,602,207 506,182 ----------- ------------ ------------- Other financing sources: Operating transfers in (Note 9) Operating transfers out (Note 9) (3,593,621) (3,593,621) ----------- ------------ ------------- Total other financing sources (uses) (3,593,621) (3,593,621) - ---------- ------------ ------------- Excess of revenues and other financing sources over (under) expenditures and other financing uses 2,096,025 (991,414) (3,087,439) ----------- ------------ ------------- Fund balance (deficit) - beginning of year 7,687,697 7,687,697 Restatement (Note 2) (646,878) (646,878) ----------- ------------ ------------- Fund balance (deficit) - beginning of year as restated 7,040,819 7,040,819 ----------- ------------ ------------- Fund balance - end of year $9,136,844 $6,049,405 ($3,087,439) See accompanying notes to financial statements —4— s �e CITY OF DUBLIN { COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES PROPRIETARY -FUND TYPES is FOR THE YEAR ENDED JUNE 30, 1988 Internal Enterprise Service Fund Fund ----------- ----------- Dublin Totals Equipment Information (Memorandum Replacement Inc. Only) ----------- ----------- ----------- Revenues Interest income $5,761 $300,105 $305,866 Rent income 1,252,242 19252,242 Equipment usage 119,131 119,131 Miscellaneous 13,450 13,450 ----------- ----------- ----------- Total revenues 124,892 1,565,797 1,690,689 Expenses ----------- ----------- ----------- Interest payments 413,603 413,603 Depreciation 60,774 60,774 Miscellaneous 46,743 27,216 73,959 ----------- ----------- ----------- Total expenses 107,517 440,819 548,336 ----------- ----------- ----------- Operating income 17,375 1,124,978 1,142,353 Other financial sources (uses) : Operating transfer in (Note 9) 67,971 838,064 906,035 Effect of advance refunding of debt (Note 5) (1,024,596) (1,024,596) ----------- ----------- ----------- Total other financial sources (uses) 67,971 (186,532) (118,561) ----------- ----------- ----------- Net income 85,346 938,446 1,023,792 Retaind earnings, beginning of year 227,659 5,038,143 5,265,802 ----------- ----------- ----------- Retained earnings, end of year $313,005 $5,976,589 $6,289,594 See accompanying notes to financial statements. -5- r (7. CITY OF DUBLIN COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES PROPRIETARY FUND TYPES FOR THE YEAR ENDED JUNE 30, 1988 ;J Internal Enterprise Service Fund Fund ----------- ----------- Dublin Totals Equipment Information (Memorandum Replacement Inc. Only) i.- ----------- ----------- ----------- `3 Revenues Interest income $5,761 $300,105 $305,866 Rent income 1,252,242 1,252,242 119 Equipment usage ,131 119,131 Miscellaneous 13,450 13,450 Total revenues 124,892 1,565,797 1,690,689 - Expenses ----------- ----------- ----------- Interest payments 4137603 413,603 Depreciation 60,774 60,774 Miscellaneous 46,743 27,216 73,959 ----------- ----------- ----------- Total expenses - 107,517 4407819 548,336 ----------- ----------- ----------- Operating income 17,375 1,1249978 1,142,353 Other financial sources (uses) : Operating transfer in (Note 9) 67,971 838,064 906,035 Effect of advance refunding of debt (Note 5) (1,024,596) (1,024,596) ----------- ----------- ----------- Total other financial sources (uses) 67,971 (186,532) (118,561) _ ----------- ----------- ----------- Net income 85,346 938,446 1,023,792 Retaind earnings, beginning of year 227,659 5,038,143 5,265,802 ----------- ----------- ----------- Retained earnings, end of year $313,005 $5,9761589 $6,289,594 See accompanying notes to financial statements. rs -5- l CITY OF DUBLIN COMBINED STATEMENT OF CHANGES r IN FINANCIAL POSITION "+ ALL PROPRIETARY FUND TYPES FOR THE YEAR ENDED JUNE 30, 1988 Internal Enterprise Service Fund Fund ----------- ----------- Dublin Totals j ; Equipment Information (Memorandum Replacement Inc. only) ----------- ----------- ----------- ! >i Sources of working capital Operations: r-; Net income $85,346 $938,446 $1,023,792 Add back depreciation, not requiring i-� outlay of working capital 60,774 60,774 ----------- ----------- ----------- �: Total,working capital provided by operations 146,120 938,446 1,084,566 ----------- ----------- ----------- �-, Proceeds from issue of Refunding Certificates of Participation 16,852,820 16,852,820 ----------- ----------- ----------- Total sources of working capital 146,120 17,791,266 17,937,386 Uses of working capital Increase in construction in-progress 4,691,974 4,691,974 Acquisition of fixed assets 67,971 67,971 Advance refunding of certificates of 0 participation 11,615,000 11,615,000 Principal payment 180,000 180,000 ----------- ----------- ----------- Total uses of working capital 67,971 16,486,974 16,554,945 ----------- ----------- ----------- Net increase in working capital $78,149 $1,304,292 $1,382,441 Changes in components of j working capital Cash $78,758 $2,168,149 $2,246,907 Accounts payable (609) (484,311) (484,920) Interest payable (433,273) (433,273) Account receivable 53,727 53,727 ------ ----------- ----------- i Net increase in working capital $78,149 $1,304,292 $1,382,441 See accompanying notes to financial statements. i +f� CITY OF DUBLIN. ` Notes to Financial Statements t:: t June 30, 1988 103 Note 1 - Summary of Significant Accounting Policies � 1 The City of Dublin was incorporated February 1, 1982 under the Municipal Organization Act of 1977. The City operates under a Council-Manager form of government and provides services to residents �..� primarily by contracting with other governmental agencies and private contractors. a The accounting policies of the City of Dublin conform to generally :a accepted accounting principles as applicable to governments. The following is a summary of the more significant policies: A. Principles of Combination The financial statements of the City of Dublin include the financial activities of the City as well as separate legal entities which are >' controlled by or dependent on the City. Determination of "controlled by or dependent on" is based on the National Council on Governmental Accounting Statement 3 "Defining the Governmental Reporting Entity" . This statement deals with existence as an organized entity, governmental character, and autonomy. The financial statements include the financial activities of the following separate legal entity: The Dublin Information, Inc. (DII) is a separate legal entity Ci established to assist in providing financing to the City. See Note 5. The DII meets the criterion of ability to significantly influence operations and accountability for fiscal matters for inclusion in the - City's reporting entity. The financial activities of the DII have been included in the Dublin Information, Inc. Enterprise Fund. B. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into seven -- generic fund types and three broad fund categories as follows: i _, -7- );Y CITY OF DUBLIN Notes to Financial Statements Note 1 r Summary of Significant Accounting Policies (Continued) GOVERNMENTAL FUNDS General Fund-- 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. Special Revenue Funds-- Special Revenue Funds are used to account for �,J the proceeds of specific revenue sources (other than major capital projects) that are -legally restricted to expenditures for specific purposes. Capital Projects Funds-- Capital Projects Funds are used to account r.. for financial resources to be used for the acquisition or construction �.� of major capital facilities (other than those financed by Proprietary Funds) . Debt Service Funds-- Debt Service Funds are established to account for the accumulation of resources for, and the payment of, interest and principal on long-term debt. PROPRIETARY FUNDS Enterprise Funds - Enterprise Funds are used to account for operations (a). that are financed and operated in a manner similar to private business enterprises where--the intent of the governing body is that the costs and expenses, including depreciation, of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital ='! maintenance, public policy, management control, accountability, or other purposes. Internal Service Funds -- Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governments, on a cost-reimbursement basis. FIDUCIARY FUNDS Agency Funds-- 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, in accordance with the conditions of the' agreements. Agency funds are purely custodial and thus do not involve measurement of results of operations. C. Fixed Assets and Long-Term Liabilities V-- '--- 'The,'-accounting-•,an-d-repor-tine treatment-appl=ied to .the._f.iXed ,asse.ts: .4rd,, long-term liabilities associated with a fund are determined by its measurement focus. All governmental funds and Expendable Trust Funds are accounted for on a spending or "financial flow" measurement -s- S CITY OF DUBLIN-. Notes to Financial Statements Note 1 - Summary of Significant Accounting Policies (Continued) 6 focus. This means that only current assets and current liabilities 1'7­1 are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources" . Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. ?.L Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Fixed assets used in governmental fund type operations (general fixed assets) are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. No depreciation has been provided on general fixed assets. x;y _ The City has elected not to capitalize its infrastructure which would consist of nonenterprise expenditures relating to roads, bridges, curbs, gutters, streets, sidewalks, drainage systems, and lighting systems. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair value on the date donated. The account group is not a "fund" . It is concerned only with the measurement of financial position. It is not involved with measurement of results of operations. Because of their spending L measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund " liabilities. A1',1 proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus, which means that all assets and all liabilities associated with their activity are included on their balance sheets. Their reported fund equity is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total assets. Depreciation of all exhaustible fixed assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is reported on proprietary fund balance sheets. I 3 �1� CITY OF DUBLIN Notes to Financial Statements i<g Note 1 - Summary of Significant Accounting Policies (Continued) Depreciation has been provided over the estimated useful lives of the assets using the straight line method. The estimated useful lives are _v three to five years. D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or r expenses are recognized in the accounts and reported in the financial • j statements. Basis of accounting relates to the timing of the measurements made., regardless of the measurement focus applied. All governmental funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Their revenues are .,� recognized when they become measurable and available as net current assets. Sales taxes are considered "measurable" when in the hands of ._.i intermediary collecting governments and are recognized as revenue at that time. Anticipated refunds of such taxes are recorded as liabilities and reduction of revenue when they are measurable and their validity seems certain. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. An exception to this general rule is principal and interest on general long-term debt which is recognized when due. All Proprietary Funds are accounted for using the accrual basis c-f accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred. E. Budgets and Budgetary Accounting The City follows these procedures in establishing the budgetary data reflected in the financial statements; 1. Prior to June 30, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. Prior to July 1, the budget is legally enacted through passage of a resolution. 4. The City Manager is authorized to transfer budgeted amounts within an activity, within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. -10- l G CITY OF DUBLIN . _ Notes to Financial• Statements Note 1 - Summary of Significant Accounting Policies (Continued) 5. Formal budgetary integration is employed as a management control device during the year for the General Fund, Special Revenue and Capital Projects Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. r� •• ± 6. Budgets for the General, Special Revenue and Capital Projects Funds are adopted on a basis consistent with generally accepted accounting principles (GAAP) , Budgeted amounts are as originally adopted, or as amended by the City 4 Council. Individual amendments were not material in relation to the original • appropriations which were amended. F. Appropriation Lapses In all funds unexpended appropriations lapse at year end. G. Cash and Investments The City pools idle cash from all funds except for the Cash and Investments with Fiscal Agent for the purpose of increasing income through investment activities. Investments are carried at cost which approximates market value. Interest income on investments is allocated on the basis of average month-end cash and investment balances in each fund. H. Property Tax Alameda County assesses properties and bills for and collects property taxes as follows: Secured Unsecured Valuation dates March 1 March 1 Lien/levy dates March 1 March 1 Due dates 50% on November 1 July 1 50% on February 1 Delinquent as of December 10 (for November) August 31 April 10 (for February) The term "unsecured" refers to taxes on personal property other than real estate, land and buildings. These taxes are secured by liens on the property being taxed. Property taxes levied are recorded as revenue and receivables, net of estimated uncollectibles, in the fiscal year of levy. • -11= CITY OF DUBLIN � Notes to Financial Statements Note 1 - Summary of Significant Accounting Policies (Continued) I. Accumulated Unpaid Vacation, Sick Pay, and Other Employee Benefit Accounts. The City accounts for compensated absences (unpaid vacation and sick leave) in accordance with NCGA Statement No. 4. In governmental funds, compensated absences are recorded as expenditures in the year paid, as it is the City's policy to liquidate any unpaid vacation or sick leave at June 30 from currently available expendable resources rather than future t� resources. Accordingly, the entire unpaid liability for the governmental funds is recorded in the General Fund. In prior years this liability was recorded as a reservation to fund balance. J. Total Columns on Combined Statements :- Overview Total columns on the Combined Statements - Overview are captioned Memorandum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2 - Restatement of Fund Balances Special Assessment and Special Revenue Funds Effective July 1, 1987 the City implemented Governmental Accounting Standards Board Statement No. 6, Accounting and Financial Reporting for Special Assessments, the effect of which was to eliminate the Special I Assessment. Fund type for financial reporting purposes. All Special 'J Assessment funds except the San Ramon Road Specific Plan Assessment District Fund discussed below were recategorized as Special Revenue Funds as of July 1, 1987. The fund balances of these Special Assessment Funds at July 1, 1987 were $71,127, which was recategorized as Special Revenue Fund Balance as of that date. In addition, $1,456 in Special Revenue Fund balance deficits excluded in error from the prior year financial statements have been included as of July 1, 1987. San Ramon Road Specific Plan Assessment District The San Ramon Road Specific Plan Assessment District Fund was recategorized as an Agency Fund as of July 1, 1987. Included in this Fund at that date were $770,000 principal amount of Special Assessment bonds. These Bonds are a limited obligation issue secured solely by unpaid assessments on property owners of the San Ramon Road Specific Plan Assessment District and any remaining cash with fiscal agent. The City is not liable for repayment of the bonds, but acts as agent for .the_pr.operay:.�owne-rs::an coale.ating_the-..assessments:, .7fo-rwar-.ding_—the collections to bondholders, and initiating foreclosure proceedings, if appropriate. E -12- CITY OF DUBLIN Notes to Financial Statements ."3 Note 2 - Restatement of Fund Balances (Continued) The City does not intend to assume responsibility for these Bonds in the event of default. Therefore, in accordance with the provisions of GASB #6, discussed above, the liability for these Bonds has been eliminated from the Fund balance as of July 1, 1987. ' The remaining fund balance of $543,500 has been reclassified as a liability as of July 1, 1987 as part of the recategorization of this Fund as an Agency Fund. General Fund _y During 1988 the City determined that $460,496 expended in a prior year to obtain Federal Aid Urban grant funding had been recorded in error in the General Fund as receivable from other governments., The City also determined in 1988 that it '-' had accrued $123,703 of sales tax receivables in excess of the amount actually collectible as of June 30, 1987. The City analyzed its deposits account in 1988 and as a result wrote off $26,476 of deposits from prior periods. General Fund balance has been restated as of July 1, 1987 to reflect the elimination of these amounts. The City also began to account for compensated absences on the accrual basis in 1988 instead of the cash basis. Accordingly, General Fund balance has been restated as of July 1, 1987 to eliminate $36,203 of accumulated vested compensated absences which had previously been reflected as a reservation of General Fund balance. Note 3 - Cash and Investments Cash and investments comprise: Cash in banks $ 888,541 LJ Non-negotiable certificates of deposit 9,257,435 l Local Agency Investment Fund 8,122,000 Cash & investment with fiscal agent 3.063,817 Total cash & investments $21,331,793 All pooled cash and non-negotiable certificates of deposit are entirely insured or collateralized. The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government securities as collateral. The market value of pledged securities must equal at least 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. Zity­may.=waive collateral nreq.uirements..f.o.ra. deposits_ wh c.h. are,�f,u1.Zy�i=nsure • up to $100,000 by the Federal Deposit Insurance Corporation (FDIC) or Federal Savings and Loan Insurance Corporation (FSLIC) . c. -13- CITY OF DUBLIN r Notes to Financial Statements Note 3 - Cash and Investments (Continued) Under provision of the City's Investment Policy, and in accordance with Section 53601 of the California Government Code, the City may invest in the "j following types of investments: Securities of the U.S. Government; or its agencies Negotiable Certificates of Deposits Bankers Acceptances Local Agency_Investment Fund (State Pool) Deposits Passbook Savings Account Demand Deposits :. Repurchase Agreements The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds,: and certificates of participation. The California Government Code provides these monies, in the absence of specific statutory provisions governing the issuance of bonds, or certificates, may be invested in accordance with the ordinance, resolutions or indentures which are generally more restrictive than the City's general investment policy. In no instance have additional types of investments, not permitted by the City's general investment policy, been authorized. Note 4 - Certificates of Participation 1988 Refunding 1985 Certificates Certificates of Participation of Participation Interest Rate 7.25% - 9.25% 5.75% - 7.875% Maturity Date 2-1-10 2-1-10 Original Issue $ 11,795,000 $17,230,000 Balance as of July 1, 1987 11,795,000 Add: Issuance of Refunding Certificates of Participation 17,230,000 Deduct: Bond Issuance Costs, net of amortization (377,180) Principal Payment (180,000) Advance Refunding (11,615,000) - ­-- Balance as -o f..J_une..,30.,-...1988... _ . C"-c - . -� _._ ----• .$1-6-,_852.52^ - ' -14- i .�k CITY OF DUBLIN Notes to Financial Statements Note 4 - Certificates of Participation (Continued) i. In order to finance the construction of the Dublin Civic Center building, the City on March 1, 1988 signed a non-cancellable twenty-two year lease with Dublin Information Inc. (DII) , a non-profit corporation which used the lease as collateral for the issuance of the 1988 Certificates of Participation. The lease provides for semi-annual payments which are sufficient to pay principal and interest due on the 1988 Refunding Certificates of Participation. 'A Ownership of the Civic Center Building reverts to the City at the end r..•a of the lease. Since the lease is in essence a financing arrangement with ownership of the financed assets reverting to the City, the assets and the related debt evidenced by the 1988 Refunding Certificates of Participation have been included in the City's financial statements. The refunding Certificates of Participation will be repaid from general fund revenues. _ Annual debt service requirements for the 1988 Refunding Certificates of Participation, including interest, are shown below: Advanced New For the Year Refunding Money ending June 30 Portion Portion Total 1989 $ 845,812 $ 345,690 $ 1,191,502 1990 922,704 377,116 1,299,820 1991 1,217,704 502,116 1,719,820 1992 1,220,741 499,929 1,720,670 1993 1,221,841 497,129 1,718,970 thereafter 20,735,716 8,469,904 29.205,620 :a $26,164,518 $10,691,884 ,$36,865,402 Note 5 - Advance Refunding of 1985 Certificates of Participation On March 8, 1988, the City issued $17,230,000 of Refunding Certificates of Participation with interest rates of 5.75% - 7.875%. Of the proceeds, $10,100,610 was used to advance refund $11,615,000 of outstanding 1985 Certificates of Participation with interest rates of 7.25% - 9.25%. These proceeds, plus an additional $2,538,986 of 1985 Certificates of Participation reserve fund monies were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1985 Certificates of Participation. As a result, the 1985 Certificates of Participation are considered to be defeased and the liability for those obligations has been removed from the Dublin Information, Inc. Enterprise Fund. ' -15- I ' CITY OF DUBLIN ` i Notes to Financial Statements Note 5 - Advance Refunding of 1985 Certificates of Participation (Continued) •. Although the advance refunding resulted in the recognition of an -, accounting loss of $1,024,596 for the year ended June 30, 1988, the City in effect reduced its aggregate debt service payments as shown ' s below: Total remaining aggregate debt service payments, . ' including future interest payments, of the 1985 certificates of.part�cipation $27,406,993 _ Less total aggregate debt service payments, including future interest payments, for the advance refunding portion of the 1988 Refunding Certificates ~; of Participation (26,164,518) Reduction in aggregate debt service payments over the next 22 years $ 1,242,475 The present value of the above $1,242,475 reduction in aggregate debt service at the effective interest rate of the Refunding Certificates of Participation is approximately $903,000, which represents the economic gain obtained by the City as a result of the advance refunding. Note 6 - Pension Plan A. Plan Description The City contributes to the California Public Employees Retirement �- System (PERS) , an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating members in California. All qualified permanent and probationary employees are eligible to participate in PERS. Benefits vest after five years of service and are payable monthly for life upon retirement. Employees who retire at age 60 with 5 years of credited service receive a benefit equal to 10% of their average monthly salary for their last three years of employment up to a maximum of 2% of their annual salary. A credited service year is one year of full time employment. PERS requires City employees to contribute 7€ of their annual salary and the City pays the remainder. These benefit provisions and all other requirements are established by state statute and city ordinance. Contributions necessary to fund PERS on an actuarial basis are determined by PERS and its Board of Administration. -16- 'CITY OF DUBLIN Notes to the Financial Statements i Note 6 - Pension Plan (Continued) B. Funding Status and Progress r '{ '.a The amount shown below as the "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of PERS on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due and make comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding 17) method used to determine contributions to the PERS. i The pension benefit obligation was computed as part of an actuarial valuation performed as of June 30, 1987. Significant actuarial assumptions used in the valuation include (a) a rate of return on the investment of present and future assets of 8.5% a year compounded annually, (b) projected salary increases of 5.75% a year compounded annually, attributable to inflation, plus additional projected salary increases attributable to seniority/merit, and (d) postretirement benefit increases adjusted 2% annually after the fist two years of retirement. Total over-funded pension benefit obligation applicable to the City's employees was $31,021 at June 30, 1987, as follows: Pension benefit obligation: _ Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits -0- Current employees: Accumulated employee contributions including ! ' allocated investment earnings $101,556 Employer-financed vested 62,016 Employer-financed nonvested 29.924 Total pension benefit obligation 193 ,496 Net assets available for benefits, at cost (market value is $281,095) 224.517 Overfunded pension benefit obligation LLl 021 C. Actuarially Determined Contribution Requirements and Contribution Made PERS uses the Entry Age Normal Actuarial Cost Method which is a projected benefit cost method. That is, it takes into account those benefits that are expected to be earned in the future as well as those already accrued. -17- 1 ,1. CITY OF DUBLIN Notes to the Financial-Statements Note 6 - Pension Plan (Continued) j According to this cost method, the normal cost for an employee is the level „ amount which would fund the projected benefit if it were paid annually from date of employment until retirement. PERS uses a modification of the Entry Age Cost Method in which the employer's total normal cost is expressed as a level percentage of payroll. PERS also uses the level percentage of payroll method to amortize any unfunded actuarial liabilities. The amortization period of the unfunded actuarial liability ends on June 30, 2000. The significant actuarial assumptions used to compute the actuarially determined contribution requirement are the same as those used to compute �1 the pension benefit obligation, as previously described. Contributions to PERS are made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of year end. The PERS contributions which were entirely paid by the City consisted of the following for fiscal year ended June 30, 1988: Percent of Covered Amount Pavroll Covered payroll 653 811 Total payroll $653,811 i Normal cost contributions $ 84,342 12.9% Amortized unfunded actuarial accrued liability 1.308 .2% Total 85 650 13.1% City contributions $ 39,883 6.1% Employee contributions 45,767 7.0% Total L.85.650 13.1% D. Trend Information Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Systemwide ten-year trend -. information may be found in the California Public Employees' Retirement System Annual Reports. For the fiscal year 1986-87, net assets available for benefits funded 116% ly:::-;: .L : a=.• r..�.: of- the�pension�plan':s -total.-pension benefit..obligation.and!,t.he:_.ouerfunded;—,.: sl , pension benefit obligation represented 4.7% of covered payroll. For the fiscal year 1987-88, the City's PERS contributions, made in accordance with actuarially determined requirements, were 36€ of covered payroll. Trend information required by Governmental Accounting Standard No.S was not available from PERS. .�; -1S- Old CITY OF DUBLIN Notes to Financial Statements Note 7 - Fixed Assets G Fixed assets at June 30, 1988 consist of the following: Internal General 3 Enterprise Service Fixed `-� Funds Fund Assets i 4.� Machinery & equipment $292,748 $179,451 Construction in progress $12,824,412 Total 292.748 Less: accumulated =� depreciation 138.864 Net $12,824,412 1153,884 $179,451 3 - Additions to general fixed assets in the year ended June. 30, 1.988 comprised $35,540 of machinery and equipment. Construction in progress consists of costs incurred on the Dublin Information, Inc. Civic Center Project. Details of changes in construction in progress are shown below: Balance as of Balance as of June 30, 1987 Additions June 30, 1988 Land $5,861,104 $ 839,472 $ 6,700,576 Construction 497,546 2,331,483 - 2,829,029 Engineering and architecture 73,411 510,034 583,445 Legal 67,500 67,500 Other 31.082 64,002 95.084 f Subtotal 6.530.643 3,744,991 10,275,634 Financing costs: Interest expense 1,206,851 1,090,407 2,297,258 Underwriters discount 394,944 394,944 Interest income (143,424) (143,424) Subtotal 1,601,795 946.983 2,548,778 $8,132,438 $4,691,974 $12,824,412 Financing costs have been capitalized as part of Construction in Progress as required under Financial Accounting Standards Board Statement #34, which requires that all financing costs incurred to acquire or prepare assets for their intended use be added to the cost of the related assets. -19- I IL J CITY OF DUBLIN Notes to Financial Statements Note 8 - Interfund Receivables and Payables Interfund receivables and payables consisted of the following at June 30, 1988: Due from Due to General Fund $ 142,655 Special Revenue Funds $ 121,382 Capital Projects Funds 2,093.695 2, 114,963 Totals $2,236,350 $2,236,350 Note 9 - Interfund Transfers .`, Interfund transfers for the 1987-88 fiscal year were as follows: Operating transfers Operating transfers Fund type in out General Fund $3,593,621 Special Revenue Funds $ 955 1,538,949 Enterprise Funds 906,035 Capital Projects 4.288,295 62,715 I Total $5,195,285 $5,195,285 Note 10 - Contingent Liabilities The City participates in several federal and State grant programs. These programs have been audited by the City's independent accountants in accordance with the provisions of the federal Single Audit Act of 1984 and applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. -20- E CITY OF DUBLIN SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET NNE 30, 1988 TRANSPORTATION SPECIAL COMMUNITY TRAFFIC STATE DEVELOPMENT CRIMINAL DEVELOPMENT PARR REVENUE SAFETY GAS TAX ACT ACTIVITY BLOCK GRANT DEDICATION SHARING --------- ---------- -------------- ----------- ----------- ----------- ----------- ASSETS Assets: Cash and investments $63,481 $227,307 $25,904 $1,139,207 Account receivable --------- ---------- -------------- ----------- ----------- ----------- ----------- Total Assets $63,481 $227,307 $25,904 $1,139,207 i LIABILITIES AND FUND EQUITIES ----------------------------- Liabilities: Accounts payable $9,161 $28,636 Due to other funds $111,222 $8,660 Deferred revenue 26,000 Deposit --------- ---------- -------------- ----------- ----------- ----------- ----------- Total Liabilities 9,161 28,636 111,222 34,660 _ --------- ---------- -------------- ----------- ----------- ----------- ----------- Fund Equities: - Designated for street improvement 54,320 198,671 (111,222) $25,904 (34;660) $1;139,207 --------- ---------- -------------- ----------- ----------- ----------- ----------- Total Fund Balance 54,320 198,671 (111,222) 25,904 (34,660) 1,139,207 --------- ---------- -------------- ----------- ----------- ----------- ----------- Total Liabilities and Fund Balance $63,481 $227,307 $25,904 $1,139,207 a; -- R CITY OF DUBLIN !' SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 1988 TRANSPORTATION SPECIAL FEDERAL COMMUNITY TRAFFIC STATE DEVELOPMENT CRIMINAL AID URBAN DEVELOPEMENT PARR SAFETY GAS TAX ACT ACTIVITY HIGHWAY FUND BLOCK GRANT DEDICATION Revenues: Taxes Sales and use taxes Intergovernmental FAU grant $615,131 Gasoline tax $301,048 TDA Act funds $11,436 State park bond Fines and forfeits Vehicle code fines $75,770 Use of money and property Interest 4,106 18,032 $323 $70,889 All other Park dedication fees and flood grant 282,063 Nondepartmental special assessments Miscellaneous 25,581 --------- --------- -------------- --------- ----------- ----------- ---------- Total Revenues 79,876 319,080 11,436 25,904 615,131 352,952 --------- --------- -------------- --------- ----------- ----------- ---------- = Expenditures: Public safety Service and supplies 28,830 Contract services 37,863 Highways and streets Contract services 283,537 11,417 Community developement Contract services 5,000 Culture and leisure Contract services --------- --------- -------------- --------- ----------- ----------- ---------- Total expenditures 66,693 288,537 11,417 --------- --------- -------------- --------- ----------- ----------- ---------- Excess of revenues over (under) expenditures 13,183 30,543 19 25,904 615,131 352,952 --------- --------- -------------- --------- ----------- ----------- ---------- Other financing sources (uses): Operating transfers in Operating transfers (out) (111,241) (1,412,506) --------- --------- -------------- --------- ----------- ----------- ---------- Total other financing sources (uses) (111,241) (1,412,506) --------- --------- -------------- --------- ----------- ----------- ---------- Excess of revenues and other financing sources over (under) expenditures and other financing uses 13,183 30,543 (111,222) 25,904 (797,375) 352,952 --------- --------- -------------- --------- ----------- ----------- ---------- Fund balance - beginning of the year 41,137 168,128 797,876 ($34,660) 786,255 Restatement (501) --------- --------- -------------- --------- ----------- ----------- ---------- Fund balance as restated 41,137 168,128 797,375 (34,660) 786,255 --------- --------- -------------- --------- ----------- ----------- ---------- Fund balance - end of the year $54,320 $198,671 ($111,222) $25,904 ($34,660) $1,139,207 �u DOUGHERTY F]" STAGECOACH LANDSCAPE STREET LANDSCAPE AND LIGHTING DUBLIN STATE PARR SALES TAX LIGHTING ASSESSMENT ASSESSMENT BOULEVARD TOTALS BOND ACT MEASURE B ASSESSMENT DISTRICT DISTRICT EXTENSION 1988 ----------- ------------- ------------- ------------- ------------- -------°- Wi! $89,655 $61,069 $7,020 $56,439 $41 $1,670,123 2,944 67 180 3,191 $89,655 $64,013 $7,087 $56,619 $41 $1,673,314 RJ $213 $8,383 $263 $46,656 $1,500 121,382 26,000 ( $2,200 2,200 i .1 ----------- ------------- --- ------------- ---------- ------------- y' ------2=200- ---------213- -------8-383- ---------263- ----1=500- - 196,238 ----------- - ------------ 87,455 63,800 (1,296) ------56,356- (1,459) 1,477,076 f 87,455 63,800 (1,296) 56,356 (1,459) 1,477,076 ----------- ------------- ------------- ------------- ------------- ---------- ------------- $89,655 $64,013 $7,087 $56,619 $41 $1,673,314 L L i f + IMF CITY OF DUBLIN CAPITAL PROJECTS FUND COMBINING BALANCE SHEET JUNE 30, 1988 i GENERAL COMMUNITY PARK STREET TOTALS IMPROVEMENTS IMPROVEMENTS IMPROVEMENTS IMPROVEMENTS 1988 t: ASSETS Cash $100 $4,626 $1,573,071 $1,577,797 Accounts receivable 12,264 12,264 Due from other funds 2,857 $714,474 31,832 1,344,532 $2,093,695 ------------- ------------- ------------- ------------- ------------- �-s Total assets $2,957 $714,474 $48,722 $2,917,603 $3,683,756 LIABILITIES AND FUND BALANCE LIABILITIES: Account payable $1,327 $17,526 $100,561 $36,072 $155,486 Due to other funds 15,819 ------40,860- -----112-313- 1,945,976 2,114,968 —" Total liabilities 17,146 58,386 212,874 1,982,048 2,270,454 ------------- ------------- ------------- ------------- ------------- FUND BALANCES Designed for authorized projects (14,189) 656,088 (164,152) 935,555 1,413,302 Total fund balance (14,189) 656,088 (164,152) 935,555 1,413,302 ------------- ------------- ------------- ------------- ------------- Total liabilities and fund balances $2,957 $714,474 $48,722 $2,917,603 $3,683,756 C. ' CITY OF DUBLIN CAPITAL PROJECTS FUNDS INDIVIDUAL FUNDS BALANCE SHEETS JUNE 30, 1988 FUND BALANCE ASSETS LIABILITIES DESIGNATED --------------- ----------- ----------------------------------- ----------------------------------- FOR TOTAL ACCOUNTS DUE FROM TOTAL ACCOUNTS DUE TO TOTAL AUTHORIZED LIABILITIES AND CASH RECEIVABLE OTHER FUNDS ASSETS PAYABLE OTHER FUNDS LIABILITIES PROJECTS FUND BALANCES ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------- --------------- General Improvements DatacProcessing System $100 $100 $1,327 $1,327 ($1,227) $100 Cable TV Equipment And Facility Word ProcessLng Equipment $15,819 15,819 (15,819) l City Base Maps $183 183 183 Dublin San Ramon Services District Study 2,507 2,507 2,507 2,507 General Copier Equipment 129 129 129 129 Dublin Storage Yard 38 38 38 38 -- ----------- ----------- ----------- ----------- ----------- ----------- ------------- --------------- 8 w 2,957 Total General Improvements 100 2,857 2,957 1,327 15,819 1 ,1 , ------- - ----------- ----------- ----- - ----- - ---- - ----------- ----- --------- - Community Improvements Major Arterial Soundwalls Bus Shelters 30,315 30,315 30,315 30,315 22,928 22,928 22,928 22,928 C1ty;Entrance Signs 15,513 13,931 29,444 (29,444) Sidewalk Safety And Bus Stop Pad Arroyo Vista Soundwall 2,013 2,013 (2,013) Downtown Improvement Plan 6,965 6,965 (6,965) 1 Dougherty Road East Side Fencing Community TV Grant 45,950 45,950 45,950 45,950 Civic Center 557,428 557,428 557,428 557,428 Village Sidewalk Landscape 2,960 2,960 2,960 2,960 Village Parkway Wall 2,490 2,490 2,490 2,490 Silvergate Drive Median Landscape 1,237 1,237 1,237 1,237 VLLIege Parkway (Amador Valley Boulevard to Kimball Road) Landscape 51,166 51,166 51,166 S Arroyo Vista Sidewalks 19,964 19,964 (19,964) ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total Community Improvements 714,474 714,474 17,526 40,860 58,386 656,088 716,474 i ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------- --------------- Park Improvements Kolb,,.Park 6,116 110,748 116,864 (116,864) Shannon Center Renovation C 1,140 1,140 (1,140) Dolan Park 77,052 77,052 (77,052) Stagecoach Park 31,832 31,832 31,832 31,832 Senior Citizen Center 1,398 1,565 2,963 (2,963) Dougherty Hills Park 12,083 12,083 (12,083) Alamo Creek Park 4,626 12,264 16,890 2,772 2,772 14,118 16,890 Park,Developement Plan ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------- --------------- Total Park Improvements 4,626 12,264 31,832 48,722 100,561 112,313 212,874 (164,152) 48,722 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------- Street,Improvements Annual Street Overlay 16,519 80,232 96,751 (96,751) San Ramon Road Phase II 600,199 600,199 64 1,293,705 1,293,769 (693,570) 600,199 San Ramon Road Phase 111 5,969 40,150 46,119 (46,119) Traffic Signal Interconnect 34,966 34,966 34,966 34,966 Traffic Signal Emergency Preemption 6,978 6,978 (6,978) Amador Valley Boulevard Rehabilitation/Landscape 964,818 964,818 377,357 377,357 587,461 964,818 San Ramon Road Phase IV 29 29 (29) Dublin Boulevard Northwest Clark Avenue 7,700 7,700 81 81 7,619 7,700 Traffic Signals Addition 2,497 2,497 (2,497) Fuel,EffLelency/TraffLe Signal Study Amador Plaza To Regional Street Copnecting Road Study 81 81 (81) Dougherty Road Bike Path 354 354 354 354 354 Dublin Boulevard/Village Parkway Turn Lane 310 310 (310) Dublin Boulevard/Regional Street Third Lane 1,574 1,364 2,938 (2,938) Amador Valley Boulevard Signal Extension 73,874 73,874 73,874 73,- Dublin Road/Dougherty Road Intersection Modification 20,143 20,143 20,143 20,143 Street flame Approach 1,701 1,701 1,701 1,701 Stagecoach Road/Amador Valley Bo,dlevard Traffic Signal 12,690 12,690 12,690 12,690 Amador Valley Boulevard Steet Rehabilitation 96,367 96,367 96,367 96,367 Sewage Facility Expansion 758,722 758,722 758,722 758,722 Dublin Boulevard Underground Utility 130,790 130,790 130,790 130,790 Downtown Street Lighting Additions 171,789 171,789 171,789 171,789 Alcosta. Road/San Ramon Road Traffic Signal 17,071 17,071 17,071 17,071 Dublin Boulevard/Sierra Road Traffic Signal 138,599 138,599 (138,599) Dublin Boulevard Extension I Specific Plan 2,784 2,784 2,784 2,784 Dublin Boulevard West of Sam Ramon Roid Improvement 10,739 10,739 10,739 10,739 Dougherty Road Widening 14,569 14,569 (14,569) Amad6r Valley Boulevard/Amador Plaza Road Traffic Signal 9,821 9,821 9,821 9 Village Parkway/Lewis Street Traffic Signal 2,428 2,428 2,428 i Stre i et flame Identification and Signal Replacement 647 647 647 647 Major Arterial Fence Replacement Dublin Boulevard Plan Line 1,616 1,616 (1,616) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------- --------------- Toi,I Street Improvements 1,573,071 1,344,532 2,917,603 36,072 1,945,976 1,982,048 935,555 2,917,603 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------- --------------- Total Capital Projects Funds $1,577,797 $12,264 $2,093,695 $3,683,756 $155,486 $2,114,968 $2,270,454 $1,413,302 $3683,756 --- -mass-.. . -- ----------- - -24- r L' 02� e;;, DOUGHERTY STREET STAGECOACH LANDSCAPE LIGHTING LANDSCAPE L LIGHTING DUBLIN TOTAL (({� REVENUE STATE PARR SALES TAX ASSESSMENT ASSESSMENT ASSESSMENT BOULEVARD ----------- ' 'j SHARING BOND ACT MEASURE B DISTRICT DISTRICT DISTRICT EXTENSION 1988 $83,401 $83,401 •.. p_8 615,131 °v 301,048 1,000 12,436 f $15,202 15,202 75,770 3,054 $2,509 $39 $1,408 100,360 282,063 1 141,996 44,386 60,533 246,915 15,860 41,441 _ --------- ----------- ---------- ---------- ---------- ---------- ------------ ----------- ( J ----15,202- ---87,455- 144,505 ---60-285- ---61941- ------------ 1,773,767 LJi --------- ---------- ----------- 123,625 152,455 37,863 _._ 66,517 3,117 364,588 3,999 2,207 2,468 $1,459 15,133 t 4 17,065 17,065 ll --------- ----------- ---------- ------ --- ---------- ---------- ------------ ----------- 127,624 85,789 5,585 1,459 587,104 --------- ----------- ---------- ---------- ---------- -7-------- ------------ 15,202 87,455 16,881 (25,504) 56,356 (1,459) 1,186,663 --------- ----------- ---------- ---------- ---------- ---------- ------------ ----------- $955 955 (15,202) (1,538,949) --------- ----------- ---------- ---------- ---------- ---------- ------------ ----------- 955 (15,202) (1,537,994) 955 87,455 16,881 (25,504) 56,356 (1,459) (351,331) --------- ----------- ---------- ---------- ---------- ---------- ------------ ----------- 1,758,736 1 (955) 46,919 24,208 69,671 (955) 46,919 24,208 1,828,407 --------- ----------- ---------- ---------- ---------- ---------- ------------ ----------- $87,455 $63,800 _ ($1,296) $56,356 ($1,459) $1,477,076 u l � CITY OF DUBLIN (:a CAPITAL PROJECTS FUND COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 1988 TOTAL •'a GENERAL COMMUNITY PARR STREET ------------- IMPROVEMENTS IMPROVEMENTS IMPROVEMENTS IMPROVEMENTS 1988 r. ------------- ------------- ------------- ------------ ------------- r Revenues: Federal aid urban and other revenue $10,000 $38,961 $178,411 $227,372 ------------- ------------- ------------- ------------ ------------- --. Total revenues 10,000 38,961 178,411 227,372 ------------ ------------- ------------- ------------ ------------- JExpenditures: Capital projects Land, equipment and other facilities 90,417 $112,212 1,255,379 694,005 2,152,013 Contractual services 134,903 153,489 420,488 708,880 t ------------- ------------- ------------- ------------ ------------- Total expenditures 90,417 247,115 1,408,868 1,114,493 2,860,893 ------------- ------------- ------------- ------------ ------------- Excess of revenue over (under) expenditures -----(80,417) (247,115) (1,369,907) (936,082) (2,633,521) ------------- ------------- ------------ ------------- L Other financing sources (uses): Operating transfer in 136,649 263,102 1,300,351 2,588,193 4,288,295 Operating transfer out (57,459) (5,256) (62,715) ------------- ------------- ------------- ------------ ------------- Excess of revenues and other financing sources over (under) expendituresand other financing uses (1,227) 15,987 (74,812) 1,652,111 1,592,059 ------------- ------------- ------------- ------------ ------------- Fund balance - beginning of year (12,962) 640,101 (89,340) (716,556) (178,757) ------------- ------------- ------------- ------------ ------------- Fund balance - end of year ($14,189) $656,088 ($164,152) $935,555 $1,413,302 i I �� -25- 5? i ti 4 CITY OF DUBLIN CAPITAL PROJECTS FUNDS INDIVIDUAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 1988 I REVENUE EXPENDITURES --------------------- ------------------------------------ OTHER FINANCING SOURCES FUND BALANCE CAPITAL PROJECTS ---------------------- ----------------------- --------------------- ----------------------- ------------ FEDERAL AID LAND AND OTHER FINANCING URBAN AND EQUIPMENT SOURCES OVER (UNDER) OTHER TOTAL AND OTHER CONTRACTUAL TOTAL OPERATING OPERATING EXPENDITURES AND BEGINNING END REVENUE REVENUE FACILITIES SERVICES EXPENDITURES TRANSFER IN TRANSFER OUT OTHER FINANCING USES OF YEAR OF YEAR ----------- --------- ----------- ----------- ------------ ----------- ------------ -------------------- ----------- ----------- General Improvements Data Processing System $35,417 $35,417 $75,936 ($41,746) ($1,227) ($1,227) Cable TV Equipment And Facility $10,000 $10,000 55,000 55,000 45,000 Word Processing Equipment 10,926 (10,926) ($15,819) (15,819) City Base Maps.' 183 183 Dublin San Ramon Services District Study 2,507 2,507 General Copier,Equipment 4,787 (4,787) 129 129 Dublin Storage',Yard 38 38 ----------- --------- ----------- ----------- ------------ ----------- ------------ -------------------- ----------- ----------- Total General Improvements 10,000 10,000 90,417 -----90,417- ---136,649 ---(57,459) -------------(1,227) ---(12,962) -- (14-189) ----------- --------- ----------- ----------- -- - -- --- Community Improvements Major Arterial;Soundwalls $63,335 63,335 63,335 Bus Shelters 759 759 759 30,315 30,315 City Entrance Signs 22,928 22,928 Sidewalk Safety And Bus Stop Pad 95,775 50,171 145,946 159,697 13,751 (43,195) (29,444) Arroyo Vista Soundwall 12,466 12,466 10,453 (2,013) (2,013) Downtown Improvement Plan 5,454 5,454 5,451 (3) (6,962) (6,965) Dougherty Road,East Side Fencing 16,437 2,718 19,155 23,407 4,252 (4,252) Community TV Grant 45,950 45,950 Civic Center 557,428 557,428 Village Sidewalk Landscape 2,960 2,960 Village Parkway Wall 2,490 2,490 Silvergate Drive Median Landscape 1,237 1,237 Village Parkway (Amador Valley Boulevard to Kimball Road) Landscape 51,166 Sh, 166 Arroyo Vista Sidewalks (19,964) (1.,964) + ----------- --------- ----------- ----------- ------------ ----------- ------------ -------------------- ----------- ----------- Total Community Improvements 112,212 134,903 247,115 263,102 15,987- --- 640,101 656,088- ----------- --------- ----------- ----------- ------ ------ Park Improvements Kolb Park 625,533 30,654 656,187 653,695 (2,492) (114,372) (116,f64) Shannon Center.Renovation 1,326 1,326 186 (1,140) (1,140) Dolan Park 1 422,802 72,610 495,412 423,216 (72,196) (4,856) (77,052) Stagecoach Park 64,105 5,512 69,617 71,123 1,506 30,326 31,832 Senior Citizen.Center 130,856 18,640 149,496 151,789 (5,256) (2,963) (2,963) Dougherty Hilli. Park 12,083 12,083 (12,083) (12,083) Alamo Creek Park 38,961 38,961 24,747 24,747 14,214 (96) 14,118 Park Developement Plan 342 342 (342) ----------- --------- ----------- ----------- ------------ ----------- ------------ -------------------- ----------- ----------- Total Park Improvements 38,961 38,961 1,255,379 153,489 1,408,868 1,300,351 (5,256) (74,812) (89,340) (164,152) ----------- --------- ----------- ----------- ------------ ----------- ------------ -------------------- ----------- ----------- Street Improvements Annual Street Overlay (94,784) 208,674 113,890 97,371 (16,519) (80,232) (96,751) San Ramon Road'Phase II 668,255 48,401 716,656 1,331,609 614,953 (1,308,523) (693,570) San Ramon RoadwPhase III 41,648 41,648 35,679 (5,969) (40,150) (46,119) Traffic SignallInterconnect 14,311 424 14,735 106,138 91,403 (56,437) 3 Traffic Signal'Emergency Preemption 6,978 6,978 (6,978) 1 ) Amador Valley Boulevard Rehabilitati6n/Landscape 167,961 167,961 6,930 5,748 12,678 812,307 967,590 (380,129) 587,461 San Ramon Road?Phase IV 28,654 28,654 28,625 (29) (29) Dublin Boulevard Northwest Clark Avenue 97,929 13,308 111,237 121,472 10,235 (2,616) 7,619 Traffic Signals Addition 15,476 15,476 13,149 (2,327) (170) (2,497) Fuel Efficiency/Traffic Signal Study 10,450 10,450 10,450 10,450 220 220 (220) Amador Plaza To Regional Street Connecting Road Study 11,207 11,207 11,126 (81) (81) Dougherty Road"Bike Path 11,776 11,776 11,776 Dublin Boulevard/Village Parkway Turn Lane 2,930 2,930 2,620 (310) (310) . Dublin Boulevard/Regional Street Third Lane 1,364 1,574 2,938 (2,938) (2,938) Amador Valley Boulevard Signal Extension 73,874 73,874 Dublin Road/Dougherty Road Intersection Modification 1 20,143 20,143 Street flame Approach 1,701 1,701 Stagecoach Roao/Amador Valley Boulevard Traffic Signal 12,690 12,690 Amador Valley .Boulevard Steet 96,367 96,367 RehabilitatLon Sewage Facility Expansion 758,722 758,722 Dublin Boulevard Underground Utility 130,790 130 790 Downtown Street Lighting Additions 171,789 17 9 Alcosta Road/San Ramon Road Traffic Signal 17,071 17,071 Dublin Boulevard/Sierra Road Traffic Signal 716 716 (139,315) (138,599) Dublin Boulevard Extension Specific Plan 2,784 2,784 Dublin Boulevard West of Sam Ramon Road Improvement 10,739 10,739 Dougherty Roa&Widening (14,569) (14,569) Amador Valley Boulevard/Amador Plaza Road Traffic Signal 9,821 9,821 Village Parkway/Lewis Street Traffic Signal 2,428 2,428 Street flame I&entificatlon and 647 647 Signal Replacement Major ArteriaL' Fence Replacement 3,761 3,761 (3,761) Dublin Boulevard Plan Line 13,240 13,240 11,624 (1,616) (1,616) i ----------- --------- ----------- ----------- ------------ ----------- ------------ -------------------- ----------- ----------- Total Street, Improvements 178,411 178,411 694,005 420,488 1,114,493 2,588,193 1,652,111 (716,556) 935,555 i ----------- --------- ----------- ----------- ------------ ----------- ------------ -------------------- ----------- ----------- Total Capital Projects Funds $227,372 $227,372 $2,152,013 $708,880 $2,860,893 $4,288,295 ($62,715) $1,592,059 ($178,757) $1,413,302 i� CITY OF DUBLIN RECOMMENDATIONS FOR IMPROVEMENT'S IN INTERNAL CONTROL I 0 AZE & A SSOCIATEo ACCOUNTANCY CORPORATION Creekside Oaks 1470 Maria Lane - Suite 200 Walnut Creek, California 94596 (415) 930-0902 • (916) 972-7333 The Honorable Mayor and City Council City of Dublin Dublin, California We have examined the financial statements of the City of Dublin for the year ended June 30, 1988, and have issued our report thereon dated November 23, 1988. As part of our examination, we made a study and evaluation of the system of internal control to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards. The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion on the financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole. Management is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgements by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projections of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion on the system of internal accounting control of the City of Dublin taken at whole. Our study and evaluation disclosed no condition that we believe to be a material weakness. However, our examination disclosed the following areas in which internal controls could be strengthened. A Professional Corporation CITY OF DUBLIN RECOMMENDATIONS FOR IMPROVE=S IN INTERNAL CONTROL RECOMMENDATION 1 - THE FORMAT OF THE ANNUAL FINANCIAL REPORT AND INTERNAL MONTHLY FINANCIAL REPORTS SHOULD BE THE SAME WHEREVER POSSIBLE, The Finance Department has recently instituted a series of monthly 1r financial reports which summarize information by fund type. The format of the annual financial report should be conformed with the monthly report format as much as possible. We have already discussed this recommendation with the Finance Director and will work with him to implement it. RECOMMENDATION 2 - OLD CAPITAL PROJECT FUNDS SHOULD BE CLOSED The City currently has over sixty Capital Projects Funds. According to City staff, many of these Capital Project Funds could be closed, as the related project has been completed or has never been started. The City should review its Capital Project Funds and all which are not expected to incur additional activity should be closed. In addition, the City should consider reducing the number of new capital projects funds by combining closely related projects. RECOMMENDATION 3 - CAPITAL PROJECTS DUE (TO) FROM BALANCES SHOULD BE ELIMINATED During our audit we noted that all Capital Projects Funds showed a $2,114,968 balance Due To Other Funds and a $2,093,695 balance Due From Other Funds. The City should eliminate these balances by accounting for the cash transfers which caused them as inter-fund transfers. RECOMMENDATION 4 - INTEREST COSTS INCURRED ON THE CIVIC CENTER PROJECT SHOULD BE CAPITALIZED AS CONSTRUCTION IN PROGRESS During our audit we noted that interest costs incurred on the Civic Center Project had not been capitalized. Generally accepted accounting principles require that all costs incurred in acquiring an asset and preparing it for its intended use should be capitalized. This requirement includes interest costs. The City should capitalize all costs, including interest, incurred on the Civic Center Project as construction in progress. i- CITY OF DUBLIN RECOMMEND, JNS FOR IMPROVEMENTS IN INTERN. XNTROL RECOMMENDATION 5 - BILLING AND COLLECTION PROCEDURES FOR DEVELOPER ACCOUNTS SHOULD BE REVIEWED The City requires cash deposits from developers to finance work done by the City on their projects. During our audit we noted that the City's expenditures on several of these deposit accounts exceeded the amounts of the deposits. We understand the Finance Department has changed its accounting procedures in order to better control individual deposit balances. However, the City should also review its procedures for billing and collecting differences such as those noted above. In order to minimize any potential collection problems,` the Finance Department should prepare an aged trial balance of outstanding balances to assist the City Engineer in collecting these balances. In addition, the City should consider increasing the amount of the deposits required. RECOMMENDATION 6 - INTEREST INCOME ALLOCATION PROCEDURES SHOULD BE REVISED In prior years, interest income was allocated to each fund based on month-end cash balances, which resulted in certain funds receiving interest allocations even though their cash balances represented amounts due to the General Fund for expenditures on their behalf. The General Fund paid all the liabilities of these funds and was reimbursed by them after month-end. The City should revise its interest allocation method to allocate interest based on each fund's cash balance after adjustment for its balance due to or from other funds. This method would properly compensate those funds which finance the activities of other funds. We understand the Finance Department is in the process of implementing this recommendation. RECOMMENDATION 7 - OLD OUTSTANDING CHECKS SHOULD BE CLEARED The City has several old outstanding checks on its bank reconciliations. These outstanding checks should be reviewed with the City Attorney to determine the City's legal obligations to the payees. The City should then take the steps necessary to remove these old outstanding checks from its bank reconciliations. RECOMMENDATION 8 - THE CITY SHOULD CLOSE OLD BANK ACCOUNTS The City changed'.banks several years ago but still has accounts open in the old bank with $17,809 and $2,144 in the old general and payroll accounts, respectively. These accounts should be closed and the balances transferred to the current checking accounts. CITY OF DUBLIN RECOMMENL JNS FOR IMPROVEMENTS IN INTER. CONTROL RECOMMENDATION 9 - PERSONNEL POLICIES SHOULD BE REVISED TO SPECIFY WHICH DAY AN EMPLOYEE'S RIGHT TO ACCRUED COMPENSATED ABSENCES VESTS During our audit of payroll, we noted the City has established personnel policies defining accrued compensated absences such as accrued vacation I. and sick leave. These policies do not address the question of when an employee's right to these compensated absences vests. Personnel policies, should be revised to specify which day an employee's right to accrued compensated absences vests. We wish to express our appreciation for the courtesy and cooperation extended to us by Phil Molina and his staff during our examination. November 23, 1988 I i I 1-- f : I . I I