12-0618 San Buenaventura PFFA. OS - Californiacdiacdocs.sto.ca.gov/2012-0618.pdf · CITY OF SAN...
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Transcript of 12-0618 San Buenaventura PFFA. OS - Californiacdiacdocs.sto.ca.gov/2012-0618.pdf · CITY OF SAN...
CITY OF SAN BUENAVENTURA PUBLIC FACILITIES FINANCING AUTHORITY AND CITY OF SAN BUENAVENTURA
CITY COUNCIL MEMBERS
Mike Tracy, Mayor Cheryl Heitmann, Deputy Mayor Neal Andrews, Council Member Brian Brennan, Council Member
James L. Monahan, Council Member Carl E. Morehouse, Council Member
Christy Weir, Council Member
CITY STAFF
Rick Cole, City Manager James Mason, Assistant City Manager
Jay Panzica, Chief Financial Officer/Assistant City Manager Ariel Calonne, Esq., City Attorney
Cyndi Rodriguez, City Clerk
BOND COUNSEL
Jones Hall, A Professional Law Corporation
San Francisco, California
DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth, A Professional Corporation Newport Beach, California
TRUSTEE
The Bank of New York Mellon Trust Company, N.A. Los Angeles, California
ESCROW BANK
The Bank of New York Mellon Trust Company, N.A. Los Angeles, California
VERIFICATION AGENT
Grant Thornton LLP Minneapolis, Minnesota
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchasers of the Bonds.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the Authority, in any press release and in any oral statement made with the approval of an authorized officer of the Authority, the words or phrases �will likely result,� �are expected to,� �will continue,� �is anticipated,� �estimate,� �project,� �forecast,� �expect,� �intend� and similar expressions identify �forward looking statements� within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.
Official Statement Speaks as of its Date. This Official Statement speaks only as of its date, and the information and expressions of opinion herein are subject to change without notice. Neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, give rise to any implication that there has been no change in the affairs of the City or the Authority since the date hereof.
Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the City or the Authority to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and if given or made, such other information or representation must not be relied upon as having been authorized by the City, the Authority or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.
Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof and said public offering prices may be changed from time to time by the Underwriter.
NO REGISTRATION. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
The City maintains a website. However, the information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.
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TABLE OF CONTENTS
Page
INTRODUCTION ................................................................................................................................................ 1
FINANCING PLAN ............................................................................................................................................. 3The Refunding Plan ....................................................................................................................................... 3 The Refunded Certificates and the Series F Certificates ................................................................................ 3 Verification of Mathematical Computations .................................................................................................. 4 Sources and Uses of Funds ............................................................................................................................ 4
THE LEASED PROPERTY ................................................................................................................................. 4Ventura Community Park .............................................................................................................................. 4 Buenaventura Golf Course ............................................................................................................................. 5 Olivas Park Golf Course ................................................................................................................................ 5 Substitution of Leased Property ..................................................................................................................... 5 Release of Leased Property ............................................................................................................................ 5 Modification of Leased Property ................................................................................................................... 6
THE BONDS ........................................................................................................................................................ 6Authority for Issuance .................................................................................................................................... 6 General Bond Terms ...................................................................................................................................... 6 Redemption .................................................................................................................................................... 8 Registration, Transfer and Exchange ........................................................................................................... 10
DEBT SERVICE SCHEDULE ........................................................................................................................... 12
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS .................................................................. 13The Site Lease and the Lease Agreement .................................................................................................... 13 Security and Sources of Payment ................................................................................................................. 13 Reserve Account .......................................................................................................................................... 14 Deposit of Qualified Reserve Account Credit Instrument ........................................................................... 15 Parity Obligations ........................................................................................................................................ 15 Covenants to Maintain Insurance ................................................................................................................. 16 Application of Net Proceeds of Insurance and Eminent Domain Awards ................................................... 16 Abatement .................................................................................................................................................... 17 Investments .................................................................................................................................................. 17
THE AUTHORITY ............................................................................................................................................ 18
THE CITY .......................................................................................................................................................... 18
CITY FINANCES............................................................................................................................................... 18Accounting Policies and Financial Reporting .............................................................................................. 18 Revenue and Expenditure Trends ................................................................................................................ 19 General Fund Financial Summary ............................................................................................................... 20 Budgetary Process ........................................................................................................................................ 22 Fiscal Year 2011-2012 Budget..................................................................................................................... 23 Fiscal Year 2012-2013 Proposed Budget ..................................................................................................... 25 Tax Receipts ................................................................................................................................................. 25 Property Taxes ............................................................................................................................................. 25 Sales and Use Taxes ..................................................................................................................................... 27 State of California Motor Vehicle In-Lieu Payments .................................................................................. 29 Utility Tax .................................................................................................................................................... 30 Outstanding General Fund Debt and Lease Agreement Obligations ........................................................... 30 Direct and Overlapping Debt ....................................................................................................................... 31
TABLE OF CONTENTS (continued) Page
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Employee Relations and Collective Bargaining ........................................................................................... 32 Investment of City Funds ............................................................................................................................. 32 Retirement System ....................................................................................................................................... 33 Pension Funding Information ....................................................................................................................... 34 Pending Claims & Risk Management .......................................................................................................... 38 Golf Course Fund ......................................................................................................................................... 38
RISK FACTORS ................................................................................................................................................ 41General ......................................................................................................................................................... 41 General Considerations � Security for the Bonds ........................................................................................ 41 Eminent Domain .......................................................................................................................................... 42 Abatement .................................................................................................................................................... 42 Limited Recourse on Default; No Acceleration ........................................................................................... 43 Limitation on Remedies; Bankruptcy .......................................................................................................... 43 State Budget Information ............................................................................................................................. 43 Seismic Considerations ................................................................................................................................ 47 Hazardous Substances .................................................................................................................................. 48 Substitution and Release of Property ........................................................................................................... 48 Ability to Re-Let .......................................................................................................................................... 48 Investment of Funds ..................................................................................................................................... 48 Secondary Market ........................................................................................................................................ 48 Loss of Tax Exemption ................................................................................................................................ 49 No Liability of Authority to the Owners ...................................................................................................... 49
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ............ 49Constitutional Limitation on Taxes and Expenditures ................................................................................. 49 Unitary Property ........................................................................................................................................... 52 Future Initiatives .......................................................................................................................................... 53
RELEVANT LITIGATION................................................................................................................................ 53
APPROVAL OF LEGAL PROCEEDINGS ....................................................................................................... 53
TAX MATTERS................................................................................................................................................. 53
LEGAL MATTERS ............................................................................................................................................ 55
PROFESSIONAL FEES ..................................................................................................................................... 55
RATING ............................................................................................................................................................. 55
CONTINUING DISCLOSURE .......................................................................................................................... 55
UNDERWRITING ............................................................................................................................................. 56
EXECUTION ..................................................................................................................................................... 56
APPENDIX A SUMMARY OF PRINCIPAL LEGAL DOCUMENTS ....................................................... A-1 APPENDIX B CERTAIN INFORMATION REGARDING THE CITY OF SAN
BUENAVENTURA AND THE COUNTY OF VENTURA ................................................ B-1 APPENDIX C COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR YEAR
ENDED JUNE 30, 2011 ........................................................................................................ C-1 APPENDIX D BOOK-ENTRY ONLY SYSTEM ........................................................................................ D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE ................................................ E-1 APPENDIX F FORM OF OPINION OF BOND COUNSEL ........................................................................ F-1
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OFFICIAL STATEMENT
$16,450,000 $1,365,000 CITY OF SAN BUENAVENTURA PUBLIC FACILITIES FINANCING AUTHORITY
2012 REFUNDING LEASE REVENUE BONDS, SERIES A
CITY OF SAN BUENAVENTURA PUBLIC FACILITIES FINANCING AUTHORITY
2012 TAXABLE REFUNDING LEASE REVENUE BONDS, SERIES B
INTRODUCTION
This Introduction is qualified in its entirety by reference to the more detailed information included and referred to elsewhere in this Official Statement. The offering of the captioned Bonds to potential investors is made only by means of the entire Official Statement. Terms used in this Introduction and not otherwise defined have the respective meanings given to them elsewhere in this Official Statement. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS�Definitions.�
General. The purpose of this Official Statement, including the appendices hereto, is to furnish information regarding the issuance and sale by the City of San Buenaventura Public Facilities Financing Authority (the �Authority�) of the City of San Buenaventura Public Facilities Financing Authority 2012 Refunding Lease Revenue Bonds, Series A (the �Series A Bonds�) and 2012 Taxable Refunding Lease Revenue Bonds, Series B (the �Series B Bonds� and together with the Series A Bonds, the �Bonds�).
Changes To Preliminary Official Statement. See the statements under the captions �CONTINUING DISCLOSURE� and �THE BONDS�Redemption� for updated information regarding the City�s continuing disclosure undertaking and the optional redemption provisions applicable to the Series A Bonds maturing February 1, 2027. See also �SECURITY AND SOURCES OF PAYMENT FOR THE BONDS�Reserve Account� for a description of a change in the definition of �Reserve Requirement� for the Bonds. Finally, see �RISK FACTORS�State Budget Information�Impact on City,� ��Redevelopment Agency Dissolution� and ��Ongoing State Budget Risks� for a discussion of the Governor�s May Revision to the State Budget and related proposed changes to AB x1 26
Authority for Issuance. The Bonds are being issued under resolutions adopted on April 23, 2012, by the Authority and the City Council of the City of San Buenaventura (the �City�) and an Indenture of Trust (the �Indenture�) dated as of June 1, 2012, between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the �Trustee�). The Bonds will be issued in full conformity with the Constitution and laws of the State of California (the �State�). See �THE BONDS�Authority for Issuance.�
Purpose. The proceeds of the Bonds will be used (i) provide for the refunding and defeasance of the City�s outstanding 2001 Certificates of Participation, Series C (the �Series C Certificates�) and the City�s outstanding 2002 Certificates of Participation, Series D (the �Series D Certificates�), and a portion of the principal and interest payable on July 1, 2012 with respect to the City�s outstanding 2010 Certificates of Participation, Series F (the �Series F Certificates�) and (ii) pay the costs of issuing the Bonds. See �FINANCING PLAN�Sources and Uses of Funds.�
The Site Lease and the Lease Agreement. The City will lease certain property to the Authority under a Site Lease dated as of June 1, 2012 (the �Site Lease�) between the City as lessor and the Authority as lessee. Under the Site Lease, the Authority agrees to make a payment (the �Site Lease Payment�) to the City in consideration of its lease of such property from the City thereunder. The City will use the Site Lease Payment for the purpose of refinancing the Series C Certificates, Series D Certificates, and a portion of the Series F Certificates, as described more fully above. See �THE FINANCING PLAN.�
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Concurrently, the Authority will lease such property together with certain additional property which is owned by the Authority (collectively, the �Leased Property�) back to the City under a Lease Agreement dated as of June 1, 2012 (the �Lease Agreement�), between the Authority as lessor and the City as lessee, in consideration of which the City agrees to pay semiannual lease payments (the �Lease Payments�) which constitute the primary source of Revenues which are pledged to the Bonds.
The Leased Property. The Lease Payments are for the right to use and possession by the City of the Leased Property, which will consist generally of the City�s Ventura Community Park, Buenaventura Golf Course and Olivas Park Golf Course. See �THE LEASED PROPERTY� for a description of the Leased Property that is subject to the Lease Agreement.
Security for the Bonds. The Bonds are special obligations of the Authority, payable solely from �Revenues� under the Indenture, which consist primarily of Lease Payments to be received by the Authority from the City under the Lease, and amounts on hand from time to time in the funds established under the Indenture. See �SECURITY AND SOURCES OF PAYMENT FOR THE BONDS.�
The Lease Payments are payable by the City from any source of legally available funds, including its General Fund, and to the limited extent described herein, its Golf Course Fund and are designed to be sufficient in both time and amount to pay, when due, the principal of and interest on the Bonds. The City has covenanted in the Lease Agreement to take such action as may be necessary to include the Lease Payments in its annual budgets and has further covenanted to make the necessary annual appropriations for all such Lease Payments.
Abatement. The Lease Payments are subject to abatement in the event of material damage to or destruction of the Leased Property or a taking by eminent domain of the Leased Property in whole or in part. See �SECURITY AND SOURCES OF PAYMENT FOR THE BONDS�Abatement� and �RISK FACTORS.�
Special Obligation. The Bonds are special obligations of the Authority payable solely from and secured solely by the revenues pledged in the Indenture. The Bonds are not a debt of the Authority, the City, the State of California or any of its political subdivisions, except the Authority to the extent described herein, and neither the Authority, the City, the State of California nor any of its political subdivisions, except the Authority to the extent described herein, is liable thereon. In no event are the Bonds or any interest thereon payable out of any funds or properties other than those of the Authority as set forth in the Indenture. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of the Authority, the City, nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance.
The obligation of the City to pay the Lease Payments does not constitute an obligation for which the City is obligated to pledge any form of taxation or for which the City has pledged any form of taxation. The obligation of the City to pay the Lease Payments does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.
The City and the Authority. For certain information concerning the City and the Authority, see �THE CITY� and �THE AUTHORITY.� For certain information on the City�s current financial situation, see �CITY FINANCIAL INFORMATION� and APPENDIX C��COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR YEAR ENDED JUNE 30, 2011.� For a discussion of certain limitations on imposing or raising taxes contained in the State Constitution and their impact on the City, see �CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.�
Tax Matters. Assuming compliance with certain covenants and provisions of the Internal Revenue Code of 1986, in the opinion of Bond Counsel, interest on the Series A Bonds is excludable from gross income for federal income tax purposes although it may be includable in the calculation for certain taxes. Also in the opinion of Bond Counsel, interest on the Bonds is exempt from State of California personal income taxes. The
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Authority and the City have determined that interest on the Series B Bonds is not excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986. See �TAX MATTERS.�
Continuing Disclosure. Under a Continuing Disclosure Certificate the City will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data and to provide notices of the occurrence of certain enumerated events, if material, in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5). See �CONTINUING DISCLOSURE� and APPENDIX E��FORM OF CONTINUING DISCLOSURE CERTIFICATE.�
Additional Information. The City regularly prepares a variety of reports, including audits, budgets and related documents. Any Bond owner may obtain a copy of any such report, as available, from the City. Any additional information regarding this Official Statement may be obtained by contacting the Trustee or the City of San Buenaventura at 501 Poli Street, Ventura, California 93002; Attention: Chief Financial Officer.
All references to and summaries of provisions of the Indenture, the Site Lease, the Lease Agreement and the Continuing Disclosure Certificate are qualified in their entirety by reference to the full Indenture, the Site Lease, the Lease Agreement and Continuing Disclosure Certificate, copies of which are available for inspection at the offices of the City in San Buenaventura, California or at the corporate trust office of the Trustee in Los Angeles, California.
FINANCING PLAN
The Refunding Plan
The Bonds are being executed and delivered to provide for the refunding of (i) $6,175,000 comprising the City�s remaining principal amount of the lease payment obligations relating to the Series C Certificates, (ii) $10,190,000 remaining principal amount of the City�s lease payment obligations relating to the Series D Certificates and (iii) $1,339,800 principal and interest component of the City�s lease payment obligations relating to the Series F Certificates due July 1, 2012 (the �Series F Refunded Installment�). A portion of the proceeds of the Bonds, together with funds deposited by the City and funds held by the prior trustee with respect to the refunded Series C Certificates and Series D Certificates (together, the �Refunded Certificates�) and the Series F Refunded Installment, will be used to establish an irrevocable escrow (the �Escrow Fund�) to be held by The Bank of New York Mellon Trust Company, N.A. (the �Escrow Bank�). Moneys on deposit in the Escrow Fund will be held as cash. The cash will be held by the Escrow Bank on behalf of the City and for the benefit of the Owners and applied to: (i) prepay the outstanding Series C Certificates in full on or about June 15, 2012, at a prepayment price equal to 100.5 percent of the principal amount thereof, plus accrued interest; (ii) prepay the outstanding Series D Certificates in full on or about June 15, 2012, at a prepayment price equal to 100 percent of the principal amount thereof, plus accrued interest; and (iii) pay the Series F Refunded Installment due on July 1, 2012. Upon the establishment of the Escrow Fund as described above, the lien of the trust agreements and lease agreements pursuant to which the Refunded Certificates were executed and delivered and the proceedings pursuant to which the Refunded Certificates were authorized, executed and delivered will cease, terminate and become void with respect to the Refunded Certificates, except for the rights of the owners of the Refunded Certificates to payments from the Escrow Fund. Upon the issuance of the Bonds, Grant Thornton, LLP, will deliver a report verifying the sufficiency of the moneys deposited in the Escrow Fund. See �FINANCING PLAN�Verification of Mathematical Computations� herein.
The Refunded Certificates and the Series F Certificates
The Series C Certificates were executed and delivered in 2001 in the original principal amount of $16,345,000 and financed improvements to the Ventura Community Park, City Hall and certain general city-wide street improvements. The Series D Certificates were executed and delivered in 2002 in the original principal amount of $15,930,000 and financed major improvements to the Buenaventura Golf Course and
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Olivas Park Golf Course, and the Series F Certificates were originally executed and delivered in 2010 in the original principal amount of $20,615,000, and refinanced a portion of several of the City�s outstanding Certificates of Participation including a portion of the City�s Series C Certificates and Series D Certificates, as well as a portion of the City�s Series A Certificates and Series B Certificates, which financed other municipal improvements. The Series F Certificates also funded certain minor golf course improvements at the Olivas Park Golf Course.
Verification of Mathematical Computations
Upon delivery of the Bonds, Grant Thornton LLP, acting as verification agent, will deliver a report verifying the mathematical accuracy of certain computations concerning (i) the adequacy of the amounts deposited in the Escrow Fund to defease and prepay all the outstanding Refunded Certificates in full on the dates as described herein, and (ii) the yield on the Series A Bonds considered by Bond Counsel in its determination that the portion of Lease Payments designated as and comprising interest and received by owners of the Series A Bonds is excluded from gross income for federal income tax purposes.
Sources and Uses of Funds
The following table sets forth the sources and uses of funds with respect to the Bonds. The City expects to fund the deposit to the Reserve Account for the Bonds from a combination of Bond proceeds and a direct contribution of City funds in the amount of $1,781,500.00.
Sources: Series A Bonds Series B Bonds Principal Amount of Bonds $ 16,450,000.00 $ 1,365,000.00 Plus Net Original Issue Premium 786,038.75 - Less Underwriter�s Discount (98,700.00) (8,190.00) City Contribution 1,645,000.00 136,500.00 Total Sources: $ 18,782,338.75 $ 1,493,310.00
Uses: Deposit into Escrow Fund $ 16,962,894.94 $ - Series F Certificates Deposit - 1,339,800.00 Deposit into Costs of Issuance Fund (1) 174,443.81 17,010.00 Deposit to Reserve Account 1,645,000.00 136,500.00 Total Uses: $ 18,782,338.75 $ 1,493,310.00
(1) Includes fees of the bond counsel and disclosure counsel, and the Trustee; title insurance; rating agency fees; and other miscellaneous expenses.
THE LEASED PROPERTY
At the time of the delivery of the Bonds, the Leased Property will consist of the City�s Ventura Community Park, Buenaventura Golf Course and Olivas Park Golf Course. The Leased Property includes all related land and the improvements which are at any time situated on such land.
The Leased Property is generally described as follows:
Ventura Community Park
The Ventura Community Park is a 100 acre master planned park site located in east Ventura, at 901 S. Kimball Road immediately northwest of the intersection of Kimball and Telephone Roads. The Community Park was acquired by the City of Ventura in February of 2001 as the site of a youth sports playground and activity center. The park features three large sports fields, a 1.4-mile paved trail and a state of the art aquatics facility with two 25-foot water slides, a recreation pool, competition pool and a water playground for children.
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Buenaventura Golf Course
The Buenaventura Golf Course is currently an 18-hole, 6,000-yard championship golf course designed by architect William Bell located at 5882 Olivas Park Road, Ventura. The Buenaventura Golf Course was built in or around 1932 and was originally a 9 hole course. In 1958, the City acquired additional land and expanded the course to create an 18 hole layout. The course was renovated in 1984 and again in 2006. Course amenities include a full-service pro shop, locker rooms/restroom facilities, a two-story 4,800 square foot banquet center, and snack bar. The latest re-design of Buenaventura Golf Course in 2006 included changes in the layout of the course, upgrades to infrastructure, and the construction of a new maintenance facility and offices.
Olivas Park Golf Course
The Olivas Park Golf Course was originally built in 1961 and is currently an 18-hole, 6,755-yard championship golf course designed by William Bell, Jr. located at 3750 Olivas Park Road, Ventura. Course amenities include a practice area, a full-service pro shop, a locker room, banquet facility and snack bar. The course is adjacent to the historic Olivas Adobe, the Santa Clara River and the Pacific Ocean.
The course was dramatically redesigned in 2007 from a traditional course to a links-style course, and has been planted with Sea Isle paspalum turf that offers a durable smooth playing surface. The course was ranked among the top 10 Municipal Golf Courses in the Nation for 2009 by Golf Week Magazine.
Both golf courses comprising part of the Leased Property are subject to flood risk and other natural disasters. Both courses have been subject to inundation by flood in the past. See �RISK FACTORS�Seismic Considerations/Flood Risk� below.
Substitution of Leased Property
The Lease Agreement permits the substitution of property for the Leased Property (or any portion thereof), upon satisfaction of various conditions that include, among other things, the requirements that the City:
(i) obtain a CLTA policy of title insurance insuring the City�s leasehold estate under the Lease Agreement in the substitute property, in an amount at least equal to the estimated value of the substitute property, and
(ii) file with the Authority and the Trustee a written certificate of the City or other written evidence stating that the estimated value of the substitute property is at least equal to the original aggregate principal amount of the Bonds and the fair rental value of the property which remains subject to the Lease Agreement following the substitution is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement.
See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS�LEASE AGREEMENT� for a more complete description of the conditions which must be met before the City is permitted to substitute property under the Site Lease and Lease Agreement.
Release of Leased Property
Under the Lease Agreement, the City has the option at any time and from time to time to release any portion of the Leased Property upon satisfaction of various conditions that include, among other things, the requirements that the City certify in writing to the Authority and the Trustee that (a) the value of the property that remains subject to the Lease Agreement following the release is at least equal to the aggregate original principal amount of the Bonds, and (b) the fair rental value of the property that remains subject to the Lease
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Agreement following the release is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement.
See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS�LEASE AGREEMENT� for a more complete description of the conditions which must be met before the City is permitted to release portions of the Leased Property under the Site Lease and the Lease Agreement.
Modification of Leased Property
Under the Lease Agreement the City has the right, at its own expense, to make additions, modifications and improvements to the Leased Property or any portion thereof. All additions, modifications and improvements to the Leased Property will thereafter comprise part of the Leased Property and become subject to the provisions of the Lease Agreement.
Such additions, modifications and improvements may not in any way damage the Leased Property, or cause the Leased Property to be used for purposes other than those authorized under state and federal law; and the Leased Property, upon completion of any additions, modifications and improvements made thereto under the Lease Agreement, must be of a value which is not substantially less than the value thereof immediately prior to the making of such additions, modifications and improvements.
The City will not permit any mechanic�s or other lien to be established or remain against the Leased Property for labor or materials furnished in connection with any remodeling, additions, modifications, improvements, repairs, renewals or replacements made by the City under the Lease Agreement; except that if any such lien is established and the City first notifies or causes to be notified the Authority of the City�s intention to do so, the City may in good faith contest any lien filed or established against the Leased Property, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom, and will provide the Authority with full security against any loss or forfeiture which might arise from the nonpayment of any such item, in form satisfactory to the Authority. The Authority will cooperate fully in any such contest, upon the request and at the expense of the City.
THE BONDS
Authority for Issuance
The Bonds are being issued under the Indenture, a resolution adopted by the Authority on April 23, 2012, and a resolution adopted by the City Council of the City on April 23, 2012 (collectively, the �Resolutions�). Under the Resolutions, the Bonds may be issued in a maximum principal amount of $21,000,000. The Series A Bonds and the Series B Bonds are the only series of Bonds that may be issued under this Authorization.
General Bond Terms
Dated Date, Maturity and Authorized Denominations. The Bonds will be dated their date of delivery and will mature in the amounts and on the dates set forth on the inside cover page of this Official Statement. The Bonds will be issued in denominations of $5,000 or any integral multiple of $5,000, so long as no Bond has more than one maturity date.
Fully Registered Form; Book-Entry Only System. The Bonds will be issued in fully registered form, and registered initially in the name of �Cede & Co.,� as nominee of The Depository Trust Company, New York, New York (�DTC�), which has been appointed as securities depository for the Bonds, and registered ownership may not be transferred thereafter except as provided in the Indenture. Purchasers will not receive certificates representing their interests in the Bonds. Principal of and interest on the Bonds will be paid by the Trustee to DTC, which in turn is obligated to remit such principal and interest to its Participants for subsequent
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disbursement to beneficial owners of the Bonds as described herein. See APPENDIX D��BOOK-ENTRY ONLY SYSTEM.�
Payment of Interest and Principal. For so long as DTC is used as depository for the Bonds, principal, premium, if any, and interest payments on the Bonds will be made solely to DTC or its nominee, Cede & Co., as registered owner of the Bonds, for distribution to the beneficial owners of the Bonds in accordance with the procedures adopted by DTC.
Interest on the Bonds will be payable on February 1 and August 1 of each year (each an �Interest Payment Date�), commencing on August 1, 2012.
Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below.
Interest on any Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the person in whose name the ownership of such Bond is registered on the Registration Books at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice of which is given to such Owner by first-class mail not less than 10 days prior to such special record date.
The Trustee will pay interest on the Bonds by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. At the written request of the Owner of Bonds in an aggregate principal amount of at least $1,000,000, which written request is on file with the Trustee as of any Record Date, the Trustee will pay interest on such Bonds on each succeeding Interest Payment Date by wire transfer in immediately available funds to such account of a financial institution within the United States of America as specified in such written request, which written request will remain in effect until rescinded in writing by the Owner.
The Trustee will pay principal of the Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee.
Calculation of Interest. The Series A Bonds and the Series B Bonds will bear interest at the annual rates set forth on the inside cover page of this Official Statement.
Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless:
a Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date,
a Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or
interest on any Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date.
Interest on the Bonds will be computed on the basis of a 360-day year composed of twelve 30-day months.
8
Redemption
Optional Redemption of Series A Bonds. The Series A Bonds maturing on or before February 1, 2022, are not subject to optional redemption prior to their respective stated maturity dates.
The Series A Bonds maturing on or after February 1, 2023 (other than Series A Bonds maturing February 1, 2027), are subject to redemption prior to maturity at the option of the Authority, among maturities as directed by the Authority and by lot within maturity in whole or in part, on any date on or after February 1, 2022, in integral multiples of $5,000 from any source of funds, upon notice as described below, at a redemption price equal to the principal amount of the Series A Bonds to be redeemed, together with interest accrued to the date fixed for redemption, without premium.
The Series A Bonds maturing February 1, 2027 are subject to redemption prior to maturity at the option of the Authority, in whole or in part, on any date on or after February 1, 2017, in integral multiples of $5,000 from any source of funds, upon notice as described below, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with interest accrued to the date fixed for redemption, without premium.
Special Mandatory Redemption From Insurance or Condemnation Proceeds. The Bonds are subject to redemption as a whole, or in part on a pro rata basis among maturities, on any date, from the Net Proceeds of condemnation or insurance award with respect to the Leased Property, to the extent such Net Proceeds are required to be used for such purpose as provided in the Indenture, at a redemption price equal to 100% of the Bonds to be redeemed, plus interest accrued on such Bonds to the date fixed for redemption, without premium. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS� for a more complete description of the application of Net Proceeds of condemnation or insurance.
Mandatory Sinking Fund Redemption of Series A Bonds. The Series A Bonds maturing February 1, 2032 (the �Series A Term Bonds�) are subject to mandatory redemption in part by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on February 1 in the respective years as set forth in the following tables; provided, however, that if some but not all of the Series A Term Bonds have been redeemed pursuant to the optional or special mandatory redemption provisions described above, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Series A Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis in integral multiples of $5,000 (as set forth in a schedule provided by the Authority to the Trustee).
Series A Term Bonds Maturing February 1, 2032
Sinking Fund Redemption Date
(February 1) Principal Amount To Be Redeemed
2030 $1,905,000 2031 1,990,000 2032 (maturity) 985,000
Mandatory Sinking Fund Redemption of Series B Bonds. The Series B Bonds are subject to mandatory redemption in part by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on February 1 in the respective years as set forth in the following tables; provided, however, that if some but not all of the Series B Bonds have been redeemed pursuant to the special mandatory redemption provisions described above, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Series B
9
Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis in integral multiples of $5,000 (as set forth in a schedule provided by the Authority to the Trustee).
Series B Term Bonds Maturing February 1, 2020
Sinking Fund Redemption Date
(February 1) Principal Amount To Be Redeemed
2015 $105,000 2016 110,000 2017 115,000 2018 115,000 2019 645,000 2020(maturity) 275,000
No Optional Redemption of Series B Bonds. The Series B Bonds are not subject to optional
redemption prior to maturity.
Selection of Bonds for Redemption. If less than all the Bonds of a single maturity are to be redeemed, the Trustee will select the Bonds of such maturity to be redeemed by lot in any manner which the Trustee in its sole discretion deems appropriate. For purposes of such selection, the Trustee will treat each Bond as consisting of separate $5,000 portions, and each such portion is subject to redemption as if such portion were a separate Bond.
Notice of Redemption. Written notice of redemption is required to be mailed by the Trustee not less than 20 nor more than 60 days prior to the redemption date to (i) the respective Owners of any Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee, and (ii) one or more Securities Depositories and to the Information Services.
Each notice of redemption will state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and (in the event that not all Bonds within a maturity are called for redemption) Bond numbers of the Bonds to be redeemed and the maturity or maturities of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed.
Each such notice will also state that on the redemption date there will become due and payable on each of the Bonds called for redemption the redemption price thereof, and that from and after such redemption date interest thereon will cease to accrue, and will require that such Bonds be then surrendered.
Neither the failure to receive any notice nor any defect therein will affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date.
However, while the Bonds are subject to DTC�s book-entry system, the Trustee will be required to give notice of redemption only to DTC as provided in the letter of representations executed by the Authority and received and accepted by DTC. DTC and the Participants will have sole responsibility for providing any such notice of redemption to the beneficial owners of the Bonds to be redeemed. Any failure of DTC to notify any Participant, or any failure of Participants to notify the Beneficial Owner of any Bonds to be redeemed, of a notice of redemption or its content or effect will not affect the validity of the notice of redemption, or alter the effect of redemption set forth in the Indenture.
Rescission of Redemption. The Authority has the right to rescind any notice of the optional redemption of Bonds by written notice to the Trustee on or prior to the date fixed for redemption. Any notice
10
of redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation will not constitute an Event of Default under the Indenture.
The Authority and the Trustee will have no liability to the Bond Owners or any other party related to or arising from such rescission of redemption. The Trustee will mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under the Indenture.
Effect of Redemption. Once notice of redemption has been given as required, and moneys for payment of the redemption price of the Bonds (together with interest accrued to the date of redemption and any applicable premium) is held by the Trustee, the Bonds (or portions thereof) called for redemption will become due and payable, interest on the Bonds called for redemption will cease to accrue, such Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture, and the Owners of the called Bonds will have no rights in respect thereof except to receive payment of the redemption price thereof.
All Bonds redeemed under the provisions of the Indenture will be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect.
Registration, Transfer and Exchange
The following provisions regarding the exchange and transfer of the Bonds apply only during any period in which the Bonds are not subject to DTC�s book-entry system. While the Bonds are subject to DTC�s book-entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC. See APPENDIX D��BOOK-ENTRY ONLY SYSTEM.�
Registration. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which will upon reasonable notice as agreed to by the Trustee, be open to inspection during regular business hours by the Authority; and, upon presentation for such purpose, the Trustee will, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as described above.
Transfer. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed.
The Trustee will collect any tax or other governmental charge on the transfer of any Bonds.
Whenever any Bond or Bonds is surrendered for transfer, the Authority will execute and the Trustee will authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity and aggregate principal amount. The Authority will pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds.
Exchange. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations and of the same series, interest rate and maturity.
The Trustee will collect any tax or other governmental charge on the exchange of any Bonds. The Authority will pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of Bonds.
11
Limitations. The Trustee may refuse to transfer or exchange any Bonds selected by the Trustee for redemption under the Indenture, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption.
12
DE
BT S
ERV
ICE
SCH
ED
ULE
The
sche
dule
of t
he p
rinci
pal a
nd in
tere
st p
aym
ents
on
the
Bon
ds is
set f
orth
bel
ow:
Se
ries A
Bon
ds
Serie
s B B
onds
Bond
Yea
r En
ding
Fe
brua
ry 1
Pr
inci
pal
Inte
rest
Annu
al T
otal
Pr
inci
pal
Inte
rest
Ann
ual T
otal
Annu
al T
otal
Se
ries A
an
d Se
ries B
2013
$
$ 44
6,08
5.08
$
446,
085.
08
$
$ 24
,607
.92
$
24,6
07.9
2 $
47
0,69
3.00
20
14
68
0,46
8.76
68
0,46
8.76
37,5
37.5
0 37
,357
.50
718,
006.
26
2015
680,
468.
76
680,
468.
76
105,
000
37,5
37.5
0 14
2,53
7.50
82
3,00
6.26
20
16
68
0,46
8.76
68
0,46
8.76
11
0,00
0 34
,650
.00
144,
650.
00
825,
118.
76
2017
680,
468.
76
680,
468.
76
115,
000
31,6
25.0
0 14
6,62
5.00
82
7,09
3.76
20
18
68
0,46
8.76
68
0,46
8.76
11
5,00
0 28
,462
.50
143,
462.
50
823,
931.
26
2019
680,
468.
76
680,
468.
76
645,
000
25,3
00.0
0 67
0,30
0.00
1,
350,
768.
76
2020
38
5,00
0 68
0,46
8.76
1,
065,
468.
76
275,
000
7,56
2.50
28
2,56
2.50
1,
348,
031.
26
2021
68
0,00
0 67
1,32
5.00
1,
351,
325.
00
1,
351,
325.
00
2022
69
5,00
0 65
0,92
5.00
1,
345,
925.
00
1,
345,
925.
00
2023
71
5,00
0 63
1,81
2.50
1,
346,
812.
50
1,
346,
812.
50
2024
74
0,00
0 61
2,15
0.00
1,
352,
150.
00
1,
352,
150.
00
2025
1,
515,
000
589,
950.
00
2,10
4,95
0.00
2,10
4,95
0.00
20
26
1,58
5,00
0 51
4,20
0.00
2,
099,
200.
00
2,
099,
200.
00
2027
1,
665,
000
434,
950.
00
2,09
9,95
0.00
2,09
9,95
0.00
20
28
1,75
0,00
0 35
1,70
0.00
2,
101,
700.
00
2,
101,
700.
00
2029
1,
840,
000
264,
200.
00
2,10
4,20
0.00
2,10
4,20
0.00
20
30
1,90
5,00
0 19
5,20
0.00
2,
100,
200.
00
2,
100,
200.
00
2031
1,
990,
000
119,
000.
00
2,10
9,00
0.00
2,10
9,00
0.00
20
32
985,
000
39
,400
.00
1,
024,
400.
00
1,
024,
400.
00
Tota
l
$ 16
,450
,000
$
10,2
84,1
78.9
0 $
26,7
34,1
78.9
0 $
1,36
5,00
0 $
227,
282.
92
$ 1
,592
,282
.92
$
28,3
26,4
61.8
2
13
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS
This section provides summaries of the security for the Bonds and certain provisions of the Site Lease, the Lease Agreement and the Indenture. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS� for a more complete summary of the Site Lease, the Lease Agreement and the Indenture. Capitalized terms used but not defined in this section have the meanings given in Appendix A.
The Site Lease and the Lease Agreement
The City will lease the portion of the Leased Property which is owned by it to the Authority under the Site Lease between the City as lessor and the Authority as lessee. Under the Site Lease, the Authority agrees to make the Site Lease Payment to the City in consideration of its lease of the Leased Property from the City thereunder. The City will use the Site Lease Payment for the purpose of refinancing certain prior lease payment obligations of the City, as described more fully above. See �FINANCING PLAN.�
Concurrently, the Authority will lease the Leased Property, including the portion of the Leased Property which is owned by the Authority, back to the City under the Lease Agreement, in consideration of which the City agrees to pay semiannual Lease Payments which constitute the primary source of Revenues which are pledged to the Bonds.
See �THE LEASED PROPERTY� for a description of the Leased Property.
Security and Sources of Payment
Pledge of Revenues. Under the Indenture, the Authority will pledge all of the �Revenues� and all amounts (including proceeds of the sale of the Bonds) held in any fund or account established under the Indenture to secure the payment of the principal of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of the Indenture. This pledge constitutes a lien on and security interest in the Revenues.
The Indenture defines �Revenues� as:
(a) all amounts received by the Authority or the Trustee under or with respect to the Lease Agreement, including, without limiting the generality of the foregoing, all of the Lease Payments (including both timely and delinquent payments, any late charges, and whether paid from any source), but excluding (i) any amounts described in the provisions of the Lease Agreement regarding amendments thereof to permit the payment of additional rental thereunder to support additional debt or other obligations (as described below; see ��Parity Obligations�), and (ii) any Additional Rental Payments; and
(b) all interest, profits or other income derived from the investment of amounts in any fund or account established under the Indenture.
Assignment to Trustee. Under that certain Assignment Agreement dated as of June 1, 2012 (the �Assignment Agreement�) between the Authority as assignor and the Trustee as assignee, certain of the rights, title and interest of the Authority under the Lease Agreement will be assigned to the Trustee for the benefit of the Bond owners, including but not limited to its right to receive Lease Payments under the Lease Agreement, but excluding certain rights to payment of the Authority�s expenses. Based on this assignment, the City will pay the Lease Payments directly to the Trustee, who will hold them for the benefit of the Bond owners.
Sources of Payment for Lease Payments. Under the Lease Agreement, the Lease Payments are payable from any source of legally available funds of the City, including its General Fund and to a limited
14
extent described below, the Golf Course Fund, subject to abatement as discussed below. The Lease Payments are designed to be sufficient to enable the Trustee to pay the principal of and interest on the Bonds when due.
However, the Lease Payments are not secured by any pledge of the revenues of the General Fund or the Golf Course Fund.
Additional Rental Payments. Additional Rental Payments due from the City under the Lease Agreement include amounts sufficient to pay certain fees and expenses incurred by the Authority in connection with or by reason of its leasehold estate in the Leased Property as and when they become due and payable, certain expenses of the Authority not paid from Bond proceeds incidental to the issuance of the Bonds, all Trustee�s fees and other administrative expenses directly related to the Lease Agreement, and certain Excess Investment Earnings payable with respect to arbitrage rebate.
Covenant to Budget and Appropriate. The City will covenant in the Lease Agreement to take such action as may be necessary to include and maintain all rental payments for the Leased Property in its annual budgets and to make the necessary annual appropriations therefor. Repayments are expected to be derived from the General Fund and to a limited extent the Golf Course Fund. See �CITY FINANCES�Golf Course Fund.�
Remedies Following Default Under Lease Agreement. If the City defaults under the Lease Agreement, the Lease Agreement provides that the Authority may, with or without terminating the Lease Agreement, re-let the Leased Property for the account of the City. If the Authority re-lets the Leased Property without terminating the Lease Agreement, the Authority may hold the City liable for semiannual payments of any cumulative net deficiency in Lease Payments or Additional Rental under the Lease Agreement.
In lieu of the foregoing, so long as the Authority does not terminate the Lease Agreement or the City�s right to possession of the Leased Property, the Authority may sue to recover Lease Payments as they become due. The Trustee may not accelerate the City�s obligation to make Lease Payments.
The exercise of rights and remedies under the Lease Agreement is subject to the restrictions contained in the Indenture. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.�
Reserve Account
General. The Indenture establishes a Reserve Account to be funded initially in an amount equal to the �Reserve Requirement,� and which is pledged to the payment of principal of and interest on the Bonds. Amounts in the Reserve Account are to be used only for the payment of principal of and interest on the Bonds if amounts in the Bond Fund (constituting the Principal Account and the Interest Account) are insufficient to make such payments. The Indenture provides that on the date of delivery of the Bonds, the Reserve Requirement will be initially satisfied with a deposit by the City of cash in an amount equal to the Reserve Requirement, initially $1,781,500, from a direct City contribution.
Replenishment. The Reserve Account will be replenished from amounts received as delinquent Lease Payments, proceeds of certain insurance and earnings on amounts held in certain other funds. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.�
Reserve Requirement. The Reserve Fund will initially be funded in an amount equal to the �Reserve Requirement.� As defined in the Indenture, the term �Reserve Requirement� means, as of any date of calculation, the lesser of (a) an amount equal to 10% of the original principal amount of such series of Bonds, (b) the maximum amount of principal of and interest coming due and payable on the Bonds in the current or any future Bond Year or (c) 125% of the average amount of principal of and interest on the Bonds in any Bond Year, calculated without regard to principal and interest having come due and payable prior to the date of calculation. If the amount on deposit in the Reserve Fund falls below the Reserve Requirement in any future
15
Bond Year, the Trustee will withdraw the excess amount in the Reserve Fund and return such amount to the City.
Deposit of Qualified Reserve Account Credit Instrument
General. The City may cause the Trustee to transfer amounts in the Reserve Account to the City by filing with the Trustee (a) an opinion of Bond Counsel stating that such transfer will not cause interest on the Bonds to become includable in gross income for purposes of federal income taxation, and (b) a �Qualified Reserve Account Credit Instrument.� All amounts so transferred to the City from the Reserve Account must be applied by the City to finance public capital improvements of the City.
The Trustee will comply with all documentation relating to a Qualified Reserve Account Credit Instrument as required to maintain such Qualified Reserve Account Credit Instrument in full force and effect and as required to receive payments thereunder if and to the extent required to make any payment when and as required under the Indenture.
Expiration. Upon the expiration of any Qualified Reserve Account Credit Instrument, the City will either (i) replace such Qualified Reserve Account Credit Instrument with a new Qualified Reserve Account Credit Instrument, or (ii) deposit or cause to be deposited with the Trustee an amount of funds equal to the Reserve Requirement, to be derived from the first available funds of the City.
Qualified Reserve Account Credit Instrument. As defined in the Indenture, a �Qualified Reserve Account Credit Instrument� means an irrevocable standby or direct-pay letter of credit or surety bond issued by a commercial bank or insurance company which meets all of the following requirements:
at the time of issuance the long-term credit rating of such bank or insurance company is �AA� or better from Fitch or �AA� or better from S&P, or the claims paying ability of such insurance company is rated in the highest rating category by A.M. Best & Company;
such letter of credit or surety bond has a term of at least 12 months;
such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Requirement with respect to which funds are proposed to be released; and
the Trustee is authorized under the terms of such letter of credit or surety bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in the Interest Account or the Principal Account for the purpose of making payments from such accounts.
Parity Obligations
No Issuance of Parity Bonds. Under the Indenture, the Authority agrees that it will not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under the Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by the Indenture.
Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, and reserves the right to issue other obligations for such purposes.
Parity Obligations under the Lease Agreement. The Authority and the City may at any time amend or modify any of the provisions of the Lease Agreement, without the consent of the Trustee or any of the Bond Owners, if such amendment or modification is for the purpose of obligating the City to pay additional amounts of rental for the use and occupancy of the Leased Property, but only if:
16
(A) such additional amounts of rental are pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which are applied to finance or refinance the acquisition or construction of any real or personal property for which the City is authorized to expend funds subject to its control,
(B) the City has obtained and filed with the Trustee an M.A.I. appraisal showing that the appraised value of the Leased Property is at least equal to the aggregate principal amount of the Outstanding Bonds and all such other bonds, notes, leases or other obligations, and
(C) the City has filed with the Trustee written evidence that the amendments made under this provision of the Lease Agreement will not of themselves cause a reduction or withdrawal of any rating then assigned to the Bonds.
Covenants to Maintain Insurance
This section summarizes the covenants of the City under the Lease Agreement to maintain insurance. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.�
Rental Interruption. The Lease Agreement provides that the City will maintain rental interruption insurance throughout the term of the Lease Agreement so that, if Lease Payments are abated under the Lease Agreement, monies will be available in an amount sufficient to pay maximum Lease Payments payable under the Lease Agreement for at least two Fiscal Years.
Casualty. The Lease Agreement requires the City to maintain casualty insurance on the Leased Property against loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance. Such insurance is not required to include earthquake insurance unless it is determined by the City to be available at reasonable cost from reputable insurers.
General Liability. The Lease Agreement also requires the City to maintain standard comprehensive general liability insurance in the amounts provided in the Lease Agreement against all direct or contingent loss or liability for damages for personal injury, death or Leased Property damage occasioned by reason of operation of the Leased Property.
Title Insurance. The Lease Agreement also requires the City to obtain a CLTA title insurance policy insuring the City�s leasehold in the Leased Property, subject only to Permitted Encumbrances, in an amount at least equal to the aggregate principal amount of the Bonds. The City will pay any net proceeds received by it under any such title insurance policy to the Trustee for deposit in the Bond Fund, to be credited towards the prepayment of the Lease Payments and the corresponding redemption of the Bonds.
Application of Net Proceeds of Insurance and Eminent Domain Awards
The Trustee, as assignee of the Authority under the Assignment Agreement, has the right to receive all �Net Proceeds,� which the Indenture defines as amounts derived from any policy of casualty insurance or title insurance with respect to the Leased Property, or the proceeds of any taking of the Leased Property or any portion thereof in eminent domain proceedings (including sale under threat of such proceedings), to the extent remaining after payment therefrom of all expenses incurred in the collection and administration thereof.
As provided in the Indenture, the Trustee will deposit all Net Proceeds in the Insurance and Condemnation Fund to be applied as set forth in the Indenture. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.�
17
Abatement
Termination or Abatement Due to Eminent Domain. If the Leased Property is taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the Term of the Lease Agreement thereupon ceases as of the day possession is taken.
If less than all of the Leased Property is taken permanently, or if the Leased Property is taken temporarily, under the power of eminent domain, then:
(a) the Lease Agreement will continue in full force and effect with respect thereto and will not terminate by virtue of such taking, and the parties to the Lease Agreement waive the benefit of any law to the contrary, and
(b) the Lease Payments are subject to abatement in an amount determined by the City such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portions of the Leased Property. However, the Lease Payments are not subject to abatement to the extent that amounts in the Reserve Account, are available to pay Lease Payments which would otherwise be abated under this provision, it being declared in the Lease Agreement that such amounts constitute special funds for the payment of the Lease Payments.
Abatement Due to Damage or Destruction. The Lease Payments are subject to abatement during any period in which by reason of damage or destruction (other than by eminent domain which is described above) there is substantial interference with the use and occupancy by the City of the Leased Property or any portion thereof.
The Lease Payments are subject to abatement in an amount determined by the City, such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portions of the Leased Property not damaged or destroyed.
Such abatement will continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repair or reconstruction. In the event of any such damage or destruction, the Lease Agreement will continue in full force and effect and the City waives any right to terminate the Lease Agreement by virtue of any such damage and destruction.
However, the Lease Payments are not subject to abatement to the extent that the proceeds of hazard insurance, renter�s interruption insurance or amounts in the Reserve Account, are available to pay Lease Payments which would otherwise be abated under this provision, it being declared in the Lease Agreement that such proceeds and amounts constitute special funds for the payment of the Lease Payments.
Investments
Amounts held in any fund account held under the Indenture will be invested in Permitted Investments, as that term is defined in the Indenture. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS�Definitions.�
Investment earnings on monies on deposit in any fund or account held under the Indenture will be deposited in the Bond Fund, except that earnings on the investment of amounts in the Reserve Account shall be retained therein to the extent that the amount on deposit therein is less than the Reserve Requirement, and thereafter any excess will be deposited in the Bond Fund.
18
THE AUTHORITY
The Authority was established by Ordinance No. 85-17, adopted by the City Council on May 28, 1985 pursuant to the City Charter and the Constitution of the State of California, as a public body corporate and politic acting to facilitate the financing of the acquisition, construction and improvement of facilities serving the public purposes of the City. The governing body of the Authority consists of the existing members of the City Council.
Pursuant to Ordinance No. 85-17, the Authority is empowered to construct, acquire, maintain and improve public facilities and improvements within the City and to sell, lease, exchange, transfer, encumber or otherwise dispose of any interest in property. The Authority does not have the power to levy taxes.
THE CITY
The City of San Buenaventura, generally referred to as the City of Ventura, is located on the southern California coastline approximately 62 miles northwest of the City of Los Angeles and 364 miles south of the City of San Francisco. City limits cover approximately 35.7 square miles, including 14.0 square miles of water.
The City was incorporated in 1866 and has been the seat of the County since 1873. The City is a charter city with a council-manager form of government. A seven-member City Council is elected at large for four-year alternating terms at elections held every two years. The Mayor of the City is the presiding officer of the City Council and is selected by the City Council from among its members to serve a two-year term. The City Manager, appointed by the City Council for an indeterminate term, acts as chief executive officer in carrying out the policies of the City Council.
The City�s first charter was adopted in 1932. The present charter was adopted by election on November 6, 1973 and approved by the California legislature in January of 1974, and was amended on November 7, 1995. As of July, 2011, the City had approximately 587 full-time employees and ten (full time equivalent) part-time or temporary employees. City services include police and fire protection, public works, community recreational services, water/wastewater services and community development.
For additional information concerning the City, see APPENDIX B��GENERAL INFORMATION ABOUT THE CITY OF SAN BUENAVENTURA� herein.
CITY FINANCES
The following selected financial information provides a brief overview of the City�s finances. This financial information has been extracted from the City�s audited financial statements and other sources. The most recent audited financial statements of the City with an unqualified auditor�s opinion is included as Appendix C hereto. See APPENDIX C��COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR YEAR ENDED JUNE 30, 2011.�
Accounting Policies and Financial Reporting
The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate 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 the spending activities are controlled. The basis of accounting for all funds is more fully explained in the �Notes to Financial Statements� contained in Appendix C.
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The City Council employs, at the beginning of each fiscal year, an independent certified public accountant who, at such time or times as specified by the City Council, at least annually, and at such other times as he or she determines, examines the combined financial statements of the City in accordance with generally accepted auditing standards, including such tests of the accounting records and such other auditing procedures as such accountant considers necessary. As soon as practicable after the end of the City�s fiscal year ending June 30 (the �Fiscal Year�), a final audit and report is submitted by such accountant to the City Council and a copy of the financial statements as of the close of the fiscal year is published. The City�s Independent Auditor�s Report for Fiscal Year ending June 30, 2011 was prepared by White Nelson Diehl Evans, LLP, Irvine, California (the �Auditor�).
A Finance, Audit and Budget Committee was appointed by the Council and serves as a formal body among staff, the City�s outside Auditor and the Council. The Committee functions as a working committee to vet budgetary and financial ideas, review staff proposals on controversial and political issues and provide a forum whereby the outside Auditor can present updates, issues or concerns prior to being presented to the full Council.
Revenue and Expenditure Trends
The General Fund City Budget includes programs and services which are provided on a largely City-wide basis. The programs and services are financed primarily by the City�s share of property taxes, sales tax, local taxes, revenues from the State and charges for services provided.
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The table below compares the City�s General Fund Budget adopted for Fiscal Year 2011 with the City�s audited revenues and expenditures for Fiscal Year 2011.
TABLE 1 CITY OF SAN BUENAVENTURA
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund
For the Fiscal Year Ended June 30, 2011
General
Final Budget Actual Variance Favorable
(Unfavorable)
Revenues: Taxes $ 58,589,958 $ 56,877,384 $ (1,712,574) Licenses and Permits 1,069,489 2,103,379 1,033,890 Intergovernmental(1) 10,857,806 9,176,456 (1,681,350) Charges for Services 8,297,112 7,604,749 (692,363) Fine and Forfeitures 1,968,801 1,634,251 (334,550) Use of Money and Property 1,801,909 1,486,905 (315,004) Other Revenue 2,799,510 2,769,381 (30,129) Transfers from other funds 2,810,866 2,037,691 (773,175) Amount available for appropriations 88,195,451 83,690,196 (4,505,255)
Expenditures: Current: General Government 3,281,812 2,677,327 604,485 Human Resources 955,780 758,217 197,563 Finance & Technology 7,670,168 7,305,876 364,292 Community Development 7,192,698 7,014,408 178,290 Community Services 12,113,518 11,217,429 896,089 Public Safety - Police 27,777,527 27,712,849 64,678 Public Safety - Fire 14,787,295 14,460,517 326,778 Public Works 9,467,756 6,954,028 2,513,728 Capital Outlay 711,003 400,263 310,740 Transfers to other funds(2) 12,411,232 6,562,614 5,848,618 Total charges to appropriations 96,368,789 85,063,528 11,305,261
Revenues Over (Under) Expenditures (8,173,338) (1,373,332) 6,800,006
Fund Balances: Beginning of Year 33,401,669 33,401,669 - End of Year $ 25,228,331 $ 32,028,337 $ 6,800,006
(1) Includes Motor Vehicle License Fee In-Lieu Payments. (2) Debt service is a component of transfers out to related financing funds, capital projects or other operations. Source: City of San Buenaventura
General Fund Financial Summary
The Lease Agreement provides that the City will make Lease Payments in full from any source of legally available funds of the City which are generally expected to be derived from money in the General Fund and, to a limited extent the Golf Course Fund. The following provides financial information for the General Fund taken primarily from the City�s audited financial statements for Fiscal Years 2007 through 2011. See APPENDIX C��COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR YEAR ENDED JUNE 30, 2011� for the City�s audited financial statements for Fiscal Year 2011.
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Table 2 below presents the City�s audited General Fund Statement of Revenues, Expenditures and Fund Balances for Fiscal Years 2007 through 2011.
TABLE 2 CITY OF SAN BUENAVENTURA
General Fund - Audited Revenues, Expenditures and Fund Balances For Fiscal Years Ending June 30
2007 2008 2009 2010 2011Revenues: Taxes $ 60,634,346 $ 61,035,839 $ 59,715,852 $ 55,276,410 $ 56,877,384 Licenses and Permits 1,880,019 1,429,502 1,004,297 1,466,512 2,103,379 Intergovernmental(1) 9,088,638 8,728,421 8,941,003 8,795,025 9,176,456 Charges for Services 8,107,233 8,764,388 10,124,934 7,580,684 7,604,749 Fine and Forfeitures 1,865,739 1,945,958 2,226,912 1,867,339 1,634,251 Use of Money and Property 4,040,933 4,002,037 3,427,865 2,228,707 1,486,905 Other(2) 3,442,823 2,823,121 2,669,648 2,621,999 2,769,381 Total Revenues 89,059,731 88,729,266 88,110,511 79,836,676 81,652,505
Expenditures: Current: General Government 8,276104 7,698,414 4,701,884 3,291,986 2,677,327 Human Resources 1,867,800 1,923,705 1,952,090 958,777 758,217 Finance & Technology 4,357,976 4,741,342 6,499,052 6,364,935 7,305,876 Community Development 4,284,899 4,106,905 4,432,927 3,632,431 7,014,408 Community Services 6,066,137 6,612,536 6,608,893 6,473,828 11,217,429 Public Safety � Police 26,816,977 28,657,300 29,952,775 27,436,303 27,712,849 Public Safety � Fire 16,505,456 18,391,152 19,398,973 17,478,861 14,460,517 Public Works 14,239,645 15,864,637 15,504,207 13,328,473 6,954,028 Nondepartmental - - - - - Capital Outlay 957,625 396,744 586,294 38,381 400,263 Other - - - - - Total Expenditures 83,372,619 88,392,735 89,637,095 79,003,975 78,500,914
Revenues Over (Under) Expenditures 5,687,112 336,531 (1,526,584) 832,701 3,151,591
Other Financing Sources (Uses): Operating Transfers In 1,822,152 1,886,762 4,104,486 4,138,423 1,621,971 Operating Transfers Out(3) (12,262,313) (7,449,821) (7,444,669) (4,803,429) (6,146,894)
Total Other Financing Sources (Uses) (10,440,161) (5,563,059) (3,340,183) (665,006) (4,524,923)
Net Change in Fund Balance (4,753,049) (5,226,528) (4,866,767) 167,695 (1,373,332) Fund Balances: Beginning of Year 47,566,722 43,327,269 38,100,741 33,233,974 33,401,669 Equity Transfers - - - - - End of Year $ 42,813,673 $ 38,100,741 $ 33,233,974 $ 33,401,669 $ 32,028,337
(1) Includes Motor Vehicle License Fee In-Lieu Payments. (2) Includes a variety of sources which include developer fee deposits and recoveries, which can change from year to year. (3) Debt service is a component of transfers out to related financing funds as well as one-time capital funding transfers. Source: City of San Buenaventura Comprehensive Annual Financial Reports.
Table 3 below presents the City�s audited General Fund Balance Sheets for Fiscal Years 2007 through 2011. The City�s current financial policy is to maintain approximately $12,000,000 in operating costs
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reserves. These reserves will be adjusted as necessary to reflect the amount of the City contribution to the Reserve Account for the Bonds. See �SECURITY AND SOURCES OF PAYMENT FOR THE BONDS�Reserve Account.�
TABLE 3 CITY OF SAN BUENAVENTURA
General Fund Balance Sheet For Fiscal Years Ending June 30
2007 2008 2009 2010 2011
Cash and investments $ 34,344,559 $ 30,376,561 $ 34,153,592 $ 32,973,942 $ 33,114,213 Investments in bonds 935,000 775,000 590,000 400,000 200,000 Accounts receivable, net 143,677 183,032 154,252 259,204 117,992 Interest receivable 1,503,489 1,602,465 733,374 356,895 328,900 Due from other funds 99,682 4,427 882,907 2,390,644 2,837,161 Due from other governments 3,753,829 4,019,746 3,395,490 3,483,682 3,083,532 Due from others 2,075,288 2,127,192 3,032,312 2,640,708 3,391,478 Prepaid items 44,759 756 6,359 848 926 Inventory, at cost 589,851 473,174 405,825 18,420 19,140 Loans and notes receivable 1,240,412 1,235,004 1,206,172 1,115,692 1,070,114 Advances to other funds 14,115,040 14,069,892 5,994,297 5,771,750 5,538,076
Total assets 58,845,586 54,867,249 50,554,580 49,411,785 49,701,532 Liabilities and Fund Balances Liabilities:
Accounts payable 990,577 1,420,731 1,928,341 782,368 1,181,138 Contracts payable 2,418 115,325 - - - Due to other funds 2,796,413(1) 2,596,413 2,396,413 2,196,413 1,996,413 Due to other governments 17,405 10,556 6,063 4,594 6,879 Deposits held for others 11,415,843 11,828,586 11,879,071 12,374,992 13,205,077 Deferred revenue 809,257 794,897 1,110,718 651,749 1,283,688
Total Liabilities 16,031,913 16,766,508 17,320,606 16,010,116 17,673,195 Fund Balances:
Nonspendable(2) 6,888,290 6,630,047 Restricted(2) 613,989 5,260,641 Committed(2) 16,304,014 15,873,858 Assigned(2) 3,341,324 4,263,791 Unassigned(2) 6,254,052 - Reserved:
Encumbrances 1,845,402 1,408,874 1,641,197 Petty cash 12,570 12,545 12,745 Advances to Redevelopment Agency 14,115,040 14,069,892 5,994,297 Prepaid items 44,759 756 6,359 Inventories 589,851 473,174 405,825 Loan and notes receivable 1,240,412 1,235,004 1,206,172 Investment in Portobello bonds 935,000 775,000 590,000
Total reserved 18,783,034 17,975,245 9,856,595 Unreserved:
Designated for anticipated projects 24,013,323 19,925,883 19,002,989 Undesignated 17,316 199,613 4,374,390
Total Fund Balances 42,813,673 38,100,741 33,233,974 33,401,669 32,028,337 Total Liabilities, Equity and Other Credits $ 58,845,586 $ 54,867,249 $ 50,554,580 $ 49,411,785 $ 49,701,532
(1) Includes a variety of trust deposits, the most material of which are developer impact fees held for specific future application. (2) The City adopted and implemented GASB 54 in Fiscal Year 2009-2010. GASB 54 changed the requirement for classification of fund
balance. Source: City of San Buenaventura Comprehensive Annual Financial Reports.
Budgetary Process
Budgets are legally adopted and formal budgetary integration is employed as a management control device during the fiscal year for all governmental fund types. Reported budgeted amounts shown in the table below represent the original legally adopted budget as amended. The City Council may amend the budget only
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by motion passed by the affirmative vote of at least four of its seven members at a regular or special meeting, providing that sufficient moneys are available and that expenditures of proceeds of taxes will not be increased beyond the constitutional appropriation limit as imposed by Article XIIIB of the State Constitution.
Fiscal Year 2011-2012 Budget
During Fiscal Year 2009-10 and Fiscal Year 2010-11, the City cut more than $15 million in annual spending from the General Fund, eliminating nearly 100 positions. Setting aside fixed costs such as debt service, this meant a nearly 20% reduction in operating expenditures. In Fiscal Year 2011-12, The City focused on effectively implementing those cost-cutting measures and realigning the way it does business to adjust to reduced resources. To address the downturn in revenue due to the economy, at the direction of the City Council, spending levels were reduced to match projected revenue levels. This resulted in budgets that continued to reflect a reduction of expenses. These reductions eliminated the projected gap between revenue and expenses. The Fiscal Year 2011-12 budget was designed to reflect a predicted flattening of the economic recovery for the local economy. As a result, the Fiscal Year 2011-12 budget was conservatively built and did not predict any real growth in revenue. Through March 31, 2012 sales tax revenue for Fiscal Year 2011-12 is running better than expected by 6% and property tax revenue remains flat.
In delivering a balanced budget plan for Fiscal Year 2011-12, the City followed City Council direction to balance additional spending reductions with prudent use of one-time revenue sources. On the one hand, no further visible or damaging reductions in services were projected, but the original budget did not restore certain prior cuts in services, such as reductions in the City�s Police staffing.
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Set forth below is the City�s adopted General Fund operating budget for Fiscal Year 2011-12, together with the revised budget for Fiscal Year 2011-12. The City Council adopted the Fiscal Year 2011-12 operating budget on June 13, 2011.
The principal adjustments shown in the revised budget relate to adjustment and re-appropriation of unspent encumbrances from the prior year. The City Council adopts a balanced budget before June 30 of each year. Once the fiscal year is closed, unspent encumbrances from the prior year are appropriated and encumbered in the new year. Additionally, appropriations for certain capital project transfers were added to the budget. This adjustment resulted in increased budgeted revenues and a corresponding increase in expenditure appropriations.
TABLE 4 CITY OF SAN BUENAVENTURA
Adopted General Fund Budget Revenues and Expenditures
For Fiscal Year 2012
Fiscal Year 2012 Adopted Budget
Fiscal Year 2012 Revised Budget (As
of 4/16/2012) Revenues:
Taxes $ 59,427,734 $ 59,541,436 Licenses and Permits 1,052,489 1,052,489 Intergovernmental(1) 8,142,857 12,442,282 Charges for Services 8,513,622 8,594,343 Fine and Forfeitures 1,968,801 1,968,801 Use of Money and Property 1,779,887 1,785,887 Other 9,448,656 11,739,171
Total Revenues 90,334,046 97,124,409 Expenditures:
Current: General Government 3,479,909 3,830,795 Human Resources 1,048,815 1,065,512 Finance & Technology 16,809,442 17,247,474 Community Development 7,202,526 8,355,558 Community Services 11,982,476 12,244,576 Public Safety � Police 28,007,852 28,552,295 Public Safety � Fire 15,058,562 17,627,816 Public Works 9,666,913 11,596,390 Capital Outlay 278,000 827,088
Total Expenditures 82,896,689 90,667,008
Excess (Deficiency) of Revenues Over (Under) Expenditures 7,437,357 6,457,401
Other Financing Sources (Uses):
Operating Transfers In 3,200,449 4,223,095 Operating Transfers Out(2) 10,637,806 10,680,496
Total Other Financing Sources (Uses) (7,437,357) (6,457,401) Net Change in Fund Balance $ - $ -
(1) The Fiscal Year 2012 Budget anticipates the use of prior year reserves totaling $6.8 million. (2) Includes debt service payment transfers and capital transfers. Source: City of San Buenaventura
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Fiscal Year 2012-2013 Proposed Budget
The City is entering the fourth year of challenges from the global financial crisis. The City Council has been developing the operating and capital improvement budgets for Fiscal Years 2012-13 and 2013-14 through a series of public meetings beginning in January 2012. Although the General Fund budget for Fiscal Year 2012-13 will not be adopted until June of 2012, staff is projecting a balanced budget of approximately $83.4 million based on projections of ongoing revenues of $82.9 million and $0.5 million of one-time revenue sources which will allow for a modest reinvestment in public safety personnel.
Tax Receipts
Taxes received by the City include property taxes, sales and use taxes, franchise taxes, utility users taxes and others. Of such taxes, property taxes (approximately 44% of the City�s Fiscal Year 2011 General Fund tax revenues), sales and use taxes (approximately 25% of Fiscal Year 2011 General Fund tax revenues), and utility user�s taxes (approximately 15% of Fiscal Year 2011 local tax revenues) constitute major sources of General Fund revenues. The City believes that the general taxes currently imposed by or for the benefit of the City are in compliance with Proposition 218. See �CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS�Proposition 218� herein.
The following table sets forth tax revenues received by the City for Fiscal Years 2007 through 2011 by source:
TABLE 5 CITY OF SAN BUENAVENTURA
General Fund Tax Revenues by Source(1)
For Fiscal Years Ending June 30
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Source: Property Tax(2) $ 24,829,049 $ 25,890,611 $26,459,567 $20,974,140 $24,838,065 Sales Tax(2) 17,660,066 16,784,328 14,598,479 13,749,457 14,231,682 Utility Tax 8,676,992 8,796,097 9,019,829 8,719,232 8,774,360 Franchise Tax 2,878,263 2,770,318 3,713,057 2,984,316 3,278,467 Business License Tax 1,479,714 1,519,461 1,535,109 1,482,459 1,449,501 Other Taxes(3) 5,110,263 5,275,024 4,389,811 7,366,806 4,305,309 Total General Fund Taxes $ 60,634,347 $ 61,035,839 $59,715,852 $55,276,410 $56,877,384
(1) Includes tax revenues received by the General Fund of the City. (2) Property tax revenues and sales and use tax revenues are affected by the �Triple Flip.� See ��Sales and Use Taxes� and
�RISK FACTORS�State Budget Information�Triple Flip� below. (3) Includes Transient Occupancy Tax. Source: City of San Buenaventura Comprehensive Annual Financial Reports.
Property Taxes
Property tax receipts provided the largest tax revenue source of the City, contributing approximately 44% of General Fund tax revenues and approximately 30% of total General Fund revenues during Fiscal Year 2011. In California, property which is subject to ad valorem taxes is classified as �secured� or �unsecured�. The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State Law, on the secured property, regardless of the time of the creation of other liens. The valuation of property is determined as of January 1 each year, and installments of taxes levied upon secured property become delinquent on April 10th and December 10th. Taxes on unsecured property are due July 1, and become delinquent August 31.
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Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of forcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes of the State for the amount of taxes that are delinquent. The taxing authority has four methods of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder�s Office in order to obtain a lien on certain property of the taxpayer, and (4) seizure and sale of personal property, improvement or possessory interest belonging or taxable to the assessee.
A ten percent penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, beginning on the July 1 following a delinquency, interest begins accruing at the rate of 1½% per month on the amount delinquent. Such property may thereafter be redeemed by the payment of the delinquent taxes and the ten percent penalty, plus interest at the rate of 1½% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A ten percent penalty also applies to the delinquent taxes or property on the unsecured roll, and further, an additional penalty of 1½% per month accrues with respect to such taxes beginning on the varying dates related to the tax billing date.
Legislation enacted in 1984 (Section 25 et seq. of the Revenue and Taxation Code of the State of California), provided for the supplemental assignment and taxation of property as of the occurrence of a change in ownership or completion of new construction. Collection of taxes based on supplemental assessments occurs throughout the year. Taxes due are prorated according to the amount of time remaining in the tax year, with the exception of tax bills dated January 1 through May 31, which are calculated on the basis of the remainder of the current fiscal year and the full 12 months of the next fiscal year.
In many recent years, the State Legislature has shifted property taxes from cities, counties and special districts to the Educational Revenue Augmentation Fund. The term �ERAF� is often used as a shorthand reference for this shift of property taxes. In 1992-93 and 1993-94, in response to serious budgetary shortfalls, the State Legislature and administration permanently redirected over $3 billion of property taxes from cities, counties, and special districts to schools and community college districts. The 2004-05 California State Budget included an additional $1.3 billion shift of property taxes from certain local agencies, including the City, to occur in Fiscal Years 2004-05 and 2005-06. The City�s portion of such property tax shift for each of these two Fiscal Years was $2,716,305. To date, over $45 million has been shifted under ERAF, excluding the SERAF shift for Fiscal Year 2009-10. The 2009-10 California State Budget included an additional $1.7 billion shift of property taxes from certain local agencies, including the City.
On November 2, 2004, California voters approved Proposition 1A, which amends the State Constitution to significantly reduce the State�s authority over major local government revenue sources. Under Proposition 1A, the State may not (i) reduce local sales tax rates or alter the method of allocating the revenue generated by such taxes, (ii) shift property taxes from local governments to schools or community colleges, (iii) change how property tax revenues are shared among local governments without two-third approval of both houses of the State Legislature, or (iv) decrease Vehicle License Fees revenues without providing local governments with equal replacement funding. Beginning in Fiscal Year 2008-09, the State may shift to schools and community colleges a limited amount of local government property tax revenue if certain conditions are met, including (a) a proclamation by the Governor that the shift is needed due to a severe financial hardship of the State, and (b) approval of the shift by the State Legislature with a two-thirds vote of both houses. Under such a shift, the State must repay local governments for their property tax losses, with interest, within three years. The Governor and the State implemented these provisions in Fiscal Year 2009-10. See �RISK FACTORS�State Budget Information.� Proposition 1A does allow the State to approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Recent
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significant changes in the law providing for the dissolution of redevelopment agencies has significantly affected the City. See �RISK FACTORS�State Budget Information.�
The following table shows assessed valuations and tax levies for Fiscal Years 2007 through 2011.
TABLE 6 CITY OF SAN BUENAVENTURA
Assessed Value of Taxable Property and Total Current Tax Levy For Fiscal Years Ending June 30(1)
Local Secured Utility Unsecured Taxable Assessed
Value
Total Before Redevelopment
Increment
Total After Redevelopment
Increment
2007 10,631,829,726 1,078,448 571,736,291 11,204,644,465 11,204,644,465 10,922,072,657 2008 11,475,208,604 659,229 596,099,280 12,071,967,113 12,071,967,113 11,742,732,417 2009 11,919,084,579 659,229 591,251,093 12,510,994,901 12,510,994,901 12,171,440,893 2010 11,530,310,044 659,229 613,346,934 12,144,316,207 12,144,316,207 11,803,611,398 2011 11,539,816,985 439,241 553,850,896 12,094,107,122 12,094,107,122 11,762,694,884
(1) Data is stated at 100% of actual value as required under Section 135 of the Revenue and Tax Code. Exemptions are netted directly against the individual property categories.
Source: Ventura County Auditor-Controller�s Office.
The ten largest taxpayers in the City shown on the Fiscal Year 2010-11 secured tax roll, type of business, the assessed valuation and the percentage of the City�s total taxable assessed value attributable to each are shown on Table 7 below.
TABLE 7 CITY OF SAN BUENAVENTURA Top Ten Local Secured Taxpayers
Fiscal Year 2011
Property Owner Assessed Valuation
2010-11 % of Total(1)
1. ASN Ventura LLC $135,976,600 1.18% 2. Community Memorial Hospital 89,137,951 0.77 3. Macerich Buenaventura, LTD 81,812,609 0.71 4. Jefferson at Pelican Point 59,313,000 0.51 5. Ventura Pines Associates, LLC 41,579,500 0.36 6. MBL Golf Course, LLC 30,442,999 0.26 7. Ventura Beach Ventures LLC 28,419,915 0.25 8. Center Promenade, LLC 28,250,000 0.24 9. Poinsetta Plaza, LLC 27,124,190 0.24 10. Newport Beach North LLC 26,010,300 0.23
(1) 2010-11 Local Secured Assessed Valuation: $11,539,816,985. Source: Ventura County Assessor�s Office.
Sales and Use Taxes
A sales tax is imposed on retail sales or consumption of personal property. The tax rate is established by the State Legislature. The current effective sales tax rate in the City is 7.250%. The City�s share of sales tax would be approximately 1% considering the combined City share of 0.717% and the State�s 0.250% fiscal recovery funding (Triple-Flip swap) which is currently payable from property taxes as described below. With the enactment of the triple flip, the City now receives the 0.250% as reclassified revenue through property tax
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as an in lieu remittance, the payment of which heretofore coincides with the County property tax calendar. The State collects and administers the tax, and makes distributions on taxes collected within the City as follows:
TABLE 8 CITY OF SAN BUENAVENTURA
Sales Tax Rates
State General Fund ............................................. 5.500% State Local Public Safety Fund .......................... 0.500 State Local Revenue Fund ................................. 0.500 Ventura County .................................................. 0.033 City .................................................................... 0.717 Total ................................................................... 7.250%
The State�s actual administrative costs with respect to the portion of sales taxes allocable to the City are deducted before distribution and are determined on a quarterly basis.
On March 2, 2004, voters approved a bond initiative formally known as the �California Economic Recovery Act.� This act authorized the issuance of $15 billion of Economic Recovery Bonds to finance ongoing State budget deficits, which are payable from a fund established by the redirection of tax revenues known as the �Triple Flip.� The State issued $11.3 billion of Economic Recovery Bonds prior to June 30, 2004. Under the �Triple Flip,� one-quarter of local governments� one percent share of the sales tax imposed on taxable transactions within their jurisdiction is being redirected to the State. In an effort to eliminate the adverse impact of the sales tax revenue redirection on local government, State legislation provides for certain property taxes to be redirected to local government. Because these property tax monies were previously earmarked for schools, the legislation provides for schools to receive other State general fund revenues. It is expected that the swap of sales taxes for property taxes will terminate once the Economic Recovery Bonds are repaid. See �RISK FACTORS � State Budget Information� herein.
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During calendar year 2010, total taxable transactions in the City amounted to $1,643,898,000, a 1 percent increase over the $1,624,801,000 of taxable transactions that occurred during calendar year 2009. Since then, City sales tax receipts reflect a slight increase in sales tax revenues. See ��Fiscal Year 2010-11; Fiscal Year 2011-12 Budget.� The following table shows taxable transactions in the City during calendar years 2003 through 2010.
TABLE 9 CITY OF SAN BUENAVENTURA
Taxable Transactions by Type of Business For Calendar Years 2001 through 2008
(amounts in thousands)
Retail Sales Total Sales
Year Permits
On July 1 Taxable
Transactions Permits On
July 1 Taxable
Transactions
2003 1,926 $1,505,464,000 5,683 $1,798,072,000 2004 1,953 1,641,053,000 5,710 1,944,290,000 2005 2,020 1,704,150,000 5,823 2,028,969,000 2006 N/A 1,707,140,000 N/A 2,088,774,000 2007 N/A 1,705,586,000 N/A 2,063,622,000 2008 N/A 1,505,336,000 N/A 1,877,036,000 2009 N/A 1,317,593,000 N/A 1,624,801,000 2010(1) N/A 1,347,565,000 N/A 1,643,898,000
(1) Most recent data available. Source: California State Board of Equalization.
Net sales tax revenues to the City are affected by a City agreement with Macerich Buenaventura Limited Partnership (Developer) for the development of Pacific View Mall (Mall), which is located within the City�s boundaries. The Developer agreed to make improvements to the Mall in exchange for sales tax rebates. The improvements include three projects on-site, off-site, and transit facility improvements. Upon completion of the projects, the on-site and transit facility assets will be the property of the Developer. The off-site improvements are public domain assets and will be donated to the City by the Developer. The agreement provides for 80 percent sales tax revenue rebates to the Developer over a base amount calculated as average sales tax revenue before the improvements are made. Payments are to be made for twenty years, beginning February 1, 2001, or until a maximum dollar amount of $32,300,000 (for all three projects) has been dispersed, whichever comes first. Total payments made by the City as of February 15, 2012, were $8,826,242. If the twenty years has elapsed and the maximum dollar amount has not been reached, the Developer has the right to appeal for further payments for an additional two years. The City does have the option to prepay the maximum dollar amount. There is no minimum amount due and if sales tax revenues do not exceed the base level, the City�s payments would be zero.
State of California Motor Vehicle In-Lieu Payments
The State imposes a vehicle license fee (�VLF�), which is the portion of the fees paid in lieu of personal property taxes on a vehicle. The vehicle license fee is based on vehicle value and declines as the vehicle ages. Prior to the adoption of the Fiscal Year 2004-05 State Budget, the fee was 2 percent of the value of a vehicle. Through legislation in prior fiscal years, the State enacted vehicle license fee reductions under which the State was required to �backfill� local governments for their revenue losses resulting from the lowered rates. The Fiscal Year 2004-05 State Budget permanently reduced the vehicle license fee from 2 percent to 0.65 percent and deleted the requirement for backfill payments, providing, instead, that the amount of the backfill requirement will be met by an increase in the property tax allocation to cities and counties. Vehicle license fee apportionments were ended as part of the State�s Fiscal Year 2011-12 Budget with the
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money instead being used for local law enforcement programs. See �RISK FACTORS�State Budget Information.�
As set forth in Table 10 below, for Fiscal Year 2011, the City received approximately $8.3 million in total vehicle license fees of which $7.8 million was paid from property taxes.
TABLE 10 CITY OF SAN BUENAVENTURA
State of California Motor Vehicle In-Lieu Payments
Source 2007 2008 2009 2010 2011
Motor Vehicle In-Lieu $7,887,568 $8,308,227 $8,480,754 $8,194,617 $8,342,441
(1) Includes one time receivable payback from prior year borrowings by State. Source: The City of San Buenaventura Comprehensive Annual Financial Reports.
Utility Tax
The City has two separate utility user taxes. One covers electricity and gas service at a 5% rate. A second, approved by the voters November 6, 2007, adopted the Communication Services Tax, which applies to all types of modern communication services, including telephone and cable service, at a 4.5% rate. In Fiscal Year 2011, utility tax revenues were the third largest source of General Fund tax revenues and constituted approximately 15.4% of all General Fund tax revenues.
Outstanding General Fund Debt and Lease Agreement Obligations
The City had the following long-term obligations for the year ended June 30, 2011.
TABLE 11 CITY OF SAN BUENAVENTURA
General Long-Term Debt Account Group
Balance July 1, 2010 Debt Issued Debt Retired
Balance June 30, 2011
Governmental Activities: Cal HFA HELP Loan � 2008 $ 1,500,000 $ - $ - $ 1,500,000 Certificates of Participation � 2001 Series A 1,580,000 - (1,580,000) - Certificates of Participation � 2001 Series C 13,740,000 - (7,155,000) 6,585,000 Certificates of Participation � 2002 Series B 11,345,000 - (9,890,000) 1,455,000 Certificates of Participation � 2002 Series D 13,670,000 - (2,985,000) 10,685,000 Certificates of Participation � 2007 Series E 10,165,000 - (450,000) 9,715,000 Certificates of Participation � 2010 Series F - 20,615,000 - 20,615,000 Tax Allocation Bonds � 2003 6,545,000 - (270,000) 6,275,000 Tax Allocation Bonds � 2008 8,500,000 - (35,000) 8,465,000 California Energy Commission 2004 150,999 - (12,586) 138,413 California Energy Commission 2007 111,070 - (73,221) 37,849
Subtotal governmental activities 67,307,069 20,615,000 (22,450,807) 65,471,262 Claims and judgments payable 8,640,993 2,820,236 (2,721,726) 8,739,503 Compensated absences payable 4,916,998 2,393,436 (2,201,407) 5,109,027
Total governmental activities $ 80,865,060 $ 25,828,672 $ (27,373,940) $ 79,319,792
Source: The City of San Buenaventura.
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Direct and Overlapping Debt
Contained within the City are overlapping local agencies providing public services which have issued general obligation bonds and other types of indebtedness. Direct and overlapping bonded indebtedness as of June 30, 2011 is shown in the following table.
TABLE 12 CITY OF SAN BUENAVENTURA
Statement of Direct and Overlapping Debt(1) As of June 30, 2011
2010-11 Assessed Valuation: $12,094,107,122 Redevelopment Incremental Valuation: 330,375,182 Adjusted Assessed Valuation: $11,763,731,940
Total Debt City�s Share of OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/11 % Applicable(2) Debt 6/30/11 Ventura County Community College District $314,522,814 12.420% $39,063,733 Ventura Unified School District 67,275,000 81.180 54,613,845 Oxnard Union High School District 92,889,913 0.014 13,005 Mesa Union School District 7,695,000 0.223 17,160 Oxnard School District 118,733,139 0.019 22,559 Rio School District 15,653,540 0.013 2,035 City of San Buenaventura 1915 Act Bonds 200,000 100. 200,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $93,932,337
DIRECT AND OVERLAPPING GENERAL FUND DEBT: Ventura County General Fund Obligations $101,290,000 12.416% 12,576,166 Ventura County Supt. of Schools Certificates of Participation 12,140,000 12.416 1,507,302 Ventura Unified School District Certificates of Participation 3,840,000 81.180 3,117,312 Oxnard Union High School District Certificates of Participation 9,280,000 0.014 1,299 Oxnard School District Certificates of Participation 5,285,900 0.019 1,004 Rio School District Certificates of Participation 7,930,000 0.013 1,031 City of San Buenaventura General Fund Obligations 48,925,000 100. 48,925,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $66,129,114
COMBINED TOTAL DEBT $160,061,451(3)
Ratios to 2011-12 Assessed Valuation: Total Overlapping Tax and Assessment Debt� 0.78%
Ratios to Adjusted Assessed Valuation: Combined Direct Debt ($48,925,000) .................... 0.42% Combined Total Debt ................................................. 1.36%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/11: $0 (1) Excludes issue to be sold. (2) Percentage of overlapping agency�s assessed valuation located within the boundaries of the city. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations. Source: California Municipal Statistics, Inc.
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Employee Relations and Collective Bargaining
The City has existing three-year contracts with 90% of its workforce. All have been modified in this current cycle to require employees to begin paying at least one-half of the required employee contribution (more in the case of non-public safety employees) toward pension costs. City employees are divided into thirteen (13) separate salary schedules (excluding temporary support staff) for the purpose of salary and benefit administration, (8) eight of which are represented by a bargaining union/association. These salary schedule groups are listed below:
Salary Schedule
Approximate Number of Regular Employees Covered Term of MOU
Maintenance Unit (Non-Supervisory Maintenance, Operations and Laboratory Employees) 121 Jul. 1, 2010 � Jun. 30, 2013
General Unit (Non-Supervisory Clerical, Technical, Para-professional, Inspectors and Civilian Public Safety Employees) 127 Jul. 1, 2010 � Jun. 30, 2013
Supervisor Unit (Supervisory Employees) 75 Jul. 1, 2010 � Jun. 30, 2013 Professional Unit (Professional Employees) 30 Jul. 1, 2010 � Jun. 30, 2013 Police Unit (Police Officers, Corporals and Sergeants) 115 Jul. 1, 2010 � Jun. 30, 2013 Fire Unit (Basic Unit: Firefighter Trainee,
Firefighter/Paramedic Trainees/ Firefighter, Firefighters/Paramedics and Fire Engineers) and (Fire Captain�s Unit: Fire Captain) 54 Jan. 1, 2011 � Dec. 31, 2013
Police and Fire Recruits (Police Officer Trainee, Firefighter-Paramedic Recruit and Firefighter Recruit. Trainees in unit for less than six months) 3 No MOU
Police Management Unit (Police Commander and Assistant Police Chiefs) 6 Jul. 1, 2010 � Jun. 30, 2012
Fire Management Unit (Fire Battalion Chiefs, Assistant Fire Chiefs) 5 Jan. 1, 2011 � Dec. 31, 2013
Executive (Department Heads, City Attorney, City Manager) 11 No MOU - Unrepresented
Management (Division Heads and other managers) 27 No MOU - Unrepresented Administrative Professional 5 No MOU - Unrepresented Confidential (Administrative Secretaries, Human
Resources non-analyst staff, Legal Administrative Secretaries) 19 No MOU - Unrepresented
Totals 598 (1) The positions within this unit are non-safety trainee positions that upon completion of required training are promoted to
either Police or Fire Unit represented positions.
Investment of City Funds
The City invests its funds in accordance with the City�s Investment Policy, most recently amended on June 20, 2011. On June 20, 2011, City Council approved an annual update to the Investment Policy. In accordance with Section 53600 et seq. of the California Government Code, idle cash management and investment transactions are the responsibility of the City Treasurer. The City�s Investment Policy sets forth the policies and procedures applicable to the investment of City funds, and designates eligible investments. The Investment Policy sets forth a stated objective, among others, of insuring the safety of invested funds by limiting credit and interest rate risks. Eligible investments are limited to the Local Agency Investment Fund which is operated by the California State Treasurer, U.S. Treasury Bills, Notes and Bonds having maturities
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not greater than 5 years, U.S. Government Agency issues having maturities not greater than 5 years, FDIC insured or fully collateralized certificates of deposit, repurchase agreements, banker�s acceptances and commercial paper rated A1/P1 or better, and mutual funds investing in specified securities and obligations. Funds are invested in the following order of priority:
Safety of Principal. Liquidity Return of Investment
The City Treasurer is required to provide a quarterly report to the City Manager and the City Council showing the type of investment, date of maturity, amount invested, current market value, rate of interest, and other such information as may be required by the City Council.
Retirement System
The City contributes to the State of California Public Employees� Retirement System (PERS), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for cities in the State. A menu of benefit provisions as well as other requirements are established by State statutes within the Public Employees� Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with PERS and adopts those benefits through local ordinance. The City�s payroll for employees covered by PERS for the year ended June 30, 2010 was $48,002,417.
All full-time City employees and part-time City employees who have worked over 1,000 hours during a fiscal year are eligible to participate in PERS, with benefits vesting after 5 years of service. Employees are designated as safety (police officers, firefighters and others designated as safety by law) or miscellaneous (all others). The City implemented a 2-tier retirement plan, effective July 23, 2011 for Miscellaneous members and July 23, 2011 for Police members. Employees beginning service with the City after this date are covered by the Tier 2 formula.
Tier 1 Retirement Formula. Miscellaneous members who are age 50 with at least 5 years of credited CalPERS service, are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to a benefit factor multiplied by their final compensation. The Miscellaneous members retirement formula is 2% at 55, and the benefit factor is an amount equal to between 1.426% and 2.418% multiplied by the number of years of credited employment. The benefit factor is based upon the age of the employee at retirement, increasing from age 50 to age 63. Final compensation is the average monthly pay rate for the last consecutive 12 months (or any 12-month period in which pay was higher) of employment.
Safety members who are age 50 with at least 5 years of credited CalPERS service, are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to a benefit factor multiplied by their final compensation. For participants in the 3% at 50 plan (applicable to Police members) the benefit factor is 3%, while for those who are participants in the 3% at 55 plan (applicable to Fire members) the benefit factor is an amount equal to between 2.4% and 3.0%. The benefit factor is based upon the age of the employee at retirement, increasing from age 50 to age 55 in the case of Fire members in the 3% at 55 plan, and remaining at 3% from age 50 to age 55 in the case of Police members in the 3% at 50 plan. Final compensation for safety members is the average monthly pay rate for the last consecutive 12 months (or any 12-month period in which pay was higher) of employment.
Tier 2 Retirement Formula. Miscellaneous members who are age 50 with at least 5 years of credited CalPERS service, are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to a benefit factor multiplied by their final compensation. The Miscellaneous members retirement formula is 2% at 60, and the benefit factor is an amount equal to between 1.092% and 2.418% multiplied by the number of years of credited employment. The benefit factor is based upon the age of the employee at retirement, increasing from age 50 to age 63. Final compensation is the average three highest years of employment.
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Safety (Police) members who are age 50 with at least 5 years of credited CalPERS service, are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to a benefit factor multiplied by their final compensation. The Safety members retirement formula is 3% at 55, and the benefit factor is an amount equal to between 2.40% and 3.0% multiplied by the number of years of credited employment. The benefit factor is based upon the age of the employee at retirement, increasing from age 50 to age 55. Final compensation is the average monthly pay rate for the last consecutive 12 months (or any 12-month period in which pay was higher) of employment.
PERS also provides death and disability benefits. These benefit provisions and all other requirements are established by state statute and City ordinance.
PERS requires that miscellaneous employees contribute 7% and safety employees contribute 9% of their annual salary to PERS. However, this benefit, like all others, is subject to collective bargaining. Prior to Fiscal Year 2010-11 all of the City�s bargaining units had negotiated for the City to contribute this portion on behalf of the employee. However, covered employees agreed to contribute an amount equal to 2% of their annual salary for Fiscal Year 2010-11, with the amount increasing to 4.5% for Miscellaneous employees and 3.5% for Safety employees for the remaining years in the current collective bargaining agreements. The City is required to contribute the remaining amounts necessary to fund the benefits for its members using the actuarial basis recommended by the PERS actuaries and actuarial consultants and adopted by the PERS Board of Administration. The actuarial methods and assumptions used are those adopted by the PERS Board of Administration. The contribution requirements of the plan members are established by State statute and the employer contribution rate is established and may be amended by PERS.
For Fiscal Years 2011-12 and 2012-13, employer contribution rates are as follows:
Annual Rate Components Miscellaneous Category Safety Category
2011-12 2012-13 2011-12 2012-13
A. Normal cost rate 7.732% 7.474 17.467% 17.468% B. Unfunded liability rate 5.145 5.639 17.723 20.410 C. Total Required 12.877% 13.113% 35.190% 37.878%
The contribution to PERS for Fiscal Year 2010-11 of $12,050,557 was made in accordance with
actuarially determined requirements performed as of June 30, 2009. The City contribution was $9,157,566. The employees� contribution was $3,692,991, a portion of which was paid by the City as described above.
The three-year trend information for the Annual Pension Cost funding for the plan (unaudited) is set forth below.
Fiscal Year ended June 30
Annual pension cost(1)
(APC) Percentage of APC
contributed Net pension obligation
2011 $9,157,566 100% � 2010 9,128,521 97 388,095 2009 9,162,430 100 �
(1) Excludes required employee contributions paid by the City.
Pension Funding Information
The staff actuaries at PERS prepare annually an actuarial valuation which covers a Fiscal Year ending approximately 15 months before the actuarial valuation is delivered (thus, the actuarial valuation delivered to the City in October 2011 covered PERS� Fiscal Year ended June 30, 2010). The actuarial valuations express
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the City�s required contribution rates in percentages of covered payroll, which percentages the City must contribute in the Fiscal Year immediately following the Fiscal Year in which the actuarial valuation is prepared (thus, the City�s contribution rate derived from the actuarial valuation as of June 30, 2010, that was delivered in October 2011, will affect the City�s Fiscal Year 2012-13 required contribution rate). PERS rules require the City to implement the actuary�s recommended rates.
In calculating the annual actuarially recommended contribution rates, the PERS actuary calculates, on the basis of certain assumptions, the actuarial present value of benefits that PERS will fund under the PERS Plans, which includes two components, the normal cost and the Unfunded Actuarial Accrued Liability (the �UAAL�). The normal cost represents the actuarial present value of benefits that PERS will fund under the PERS Plans that are attributed to the current year, and the actuarial accrued liability (the �AAL�) represents the actuarial present value of benefits that PERS will fund that are attributed to past years. The UAAL represents an estimate of the actuarial shortfall between actuarial value of assets on deposit at PERS and the present value of the benefits that PERS will pay under the PERS Plans to retirees and active employees upon their retirement. The UAAL is based on several assumptions such as, among others, the rate of investment return, average life expectancy, average age of retirement, inflation, salary increases and occurrences of disabilities. In addition, the UAAL includes certain actuarial adjustments such as, among others, the actuarial practice of smoothing losses and gains over multiple years (which is described in more detail below). As a result, the UAAL may be considered an estimate of the unfunded actuarial present value of the benefits that PERS will fund under the PERS Plans to retirees and active employees upon their retirement and not as a fixed expression of the liability the City owes to PERS under its PERS Plans.
In each actuarial valuation, the PERS actuary estimates the actuarial value of the assets (the �Actuarial Value�) of the PERS Plans at the end of the Fiscal Year (which assumes, among other things, that the rate of return during that Fiscal Year equaled the assumed rate of return of 7.75%). The PERS actuary uses a smoothing technique to determine Actuarial Value that is calculated based on certain policies. As described below, these policies have changed significantly in recent years.
Actuarial Assumptions and Policies. On April 21, 2004, the PERS Board approved a change in the inflation assumption used in the actuarial valuations used to determine employer contribution rates. The inflation assumption was changed from 3.5 percent to 3 percent. The change impacted the inflation component of the annual investment return assumption and the long term payroll growth assumption as follows:
The annual assumed investment return was decreased from 8.25 percent to 7.75 percent.
The long term payroll growth assumption was decreased from 3.75 percent to 3.25 percent.
The inflation component of individual salary scales was decreased from 3.75 percent to 3.25 percent.
In April 2005, the PERS Board adopted new policies aimed at stabilizing rising employer costs. These policies have been used to set employer contribution rates for the City beginning in Fiscal Year 2006-07. These policies include:
Spreading PERS market value asset gains and losses over 15 years rather than three years.
Widening the �corridor� limits for establishing the actuarial value of assets from 90 to 110 percent of market value to 80 to 120 percent of market value (except for the 3-year phase-in of investment losses from Fiscal Year 2009, as described below).
Establishing a rolling 30-year amortization on all remaining net unamortized gains or losses, instead of amortizing 10% of the net unamortized gain or loss each year pursuant to prior policy. Such an amortization schedule results in the amortization of approximately 6% of unamortized
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gains and losses each year. Due to the excess of accrued liability over actuarial value of plan assets, the amortization payment of the total unfunded liability may be higher than the payment calculated over a 30-year amortization period.
Requiring a minimum employer contribution rate equal to the employer normal costs minus a 30-year amortization of surplus (but not less than 0%).
Pursuant to the April 2005 policy change, multiple amortization bases (including those for benefit improvement or changes in actuarial methods or assumptions, which are typically less than 30 years) were combined into a single base (the gain and loss bases) and amortized over a rolling 30-year period to effect a �fresh start� as of June 30, 2004. The April 2005 policy did not affect other existing amortization bases for benefit improvements, assumptions changes and method changes.
Due to significant market investment losses of approximately 24% in the PERS trust fund for fiscal year 2008-09, PERS implemented a 3-year phase-in of the 2008-09 investment loss. This phased in approach will be achieved by temporarily relaxing the constraints on the smoothed value of assets around the actual market value. The corridor will be widened and then contracted as follows:
Increase the corridor limits from 80%-120% of market value to 60% to 140% of market value to determine the actuarial value of assets for the June 30, 2009 valuation, which impacts the 2011-12 contribution rate.
Reduce the corridor limits from 60%-140% of market value to 70% to 130% of market value to determine the actuarial value of assets for the June 30, 2010 valuation, which impacts the 2012-2013 contribution rate.
Return to the 80%-120% of market value corridor limits for the actuarial value of assets on June 30, 2011 and thereafter, which impacts contribution rates for fiscal years 2013-14 and beyond.
Asset losses outside of the 80%-120% corridor described above will be amortized pursuant to a fixed 30-year amortization schedule.
In addition, in February 2010, the PERS Board adopted a resolution requiring additional contributions for any plan or pool if the cash flows hamper adequate funding progress by preventing the expected funded status on a market value of assets basis of the plan to either:
Increase by at least 15% by June 30, 2043; or
Reach a level of 75% funded by June 30, 2043.
Such contributions have been factored into the City�s contribution rates set by PERS.
In March of 2012, the PERS Board adopted a resolution lowering the assumed investment return from 7.75% down to 7.50% and reducing the inflation assumption from 3.0% to 2.75%. The City expects a 1 to 2 percent increase in contribution rates for the Miscellaneous Plan and 2 to 3 percent for the Safety Plan benefit resulting from the change in the assumed investment return, to be phased in over a two-year period.
As of June 30, 2010, the date of the latest actuarial valuation, the City�s underfunded actuarial liability was $89,712,605. This underfunded liability is primarily the result of a significant decline in the value of the plan assets and less than anticipated investment returns by PERS. The City cannot predict the level of future contributions to PERS which may be required by PERS but such amounts may increase significantly over current levels.
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The
City
�s P
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on P
lan
incl
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sepa
rate
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ns fo
r Mis
cella
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s Mem
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and
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. Th
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Misc
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(d
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Valu
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)
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Actu
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s
Mar
ket
valu
e
of a
sset
s
Und
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nded
lia
bilit
y (U
AAL
) Fu
nded
ratio
Annu
al
cove
red
payr
oll
UAA
L as
a
perc
enta
ge
of p
ayro
ll
2010
$ 19
2,58
7
$ 17
1,26
0
$ 22
3,59
9
$ 21
,327
88
.9%
$ 27
,786
76
.8%
20
09
184,
807
165,
040
217,
941
19,7
66
89.3
28
,936
68
.3
2008
16
7,83
8
15
7,52
9
15
9,86
8
10
,308
93
.9
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51
33.4
Safe
ty M
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Valu
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Mar
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lia
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nded
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payr
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UAA
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a
perc
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ge
of p
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ll
2010
$ 25
8,87
6
$ 19
0,49
1
$ 14
9,00
6
$ 68
,385
73
.6%
$ 20
,216
33
8.3%
20
09
248,
930
184,
660
134,
890
34,2
69
74.2
21
,899
29
3.5
2008
22
3,93
8
17
7,31
4
18
1,72
3
46
,624
79
.2
19,8
55
234.
8
38
The City does not have a contractual obligation to fund post-retirement health benefits for any of its employees. The City agreed to pay a portion of the retirees� health care premiums through December 31, 2008, after which the City has no further post-employment benefit obligations.
Pending Claims & Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City is self-insured for the first $500,000 in loss for each workers� compensation claim and the first $1,000,000 for each general liability claim and up to $25,000 for property damage claims. The City accounts for and finances its self-insured risks of loss in the Workers� Compensation Fund and Public Liability Fund. Excess insurance is purchased from commercial carriers for each workers� compensation and general liability claim losses in excess of the self-insured retention levels.
The outstanding claim liabilities in each of the self-insurance internal service funds are based on independent claims evaluation and also the results of separate actuarial studies and include amounts for claims incurred but not reported. Claims liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. General and workers� compensation liabilities are carried at an actuarially determined rate. It is the City�s practice to obtain full actuarial studies biannually for general liability and workers� compensation coverage. Premiums are charged by the internal service self-insurance funds using various allocation methods that include actual costs, trends in claims experience, claim severity and claims frequency. Revenues of the internal service self-insurance funds are expended to provide adequate resources to allay program administrative costs, preventative measures and to meet liabilities as they become due. Claims and judgments are generally liquidated by the internal service funds.
During the past three fiscal (claims) years, none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. See �LITIGATION� below.
Golf Course Fund
The Lease Agreement provides that the City will make lease payments in full from any source of legally available funds, subject to abatement as provided in the Lease Agreement. The City has determined that a varying amount of annual Lease Payments (generally more than 50%, but substantially less in certain years) may be made from the Golf Course Fund, subject to the availability of funds, as set forth in the Lease Agreement. See APPENDIX A��SUMMARY OF PRINCIPAL LEGAL DOCUMENTS�Lease Agreement.� In recent years, the Golf Course Fund has not received sufficient revenues to offset expenses and make the annual debt service payments. The Golf Course Fund has reduced expenses in the last three years, and has been working to increase revenues, but current projections indicate that the City should not rely on the Golf Course Fund to make substantial contributions to the debt service requirements over the next three to five years. However, amounts in the Golf Course Fund are not pledged to the Bonds and the City has not covenanted to produce or maintain revenues in the Golf Course Fund at a level sufficient to pay such portion of Lease Payments, or at any level.
Set forth in Table 13 below is the comparative statement of Revenues and Expenses for the Golf Course Fund for the five most recent Fiscal Years. Under the management agreement with Kemper Sports Management commencing February 15, 2010, the City receives 100% of Net Income from golf operations and Kemper Sports Management receives a fee for managing the golf courses. Kemper Sports Management will receive a Base Fee of $150,000 per year with annual increases of 3% for the next five years plus an incentive
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fee of 5% of annual gross revenues over $4.8 million. The net income numbers in Table 13 do not reflect any charges for a portion of debt service on prior Certificates which may be lawfully chargeable to the Golf Course Fund which includes a significant portion of the Series F Certificates and all of the Series D Certificates. Debt service payments from the Golf Course Fund are shown as �transfers out� in the fund�s financial statements and are not shown in Table 13. While the statements have reflected debt service transfers to the General Fund, these transfers have resulted in an increased liability to the General Fund and a reduction to unrestricted net assets of the Fund. In effect, the Fund has not contributed material amounts to debt service. Historically, the Golf Course Fund has had insufficient net operating income to pay any significant portion of Lease Payments attributable to the Series D Certificates and Series F Certificates, and the City gives no assurance it will have sufficient amounts in the future to pay Lease Payments attributable to the Golf Course Fund with respect to the Bonds or Series F Certificates.
Table 13 CITY OF SAN BUENAVENTURA
Golf Course Fund Comparative Statement of Revenues and Expenses Fiscal Years 2007 through 2011
2007 2008 2009 2010 2011 Operating Revenues: Charges for services: Greens Fees - Buena $ 1,811,017 $ 1,614,122 $ 1,474,056 $ 1,473,052 $ 1,450,336 Electric Carts - Buena 442,144 407,240 360,710 315,580 370,734 Snackbar - Buena 92,136 116,870 116,000 116,000 116,000 Pro Shop - Buena 191,987 161,431 134,820 92,449 105,639 Greens Fees � Olivas(1) 402,278 1,829,224 1,754,540 1,765,304 1,,604,167 Driving Range - Olivas 39,193 120,533 82,778 147,431 241,410 Electric Carts - Olivas 79,611 339,162 320,583 286,570 297,487 Snackbar - Olivas 1,024 100,878 22,097 45,381 53 Pro Shop - Olivas 21,440 253,094 324,495 272,548 132,577 Total charges for services 3,080,829 4,942,555 4,590,079 4,514,315 4,318,403 Other operating revenues - - 215,763 105,720 147,154 Total Operating Revenues 3,080,829 4,942,555 4,805,842 4,620,035 4,465,557 Operating Expenses: Personal Services 202,040 168,445 202,617 196,927 173,382 Contractual Services 3,444,301 4,143,377 3,234,707 3,381,398 3,284,732 Materials and Supplies 625 4,199 25,302 6,796 22,893 General and Administrative 604,377 366,507 339,063 226,510 342,445 Depreciation 370,372 917,621 917,443 917,206 913,634 Total Operating Expenses 4,622,075 5,600,149 4,719,132 4,728,810 4,737,086 Operating Income (Loss) (1,541,246) (657,593) 86,710 (108,775) (271,529) Non-Operating Revenues (Expenses): Interest Income(2) 126,331 10,452 - - - Interest expense (9,696) (23,436) (12,888) (6,459) - Gain on sale of assets 8,007 - - - - Total Non-Operating Revenues
(Expenses): 124,642 (12,985) (12,888) (6,459) - Net Income (Loss) $ (1,416,604) $ (670,578) $ 73,822 $ (115,234) $ (271,529)
(1) Olivas Links Golf Course was closed for renovation from October 2005 to May 2007. (2) Interest income includes unrealized gain (loss) on investments. Source: Comprehensive Annual Financial Reports and Community Services Department Projections for Fiscal Year 2010
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Table 14 below provides a projection of future Golf Course Fund operating results for Fiscal Years 2012 through 2016. The projections assume certain levels of green fees, management expenses and other matters which will require action by the City Council, and do not reflect any decisions or approvals that may or may not be made by the City Council in the future. No assurance can be made or given that any future management contract(s) or the discretionary approvals of the City Council assumed in such projections will be approved. Certain results, performance or achievements projected in Table 14 may differ materially from actual results, performance or achievements. In particular, no City Council decision has been made as to the management fee since the current contract was approved in February 2010. The current contract expires in 2014 but the projections in Table 14 assume a continuation of the terms of the current contract. The net income amounts reflected in Table 14 do not reflect any charges for debt service on a portion of the prior Certificates such as the Series D Certificates or the Bonds, which may be lawfully chargeable to the Golf Course Fund.
Table 14 CITY OF SAN BUENAVENTURA
Golf Course Fund Projected Operating Results Cash Flow Basis
For the Projected Fiscal Years Ending June 30
2012 2013 2014 2015 2016 Operating Revenues: Charges for services: Greens Fees - Buena $ 1,341,781 $ 1,381,506 $ 1,437,180 $ 1,480,583 $ 1,525,972 Electric Carts - Buena 471,208 475,920 480,679 485,486 490,340 Snackbar - Buena 116,000 116,000 116,000 116,000 116,000 Pro Shop - Buena 102,900 103,929 104,968 106,017 107,077 Greens Fees � Olivas 2,012,672 2,072,259 2,155,771 2,220,875 2,287,945 Driving Range - Olivas 257,250 259,822 262,420 265,044 267,695 Electric Carts - Olivas 314,138 303,721 306,758 309,825 312,924 Snackbar - Olivas 154,350 155,893 157,452 159,026 160,616 Pro Shop - Olivas 113,180 114,311 115,454 116,608 117,775 Total charges for services 4,883,479 4,983,361 5,136,682 5,259,464 5,386,344 Other operating revenues - - - - - Total Operating Revenues 4,883,479 4,983,361 5,136,682 5,259,464 5,386,344 Operating Expenses: Personal Services 209,676 211,771 213,888 220,327 222,530 Contractual Services 2,944,676 2,974,305 2,992,992 3,052,851 3,113,908 Materials and Supplies 259,163 261,754 264,371 267,015 269,685 General and Administrative 330,464 333,769 337,106 340,477 343,882 Depreciation 915,000 913,000 910,000 900,000 890,000 Total Operating Expenses 4,658,979 4,694,599 4,718,357 4,780,670 4,840,005 Operating Income (Loss) 224,500 288,762 418,325 478,794 546,339 Non-Operating Revenues (Expenses): Interest Income Interest expense - - - - - Gain on sale of assets - - - - - Total Non-Operating
Revenues (Expenses): - - - - - Net Income (Loss) $ 224,500 $ 288,762 $ 418,325 $ 478,794 $ 546,339
Source: City of San Buenaventura, Community Services Department
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RISK FACTORS
The following factors, along with the other information in this Official Statement should be considered by potential investors in evaluating the purchase of the Bonds. However, the following does not purport to be an exhaustive listing of risks and other considerations which may be relevant to investing in the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks.
General
The Bonds are special obligations of the Authority payable solely from and secured solely by the Revenues pledged therefor in the Indenture. Revenues consist primarily of amounts payable by the City under the Lease Agreement and amounts on deposit from time to time in the funds and accounts held by the Trustee. If for any of the reasons described below, or for any other reason, the Authority does not collect sufficient Revenues to pay debt service on the Bonds, the City will not be obligated to utilize any other of its funds, other than moneys on deposit in the Reserve Account and certain other amounts on deposit in the funds and accounts established under the Indenture, to pay debt service on the Bonds.
The City is obligated under the Lease Agreement to pay the Lease Payments from any source of legally available funds, including its General Fund and to a limited extent, the Golf Course Fund. The Lease Payments are not secured by any pledge of or lien on taxes or other revenue of the City. The City has the capacity to enter into other obligations which may constitute additional charges against its revenues. If the City�s revenue sources are less than its total obligations, the City could choose to fund other obligations before making such Lease Payments. The same result could occur if, because of State constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues. However, the City has covenanted in the Lease Agreement to budget for, appropriate and make the Lease Payments in each year it has possession and use of the Leased Property.
The obligation of the City to pay the Lease Payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to pay Lease Payments and Additional Rental Payments does not constitute a debt of the City or the State or any of its political subdivisions, and does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.
General Considerations � Security for the Bonds
The obligation of the City to make the Lease Payments does not constitute a debt of the City or the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation.
Although the Lease Agreement does not create a pledge, lien or encumbrance upon the funds of the City, the City is obligated, subject to abatement, under the Lease Agreement to pay the Lease Payments from any source of legally available funds and the City has covenanted in the Lease Agreement that it will take such action as may be necessary to include all Lease Payments and Additional Payments due under the Lease Agreement in its annual budgets and to make necessary annual appropriations for all such rental payments. The City is currently liable and may become liable on other obligations payable from general revenues (and Golf Course Fund revenues), some of which may have a priority over the Lease Payments.
The City has the capacity to enter into other obligations which may constitute additional charges against its revenues. To the extent that additional obligations are incurred by the City, the funds available to
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make Lease Payments may be decreased. In the event the City�s revenue sources are less than its total obligations, the City could choose to fund other activities before making Lease Payments and other payments due under the Lease Agreement. See �CITY FINANCES�Outstanding General Fund Debt and Lease Agreement Obligations.�
The City has determined that the Golf Course Fund may lawfully pay a portion (varying substantially in each year and generally less than 50%) of the annual Lease Payments based on the prior use of proceeds of obligations refunded by the Bonds. Historically, the Golf Course Fund has had insufficient net operating income to pay any portion of Lease Payments attributable to the Series D Certificates and Series F Certificates and the City gives no assurance it will have sufficient amounts to contribute any funds to the Lease Payments related to the Bonds in the future. See �CITY FINANCES�Golf Course Fund.�
The City�s ability to collect, budget and appropriate various revenues is subject to current and future State laws and constitutional provisions, and it is possible that the interpretation and application of these provisions could result in an inability of the City to pay the Lease Payments when due. See �CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS� herein.
Eminent Domain
If the Leased Property is taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the term of the Lease will cease as of the day possession is taken. In such event, the City is required to apply the Net Proceeds of any eminent domain award to the prepayment of Bonds. If less than all of the Leased Property is taken permanently, or if the Leased Property or any part thereof are taken temporarily, under the power of eminent domain, (1) the Lease will continue in full force and effect and will not be terminated by virtue of such taking, and (2) there will be a partial abatement of Lease Payments in an amount to be determined by the City, such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portion of the Leased Property. Notwithstanding the foregoing, the Lease Payments will not be abated under the Lease Agreement to the extent that amounts in the Reserve Fund are available to pay Lease Payments which would otherwise be abated under the Lease Agreement, as such proceeds and amounts constitute a special fund for the payment of the Lease Payments.
Abatement
The Lease Agreement provides that the amount of Lease Payments will be subject to abatement during any period in which by reason of damage or destruction there is substantial interference with the use and occupancy by the City of the Leased Property. The amount of such abatement will be determined by the City, such that the resulting Lease Payments represent fair consideration for the use and occupancy of the portions of the Leased Property not damaged or destroyed. Such abatement will continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repair or reconstruction. In the event of any such damage or destruction, the Lease Agreement will continue in full force and effect and the City, in the Lease Agreement, waives any right to terminate the Lease Agreement by virtue of any such damage and destruction.
However, there will be no abatement of Lease Payments to the extent that the proceeds of hazard insurance, rental interruption insurance or amounts in the Reserve Fund are available to pay Lease Payments, or to the extent that moneys are available in the Lease Payment Fund it being declared in the Lease Agreement that such proceeds and amounts constitute special funds for the payment of the Lease Payments.
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Limited Recourse on Default; No Acceleration
If the City defaults on its obligation to make Lease Payments, there is no available remedy of acceleration of the total Lease Payments due over the term of the Lease Agreement. The City will only be liable for Lease Payments on an annual basis, and the Trustee would be required to seek a separate judgment in each fiscal year for that fiscal year�s rental payments. Furthermore, following an Event of Default, the Trustee may be required to apply any or all of the remaining balance in the Reserve Fund to the next maturing principal amount of Bonds to the detriment of owners of later maturing Bonds.
Limitation on Remedies; Bankruptcy
The rights of the Owners of the Bonds are subject to the limitations on legal remedies against cities in the State, including State constitutional limits on expenditures and limitations on the enforcement of judgments against funds needed to serve the public welfare and interest, by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other laws affecting the enforcement of creditors� rights, by equitable principles, by the exercise of judicial powers in appropriate cases and by the exercise by the federal and State governments of their sovereign powers. The opinions of counsel, including Bond Counsel, delivered in connection with the Bonds will be so qualified. Under Chapter 9 of the Bankruptcy Code (Title 11, United States Code), which governs the bankruptcy proceedings for public agencies such as the City, there are no involuntary petitions in bankruptcy. Bankruptcy proceedings, if initiated, or the exercise of powers by the federal or State government, could subject the owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy proceedings or otherwise and consequently may entail risk of delay, limitation or modification of their rights.
State Budget Information
The following information concerning the State�s budgets has been obtained from publicly available information which the City believes to be reliable; however, the City does not guaranty the accuracy or completeness of this information and has not independently verified such information. Furthermore, it should not be inferred from the inclusion of this information in this Official Statement that the principal of or interest on the Bonds is payable from any funds of the State.
The Budget Process. Through the State budget process, the State can enact legislation that significantly impacts the source, amount and timing of the receipt of revenues by local agencies including the City. As in recent years, State budget deficits can result in legislation that adversely impacts local agency budgets.
The State�s fiscal year begins on July 1 and ends on June 30. The annual budget is proposed by the Governor by January 10 of each year for the next fiscal year (the �Governor�s Budget�). Under State law, the annual proposed Governor�s Budget cannot provide for projected expenditures in excess of projected revenues and balances available from prior fiscal years. Following the submission of the Governor�s Budget, the Legislature takes up the proposal.
Under the State Constitution, money may be drawn from the Treasury only through an appropriation made by law. The primary source of the annual expenditure authorizations is the Budget Act as approved by the Legislature and signed by the Governor. The Budget Act must be approved by a two-thirds majority vote of each House of the Legislature. The Governor may reduce or eliminate specific line items in the Budget Act or any other appropriations bill without vetoing the entire bill. Such individual line-item vetoes are subject to override by a two-thirds majority vote of each House of the Legislature.
Appropriations also may be included in legislation other than the Budget Act. Bills containing appropriations (except for K-14 education) must be approved by a two-thirds majority vote in each House of the Legislature and be signed by the Governor. Bills containing K-14 education appropriations only require a
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simple majority vote. Continuing appropriations, available without regard to fiscal year may also be provided by statute or the State Constitution.
Funds necessary to meet an appropriation need not be in the State Treasury at the time such appropriation is enacted; revenues may be appropriated in anticipation of their receipt.
Recent State Budgets. Certain information about the State budgeting process and the State Budget is available through several State of California sources. A convenient source of information is the State�s website, where recent official statements for State bonds are posted. The references to internet websites shown below are shown for reference and convenience only; the information contained within the websites has not been reviewed by the City and is not incorporated herein by reference.
The California State Treasurer�s Internet home page at www.treasurer.ca.gov, under the heading �Bond Finance Public Finance Division Bond Sales,� posts various State of California Official Statements, many of which contain a summary of the current State Budget, past State Budgets, and the impact of those budgets on school districts in the State.
The California State Treasurer�s Internet home page at www.treasurer.ca.gov, under the heading �Financial Information,� posts the State�s audited financial statements. In addition, the �Financial Information� section includes the State�s Rule 15c2-12 filings for State bond issues. The �Financial Information� section also includes the �Overview of the State Economy and Government, State Finances, State Indebtedness, Litigation� from the State�s most current Official Statement, which discusses the State budget and its impact on school districts.
The California Department of Finance�s Internet home page at www.dof.ca.gov, under the heading �California Budget,� includes the text of proposed and adopted State Budgets.
The State Legislative Analyst�s Office prepares analyses of the proposed and adopted State budgets. The analyses are accessible on the Legislative Analyst�s Internet home page at www.lao.ca.gov under the heading �Products.�
Proposition 1A. On November 2, 2004, California voters approved Proposition 1A, which amended the State Constitution to significantly reduce the State�s authority over major local government revenue sources. Under Proposition 1A, the State may not (i) reduce local sales tax rates or alter the method of allocating the revenue generated by such taxes, (ii) shift property taxes from local governments to schools or community colleges, (iii) change how property tax revenues are shared among local governments without two-third approval of both houses of the State Legislature, or (iv) decrease Vehicle License Fees revenues without providing local governments with equal replacement funding. Under Proposition 1A, the State may shift to schools and community colleges a limited amount of local government property tax revenue if certain conditions are met, including (a) a proclamation by the Governor that the shift is needed due to a severe financial hardship of the State, and (b) approval of the shift by the State Legislature with a two-thirds vote of both houses. Under such a shift, the State must repay local governments for their property tax losses, with interest, within three years. Proposition 1A does allow the State to approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county.
Redevelopment Agency Dissolution. On an annual basis, the City has received significant revenues from its Redevelopment Agency and from properties owned or formerly owned by the Redevelopment Agency which were affected by AB x1 26.
On June 29, 2012, the Governor signed Assembly Bills (�AB�) x1 26 and x1 27 (enacted as Stats. 2011, 1st Ex. Sess. 2011-2012, chs. 5-6 and codified in Parts 1.8 and 1.85 of Division 24 of the California Health and Safety Code), which purported to dissolve each redevelopment agency (�RDA�) in the State unless each RDA made �voluntary� payments to the county Supplemental Educational Revenue Augmentation Fund
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(�SERAF�). The California Redevelopment Association filed its challenge to both statutes directly to the California Supreme Court. The Supreme Court issued a stay of certain portions of AB x1 26 and AB x1 27, pending issuance of a final decision. On December 29, 2011, the California Supreme Court upheld AB x1 26 and struck down AB x1 27. While AB x1 26 dissolved redevelopment agencies as of February 1, 2012 and created successor agencies (�Successor Agencies�) to manage the winding down of the former redevelopment agency�s business and liquidation and distribution of former RDA assets, it preserved certain provisions of the Community Redevelopment Law (Health and Safety Code sections 33000 et seq.) relating to the calculation and distribution of statutory and negotiated pass through payments to affected taxing entities (local agencies and schools that levy taxes on property located within a redevelopment project area), although it shifted the responsibility for calculation and distribution of all pass through payments from the RDAs to county auditors-controllers. The City of San Buenaventura has been designated as the Successor Agency to its redevelopment agency and will implement the dissolution of the former Agency assets under AB x1 26.
According to draft "trailer bill" proposed legislation available from the Department of Finance website, among other things AB x1 26 is proposed to be amended to allow the County Auditor-Controller, the State Department of Finance and the State Controller to require the return of funds improperly spent or transferred to a public entity in conflict with the provisions of AB x1 26 and, if funds are not returned within 60 days, the funds may be recovered through an offset of sales and use tax or property tax allocations to the local agency, without further specificity. Although the trailer bill may be part of the Governor�s budget proposal the City cannot predict whether it will be introduced in and adopted by the Legislature in its current or a revised form, or at all.
Impact on City. AB x1 26 will adversely impact the City. The Agency had historically received approximately $3.5 million annually in tax-increment funds which paid for the former Agency�s share of general administrative expenses, a portion of which is related to the administration of capital improvement projects. Also, the receivable previously recognized by funds of the City in the amount of $5.4 million (or a portion thereof) may be uncollectible. AB x1 26 and the trailer bill, if enacted, may result in other adverse impacts to the City�s general fund although the exact impacts will not be known until after the City�s Oversight Board, which will supervise the AB x1 26 dissolution process, is formed and active and many of the complicated and confounding elements of AB x1 26 are resolved.
As it relates to the trailer bill, the City does not believe it has received material amounts from the former agency which may be asserted to be in violation of AB x1 26, even if the trailer bill provisions are adopted substantially as proposed. If enacted, elements of the trailer bill will be subject to legal challenge and judicial interpretation based on constitutional and other considerations. As with other elements of the State Budget, AB x1 26 and the legislative process, the City cannot predict the ultimate form or impact of any trailer bill language considered and adopted by the Legislature and enacted into law.
To the extent that the former Agency�s assets are liquidated for distribution to the affected taxing entities, the City�s general fund will receive a proportional share of all of the former Agency�s liquidated assets.
Ongoing State Budget Risks. The State�s financial difficulties may affect the amount and timing of payments to or for the benefit of cities of funds provided by the State. From time to time, some of the State�s budget solutions may increase the financial stress of cities and other local governments because they (1) decrease local revenues (particularly the property tax, road improvement funding, public safety or other categorical funded initiatives) or (2) directly or indirectly increase demand for local programs (such as public safety or indigent health programs). There can be no assurances that the State�s financial difficulties will not materially adversely affect the financial condition of the City.
The financial condition of the State is subject to a number of other risks in the future, including particularly potential significant increases in required state contributions to the Public Employees� Retirement System, increased financial obligations related to other post-employment benefits, and increased debt service.
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As noted above, the State is facing significant financial stress. There can be no assurances that, as a result of the current or any future State financial stress, the State will not significantly reduce or delay revenues to local governments (including the City) or shift financial responsibility for programs to local governments as part of its efforts to address the State financial difficulties. Aside from AB x1 26 described above no new proposals to reduce or delay material sources of revenues to cities were included in the adopted Fiscal Year 2011-12 Budget. However, in Fiscal Years 2008-09 and 2009-10 the State either deferred payments or issued IOU�s which could not immediately be cashed. No prediction can be made by the City as to what measures the State will adopt to respond to the current or potential future financial difficulties. The City cannot predict the final outcome of future State budget negotiations, the impact that such budgets will have on the City�s finances and operations or what actions will be taken in the future by the State Legislature and Governor to deal with changing State revenues and expenditures. Current and future State budgets will be affected by national and State economic conditions and other factors, including the current economic downturn, over which the City has no control. There can be no assurances that State actions to respond to State financial difficulties will not adversely affect the financial condition of the City.
On June 30, 2011, Governor Brown signed into law the Fiscal Year 2012 State budget (the �Fiscal Year 2012 State Budget�). The Fiscal Year 2012 State Budget attempted to close a $26.6 billion budget gap. However, the Fiscal Year 2012 State Budget recognized the potential risk if revenues might fall short of the forecast and established automatic mid-year expenditure reductions (�trigger cuts�) that would go into effect in that event.
On December 13, 2011, the State Department of Finance issued a revenue forecast indicating that the �trigger cuts� would occur. As a result, the Department of Finance called for a combination of reductions and adjustments to certain expenditures, totaling approximately $1 billion. The City does not anticipate any material changes to its revenues as a result of these trigger cuts.
Other than the potential impacts relating to the Agency and its financial relationships with the City described above, the City does not believe that the State budget as proposed for Fiscal Year 2012-13 will have a material adverse impact on the City�s General Fund finances, however, the City cannot predict what actions will be taken in the future by the State Legislature and the Governor to address the State�s current and future budget deficits. Future State budgets could be affected by national economic conditions and other factors over which the City will have no control. To the extent that the State�s annual budget process results in reduced revenues or increased expenses to the City, the City will be required to make adjustments to its budgets.
On January 5, 2012, Governor Brown proposed a budget for Fiscal Year 2012-13 (the �2012-2013 Governor�s Budget�), which attempts to address the State�s continued structural deficit, then estimated at approximately $15 billion. The cornerstone of the Governor�s 2012-2013 Budget was its assumption that the voters will approve temporary increases in personal income and sales taxes through an initiative that the Governor has proposed to be on the November 2012 ballot. If approved, the estimated $6.9 billion of additional annual revenues would be used to pay for Proposition 98 school funding obligations and to help balance the budget by paying for other state programs, including funding for public safety at the local level. In addition, the Governor�s 2012-2013 Budget proposed significant reductions to social services and child care programs and additional state borrowing. In the event the Governor�s proposed tax increase fails to pass, the Governor�s 2012-2013 Budget specifies approximately $5.4 billion in expenditure reductions in, among other things, education (accounting for 90% of the targeted reductions) and judicial branch appropriation.
Governor�s May Revision to the Proposed Budget. On May 14, 2012, the Governor released his May revision to the Proposed Budget for fiscal year 2012-13 (the �May Revision�). The following information is drawn from the Legislative Analyst's Office ("LAO") summary of the May Revision released on May 18, 2012.
The May Revision estimates that the size of the budget deficit now totals $15.7 billion, $6.2 billion higher than projected in the Proposed Budget. The $6.5 billion increase in the budget deficit is attributable to:
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(i) $4.3 billion in lower revenues resulting from weaker than assumed spring tax collections, as well as lowered estimates of PIT (after including the projected $1.5 billion of PIT collections related to the Facebook IPO) and corporation tax collections in fiscal year 2012-13; (ii) higher general fund Proposition 98 costs totaling $2.4 billion resulting from a higher year-to-year growth of general fund revenues from fiscal year 2011-12 to fiscal year 2012-13 and lower local property taxes available to school districts, which, in part, is due to lowering assumptions about the amount of the former redevelopment agencies property tax revenue distributions and (iii) an offsetting $200 million decrease in net costs of general fund expenditures outside Proposition 98 funding since the release of the Proposed Budget.
The May Revision presents a modified version of the Governor�s tax initiative which would include additional temporary sales and use tax and personal income tax increases. Among the proposals contained in the Governor's May Revision are further changes to AB x1 26. To facilitate the recapture and distribution of redevelopment agencies liquid assets, the May Revision proposes legislative changes that (i) set deadlines for successor agency asset transfer and distribution and (ii) authorize reductions of local sales and property tax revenues from agencies not complying with the Department of Finance and State Controller�s Office orders regarding redevelopment agencies liquid assets. See "�Redevelopment Agency Dissolution" above.
Triple Flip. Currently, a portion of City revenues which are treated as property tax in fact represent State diversion of property taxes in replacement of lost sales tax revenues because of legislation, commonly referred to as the �Triple Flip,� which was submitted to the voters on March 2, 2004, as part of a bond proposition formally known as the �Economic Bond Recovery Act.� This act authorized the issuance of $15 billion in bonds to finance the 2002/03 and 2003/04 State budget deficits, which are payable from a fund established by the redirection of tax revenues through the Triple Flip.
Under the �Triple Flip� one-quarter of local governments� one percent share of the sales tax imposed on taxable transactions within their jurisdiction is redirected to the State. In an effort to eliminate the adverse impact of the sales tax revenue redirection on local government, the legislation provides for property taxes in the ERAF to be redirected to local government. Because the ERAF moneys were previously earmarked for schools, the legislation provides for schools to receive other state general fund revenues. It is expected that the swap of sales taxes for property taxes would terminate once the deficit financing bonds are repaid. The �Triple Flip� legislation was approved by voters at the election on March 2, 2004 and the bonds were sold in May 2004. See �CITY FINANCES�Tax Receipts� herein.
Future State Budgets. The City cannot predict what actions will be taken in the future by the State Legislature and the Governor to address the State�s current and future budget deficits. Future State budgets could be affected by national economic conditions and other factors over which the City will have no control. To the extent that the State�s annual budget process results in reduced revenues or increased expenses to the City, the City will be required to make adjustments to its budget.
Seismic Considerations
The City, like much of California, is subject to seismic activity that could result in interference with its right to use and possession of the Leased Property. Four known active or potentially active faults (Ventura, Oak Ridge, Red Mountain, and Country Club faults) are located within the City. To date, only the Ventura fault has been designated active by the California Department of Mining and Geology within the City limits. Seismic hazards encompass potential surface rupture, ground shaking, landslides and liquefaction. Elements of the Corporation Yard may be subject to a high risk of liquefaction in the event of seismic activity. The City is not obligated by the Lease Agreement or otherwise to maintain earthquake insurance with respect to the Leased Property, unless such insurance is available at reasonable cost from reputable insurers in the judgment of the City. Based on current market conditions, the City does not expect to maintain earthquake insurance on the Leased Property.
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Hazardous Substances
The City knows of no existing hazardous substances which require remedial action on or near the Leased Property. However, it is possible that such substances do currently or potentially exist and that the City is not aware of them. The City does not currently carry insurance covering the risks of hazardous substances. Owners and operators of real property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as �CERCLA� or the �Superfund Act,� is the most well known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly and adversely affect the operations and finances of the City and/or the value of the Leased Property.
Substitution and Release of Property
The Authority and the City may, under the terms of the Lease Agreement, substitute alternate real property for any portion of the Leased Property or release a portion of the Leased Property from the Lease Agreement, upon compliance with all of the conditions set forth in the Lease Agreement. After a substitution or release, the portion of the Leased Property for which the substitution or release has been effected shall be released from the leasehold encumbrance of the Lease Agreement. See �SECURITY AND SOURCES OF PAYMENT FOR THE BONDS�Substitution of Leased Property� and ��Release of Leased Property.�
Ability to Re-Let
If the City defaults on its obligations to make Lease Payments, the Trustee may have limited ability to re-let the Leased Property to provide a source of payments sufficient to meet the principal and interest with respect to the Leased Property and preserve the tax-exempt nature of the interest component of the Lease Payments and the Leased Property. The re-letting or sale of the Leased Property is subject to market conditions and applicable City zoning requirements. See �THE LEASED PROPERTY.�
Investment of Funds
All the funds held under the Trust Agreement are required to be invested in Permitted Investments as provided under the Trust Agreement. See Appendix A attached hereto for a summary of the definition of Permitted Investments. All investments, including the Permitted Investments and those authorized by law from time to time for investments by municipalities, contain a certain degree of risk. Such risks include, but are not limited to, a lower rate of return than expected, decline in market value and loss or delayed receipt of principal. The occurrence of these events with respect to amounts held under the Trust Agreement or the funds and accounts held by the City could have a material adverse affect on the security for the Bonds, and/or the financial condition of the City. See �CITY FINANCES�Investment of City Funds� herein, and the audited financial statements of the City for the year ended June 30, 2011 attached hereto as Appendix C for information concerning the City�s investment policy and portfolio of investments.
Secondary Market
There can be no assurance that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon the then prevailing circumstances. Such prices could be substantially different from the original purchase price.
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Loss of Tax Exemption
As discussed under the caption �TAX MATTERS� below, interest represented by the Series A Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Series A Bonds were issued as a result of future acts or omissions of the Authority or the City in violation of their respective covenants in the Lease Agreement and the Trust Agreement. Interest on the Series A Bonds could also become includable in gross income if the Trustee were to re-let the Leased Property or terminate the Lease Agreement. Should such an event of taxability occur, the Series A Bonds are not subject to a special redemption and will remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Trust Agreement.
The Internal Revenue Service (the �IRS�) has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Series A Bonds will be selected for audit by the IRS. It is also possible that the market value of the Series A Bonds might be affected as a result of such an audit of the Series A Bonds (or by an audit of similar obligations).
No Liability of Authority to the Owners
Except as expressly provided in the Trust Agreement, the Authority will not have any obligation or liability to the Owners of the Bonds with respect to the payment when due of the Lease Payments by the City, or with respect to the performance by the City of other agreements and covenants required to be performed by it contained in the Lease Agreement or the Trust Agreement, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained in the Trust Agreement.
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS
Constitutional Limitation on Taxes and Expenditures
State Initiative Measures Generally. Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. For more than 25 years, the voters have exercised this power to place limitations on the ability of local governments to levy taxes and make expenditures, including through the adoption of Proposition 13 (�Article XIIIA�) and similar measures, the most recent of which was approved as Proposition 218 (Articles XIIIC and XIID) in the general election held on November 5, 1996.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the City. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the Lease Agreement.
Article XIIIA. Article XIIIA of the California Constitution limits the taxing powers of California public agencies. Article XIIIA provides that the maximum ad valorem tax on real property cannot exceed one percent of the �full cash value� of the property, and effectively prohibits the levying of any other ad valorem property tax except for taxes above that level required to pay debt service on voter-approved general obligation bonds. �Full cash value� is defined as �the County assessor�s valuation of real property as shown on the 1975/76 tax bill under �full cash value� or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.� The �full cash value� is subject to annual adjustment to reflect inflation at a rate not to exceed two percent or a reduction in the consumer price index or comparable local data. Article XIIIA has subsequently been amended to permit reduction of the �full cash value� base in the event of declining property values caused by substantial damage, destruction or other factors, and to provide that there could be no increase in the �full cash value� base in the event of reconstruction of property damaged or destroyed in a disaster and in other special circumstances.
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The foregoing limitation does not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any indebtedness approved by the voters before July 1, 1978 or any bonded indebtedness for the acquisition or improvement of real property approved by two-thirds of votes cast by the voters voting on the proposition.
In the general election held November 4, 1986, voters of the State of California approved two measures, Propositions 58 and 60, which further amend the terms �purchase� and �change of ownership�, for purposes of determining full cash value of property under Article XIIIA, to not include the purchase or transfer of (1) real property between spouses and (2) the principal residence and the first $1,000,000 of other property between parents and children. Proposition 60 amends Article XIIIA to permit the Legislature to allow persons over age 55 who sell their residence and buy or build another of equal or lesser value within two years in the same city, to transfer the old residence�s assessed value to the new residence. In the March 26, 1996 general election, voters approved Proposition 193, which extends the parents-children exception to the reappraisal of assessed value. Proposition 193 amended Article XIIIA so that grandparents may transfer to their grandchildren whose parents are deceased, their principal residences, and the first $1,000,000 of other property without a re-appraisal of assessed value. From time to time the electorate has made other minor exceptions to the reassessment provisions of Article XIIIA.
Article XIIIB. In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and most local governments are subject to an annual �appropriations limit� imposed by Article XIIIB which effectively limits the amount of such revenues those entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to �proceeds of taxes,� which consist of tax revenues, State subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed �the cost reasonably borne by such entity in providing the regulation, product or service.� �Proceeds of taxes� excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not �proceeds of taxes,� such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on certain bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations limit for the next three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government.
The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each agency�s actual appropriations be tested against its limit every two years.
If the aggregate �proceeds of taxes� for the preceding two-year period exceeds the aggregate limit, the excess must be returned to the agency�s taxpayers through tax rate or fee reductions over the following two years.
The City has never exceeded its appropriations limit.
Proposition 62 and Article XIIIC and XIIID. A statutory initiative (�Proposition 62�) was adopted by the voters of the State at the November 4, 1986 General Election which (a) requires that any tax for general governmental purposes imposed by local governmental entities be approved by resolution or ordinance adopted by two-thirds vote of the governmental agency�s legislative body and by a majority of the electorate of
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the governmental entity, (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two-thirds vote of the voters within the jurisdiction, (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax is imposed, (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities and (f) requires that any tax imposed by a local governmental entity on or after August 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the initiative or be terminated by November 15, 1988. The requirements imposed by Proposition 62 were upheld by the California Supreme Court in Santa Clara County Local Transportation Authority v. Guardino, 11 Ca1.4th 220; 45 Cal.Rptr.2d 207 (1995).
Proposition 62 applies to the imposition of any taxes or the effecting of any tax increases after its enactment in 1986, but the requirements of Proposition 62 are largely subsumed by the requirements of Proposition 218 for the imposition of any taxes or the effecting of any tax increases after November 5, 1996.
The City has not effected certain tax increases after the enactment of Proposition 62 in 1986 but prior to the effective date of Proposition 218 on November 5, 1996. The City has not otherwise effected tax increases, except in accordance with the voter approval requirement of Proposition 218.
The Guardino decision did not decide, and the California Supreme Court has not otherwise decided, whether Proposition 62 applies to charter cities. The City is a charter city. Cases decided by the California Court of Appeals have indicated that the voter approval requirements of Proposition 62 do not apply to certain taxes imposed by charter cities. See Fielder v City of Los Angeles, 14 Cal. App. 4th 137 (1993), Fisher v County of Alameda, 20 Cal. App. 4th 120 (1993), and Trader Sports, Inc. v. City of San Leandro, 93 Cal. App. 4th 37, 112 Cal. Rptr. 2d 677 (2001).
As of the date of the Official Statement, the City Attorney believes that the provisions of Proposition 62 do not apply to charter cities. However, the City Attorney cannot opine on whether this position may be the subject of future litigation and can give no assurance that this position will be upheld if properly challenged.
If ultimately found applicable to charter cities, however, Proposition 62 could affect the ability of the City to continue the imposition of certain taxes, such as business license taxes, and may further restrict the City�s ability to raise revenue.
On November 5, 1996, California voters approved Proposition 218 - Voter Approval for Local Government Taxes - Limitation on Fees, Assessments, and Charges - Initiative Constitutional Amendment. Proposition 218 added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges. Proposition 218 states that all taxes imposed by local governments shall be deemed to be either general taxes or special taxes. Special purpose districts, including school districts, have no power to levy general taxes. No local government may impose, extend or increase any general tax unless and until such tax is submitted to the electorate and approved by a majority vote. No local government may impose, extend or increase any special tax unless and until such tax is submitted to the electorate and approved by a two-thirds vote.
Proposition 218 also provides that no tax, assessment, fee or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: (i) the ad valorem property tax imposed pursuant to Article XIII and Article XIIIA of the California Constitution, (ii) any special tax receiving a two-thirds vote pursuant to the California Constitution, and (iii) assessments, fees, and charges for property related services as provided in Proposition 218. Proposition 218 then goes on to add voter requirements for assessments and fees and charges imposed as an incident of property ownership, other than fees and charges for sewer, water, and refuse collection services. In addition, all assessments and
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fees and charges imposed as an incident of property ownership, including sewer, water, and refuse collection services, are subjected to various additional procedures, such as hearings and stricter and more individualized benefit requirements and findings. The effect of such new provisions will presumably be to increase the difficulty a local agency will have in imposing, increasing or extending such assessments, fees and charges.
Proposition 218 also extended the initiative power to reducing or repealing any local taxes, assessments, fees and charges. This extension of the initiative power is not limited to taxes imposed on or after November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles relating to the impairments of contracts.
Although a portion of the City�s general fund revenues are derived from general taxes purported to be governed by Proposition 218, all of such taxes (or increases thereof) were either adopted prior to the effective dates of such propositions or were approved (or ratified) by majority vote of the electorate.
Proposition 218 provides that, effective July 1, 1997, fees that are charged �as an incident of property ownership� may not �exceed the funds required to provide the property related services� and may only be charged for services that are �immediately available to the owner of the property.�
The foregoing discussion of Proposition 62 and Proposition 218 should not be considered an exhaustive or authoritative treatment of the issues. The City does not expect to be in a position to control the consideration or disposition of these issues and cannot predict the timing or outcome of any judicial or legislative activity in this regard. Interim rulings, final decisions, legislative proposals and legislative enactments may all affect the impact of Proposition 218 on the Lease Payments as well as the market for the Bonds. Legislative and court calendar delays and other factors may prolong any uncertainty regarding the effects of Proposition 218.
Like its antecedents, Proposition 218 is likely to continue to undergo both judicial and legislative scrutiny before its ultimate impact on the City and its obligations can be determined. Certain provisions of Proposition 218 may be examined by the courts for their constitutionality under both State and federal constitutional law. The City is not able to predict the outcome of any such examination.
Proposition 22. Proposition 22, entitled �The Local Taxpayer, Public Safety and Transportation Protection Act,� was approved by the voters of the State in November 2010. Proposition 22 eliminates or reduces the State�s authority to (i) temporarily shift property taxes from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs (the State will have to use other revenues to reimburse local governments), (iii) redirect property tax increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax revenues. In the Supreme Court case approving AB x1 26, the Supreme Court decided Proposition 22 did not prevent the Legislature from terminating redevelopment agencies. See �RISK FACTORS�State Budget Information.�
Unitary Property
Some amount of property tax revenue of the City is derived from utility property which is considered part of a utility system with components located in many taxing jurisdictions (�unitary property�). Under the State Constitution, such property is assessed by the State Board of Equalization (�SBE�) as part of a �going concern� rather than as individual pieces of real or personal property. State-assessed unitary and certain other property is allocated to the counties by SBE, taxed at special county-wide rates, and the tax revenues distributed to taxing jurisdictions (including the City) according to statutory formula generally based on the distribution of taxes in the prior year.
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Future Initiatives
Article XIIIA, Article XIIIB, Proposition 62, Proposition 218, Proposition 22, and Proposition 1A were each adopted as measures that qualified for the ballot through California�s initiative process. From time to time other initiative measures could be adopted, further affecting the City�s revenues.
RELEVANT LITIGATION
There is no litigation pending or, to the City�s knowledge, threatened in any way to restrain or enjoin the execution or delivery of the Bonds, the Lease Agreement or the Trust Agreement, to contest the validity of the Bonds, the Lease Agreement or the Trust Agreement, or any proceeding of the City with respect thereto. The City is involved in certain matters of litigation that have arisen in the normal course of City business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are not expected to result in a material adverse financial impact on the City. Additionally, City management believes that the City's insurance programs are sufficient to cover any potential losses should an unfavorable outcome materialize.
The City is a named defendant in Wishtoyo Foundation/Ventura Coastkeeper vs. City of San Buenaventura, U.S. District Court Case No.: CV10-02072- K(PJWx), an action which seeks declaratory and injunctive relief and civil penalties against the City for alleged violations of multiple effluent limitations in the City's NPDES permit, and for alleged unlawful discharge of treated sewage effluent and raw sewage into waters of the United States in violation of the Clean Water Act and the City�s NPDES permit. Among the relief requested is an order declaring that the City has violated and is in continued violation of the Clean Water Act, enjoining the City from discharging raw sewage to waters of the United States, and ordering the City to pay civil penalties of up to $32,500 per day per violation for all Clean Water Act violations occurring between January 5, 2005 and January 12, 2009, and up to $37,500 per day per violation for all Clean Water Act violations occurring since January 12, 2009. In August 2011, the City agreed to resolve the case, and the settlement became final in April of 2011. City analysis of remediation costs is underway. However, the City expects that any costs associated with the settlement would be borne by the City�s Wastewater Fund and not the General Fund and no direct expenditures by the City for such remediation costs is required until at least 2016. The City does not expect that the case will have a material adverse effect on the General Fund or on the City�s ability to pay obligations payable from the General Fund, including Lease Payments.
APPROVAL OF LEGAL PROCEEDINGS
The validity of the Bonds and certain other legal matters are subject to the approving opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. A copy of the proposed form of the opinion of Bond Counsel is attached as Appendix F. Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California is acting as Disclosure Counsel to the City. From time to time Disclosure Counsel represents the Underwriter on matters unrelated to the Bonds. Certain legal matters will be passed upon for the City and the Authority by the City Attorney.
TAX MATTERS
Federal Tax Status of Series A Bonds. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Series A Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings.
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The opinions set forth in the preceding paragraph are subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the �Tax Code�) that must be satisfied subsequent to the issuance of the Series A Bonds. The Authority and the City have covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of issuance of the Series A Bonds.
Federal Tax Status of Series B Bonds. The Authority and the City have determined that interest on the Series B Bonds is not excluded from gross income for federal income tax purposes under the Tax Code.
California Tax Status. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes.
Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes "original issue premium" for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium is disregarded.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual and corporate alternative minimum taxes.
Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the Bond's maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized bond premium is not deductible for federal income tax purposes. Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Bonds.
Other Tax Considerations. Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other than as expressly described above.
Circular 230 Disclaimer. To ensure compliance with requirements imposed by the IRS, Bond Counsel informs owners of the Series B Bonds that any U.S. federal tax advice contained in this Official
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Statement (including any attachments) (a) was not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer and (b) was written to support the promotion or marketing of the Series B Bonds. Each taxpayer should seek advice based on that taxpayer's particular circumstances from an independent tax advisor.
Form of Opinions. Copies of the proposed opinions of Bond Counsel relating to the Bonds are attached hereto as Appendix F.
LEGAL MATTERS
Issuance of the Bonds is subject to the approving opinions of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, to be delivered in substantially the form attached hereto as Appendix F. The City Attorney will pass upon certain matters for the City and the Authority. Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, is serving as Disclosure Counsel to the Authority. The Underwriter was represented by Greenberg, Traurig, LLP, Phoenix, Arizona (�Counsel to the Underwriter�).
PROFESSIONAL FEES
Payment of the following professionals involved in the offering of the Bonds is contingent upon the sale and delivery of the Bonds: the compensation of Bond Counsel, Disclosure Counsel, Counsel to the Underwriter and the Trustee.
RATING
Standard & Poor�s Ratings Services, a Standard & Poor�s Financial Services LLC business (�S&P�) is expected to assign its municipal bond rating of �AA-� to the Bonds. Such rating expresses only the views of S&P and is not a recommendation to buy, sell or hold the Bonds. Such rating of the rating agency reflects only the views of such organization, and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following address: Standard & Poor�s Ratings Services, 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such rating will continue for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely by the rating agency, if in its judgment, circumstances so warrant. The Authority, the City and the Trustee undertake no responsibility to oppose any such revision or withdrawal. Any such downward revision or withdrawal may have an adverse effect on the market price of the Bonds.
CONTINUING DISCLOSURE
The City (on behalf of the Authority and itself) will undertake all responsibilities for any continuing disclosure to Owners of the Bonds as described below.
The City will enter into a Continuing Disclosure Certificate, to be dated the date of delivery of the Bonds (the �Continuing Disclosure Certificate�), which provides for certain disclosure obligations on the part of the City. Under the Continuing Disclosure Certificate, the City will covenant for the benefit of Owners and Beneficial Owners of the Bonds to provide certain financial information and operating data relating to the City by not later than 270 days after the end of each fiscal year of the City, commencing April 1, 2013 for the fiscal year ending June 30, 2012 (the �Annual Report�), and to provide notice of the occurrence of certain enumerated events (the �Listed Events�). These covenants will be made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5) (the �Rule�).
The form of the Continuing Disclosure Certificate is attached hereto as Appendix E.
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The City became obligated to file its audited financial statements with each nationally recognized municipal securities information repository (�NRMSIR�) pursuant to debt offerings for Certificates of Participation in 2001, Wastewater Revenue in 2004 and Water Revenue in 2004. Due to an administrative oversight, the City�s audited financial statements were not timely filed with the NRMSIR for fiscal year ending June 2009. All information has since been filed, including a notice of late filing. The City has implemented procedures to ensure timely filing of all future financial information. As of the date hereof and except as described above, the City has not in the past five years failed to comply in all material respects with any previous undertakings with regard to the provision of annual reports or notices of material events as required by the Rule.
UNDERWRITING
The Bonds are being purchased by First Southwest Company (the �Underwriter�), at a purchase price for the Series A Bonds of $17,137,338.75 (which represents the aggregate principal amount of the Bonds, plus a net original issue premium of $786,038.75 and less an underwriter�s discount of $98,700.00) and for the Series B Bonds at a purchase price of $1,356,810.00 (which represents the aggregate purchase price of $1,365,000.00 less an Underwriter�s discount of $8,190.00). The purchase agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase agreement.
The Underwriter may offer and sell Bonds to certain dealers and others at prices lower than the offering price stated on the cover page hereof. The offering prices may be changed from time to time by the Underwriter.
EXECUTION
The execution and delivery of this Official Statement have been duly authorized by the Authority and the City.
CITY OF SAN BUENAVENTURA PUBLIC FACILITIES FINANCING AUTHORITY
By: /s/ Rick Cole City Manager
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APPENDIX A
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
The following is a brief summary of the provisions of the Site Lease, Lease Agreement and the Indenture of Trust relating to the Bonds. Such summary is not intended to be definitive, and reference is made to the complete documents for the complete terms thereof.
DEFINITIONS Except as otherwise defined in this summary, the terms previously defined in this Official Statement have the respective meanings previously given. In addition, the following terms have the following meanings when used in this summary: �Additional Rental Payments� means the amounts of additional rental which are payable by the City under the Lease Agreement.
�Assignment Agreement� means the Assignment Agreement dated as of June 1, 2012, between the Authority as assignor and the Trustee as assignee, as originally executed or as thereafter amended.
�Bond Counsel� means (a) Jones Hall, A Professional Law Corporation, or (b) any other attorney or firm of attorneys appointed by or acceptable to the Authority of nationally-recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Tax Code.
�Bond Fund� means the fund by that name established and held by the Trustee under the Indenture.
�Bond Year� means each twelve-month period extending from February 2 in one calendar year to February 1 of the succeeding calendar year, both dates inclusive; except that the first Bond Year commences on the Closing Date and extends to and including February 1, 2013.
�Closing Date� means the date of original issuance of the Bonds.
�Federal Securities� means: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged; (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America.
�Fiscal Year� means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period.
�Golf Course Fund� means the existing fund of the City held for the deposit and expenditure of revenues derived from the operation of public golf course facilities by the City.
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�Lease Payment Date� means, with respect to any Interest Payment Date, the 5th Business Day immediately preceding such Interest Payment Date.
�Lease Payments� means the amounts payable by the City under the Lease Agreement as rental for the Leased Property, including any prepayment thereof and including any amounts payable upon a delinquency in the payment thereof, but excluding Additional Rental Payments.
�Leased Property� means the real property described in Appendix A to the Lease, together with all improvements and facilities at any time situated thereon, consisting generally of the Ventura Community Park, the Olivas Park Golf Course and the Buenaventura Golf Course.
�Net Proceeds� means amounts derived from any policy of casualty insurance or title insurance with respect to the Leased Property, or the proceeds of any taking of the Leased Property or portion thereof in eminent domain proceedings (including sale under threat of such proceedings), to the extent remaining after payment therefrom of all expenses incurred in the collection and administration thereof.
�Owner�, when used with respect to any Bond, means the person in whose name the ownership of such Bond is registered on the Bond registration books of the Trustee.
�Permitted Encumbrances� means, as of any time: (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may permit to remain unpaid under the Lease; (b) the Site Lease, the Lease and the Assignment Agreement; (c) any right or claim of any mechanic, laborer, material man, supplier or vendor not filed or perfected in the manner prescribed by law; (d) the exceptions disclosed in the title insurance policy with respect to the Leased Property issued as of the Closing Date by Stewart Title Guaranty Company; and (e) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record and which the City certifies in writing will not materially impair the use of the Leased Property for its intended purposes. �Permitted Investments� means any of the following:
(a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged.
(b) obligations of any agency, department or instrumentality of the United States of
America, the timely payment of principal and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America.
(c) Any direct or indirect obligations of an agency or department of the United
States of America whose obligations represent the full faith and credit of the United States of America, or which are rated A or better by S&P.
(d) Interest-bearing deposit accounts (including certificates of deposit) in federal or
State chartered savings and loan associations or in federal or State of California banks (including the Trustee and its affiliates), provided that: (i) the unsecured
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obligations of such commercial bank or savings and loan association are rated A or better by S&P; or (ii) such deposits are fully insured by the Federal Deposit Insurance Corporation.
(e) Commercial paper rated at the time of purchase �A-1+� or better by S&P. (f) Federal funds or bankers acceptances with a maximum term of one year of any
bank which an unsecured, uninsured and unguaranteed obligation rating of �A-1+� or better by S&P.
(g) Money market funds registered under the Federal Investment Company Act of
1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of at least AAAm-G, AAAm or AAm, which funds may include funds for which the Trustee, its affiliates, parent or subsidiaries provide investment advisory or other management services.
(h) Obligations the interest on which is excludable from gross income pursuant to
Section 103 of the Tax Code and which are either (a) rated A or better by S&P, or (b) fully secured as to the payment of principal and interest by Permitted Investments described in clauses (a) or (b).
(i) Obligations issued by any corporation organized and operating within the
United States of America having assets in excess of $500,000,000, which obligations are rated A or better by S&P.
(j) Bonds or notes issued by any state or municipality which are rated A or better
by S&P. (k) Any investment agreement with, or guaranteed by, a financial institution the
long-term unsecured obligations or the claims paying ability of which are rated A or better by S&P at the time of initial investment, by the terms of which all amounts invested thereunder are required to be withdrawn and paid to the Trustee in the event either of such ratings at any time falls below A.
(l) The Local Agency Investment Fund of the State of California, created pursuant
to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name.
�Prior Certificates� means, collectively, the Series C Certificates, the Series D Certificates and the Series F Certificates.
�Qualified Reserve Account Credit Instrument� means an irrevocable standby or direct-pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee under the Indenture, provided that all of the following requirements are met at the time of acceptance thereof by the Trustee:
(a) at the time of issuance the long-term credit rating of such bank or insurance company is AA or better from S&P, or the claims paying ability of such
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insurance company is rated in the highest rating category by A.M. Best & Company;
(b) such letter of credit or surety bond has a term of at least 12 months; (c) such letter of credit or surety bond has a stated amount at least equal to the
portion of the Reserve Requirement with respect to which funds are proposed to be released; and
(d) the Trustee is authorized under the terms of such letter of credit or surety bond
to draw thereunder an amount equal to any deficiencies which may exist from time to time in the Interest Account or the Principal Account for the purpose of making payments of debt service on the Bonds in accordance with the Indenture.
�Record Date� means, with respect to any Interest Payment Date, the 15th calendar day of the month preceding such Interest Payment Date, whether or not such day is a Business Day.
�Refunding Instructions� means, collectively: (a) the Irrevocable Refunding Instructions dated as of June 1, 2012, and executed by the Authority and the City, directing The Bank of New York Mellon Trust Company, N.A., as trustee for the Series C Certificates and the Series D Certificates, to pay and prepay the Series C Certificates and the Series D Certificates; and (b) the Irrevocable Refunding Instructions dated as of June 1, 2012, and executed by the Authority and the City, directing The Bank of New York Mellon Trust Company, N.A., as trustee for the Series F Certificates, to pay a portion of the debt service coming due on the Series F Certificates. �Reserve Requirement� means, as of any date of calculation, the lesser of (a) an amount equal to 10% of the original principal amount of such series of Bonds, (b) the maximum amount of principal of and interest coming due and payable on the Bonds in the current or any future Bond Year or (c) 125% of the average amount of principal of and interest on the Bonds in any Bond Year, calculated without regard to principal and interest having come due and payable prior to the date of calculation.
�Revenues� means: (a) all amounts received by the Authority or the Trustee under or with respect to the Lease Agreement, including, without limiting the generality of the foregoing, all of the Lease Payments (including both timely and delinquent payments, any late charges, and whether paid from any source), but excluding (i) any amounts payable under the Lease in respect of additional obligations issued in accordance with the Lease, and (ii) any Additional Rental Payments; and (b) all interest, profits or other income derived from the investment of amounts in any fund or account established under the Indenture. �Series A Bonds� means the City of San Buenaventura Public Facilities Financing Authority 2012 Refunding Lease Revenue Bonds, Series A authorized by and at any time outstanding under the Indenture.
�Series A Costs of Issuance Fund� means the fund by that name established and held by the Trustee for the payment of Costs of Issuance of the Series A Bonds.
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�Series B Bonds� means the City of San Buenaventura Public Facilities Financing Authority 2012 Taxable Refunding Lease Revenue Bonds, Series B authorized by and at any time outstanding under the Indenture.
�Series B Costs of Issuance Fund� means the fund by that name established and held by the Trustee for the payment of Costs of Issuance of the Series B Bonds.
�Series C Certificates� means the 2001 Certificates of Participation, Series C, executed and delivered in the aggregate principal amount of $16,345,000, evidencing direct, undivided fractional interests of the owners thereof in lease payments to be made by the City under the Lease Agreement dated as of December 1, 2001, between the Authority as lessor and the City as lessee.
�Series D Certificates� means the 2002 Certificates of Participation, Series D, executed and delivered in the aggregate principal amount of $15,930,000, evidencing direct, undivided fractional interests of the owners thereof in lease payments to be made by the City under the Lease Agreement dated as of December 1, 2002, between the Authority as lessor and the City as lessee.
�Series F Certificates� means the 2010 Certificates of Participation, Series F, executed and delivered in the aggregate principal amount of $20,615,000, evidencing direct, undivided fractional interests of the owners thereof in lease payments to be made by the City under the Lease Agreement dated as of August 1, 2010, between the Authority as lessor and the City as lessee.
�Site Lease Payment� means the amount of up-front rent which is payable under the Site Lease in consideration of the lease of the Leased Property by the City to the Authority thereunder.
�S&P� means Standard & Poor�s, a division of the McGraw Hill Companies, of New York, New York, its successors and assigns.
�Tax Code� means the Internal Revenue Code of 1986 as in effect on the Closing Date or as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under said Code.
SITE LEASE Under the Site Lease, the City agrees to lease the portion of the Leased Property which is owned by it to the Authority in consideration of the payment by the Authority of the Site Lease Payment on the Closing Date. The Authority agrees to cause the full amount of the Site Lease Payment to be raised from the proceeds of the Bonds, and to cause the Site Lease Payment to be transferred to the trustee for the Prior Certificates, for application pursuant to the Refunding Instructions. No further rent payment is due by the Authority for the lease of the Leased Property under the Site Lease. The Site Lease is for a term commencing on the Closing Date and extending to the date on which no Bonds remain outstanding under the Indenture, but not later than ten years following the final stated maturity date of the Bonds. In the event of any release or substitution of property under the Lease Agreement as described below, the description of the property leased under the Site Lease will be modified accordingly.
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LEASE AGREEMENT Lease of Leased Property; Term Under the Lease Agreement, the Authority leases the Leased Property, including the portion of the Leased Property which is owned by the Authority, back to the City. The Lease Agreement is for a term commencing on the Closing Date and extending to the date on which no Bonds remain outstanding under the Indenture, but not later than ten years following the final stated maturity date of the Bonds. Lease Payments The City agrees to pay semiannual Lease Payments, subject to abatement as described below, as the rental for the use and occupancy of the Leased Property. On each Lease Payment Date, the City is obligated to deposit with the Trustee the full amount of the Lease Payments coming due and payable on the next Interest Payment Date, to the extent required to be paid by the City under the Lease Agreement. Any amount held in the Bond Fund, the Interest Account or the Principal Account on any Lease Payment Date (other than amounts specifically required to be credited to the prepayment of Lease Payments), will be credited towards the Lease Payment then coming due and payable. Source of Payments The Lease Payments are payable from any source of available funds of the City, subject to the provisions of the Lease Agreement relating to abatement. The portion of the Lease Payments which is attributable to the refunding of the Series D Certificates, and that portion of the Series F Certificates which are refunded from the proceeds of the Bonds attributable to golf course improvements, are also payable from amounts held by the City in the Golf Course Fund in amounts determined by the City, as follows: (63% through 2014, 55% in 2015 through 2018, varying amounts ranging from 21% to 37% for years 2019 through 2026, and 100% thereafter). Budget and Appropriation The City covenants to take all actions required to include the Lease Payments in each of its budgets during the Term of the Lease Agreement and to make the necessary appropriations for all Lease Payments and Additional Rental Payments. Such covenant constitutes a duty imposed by law and each and every public official of the City is required to take all actions required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in the Lease Agreement agreed to be carried out and performed by the City. Abatement of Lease Payments The Lease Payments will be abated under the Lease Agreement during any period in which there is substantial interference with the City�s use and occupancy of all or any portion of the Leased Property, including interference due to: (a) damage or destruction of the Leased Property in whole or in part or (b) eminent domain proceedings with respect to the Leased Property or any portion thereof. The amount of such abatement is required to be an amount determined by the City, such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining
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usable portions of the Leased Property. In the event of such abatement, the City will have no obligation to pay abated Lease Payments and there is no remedy available to the Trustee or the Bond Owners arising from such abatement. Notwithstanding the foregoing, there will be no abatement of Lease Payments to the extent that Net Proceeds or amounts in the Reserve Account are available to pay Lease Payments which would otherwise be abated under the Lease, such proceeds and amounts being constituted a special fund for the payment of the Lease Payments. Notwithstanding the foregoing, the Lease Payments will not be abated to the extent that amounts in the Reserve Fund are available to pay Lease Payments which would otherwise be abated, the City and the Trustee having declared that such proceeds and amounts constitute a special fund for the payment of the Lease Payments. Option to Prepay The City has the option to prepay the principal components of the Lease Payments in whole, or in part in any integral multiple of $5,000, from any source of legally available funds, on any Interest Payment Date on which the Bonds are subject to optional redemption, at a prepayment price equal to the aggregate principal components of the Lease Payments to be prepaid, together with the interest component of the Lease Payment required to be paid on such Interest Payment Date, and together with a prepayment premium equal to the premium (if any) required to be paid on the resulting redemption of Bonds under the Indenture. Substitution of Property The City has the option at any time and from time to time during the term of the Lease Agreement to substitute other land, facilities or improvements (the �Substitute Property�) for the Leased Property or portion thereof (the �Former Property�) provided that the City must satisfy all of the requirements set forth in the Lease Agreement, including the following:
(a) No Event of Default has occurred and is continuing.
(b) The City has filed with the Authority and the Trustee, and caused to be recorded in the office of the Ventura County Recorder sufficient memorialization of, an amendment to the Lease Agreement which adds the legal description of the Substitute Property to the Lease Agreement and deletes therefrom the legal description of the Former Property.
(c) The City has obtained a CLTA policy of title insurance insuring the City�s
leasehold estate in the Substitute Property, subject only to Permitted Encumbrances, in an amount at least equal to the estimated value thereof.
(d) The City has certified in writing to the Authority and the Trustee that the
Substitute Property serves the municipal purposes of the City and constitutes property which the City is permitted to lease under the laws of the State of California, and has been determined to be essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City.
(e) The Substitute Property does not cause the City to violate any of its covenants,
representations and warranties made in the Lease Agreement.
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(f) The City has certified in writing to the Authority and the Trustee that the
estimated value of the Substitute Property is at least equal to the original aggregate principal amount of the Bonds, and the fair rental value of the property which remains subject to the Lease following such substitution is at least equal to the Lease Payments thereafter coming due and payable hereunder.
(g) The City has mailed written notice of such substitution to each rating agency
which then maintains a rating on the Bonds.
Following the date on which all of the foregoing conditions precedent to such substitution are satisfied, the term of the Lease Agreement ceases with respect to the Former Property and continues with respect to the Substitute Property, and all references to the Former Property will apply with full force and effect to the Substitute Property. The City will not be entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such substitution. Release of Property The City has the option at any time and from time to time during the term of the Lease Agreement to release any portion of the Leased Property from the Lease Agreement (the �Released Property�) provided that the City must satisfy all of the requirements set forth in the Lease Agreement, including the following:
(a) No Event of Default has occurred and is continuing. (b) The City has filed with the Authority and the Trustee, and caused to be
recorded in the office of the Ventura County Recorder sufficient memorialization of, an amendment which removes the Released Property from the Site Lease and the Lease.
(c) The City has certified in writing to the Authority and the Trustee that the value
of the property which remains subject to the Lease Agreement following such release is at least equal to the aggregate original principal amount of the Bonds, and the fair rental value of the property which remains subject to the Lease Agreement following such release is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement.
(d) The City has mailed written notice of such release to each rating agency which
then maintains a rating on the Bonds.
Upon the satisfaction of all such conditions precedent, the Term of the Lease Agreement will thereupon end as to the Released Property. The City is not entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such release. The Authority and the City will execute, deliver and cause to be recorded all documents required to discharge the Site Lease, the Lease Agreement and the Assignment Agreement of record against the Released Property.
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Maintenance, Utilities, Taxes and Modifications
The City, at its own expense, has agreed to maintain or cause to be maintained the Leased Property in good repair; the Authority has no responsibility for such maintenance. The City is also obligated to pay all taxes and assessments charged to the Leased Property. The City has the right under the Lease Agreement to remodel the Leased Property and to make additions, modifications and improvements to the Leased Property, provided that any such additions, modifications and improvements to the Leased Property are of a value which is not substantially less than such value of the Leased Property immediately prior to making such additions, modifications and improvements. The City will not permit any mechanic�s or other lien to be established or to remain against the Leased Property, except that the City has the right in good faith to contest any such lien. Insurance The Lease Agreement requires the City to maintain or cause to be maintained the following insurance against risk of physical damage to the Leased Property and other risks for the protection of the Bond Owners, the Authority and the Trustee: Public Liability and Property Damage Insurance. The City shall maintain or cause to be maintained throughout the Term of the Lease, but only if and to the extent available from reputable insurers at reasonable cost in the reasonable opinion of the City, a standard commercial general liability insurance policy or policies in protection of the Authority, the City, and their respective members, officers, agents, employees and assigns. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Leased Property. Such policy or policies shall provide coverage in such liability limits and be subject to such deductibles as the City deems adequate and prudent. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of self-insurance by the City, or in the form of the participation by the City in a joint powers agency or other program providing pooled insurance. The proceeds of such liability insurance will be applied toward extinguishment or satisfaction of the liability with respect to which paid. If any insurance required pursuant to this provision is provided in the form of self-insurance, the City must file with the Trustee annually, within 90 days following the close of each Fiscal Year, a statement of the risk manager of the City or an independent insurance adviser engaged by the City identifying the extent of such self-insurance and stating the determination that the City maintains sufficient reserves with respect thereto. If any such insurance is provided in the form of self-insurance by the City, the City has no obligation to make any payment with respect to any insured event except from those reserves. Casualty Insurance. The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of the Lease, casualty insurance against loss or damage to all buildings situated on the Leased Property, in an amount at least equal to the lesser of (a) 100% of the replacement value of the insured buildings, or (b) 100% of the aggregate principal amount of the outstanding Bonds. Such insurance must, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance, and must include earthquake insurance if available at reasonable cost from reputable insurers in the judgment of the City. Such insurance may be subject to such deductibles as the City deems adequate and prudent. Such insurance may be maintained as part of or in conjunction with any other insurance
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coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers agency or other program providing pooled insurance; provided that such insurance may not be maintained by the City in the form of self-insurance. The Net Proceeds of such insurance shall be applied as provided in the Lease. Rental Interruption Insurance. The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of the Lease, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of any portion of the Leased Property constituting buildings or other improvements as a result of any of the hazards covered in the insurance required by the casualty insurance described above in an amount at least equal to the maximum such Lease Payments coming due and payable during any consecutive two Fiscal Years. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers agency or other program providing pooled insurance; provided that such insurance may not be maintained by the City in the form of self-insurance. The Net Proceeds of such insurance, if any, must be paid to the Trustee and deposited in the Bond Fund, to be applied as a credit towards the payment of the Lease Payments allocable to the insured improvements as the same become due and payable. Recordation and Title Insurance. On or before the Closing Date the City shall, at its expense, (a) cause the Site Lease, the Assignment Agreement and the Lease, or a memorandum thereof or thereof in form and substance approved by Bond Counsel, to be recorded in the office of the Ventura County Recorder, and (b) obtain a CLTA title insurance policy insuring the City�s leasehold estate in the Leased Property, subject only to Permitted Encumbrances, in an amount at least equal to the aggregate principal amount of the Bonds. All Net Proceeds received under any such title insurance policy will be deposited with the Trustee in the Bond Fund to be credited towards the prepayment of the remaining Lease Payments under the Lease. Assignment; Subleases The Authority has assigned certain of its rights under the Lease Agreement to the Trustee under the Assignment Agreement. The City may not assign any of its rights in the Lease Agreement. The City may sublease all or a portion of the Leased Property, but only under the conditions contained in the Lease Agreement, including the condition that such sublease not cause the interest component of the Lease Payments to become subject to federal or State of California personal income taxes. Amendment of Lease Agreement The Authority and the City may at any time amend or modify any of the provisions of the Lease Agreement, but only: (a) with the prior written consents of the Owners of a majority in aggregate principal amount of the outstanding Bonds; or (b) without the consent of any of the Bond Owners, but only if such amendment or modification is for any one or more of the following purposes:
to add to the covenants and agreements of the City contained in the Lease, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power therein reserved to or conferred upon the City;
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to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained therein, to conform to the original intention of the City and the Authority;
to modify, amend or supplement the Lease Agreement in such manner as to assure that the interest on the Bonds remains excluded from gross income under the Tax Code;
to amend the description of the Leased Property to reflect accurately the property originally intended to be included therein;
to obligate the City to pay additional amounts of rental for the use and occupancy of the Leased Property, but only if (A) such additional amounts of rental are pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which are applied to finance or refinance the acquisition or construction of any real or personal property for which the City is authorized to expend funds subject to its control, (B) the City has obtained and filed with the Trustee an appraisal showing that the appraised value of the Leased Property is at least equal to the aggregate principal amount of the outstanding Bonds and all such other bonds, notes, leases or other obligations, and (C) the City has filed with the Trustee written evidence that the amendments made under this clause will not of themselves cause a reduction or withdrawal of any rating then assigned to the Bonds;
in any other respect whatsoever as the Authority and the City may deem
necessary or desirable, provided that, in the opinion of Bond Counsel, such modifications or amendments do not materially adversely affect the interests of the Owners of the Bonds.
No such modification or amendment may (a) extend or have the effect of extending any Lease Payment Date or reducing any Lease Payment, without the express consent of the Owners of the affected Bonds, or (b) modify any of the rights or obligations of the Trustee without its written consent thereto. Events of Default Each of the following constitutes an Event of Default under and as defined in the Lease Agreement:
Failure by the City to pay any Lease Payment or other payment required to be paid under the Lease Agreement at the time specified therein.
Failure by the City to observe and perform any covenant, condition or agreement
on its part to be observed or performed under the Lease Agreement, other than as referred to in the preceding paragraph, for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority or the Trustee; provided, however, that if in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such 30-day period, such failure will not constitute an Event of Default if the City
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commences to cure such failure within such 30-day period and thereafter diligently and in good faith cures such failure in a reasonable period of time.
Certain events relating to the insolvency or bankruptcy of the City.
Remedies on Default Upon the occurrence and continuance of any Event of Default, the Authority has the right to terminate the Lease Agreement or, with or without such termination, re-enter, take possession of and re-let the Leased Property. When the Authority does not elect to terminate the Lease Agreement, the City remains liable to pay all Lease Payments as they come due and liable for damages resulting from such Event of Default. Any amounts collected by the Authority from the reletting of the Leased Property will be credited towards the unpaid Lease Payments. Any net proceeds of re-leasing or other disposition of the Leased Property are required to be applied as set forth in the Indenture. Under the Assignment Agreement, the Authority assigns all of its rights with respect to remedies in an Event of Default to the Trustee, so that all such remedies will be exercised by the Trustee and the Bond Owners as provided in the Indenture. The Trustee has no right to accelerate Lease Payments and, due to the governmental nature of the Leased Property, it is uncertain whether a court would permit the exercise of the remedies of re-entry, repossession or re-letting.
INDENTURE OF TRUST Establishment of Funds and Accounts; Flow of Funds Costs of Issuance Funds. A portion of the proceeds of the Series A Bonds will be deposited by the Trustee in the Series A Costs of Issuance Fund on the Closing Date. The moneys in the Series A Costs of Issuance Fund will be disbursed to pay costs of issuing the Series A Bonds and other related financing costs from time to time upon receipt of written requests of the Authority. On August 1, 2012, or upon the earlier Written Request of the Authority, the Trustee shall transfer all amounts remaining in the Series A Costs of Issuance Fund to the Interest Account to be applied to pay interest next coming due and payable on the Series A Bonds, and the Trustee shall thereupon close the Series A Costs of Issuance Fund. A portion of the proceeds of the Series B Bonds will be deposited by the Trustee in the Series B Costs of Issuance Fund on the Closing Date. The moneys in the Series B Costs of Issuance Fund will be disbursed to pay costs of issuing the Series B Bonds and other related financing costs from time to time upon receipt of written requests of the Authority. On August 1, 2012, or upon the earlier Written Request of the Authority, the Trustee shall transfer all amounts remaining in the Series B Costs of Issuance Fund to the Interest Account to be applied to pay interest next coming due and payable on the Series B Bonds, and the Trustee shall thereupon close the Series B Costs of Issuance Fund. Site Lease Payment. Proceeds representing the Site Lease Payment will be transferred to the trustee for the Prior Certificates, for application pursuant to the Refunding Instructions.
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Bond Fund; Deposit and Transfer of Amounts Therein. All Revenues will be deposited by the Trustee in the Bond Fund promptly upon receipt. On or before each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee will establish and maintain within the Bond Fund), the following amounts in the following order of priority:
(a) Interest Account. The Trustee will deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest coming due and payable on such date on all outstanding Bonds. All moneys in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it comes due and payable, including accrued interest on any Bonds redeemed prior to maturity.
(b) Principal Account. The Trustee will deposit in the Principal Account an
amount required to cause the aggregate amount on deposit therein to equal the principal amount of the Bonds maturing on such date, including the principal amount of Term Bonds which are subject to mandatory sinking fund redemption. All moneys in the Principal Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds at the maturity thereof or upon the mandatory sinking fund redemption of the Term Bonds.
(c) Reserve Account. Amounts in the Reserve Account will be used and withdrawn
by the Trustee solely for the purpose of (i) paying principal of or interest on the Bonds, including the principal amount of the Term Bonds subject to mandatory sinking account redemption, when due and payable to the extent that moneys deposited in the Interest Account or Principal Account are not sufficient for such purpose, and (ii) making the final Lease Payments by the City under the Lease Agreement and the corresponding final payments of principal of and interest on the Bonds. Any amounts remaining in the Reserve Account upon payment in full of all outstanding Bonds, will be withdrawn by the Trustee and paid to the City as a refund of overpaid Lease Payments. All amounts on deposit in the Reserve Account in excess of the Reserve Requirement will be transferred to the Bond Fund and applied as a credit towards the City�s next Lease Payment.
Insurance and Condemnation Fund; Application of Net Proceeds. Any Net Proceeds of insurance or condemnation awards with respect to the Leased Property will be deposited in the Insurance and Condemnation Fund. In the event of an insurance or eminent domain award, the Net Proceeds on deposit in the Insurance and Condemnation Fund will be used, as directed by the City, either:
to replace, repair, restore, modify or improve the Leased Property if the City determines that such is economically feasible or in the best interests of the City, or
to the extent not so used, to prepay the Lease Payments and thereby redeem outstanding Bonds.
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Notwithstanding the foregoing, however, in the event of damage or destruction of the Leased Property in full, the Net Proceeds of such insurance are required to be used by the City to rebuild or replace the Leased Property if such proceeds are not sufficient to redeem outstanding Bonds equal in aggregate principal amount to the unpaid Lease Payments. Investment of Funds; Determination of Value of Investments All moneys in any of the funds or accounts held by the Trustee under the Indenture will be invested by the Trustee solely in Permitted Investments as directed by the Authority in advance of the making of such investments. In the absence of any such direction of the Authority, the Trustee will invest any such moneys in Permitted Investments consisting of money market funds. Obligations purchased as an investment of moneys in any fund will be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts established under the Indenture will be deposited in the Bond Fund, except that interest or gain derived from the investment of the amount in the Reserve Account will be retained therein to the extent required to maintain the Reserve Requirement, and otherwise shall be transferred to the Bond Fund. For the purpose of determining the amount in any fund or account established under the Indenture, the value of investments credited to such fund will be calculated at the market value thereof, in accordance with the procedures specified in the Indenture. Covenants of the Authority Payment of Bonds. The Authority will punctually pay or cause to be paid the principal of and interest and premium (if any) on the Bonds, in strict conformity with the terms of the Bonds and of the Indenture, but only out of the Revenues and other assets pledged for such payment as provided in the Indenture. The Authority will not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under the Indenture while any of the Bonds are outstanding, except the pledge and assignment created by the Indenture. Accounting Records and Financial Statements. The Trustee will at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with industry standards, in which complete and accurate entries will be made of all transactions relating to the proceeds of the Bonds, the Revenues, the Lease Agreement and all funds and accounts established pursuant to the Indenture. Such books of record and account will be available for inspection by the Authority and the City, during regular business hours and upon reasonable prior notice. No Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness will be issued or incurred which are payable out of the Revenues in whole or in part. Tax Covenants. The Authority will not take, nor permit nor suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of any of the Bonds which would cause any of the Bonds to be �arbitrage bonds� or �private activity bonds� within the meaning of the Tax Code. The Authority will cause to be calculated annually all excess investment earnings which are required to be rebated to the United States of America under the Tax Code, and will cause all required amounts to be rebated from payments made by the City for such purpose under the Lease Agreement.
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Lease Agreement. The Trustee will promptly collect all amounts due from the City pursuant to the Lease Agreement. Subject to the provisions of the Indenture governing the enforcement of remedies upon the occurrence of an Event of Default, the Trustee is required to enforce, and take all steps, actions and proceedings which the Trustee determines to be reasonably necessary for the enforcement of all of its rights thereunder as assignee of the Authority and for the enforcement of all of the obligations of the City under the Lease Agreement. Amendment of Indenture The Indenture may be modified or amended at any time by a supplemental indenture with the prior written consents of the Owners of a majority in aggregate principal amount of the Bonds then outstanding. No such modification or amendment may (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums (if any) at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the Owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee.
The Indenture may also be modified or amended at any time by a supplemental indenture, without the consent of any Bond Owners, to the extent permitted by law, but only for any one or more of the following purposes:
To add to the covenants and agreements of the Authority contained in the Indenture, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power therein reserved to or conferred upon the Authority.
To cure any ambiguity, inconsistency or omission in the Indenture, or correct any defective provision in the Indenture, or in any other respect whatsoever as the Authority may deem necessary or desirable, so long as such modification or amendment does not materially adversely affect the interests of the Bond Owners in the opinion of Bond Counsel filed with the Trustee.
To modify, amend or supplement the Indenture in such manner as to permit the qualification of the Indenture under the Trust Indenture Act of 1939 or any similar federal statute at any time in effect.
To modify, amend or supplement the Indenture so as to cause interest on the Bonds to remain excludable from gross income under the Tax Code.
To incorporate provisions relating to a Qualified Reserve Account Credit Instrument.
Events of Default
Events of Default Defined. The following events constitute events of default under the Indenture:
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Default in the payment of the principal of any Bonds when due, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise.
Default in the due and punctual payment of any installment of interest on any Bonds when and as the same become due and payable.
Failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part contained in the Indenture or in the Bonds, if such failure has continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, has been given to the Authority by the Trustee; provided, however, if in the reasonable opinion of the Authority the failure stated in the notice can be corrected, but not within such 30-day period, such failure shall not constitute an Event of Default if the Authority institutes corrective action within such 30-day period and thereafter diligently and in good faith cures the failure in a reasonable period of time.
The commencement by the Authority of a voluntary case under Title 11 of the
United States Code or any substitute or successor statute.
The occurrence and continuation of any Event of Default under and as defined in the Lease Agreement. See �LEASE AGREEMENT - Events of Default� above.
Remedies. Upon the occurrence and during the continuance of any Event of Default, the Trustee may, and at the written direction of the Owners of a majority in aggregate principal amount of the Bonds at the time outstanding the Trustee shall:
upon notice in writing to the Authority and the City, declare the principal of all of the Bonds then outstanding, and the interest accrued thereon, to be due and payable immediately (provided that no such acceleration will have the effect of accelerating the City�s obligations under the Lease Agreement, as more fully described above), or
enforce any rights of the Trustee under or with respect to the Indenture. The Trustee is irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, the Indenture and applicable provisions of any law.
Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bond Owners, the Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of the Bonds then outstanding, and upon being indemnified to its satisfaction therefor, the Trustee shall, proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it deems most effectual to protect and enforce any such right, at law or in equity. No delay or omission to exercise any right or power accruing upon any Event of Default will impair any such
A-17
right or power or will be construed to be a waiver of any such Event of Default or acquiescence therein; such right or power may be exercised from time to time as often as may be deemed expedient. Application of Revenues and Other Funds After Default. If an Event of Default has occurred and is continuing, all Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of the Indenture will be applied by the Trustee as follows and in the following order:
(a) To the payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its legal counsel including outside counsel and the allocated costs of internal attorneys) incurred in and about the performance of its powers and duties under the Indenture;
(b) To the payment of the principal of and interest then due on the Bonds (upon
presentation of the Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid) in accordance with the provisions of the Indenture, as follows:
First: To the payment to the persons entitled thereto of all installments of
interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid principal
of any Bonds which shall have become due, with interest on the overdue principal at the rate borne by the respective Bonds (to the extent permitted by law), and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference.
Limitation on Bond Owners� Right to Sue. No Owner of any Bond has the right to institute any suit, action or proceeding at law or in equity, for any remedy under the Indenture, unless:
such Owner has previously given to the Trustee written notice of the occurrence of an Event of Default;
the Owners of a majority in aggregate principal amount of all the Bonds then
outstanding have requested the Trustee in writing to exercise its powers under the Indenture;
said Owners have tendered to the Trustee indemnity reasonably acceptable to the
Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;
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the Trustee has refused or failed to comply with such request for a period of 60 days after such written request has been received by the Trustee and said tender of indemnity is made to the Trustee; and
no direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Owners of a majority in aggregate principal amount of the Bonds then outstanding.
Discharge of Indenture The Authority may pay and discharge the indebtedness on any or all of the outstanding Bonds in any one or more of the following ways:
by paying or causing to be paid the principal of and interest on the Bonds, as and when the same become due and payable;
by irrevocably depositing with the Trustee, in trust, at or before maturity, cash
and/or non-callable Federal Securities which, together with the investment earnings to be received thereon, have been verified by an independent accountant to be sufficient to pay or redeem such Bonds when and as the same become due and payable; or
by delivering to the Trustee, for cancellation by it, all of such Bonds.
Upon such payment, and notwithstanding that any Bonds have not been surrendered for payment, the pledge of the Revenues and other funds provided for in the Indenture with respect to such Bonds, and all other obligations of the Authority under the Indenture with respect to such Bonds, will cease and terminate, except only the obligation of the Authority to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon from amounts set aside for such purpose. Any funds thereafter held by the Trustee, which are not required for said purposes, will be paid over to the Authority.
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APPENDIX B
GENERAL INFORMATION ABOUT THE CITY OF SAN BUENAVENTURA
This appendix sets forth general information about the City of San Buenaventura (the �City�). The following information concerning the City, the County of Ventura (the �County�) and the State of California (the �State�) is included only for general background purposes. The Bonds are an obligation of the City but are not an obligation of the State, the County or any governmental agency. It is not intended to suggest that the Bonds are payable from any source other than Lease Payments.
General
The City is one of the oldest settlements on the Pacific Coast. It is the site of the San Buenaventura Mission founded in 1782, and incorporated as a town by the California Legislature on March 10, 1866.
The first Charter of the City was prepared and proposed by a Board of Freeholders elected October 13, 1931. The Charter was ratified and adopted by the electors on January 7, 1932, and approved by the State Legislature on January 26, 1933 and has been amended several times thereafter.
The City is located in south-central Ventura County along the California coastline, approximately 62 miles northwest of the City of Los Angeles and 25 miles south of the City of Santa Barbara. The City is the County seat with a population estimated of 106,433 in 2010, accounting for 13 percent of the County�s population. The City�s economy revolves chiefly around the County government facilities, financial services, retail operations, the nearby oil fields and a well developed food processing industry.
Population
Table B-1 sets forth total population for the City, the County and the State for each of the last ten years.
Table B-1 CITY OF SAN BUENAVENTURA, COUNTY OF VENTURA AND STATE OF CALIFORNIA
Population
Year City of
San Buenaventura County of Ventura State of California
2001 101,801 774,438 34,725,516 2002 102,974 784,632 35,163,609 2003 103,269 792,213 35,570,847 2004 103,374 795,962 35,869,173 2005 103,827 799,049 36,116,202 2006 104,140 803,572 36,399,676 2007 104,752 808,970 36,704,375 2008 105,437 815,284 36,966,713 2009 106,285 822,108 37,223,900 2010* 106,433 823,318 37,253,956
* Numbers are as of 4/1/2010 per State of California, Department of Finance, E-4 Population Estimates for Cities, Counties and the State, 2001-2010, with 2000 & 2010 Census Counts, September 2011 revision.
Source: State of California, Department of Finance, E-4 Population Estimates for Cities, Counties and the State, 2001-2010, with 2000 and 2010 Census Counts, September 2011 revision..
B-2
Employment
Table B-2 summarizes the labor force, employment and unemployment figures over the period 2006 through 2010 for the City, the County, the State and United States.
Table B-2 CITY OF SAN BUENAVENTURA, COUNTY OF VENTURA,
STATE OF CALIFORNIA AND UNITED STATES Labor Force, Employment and Unemployment Yearly Average
Year and Area Civilian
Labor Force Civilian
Employment Civilian
Unemployment Civilian
Unemployment Rate
2006 Ventura 60,200 57,900 2,300 3.9% Ventura County 425,400 407,100 18,300 4.3 California 17,686,700 16,821,300 865,400 4.9 United States 151,428,000 144,427,000 7,001,000 4.6 2007 Ventura 60,700 58,000 2,700 4.4% Ventura County 427,500 406,600 20,900 4.9 California 17,921,000 16,960,700 960,300 5.4 United States 153,124,000 146,047,000 7,078,000 4.6 2008 Ventura 61,400 58,000 3,400 5.6% Ventura County 431,400 404,400 26,900 6.2 California 18,203,100 16,890,00 1,313,100 7.2 United States 154,287,000 145,362,000 8,924,000 5.8 2009 Ventura 61,200 55,600 5,500 9.1% Ventura County 431,300 388,200 43,600 10.0 California 18,208,300 16,144,500 2,063,900 11.3 United States 154,142,000 139,871,000 14,265,000 9.3 2010 Ventura 61,600 55,600 6,000 12.8% Ventura County 434,800 387,800 46,900 10.8 California 18,316,400 16,051,500 2,264,900 12.4 United States 153,867,000 139,066,000 14,801,000 9.6
Source: California Employment Development Department, based on March 2011 benchmark and U.S. Department of Labor, Bureau of Labor Statistics.
Table B-3 summarizes employment by Industry in the Oxnard-Thousand Oaks-Ventura MSA (�MSA�) from 2006 to 2010. Manufacturing, Retail Trade, Services and Government are the largest employment sectors in the Oxnard-Thousand Oaks-Ventura MSA.
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Table B-3 OXNARD-THOUSAND OAKS-VENTURA MSA
VENTURA COUNTY Industry Employment & Labor Force - By Annual Average
TITLE 2006 2007 2008 2009 2010 Total Farm 22,900 24,000 25,100 24,000 24,400 Total Nonfarm 297,700 296,800 291,300 275,600 273,200 Total Private 255,200 253,800 248,200 232,700 229,800 Goods Producing 59,900 57,900 53,800 47,000 44,000 Natural Resources & Mining 1,100 1,100 1,200 1,200 1,200 Construction 20,500 18,800 16,700 13,200 11,300 Manufacturing 38,400 38,000 35,900 32,600 31,500 Durable Goods 24,100 23,900 23,200 20,400 19,500 Nondurable Goods 14,300 14,100 12,700 12,200 12,000 Service Providing 237,800 239,000 237,500 227,900 227,900 Private Service Providing 195,300 195,900 194,400 185,700 185,000 Trade, Transportation & Utilities 56,400 56,800 56,100 52,500 53,100 Wholesale Trade 12,600 13,000 12,800 12,100 12,300 Retail Trade 37,600 37,600 37,300 35,100 35,500 Transportation, Warehousing & Utilities 6,100 6,100 6,000 5,400 5,300 Information 6,000 5,800 5,600 5,300 5,100 Financial Activities 24,000 22,700 21,100 20,500 20,500 Professional & Business Services 39,300 38,300 38,300 36,100 33,900 Educational & Health Services 28,900 30,500 31,800 32,300 32,800 Leisure & Hospitality 30,500 32,000 31,500 29,800 30,300 Other Services 10,200 9,900 10,000 9,300 9,200 Government 42,500 43,000 43,100 42,900 44,200 Total, All Industries 320,700 320,800 316,400 299,600 297,700
Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households and
person involved in labor/management trade disputes. Employment reported by place of work. Items may not add to total due to independent rounding. The �Total, All Industries� data is not directly comparable to the employment data found herein.
Source: State of California, Employment Development Department, Oxnard-Thousand Oaks-Ventura MSA Industry Employment & Labor Force - By Annual Average, March 2011 Benchmark.
Major Employers
Table B-4 sets forth the largest employers in the City of San Buenaventura as of 2011.
Table B-4 CITY OF SAN BUENAVENTURA
Major Employers
Employer Business Employees
County of Ventura Government 7,991 Ventura County Health Care Agency Health Care 2,493 Ventura Unified School District Education 1,916 Ventura Community College District Education 1,913 Community Memorial Health System Health Care 1,881 Argon St Inc Private Industry 990 City of San Buenaventura Government 595 Employer�s Depot Inc Job Agency 550 Meditech Health Services Inc. Health Care 400 Judicial Council of California Government 370
Source: City of San Buenaventura, Comprehensive Annual Financial Report for fiscal year ended June 30, 2011.
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Commercial Activity
Trade outlet and retail sales activity for the City are summarized based on reports of the State Board of Equalization. The following tables shows the City�s taxable transactions between 2006 through 2010.
Table B-5 CITY OF SAN BUENAVENTURA
Taxable Retail Sales, 2006-2010 ($ 000�s)
Type of Business 2006 2007 2008 2009 2010
Apparel Stores $ 104,618 $ 108,886 $ 100,894 $ 102,480 $ 101,171 General Merchandise Stores 244,223 243,118 233,410 192,822 194,220 Food/Beverage Stores 69,677 70,927 73,560 87,443 87,229 Eating/Drinking Places 203,163 213,151 212,142 206,437 209,414 Home Furnishings/Appliance Stores
47,191 43,974 42,644 61,863 60,332
Building Materials/Garden Equipment
197,820 178,818 130,812 128,116 134,325
Motor Vehicle/Parts Dealers 437,115 458,226 317,305 246,818 237,662 Service Stations 145,288 160,540 181,979 137,811 164,781 Other Retail Stores 258,045 227,946 212,590 153,804 158,430
Retail Stores Totals 1,707,140 1,705,586 1,505,336 1,317,593 1,347,565 All Other Outlets 381,634 358,036 371,700 307,208 296,334
Total All Outlets $ 2,088,774 $ 2,063,622 $ 1,877,036 $ 1,624,801 $ 1,643,898
Source: State Board of Equalization, Taxable Sales in California.
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Construction
Table B-6 summarizes building activity in the City from 2007 through 2011.
Table B-6 CITY OF SAN BUENAVENTURA
Building Permit Valuations
2007 2008 2009 2010 2011 Residential Single Family $ 41,048,610 $ 20,272,773 $ 2,280,680 $ 4,327,518 $ 5,896,214 Multi-Family 45,894,040 21,049,532 0 14,953,526 17,102,471 Alteration/Additions 13,382,855 10,679,966 8,924,585 8,288,470 4,706,375 Total $ 100,325,505 $ 52,002,271 $11,205,265 $27,569,514 $27,705,060 Non-Residential New Commercial $ 9,748,000 $ 0 $ 2,608,827 $ 5,225,474 $ 5,101,730 New Industry 0 0 0 0 0 Other(1) 3,105,492 4,673,530 1,870,786 5,149,321 6,480,390 Alteration/Additions 25,281,383 17,586,035 7,536,600 14,628,867 7,237,964 Total $ 38,134,875 $ 22,259,565 $12,016,213 $25,003,662 $18,820,084 Total Single Family Units 150 65 9 17 43 Multi-Family Units 255 61 0 157 156 Total 405 126 9 174 199
(1) Includes churches and religious buildings, hospitals and institutional buildings, schools and educational buildings, residential garages, public works and utilities buildings and non-residential alterations and additions.
Source: Construction Industry Research Board.
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Agriculture
Agricultural data is compiled for the County rather than for the City alone. The County consistently ranks among the top ten counties in California and among the top fifteen nationwide in terms of the value of its agricultural production, and is one of the state�s top producers of lemons, strawberries, celery, lettuce and oranges. Table B-7 indicates the value of agricultural production for the County for 2006 through 2010.
Table B-7 COUNTY OF VENTURA
Value of Agricultural Products (in thousands of dollars)
Crop 2005 2006 2007 2008 2009 2010
Fruit & Nut $ 652,777 $ 755,700 $ 752,138 $ 823,464 $ 867,759 $ 1,085,677 Vegetable Crops 330,269 426,659 442,220 427,742 509,248 533,473 Livestock & Poultry 2,150 4,775 9,006 6,853 7,494 6,161 Apiary Products (Beekeeping Products)
509 431 640 463 698 1,505
Nursery Stock 213,661 263,890 292,989 298,690 191,300 180,057 Cut Flowers 51,751 52,456 48,646 51,297 42,763 47,348 Field Crops 1,193 1,677 1,624 2,580 2,313 2,463 Timber 62 16 17 10 9 14 Biological Control 1,999 2,570 2,718 2,148 2,273 2.453 Total $ 1,225,109 $ 1,508,174 $ 1,549,988 $ 1,613,247 $ 1,623,857 $ 1,859,151
Source: County of Ventura, Department of Agriculture, Agricultural Crop Reports, 2006, 2007, 2008, 2009 and 2010.
Transportation
The City is served by all major modes of transportation. Both U.S. Highway 101 and State Highways 126 and 33 pass through the City, linking it with the Los Angeles metropolitan area and Santa Barbara County. Rail passenger services are provided by AMTRAK and Metrolink, which has a station in the City. Two trains daily pass through each direction and stop at the Ventura station. Southern Pacific Railroad provides freight rail service to the City. Bus services are provided by South Coast Area Transit and Ventura Intercity Transit Authority.
Utilities
The City is a full service City, providing sewer and water services. Southern California Edison provides electricity. The Gas Company of Southern California provides natural gas. Verizon provides local telephone services. Cable Television services are provided by Adelphia and Verizon Americast. Refuse service is provided by E.J. Harrison & Sons and Ventura Rubbish.
Education
The Ventura Planning Area has 17 elementary, four middle schools and five senior high schools, plus several parochial and private schools. Ventura Community College has an enrollment of over 12,300 students. The 99.7-acre campus is located on Telegraph Road between Day Road and Ashwood Avenue. Ventura College currently offers degree and certificate programs. In addition, two campuses of the University of California, Santa Barbara (UCSB) and Los Angeles (UCLA), two campuses of the California State University, Channel Islands (CSUCI) and Northridge (CSUN) and two private universities, Pepperdine University and California Lutheran University, are within a fifty minute drive.
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Recreation
Ventura offers its residents a wide range of recreation facilities. The City boasts several beach parks such as Seaside Park Beachfront which enjoys a reputation as one of the area�s most popular surfing and windsurfing beaches and it is connected with the Ventura Pier by a scenic landscaped Promenade walkway and the Omer Rains Bike Trail. Marina Park is 15 acres of beachfront located next to the Ventura Harbor. Harbor Cove Beach, just across the harbor from Marina Park, is considered to be the City�s safest swimming beach, protected from strong currents by a jetty and the marina. Next to Harbor Cove Beach is the Channel Islands National Park Headquarters. The City has several historical sites such as the Olivas Adobe Park, the Ortega Adobe Historic Residence and the San Buenaventura Mission. In addition, the City is home to the Albinger Archaeological Museum and the Ventura County Museum of History and Art. The City has several scenic parks including Arroyo Verde Park, Grant Park and Figueroa Mall Historical Rose Garden. The City also offers several sports oriented parks which include facilities tennis courts, softball/baseball fields, basketball courts, sand volleyball courts, soccer/football field space children�s play areas, concessions and picnic facilities. The City has established miles of on and off-street bicycle paths while maintaining trails that stretch along the coastline for bicyclists, runners and joggers as part of the Pacific Coast Bike Trail.
The City owns two golf courses: Buenaventura Golf Course and Olivas Links Golf Course. Buenaventura Golf Course is an 18-hole, championship course (Par 72) with a scenic mixture of tree-lined fairways, eight lakes and an abundance of challenging sand bunkers. Olivas Links Golf Course is conveniently located near the Ventura Harbor and appeals to the player who appreciates a traditional 18-hole, championship course with a beautifully landscaped layout featuring broad fairways and expansive greens. This 6,500-yard course (Par 72) is accented by a combination of well-placed holes and sand bunkers and seven lakes.
APPENDIX C
COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR YEAR ENDED JUNE 30, 2011
C A L I F O R N I A
2011
C A L I F O R N I A
2011
2011
City of San Buenaventura Comprehensive Annual Financial Report For the year ended June 30, 2011 Table of Contents
INTRODUCTORY SECTION Page Title Page Table of Contents .................................................................................................................................................... i Letter of Transmittal ............................................................................................................................................. v GFOA Certificate of Achievement for Excellence in Financial Reporting.................................................... ix Directory of City Officials .................................................................................................................................... x Organizational Structure ..................................................................................................................................... xi FINANCIAL SECTION Independent Auditor�s Report ........................................................................................................................... 1 Management�s Discussion and Analysis (unaudited) ................................................................................... 3 Basic Financial Statements: Government-Wide Financial Statements:
Statement of Net Assets ........................................................................................................................ 17 Statement of Activities .......................................................................................................................... 18 Fund Financial Statements: Governmental Fund Financial Statements:
Balance Sheet ................................................................................................................................... 20
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets .............................................................. 22
Statement of Revenues, Expenditures and Changes in Fund Balances .................................. 23
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ................ 25
Proprietary Fund Financial Statements: Statement of Net Assets ................................................................................................................. 26 Statement of Revenues, Expenses and Changes in Net Assets ................................................ 27 Statement of Cash Flows ................................................................................................................ 28
Fiduciary Fund Financial Statements: Statement of Fiduciary Assets and Liabilities ............................................................................. 29
i
City of San Buenaventura Comprehensive Annual Financial Report For the year ended June 30, 2011 Table of Contents
FINANCIAL SECTION, Continued Page Basic Financial Statements, Continued:
Index to the Notes to the Basic Financial Statements ............................................................................. 30 Notes to the Basic Financial Statements ................................................................................................... 32
Required Supplementary Information (unaudited): Budgetary Information ................................................................................................................................ 79
General Fund .......................................................................................................................................... 80 Gas Tax Special Revenue Fund ........................................................................................................... 81 Park and Recreation Special Revenue Fund ...................................................................................... 82
Schedule of Funding Progress - Defined Benefit Pension Plan ............................................................. 83
Supplementary Information:
Major Governmental Funds: Schedule of Revenues, Expenditures and Changes in Fund Balances � Budget and Actual: Certificates of Participation Debt Obligation Debt Service Fund ................................................... 84
Non-Major Governmental Funds: Combining Balance Sheet ..................................................................................................................... 85 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................... 87
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual:
Supplemental Law Enforcement Services Special Revenue Fund ........................................... 89 Law Enforcement Special Revenue Fund .................................................................................... 90 Public Art Special Revenue Fund ................................................................................................. 91 Downtown Parking Special Revenue Fund ................................................................................ 92 Maintenance Assessment District Special Revenue Fund ........................................................ 93 Street Lighting Special Revenue Fund ......................................................................................... 94 Municipal Improvement Revenue Bonds Debt Service Fund .................................................. 95 Redevelopment Agency Debt Service Fund ............................................................................... 96 Internal Service Funds: Combining Statement of Net Assets ................................................................................................... 97 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ....................... 99 Combining Statement of Cash Flows ................................................................................................. 101
ii
City of San Buenaventura Comprehensive Annual Financial Report For the year ended June 30, 2010 Table of Contents, Continued
FINANCIAL SECTION, Continued Page Basic Financial Statements, Continued:
Fiduciary Funds: Combining Statement of Fiduciary Assets and Liabilities .............................................................. 103 Combining Statement of Changes in Assets and Liabilities............................................................ 104
STATISTICAL SECTION (unaudited)
Index to the Statistical Section .................................................................................................................... 105
Statistical Section:
Financial Trends
A. Net Assets by Component � Last Nine Fiscal Years ................................................................... 107 B. Changes in Net Assets � Last Nine Fiscal Years ......................................................................... 109 C. Fund Balances of Governmental Funds � Last Nine Fiscal Years ........................................... 113 D. Changes in Fund Balances of Governmental Funds � Last Nine Fiscal Years ...................... 115
Revenue Capacity
A. Assessed Value and Estimated Actual Value of Taxable Property � Last Ten Fiscal Years . 117 B. Direct and Overlapping Property Tax Rates � Last Ten Fiscal Years ....................................... 118 C. Principal Property Taxpayers � Current Year and Ten Years Ago ........................................... 120 D. Property Tax Levies and Collections � Last Ten Fiscal Years ................................................... 121
Debt Capacity
A. Ratios of Outstanding Debt by Type � Last Ten Fiscal Years ................................................... 122 B. Direct and Overlapping Debt � June 30, 2011 .............................................................................. 124 C. Legal Debt Margin Information � Last Ten Fiscal Years ............................................................ 125 D. Pledged Wastewater and Tax Allocation Revenue Coverage � Last Ten Fiscal Years .......... 126 E. Pledged Water Revenue Coverage � Last Ten Fiscal Years ....................................................... 127
iii
City of San Buenaventura Comprehensive Annual Financial Report For the year ended June 30, 2011 Table of Contents
STATISTICAL SECTION (unaudited) Page Statistical Section, Continued:
Demographic and Economic Information
A. Demographic and Economic Statistics � Last Ten Calendar Years .......................................... 128 B. Full-Time City Employees by Function � Last Ten Fiscal Years ............................................... 129 C. Principal Employers � Current Year and Ten Years Ago .......................................................... 130 D. Investment Portfolio Statistics � Last Ten Fiscal Years .............................................................. 131
Operating Information
A. Operating Indicators by Function � Last Ten Fiscal Years ........................................................ 132 B. Capital Assets Statistics by Function � Last Ten Fiscal Years .................................................... 133 C. Wastewater Service Rates � Last Ten Fiscal Years ...................................................................... 134 D. Wastewater Customers � Current Year and Eight Years Ago .................................................. 135 E. Water Sold by Type of Customer � Last Ten Fiscal Years .......................................................... 136 F. Water Rates � Last Ten Fiscal Years .............................................................................................. 137 G. Water Customers � Current Year and Eight Years Ago ............................................................ 138
ANNUAL CONTINUING DISCLOSURE REQUIREMENTS SECTION (unaudited):
A. Public Facilities Financing Authority � Summary of Certificates of Participation ................ 139 B. 2002 COP, Series D � Buenaventura and Olivas Links Historic Operating Results .............. 140 C. 2004 COP, Wastewater Revenue � Historic Operating Results ............................................... 142 D. 2004 COP, Wastewater Revenue � Historic Usage, Connections, and Flow Charges .......... 143 E. 2004 COP, Wastewater Revenue � Top Ten Customers ............................................................ 144 F. 2004 COP, Water Revenue � Historic Operating Results .......................................................... 145 G. 2004 COP, Water Revenue � Historic and Projected Water Supply. ........................................ 146 H. 2004 COP, Water Revenue � Historic Service Charges and Sales Revenues .......................... 147 I. 2004 COP, Water Revenue � Top Ten Customers ...................................................................... 148 J. 2004 COPs, Water and Wastewater � Utility Rates .................................................................... 149
K. Employee Relations and Collective Bargaining����������������..��150
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December 12, 2011
Honorable Mayor and City Councilmembers, and the Citizens of the City of San Buenaventura:
City policy requires the annual publication of a complete set of audited financial statements. This Comprehensive Annual Financial Report (CAFR) is published to fulfill that requirement for the fiscal year ended June 30, 2011.
Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls that it has established for this purpose. Because the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements by reviewing each of the following categories:
Achievement of business objectives and goals Effectiveness and efficiency of operations Reliability of financial reporting Compliance with applicable laws and regulations Safeguarding of assets
White Nelson Diehl Evans LLP has issued an unqualified (�clean�) opinion on the City�s financial statements for the year ended June 30, 2011. The independent auditor�s report is located at the front of the financial section of this report.
The 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. The MD&A complements this letter of transmittal and should be read in conjunction with it.
Profile of the Government
The City of San Buenaventura, generally referred to as the City of Ventura, is located on the southern California coastline, approximately 62 miles northwest of the City of Los Angeles and 364 miles south of the City of San Francisco. The city limits cover approximately 33 square miles.
The City was incorporated in 1866 and has been the County seat since 1873. The City is a charter city with a council-manager form of government. A seven-member City Council is elected at large for four-year alternating terms at elections held every two years. The Mayor of the City is the presiding officer of the City Council and is selected by the City Council from its members to serve a two-year term. The City Manager, appointed by the City Council for an indeterminate term, acts as chief executive officer in carrying out the policies of the City Council.
The City�s first charter was adopted in 1932. The present charter was adopted by election on November 6, 1973, and approved by the California legislature in January 1974 and was amended on November 7, 1995. With 595 full time employee positions authorized in the FY 2010-11 citywide budget, the City provides a full range of services, including public safety (law enforcement and fire protection), public works, community development, community recreational services, and general government (finance, technology, purchasing, legal, licensing and code enforcement). In addition, enterprise funds account for the operations of two municipal golf courses and water/wastewater services. The Council is required to adopt a final budget by no later than the close of the fiscal year. The annual budget serves as the foundation for the City�s financial planning and control. The annual
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budget is prepared and organized by fund, department, and project. City department heads may make transfers within their department; however, all transfers over $50,000 are reported to City Council. All transfers between departments require approval of the City Council.
Local Economy
The City�s ongoing commitment to an economic development strategy continues to achieve results with an emphasis on generating both private and public sector value, both of which build community stability and wealth. The City�s revenue base is a blend of business and commercial, light and heavy industrial and residential uses. The City�s economy revolves chiefly around the County government facilities, financial services, retail operations, and a well-developed food processing industry. Government services employ over 12 thousand workers, providing relative stability to the City's employment base.
In July 2011, the Los Angeles Economic Development Corporation (LAEDC) issued its 2011-2012 Mid-Year Economic Forecast & Industry Outlook, with a section devoted to Ventura County. In summary, the LAEDC noted that �a stable economic plateau and visible underlying improvement in many sectors is now here.� It went on to say that Ventura County is expanding at a rate similar to other counties surrounding Los Angeles such as San Diego and Orange Counties.
On the plus side, a significant portion of Ventura County�s revenue is related to agriculture, and fortunately this industry continues to record good growth. In addition, the leisure & hospitality and professional & business services industries in Ventura have been supplying 2/3 of the job growth this year. Government employment in Ventura County has been stable, and the City of Ventura, as the hub of Ventura government has benefited from this stability in employment and the related flow of income. As a result of these observations, the decline in sales tax revenue for the City of Ventura has stopped and actually turned around. Recent forecasts reflect an improvement in sales tax revenue and the FY 2011-12 City of Ventura budget reflects this expected improvement.
On the minus side, new home building and used home sales have fallen to very low levels. The LAEDC has attributed this decline to high employment and tighter lending standards, which have combined to drive home prices downward, and has �sidelined many buyers.� Recent information from the Ventura County tax records confirms the drop in home values and has resulted in a decrease in property tax revenue to the City. The City of Ventura FY 2011-12 budget reflects this expected decrease.
A review of Ventura County Economic Indicators shows that 1) The forecast unemployment rate for FY 2011 of 10.2% is expected to drop to 9.6% in FY 2012, 2) The forecast total personal Income for FY 2011 of $39.4 billion is expected to grow to $41.4 bill, and 3) The forecast taxable retail sales of $8.2 billion is expected to grow to $8.8 billion.
Based on forecasts such as those just mentioned, the City is expecting no significant change in its overall revenue levels and corresponding service levels as it moves into the FY 2011-12 fiscal year. The level of taxes, fees, and charges for services (including development-related mitigation fees) will have a bearing on the City's competitive ability to encourage retail, office, residential, and industrial development to locate within the jurisdiction. The City places significant emphasis on encouraging economic development with higher paying jobs.
In addition to community-related economics, i.e., business, employment, and real estate indices, the City�s finances and operations are directly impacted by national and regional economic trends. In October 2011, Bloomberg provided a U.S. Economic Forecast that surveyed 80 Economists
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nationwide. The result shows that the fed funds rate projection remains as reported in recent quarters, i.e.: that rates will remain constant at 0.25% with no projected increase through the 2nd quarter of 2013. This means the market anticipates the Federal Reserve will continue to keep its overnight fed funds rate low with the intent of stimulating the economy.
This has two impacts on the City of Ventura: The first is that interest earnings on the City�s portfolio for the balance of 2011 through 2012 are expected to be historically low. This continuing multi-year decrease in market rate returns for allowable investments has resulted in the city�s effective rate of return on its investment portfolio being 1.61 percent for the fiscal year ended June 30, 2011. This represents, a decrease from the prior year�s return of 2.09 percent.
The second is that any new financing the city may pursue could also be at historically low rates. Although not currently planned for the General Fund, outside funding may be sought by the City�s Enterprise Funds in the next few years.
Long-Term Financial Planning
The City will continue with the projects identified in the six-year Capital Improvement Projects Plan. Major projects include the following:
Enterprise Funds Wastewater Planet Electrical Switchgear Replacement $3.5 M Saticoy Well #3 $3.2 M Waterline Replacement � Harbor Blvd. $2.8 M Waterline Replacement � Fairview Neighborhood $2.9 M
Public Works Annual Street Maintenance $9.8 M Callens Rd Replacement $2.1 M Highway 126/Harmon Barranca Bike Path Connection $1.9 M Beach Water Quality Improvement $0.8 M
Relevant Financial Policies
The general fund maintains $12 million committed for contingencies per the City�s financial policies.
In addition, it is the City�s policy to ensure that adequate sustainable long-term revenues are available to support any new debt issues.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its CAFR for the fiscal year ended June 30, 2010. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must have published an easily readable and efficiently organized CAFR, whose contents conform to program standards. The Comprehensive Annual Financial Report must satisfy both generally accepted accounting principles and applicable legal requirements.
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The Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to program requirements and will be submitted to the GFOA.
I would like to thank the management and staff of the Finance and Technology Department for their contributions to the preparation of this year�s CAFR. In addition, I would like to thank the staff of White Nelson Diehl Evans LLP, the City�s independent auditors, for their proactive assistance and advice during their first year of service providing the City�s audit needs. In addition, the City Manager is to be commended for his interest in the Finance and Technology Department�s progress in building the City�s financial systems to support daily operations and allow for new opportunities.
The CAFR is available in the City Council�s reading file as well as on the City�s website.
Respectfully submitted,
Jay Panzica Chief Financial Officer
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ix
Certificate of Achievement for Excellence
in Financial Reporting
Presented to
City of San Buena ventura California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2010
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 Gnancial reports (CAFRs) achieve the highest standards in government accounting
and financial reporting.
President
Executive Director
2011
2011
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2011
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2011
2875 Michelle Drive, Suite 300, Irvine, CA 92606 � Tel: 714.978.1300 � Fax: 714.978.7893
Offices located in Orange and San Diego Counties
INDEPENDENT AUDITORS� REPORT
City Council Members City of San Buenaventura San Buenaventura, 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 San Buenaventura, as of and for the year ended June 30, 2011, which collectively comprise the City�s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of San Buenaventura�s management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City�s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of San Buenaventura, as of June 30, 2011, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
As explained further in Note 21, the California State Legislature has enacted legislation that is intended to provide for the dissolution of redevelopment agencies in the State of California. The effects of this legislation are uncertain pending the result of certain lawsuits that have been initiated to challenge the constitutionality of this legislation.
In accordance with Government Auditing Standards, we have also issued our report dated December 9, 2011 on our consideration of the City of San Buenaventura�s internal control over financial reporting and 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.
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The management�s discussion and analysis, the schedules of funding progress and budgetary comparison schedules, as listed in the table of contents as required supplementary information, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. This information is an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the management�s discussion and analysis and the schedules of funding progress in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management�s responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the management�s discussion and analysis and the schedules of funding progress because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The budgetary comparison schedules and related note have been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements of the City of San Buenaventura or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of San Buenaventura�s basic financial statements as a whole. The introductory section, supplementary information and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion or provide any assurance on them.
December 9, 2011 Irvine, California
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2011
CITY OF SAN BUENAVENTURA MANAGEMENT�S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
As management of the City of San Buenaventura (City), we offer readers of the City�s basic financial statements this narrative overview and analysis of the financial activities of the City for the year ended June 30, 2011. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our transmittal letter, which is found on pages v-vii of this report. All amounts, unless otherwise indicated, are expressed in thousands of dollars.
FINANCIAL HIGHLIGHTS
Net assets of the City totaled $352.9 million at June 30, 2011. Of this amount, $67.4 million is unrestricted and may be used to meet the City�s ongoing obligations to citizens, utility customers, and creditors, subject to applicable laws and regulations
The City�s total net assets, including all activities, decreased by $6.8 million compared to last fiscal year.
The City�s total net long-term liabilities decreased by $3.0 million or 2.2% during fiscal year 2010-11.
As of June 30, 2011, the City�s governmental funds reported combined ending fund balance of $72.1 million.
Fund balance in the General Fund decreased $1.4 million.
As of June 30, 2011, the total fund balance for the General Fund was $32 million, a decrease of $1.4 million from the prior year. Funds balance is classified per GASB Statement No. 54 as Nonspendable ($6.6 million), Restricted ($5.3 million), Committed ($15.9 million), and Assigned ($4.3 million). Additional information on the City�s General Fund balances is located in note 11 on page 69 of this report.
As of June 30, 2011, the City�s other governmental funds, excluding the General Fund, reported combined ending fund balances of $40 million.
OVERVIEW OF THE FINANCIAL STATEMENTS
The City�s basic financial statements are comprised of three components: 1) Government-wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Basic Financial Statements. Each of these sections is discussed below. This report also contains other required and supplementary information in addition to the basic financial statements themselves.
Government-Wide Financial Statements
The Government-Wide Financial Statements are designed to present financial information about the City as a whole in a manner similar to the private sector, including the use of accrual-based accounting to recognize its revenues and expenses. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely primarily on user fees and charges to fund their operations. Governmental
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activities include those traditionally associated with local government, such as public safety (fire and police), community development, public works, parks and recreation, and general government (administrative) functions. Business-type activities include the City�s utility operations (water and wastewater) and golf course.
The Statement of Net Assets presents information on all of the City�s assets, including capital assets, and al related current liabilities and long-term obligations. The difference between total assets and total liabilities is presented as net assets, which serves as a measure of the financial health of the City. Over time, an increase in net assets generally indicates that the financial health of the City is improving.
The Statement of Activities presents information showing how the government�s net assets changed during the most recent fiscal year. Decreases in net assets are presented as �Expenses;� increases in net assets are presented as �Revenues.� Revenues directly attributable to a particular function within the City are presented as �Program Revenues.� Tax revenues, including those restricted to a particular program function, are reported as �General Revenues� unless specifically required to be reported as program revenues (i.e. gas and transportation taxes).
All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (such as, revenues pertaining to uncollected taxes, or expenses pertaining to earned, but unused, vacation and sick leave).
The government-wide financial statements include not only the City of San Buenaventura (known as the primary government), but also two legally separate component units: Public Facilities Financing Authority and a legally separate Redevelopment Agency. The governing board of each of these entities is comprised entirely of members of the City Council, and their financial activity has been included as an integral part of the primary government.
The government-wide financial statements are located on pages 17-19 of this report.
Fund Financial Statements
The City, like other state and local governments, uses fund accounting for recording its financial activities. In general, fund accounting provides a mechanism to separately account for a variety of different funding sources and enables the City to demonstrate compliance with legal and/or contractual requirements that may be associated with these funds. Thus, the accompanying fund financial statements present individual funds organized into one of three categories: Governmental, Proprietary, and Fiduciary Funds. Note that the fund financial statements only present information on the most significant (i.e. �major�) funds on the face of the statements. Nonmajor funds are grouped and presented in total on the face of the statements. In addition, the fund financial statements include a schedule that reconciles the fund financial statements to the government-wide financial statements. This is designed to explain the differences created by the integrated approach to ensure and demonstrate compliance with finance-related legal requirements.
Governmental funds- Most of the City�s basic services are reported in governmental funds. Governmental funds include the General Fund, Special Revenue, Capital Projects, and Debt Service funds. In the fund financial statements, all governmental fund types are reported using the modified accrual basis of accounting, whereby revenues are generally measured when measurable and available to finance current operating costs, and expenditures are recognized when the related liability is incurred. In addition, the focus is on inflow (revenues) and outflow (expenditures) of the current
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period. As such, the balance sheets of governmental funds are intended to present only short-term assets and liabilities.
The fund financial statements include separate columns, by fund type, for all �major� governmental funds of the City. All �Nonmajor� governmental funds are consolidated into a single column labeled �Other Governmental Funds.� The details of these funds are included in the Combining and Individual Fund Statements and schedules located in the supplementary information section of this report on pages 85-104.
Since the focus of governmental funds is narrower than that of government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing this comparison, readers may better understand the long-term impact of the government�s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances, provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City adopts an annual appropriated budget for its funds. A budgetary comparison is provided for the City�s General Fund, Gas Tax, and Park and Recreation Special Revenue Funds to demonstrate compliance with this budget.
Proprietary funds � Proprietary funds are used to account for services provided to external customers or other City departments and funds that are primarily funded from user fees and charges. Proprietary funds use the accrual basis of accounting and measure the balance and change in totaleconomic resources. Accordingly, balance sheets of proprietary funds include all assets and liabilities, including long-term receivables, capital assets, and long-term liabilities. The basis of accounting and measurement focus used to prepare proprietary fund statements is the same that is used to prepare the government-wide statements. Thus, proprietary fund statements provide the same, but more detailed, information about these funds, which are included in the �Business-Type Activity� column of the government-wide statements.
The City maintains two different types of proprietary funds: Enterprise and Internal Service.
Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water, Wastewater, and Golf. Water and Wastewater are classified as major funds. The Golf is classified as a non-major fund.
Internal Service funds are used by the City to account for its intra-city services: information technology services, fleet services, building maintenance, digital publishing, workers� compensation, employee fringe benefits, and risk management.
Because internal service funds predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report on pages 97-102.
The proprietary fund financial statements are located on pages 26-28 of this report.
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Fiduciary funds are used to account for resources held by the City as trustee on behalf of other agencies or individuals. Fiduciary funds are not presented in the accompanying government-wide financial statements since the resources of those funds are not available to support the City�s programs. The basis of accounting used for the fiduciary funds is similar to what is used for the proprietary funds. The fiduciary funds financial statements are located in the basic financial statements section � page 29 of this report.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements are located on pages 32-78 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City�s progress in funding the obligation to provide pension benefits to City employees and budgetary comparison schedules for the General Fund and each major special revenue fund. Required supplementary information is located on pages 79-83 of this report.
The combining statements, referred to earlier in connection with non-major governmental funds, internal service funds, and fiduciary funds are presented following the required supplementary information on pensions. Combining statements are located on pages 85-88 and 97-104 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Analysis of Net Assets
As noted earlier, net assets may serve over time as a useful indicator of a government�s financial position. In the case of the City, assets exceeded liabilities by $352.9 million at the close of the most recent fiscal year.
The largest portion of the City�s net assets (62.1%) reflects its investment in capital assets (e.g., land, buildings, infrastructure, machinery, and equipment), less any related debt used to acquire those assets that are outstanding. The City uses these capital assets to provide services to citizens and consequently, these assets are not available for future spending. Although the City�s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets alone may not be used to liquidate these liabilities.
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The unrestricted net assets in all City funds are $67.4 million and may be used to meet the government�s ongoing obligations to citizens and creditors.
At June 30, 2011, the City was able to report positive balances in all three categories of net assets, for the government as a whole and for business-type activities. The same situation held true for the prior fiscal year.
The City�s net assets decreased $6.8 billion during the fiscal year concluded June 30, 2011. This decrease was due to operations in the governmental and business-type activities where revenues were $2.1 million below prior year. 1.7 million of the decreased revenue was from operating grants.
2011 2010 2011 2010 2011 2010Assets:
Current and Other Assets $ 127,027 $ 129,725 $ 57,080 $ 63,056 $ 184,107 $ 192,781 Capital Assets 141,246 142,211 198,952 198,897 340,198 341,108
Total Assets 268,273 271,936 256,032 261,953 524,305 533,889
Liabilities: Current Liabilities 32,720 31,290 5,539 6,797 38,259 38,087 Long-Term Liabilities 74,289 75,186 58,857 60,965 133,146 136,151
Total Liabilities 107,009 106,476 64,396 67,762 171,405 174,238
Net Assets:
Invested In Capital Assets, Net of related Debt 77,322 75,888 141,883 145,414 219,205 221,302 Restricted 34,753 35,393 31,502 26,350 66,255 61,743 Unrestricted 49,189 54,179 18,251 22,426 67,440 76,605
Total Net Assets $ 161,264 $ 165,460 $ 191,636 $ 194,190 $ 352,900 $ 359,650
CITY OF SAN BUENAVENTURA-Net Assets(In Thousands)
Governmental ActivitiesBusiness-Type
Activities Total
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2011 2010 2011 2010 2011 2010Revenues:
Program RevenuesCharges for Service 14,754$ 14,093$ 41,738$ 43,427$ 56,492$ 57,520$ Operating Grants 10,590 12,243 - 16 10,590 12,259 Capital Grants 1,475 1,713 - - 1,475 1,713
General RevenuesTaxes
Property 23,499 21,562 - - 23,499 21,562 Other 17,564 17,337 - - 17,564 17,337
Intergovernmental RevenuesSales Taxes 19,172 19,629 - - 19,172 19,629 Motor Vehicle License 8,342 8,195 - - 8,342 8,195
Investment Earnings/ (loss) 1,137 1,860 301 1,664 1,438 3,524 Other - - - - - -
Total Revenues 96,533 96,632 42,039 45,107 138,572 141,739
Expenses:General Government 2,939 4,057 - - 2,939 4,057 Human Resources 758 998 - - 758 998 Finance and Technology 8,974 7,212 - - 8,974 7,212 Community Development 9,784 7,957 - - 9,784 7,957 Community Services 12,858 7,663 - - 12,858 7,663 Public Safety - Police 29,709 30,974 - - 29,709 30,974 Public Safety - Fire 15,218 19,262 - - 15,218 19,262 Public Works 17,151 21,905 - - 17,151 21,905 Interest on Long Term Debt 5,058 3,909 - - 5,058 3,909 Wastewater - - 17,092 15,096 17,092 15,096 Water - - 20,941 21,664 20,941 21,664 Golf Operations - - 4,737 4,735 4,737 4,735
Total Expenses 102,449 103,937 42,770 41,495 145,219 145,432
Increase (Decrease) In Net Assets (5,916) (7,305) (731) 3,612 (6,647) (3,693)
Transfers 1,824 2,000 (1,824) (2,000) - - Change In Net Assets (4,092) (5,305) (2,555) 1,612 (6,647) (3,693)
Net Assets - Beginning as restated 165,355 170,765 194,190 192,578 359,545 363,343
Net Assets - Ending 161,263$ 165,460$ 191,635$ 194,190$ 352,898$ 359,650$
CITY OF SAN BUENAVENTURA-Change In Net Assets
Governmental Activities Business Activities Total
(In Thousands)
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Governmental Activities
Public Safety/Police is the largest department at 29.0% of total governmental expense, followed by Public Works � 16.7%, Public Safety/Fire � 14.9%, Community Services � 12.6%, Community Development � 9.6%, Finance and Technology � 8.8%, Interest on Long Term Debt � 4.9%, General Government � 2.9%, and Human Resources � 0.7%.
The governmental activities� chart below illustrates operating revenues by source.
Revenues by Source - Governmental Activities($96.6 Million)
Motor Vehicle License9%
Investment Earnings1%Other Taxes
18%
Sales Tax20% Property Taxes
25%
Operating and Capital Grants
12%
Charges for Service15%
Sales, property, motor vehicle license, and other taxes are general revenues used to support overall government functions. These sources account for $68.6 million or 71% of total governmental revenue. Operating and capital grants make up 12.5% and charges for services amount to 15.1%.
The City�s net assets for governmental activities reflected a decrease of approximately $4.1 million. Some key factors include the following:
Investment earnings decreased approximately $723,000 due to the significant reduction in rates of return in the treasuries market and the corresponding reduction in all allowable city investment options. Any investments that could be called, were, thus requiring the city to reinvest them at rates between 0.5% and 2.0%.
Remaining revenues decreased approximately $8.2 million from the previous year due to the downturn in the economy.
Expenses decreased approximately $1.5 million from the previous year due to city-wide reductions in all departments that were instituted to respond to the reductions in the revenue being experienced by the city.
9
Business-Type Activities
The business-type activities chart below shows revenues by source. The City�s Water Enterprise is the largest business-type operation, followed by Wastewater with fees for services mainly funding the two utilities.
Business-type activities decreased the City�s overall net assets by $2.6 million. Key element is a decrease in investment earnings and operations in the Water and Wastewater Funds.
GOVERNMENT FUNDS FINANCIAL ANALYSIS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds
The focus of the City�s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City�s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government�s net resources available for spending at the end of the fiscal year.
At June 30, 2011, the City�s governmental funds reported a combined ending fund balance of $72 million, a decrease of $2.8 million in comparison with the prior year. The decrease was mainly due to capital projects and expenditure of proceeds from the new tax allocation bond issued last year. Of the total fund balance of $72 million, $14.4 million was nonspendable, $34.2 was restricted, $18.6 was committed, $13.0 was assigned, and -$8.0 million was unassigned.
The following are the major funds the City considered important to financial statement users.
Revenues by Source - Business-Type Activities ($42 Million)
Water49%
Wastewater39%
Golf 11%
Interest Earnings & Operating Grants
1%
10
General Fund
The General Fund is the City�s chief operating fund. It showed a decrease of $1.4 million in fund balance for fiscal year 2010-11. At June 30, 2011, the total fund balance was $32 million. The decrease is mainly due to a 2.6 million net transfers in prior year of Capital project fund monies returned to the General Fund.
Gas Tax Special Revenue
The Gas Tax Special Revenue Fund showed a decrease of $155,000 in fund balance for fiscal year 2010-11. This decrease is mainly due to a 1.5 million capital construction expenditure increase and a reduction in grant revenue (no Proposition 1B 2010) and Transportation development Act (TDA).
Park and Recreation Special Revenue Fund
The Park and Recreation Special Revenue Fund experienced a decrease of $9,000 in fund balance for fiscal year 2010-11. This decrease is due to a decrease in revenues related to development activity.
Certificates of Participation Debt Obligation Debt Service Fund
This fund experienced an increase of $933,000 in fund balance for fiscal year 2010-11. This increase was mainly due to the proceeds from certificate of participation issue partially offset by refunded bond and principal payments.
Capital Improvement Capital Projects Fund
The Capital Improvement Capital Projects Fund showed a decrease of $419,000 in fund balance for fiscal year 2010-11. This decrease was due to the planned use of prior year resources to complete ERP implementation.
Housing and Community Development Block Grant Fund
The Housing and Community Development Block Grant Fund is a major fund this fiscal year. Fund balance decreased approximately $7,000 this year due to investment earnings. Since this fund accounts for the reimbursable capital and other projects, revenues generally equal expenditures unless there is a delay in receiving reimbursements for qualified expenditures.
Redevelopment Agency Capital Projects
The Redevelopment Agency Capital Projects Fund experienced a decrease of $95,000 in fund balance for fiscal year 2010-11. This decrease was due to decreased tax increment revenues, reduced expenses for Low-Mod projects offset by a $500,000 loan write off for the Ventura Theater.
Proprietary Funds
The City�s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.
The net assets of the Water, Wastewater and Golf funds were $89.1 million, $88.7 million and $13.9 million, respectively. The total growth in assets for Water fund was $650,000 due to increases in
11
depreciation recordings, new principal and interest payments for the SWRF loan, offset by decreased capital expenditures. There was a decline in net assets for the Wastewater fund of $1.9 million due to decreased interest earnings by $887 thousand coupled by an increase in operating expenditures of $2.0 million. The increase in operating expenditures was mainly due to increase in legal, claims & judgments of $549 thousand and increase in operating permits of $602 thousand for State Water Resource Control Board payments. The Golf fund decreased $1.3 million in net assets due to decreased revenues and increased operational expenses.
Internal Service Funds
The internal service funds are used to finance and account for goods and services provided internally among City departments. The funds were in a positive position at the close of the fiscal year.
Fiduciary Funds
The City maintains fiduciary funds for the assets of the Portobello Assessment District Fund, the Property Based Improvement District Fund, and the newly formed Ventura Oxnard Camarillo Tourism Business Improvement District Fund. The assets for the Property Based Improvement District Fund were $33,000. The assets for the Ventura Oxnard Camarillo Tourism Business Improvement District Fund were $20,000.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the year, there was a $9.3 million increase in appropriations between the original and final amended budget for services and supplies. Following are the main components:
Expenditures
$6.9 million increase in transfers to other funds primarily for capital projects
$1.8 million increase in services and supplies essentially due to the rollover of prior year encumbrances
$400 thousand decrease in other contingencies due to the transfer of appropriation to other departments for Council approved projects
Revenue
$7.9 million increase in use of prior year resources primarily for capital projects and encumbrance rollovers
$400 thousand increase due to transfers from other funds
Significant budgetary variances between final amended budget and actual results were as follows:
Revenues for taxes were less than anticipated by $1.7 million; intergovernmental resources were $1.7 million less than anticipated, and charges for services were $800 thousand less than anticipated.
Expenditures for transfers to other funds were $5.8 million less due to a delay in capital project spending. Expenditures for Public Works were $2.5 million less due to a deferring construction projects and professional services. Expenditures for Parks, Recreation and Community Partnerships were $900 thousand less due to project delays and deferring outside professional services into next year.
12
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City�s investment in capital assets for its governmental and business-type activities as of June 30, 2011, amounts to $340.2 million (net of accumulated depreciation). This investment in capital assets includes land, water rights, buildings and related systems, improvements, machinery and equipment, park facilities, roads, highways, and bridges.
Major capital asset events during the current fiscal year included the following capital expenditures:
$4.9 million for the Upgrade VTA Wastewater Facility
$2.3 million for the Surfers Point Improvements
$977,000 for Waterline Replacement Lincoln
$685,000 for Laboratory remodel
Additional information on the City�s capital assets is located in Note 6 to the basic financial statements on pages 54-56 of this report.
Long-Term Obligations
At the end of the current fiscal year, the City had total net long-term outstanding obligations of $140 million. Of this amount, $61 million relates to revenue bonds and other obligations of the City�s business enterprises. The balance relates to revenue bonds, tax allocation bonds, notes payable, self-insurance, and employee benefit obligations for the City�s governmental activities.
2011 2010 2011 2010 2011 2010Land 19,102$ 19,102$ 497$ 497$ 19,599$ 19,599$ Water Rights - - 1,222 1,222 1,222 1,222 Buildings and improvements 64,898 64,913 70,147 70,179 135,045 135,092Improvements other than buildings 19,458 19,460 62,139 62,139 81,597 81,599 Machinery and equipment 47,675 47,576 130,509 130,680 178,184 178,256Infrastructure 101,878 101,878 1,615 1,615 103,493 103,493Construction in progress 16,037 10,261 32,082 23,620 48,119 33,881
Total 269,048$ 263,190$ 298,211$ 289,952$ 567,259$ 553,142$
TotalGovernmental
ActivitiesBusiness-Type
Activities
CITY OF SAN BUENAVENTURA - Capital Assets (Gross)(In Thousands)
13
2011 2010 2011 2010 2011 2010
Governmental Long-Term Obligations $ 79,320 $ 80,865 $ - $ - $ 79,320 $ 80,865 Revenue Bonds, Net - - 43,922 45,126 43,922 45,126 Safe Drinking Water Loan, net - - 17,149 17,988 17,149 17,988
Total $ 79,320 $ 80,865 $ 61,071 $ 63,114 $ 140,391 $ 143,979
CITY OF SAN BUENAVENTURA-Outstanding Obligations(In Thousands)
GovernmentalActivities Activities Total
Business-Type
The table does not include the capital leases of $354,000.The City�s total debt decreased by $3.6 million (excluding capital leases of $354,000) during the current fiscal year due primarily to a principal payments of $24.5 million offset by a new Certificate of Participation � 2010 Series F of $20.6 million and an increase in claims and judgments payable of $98,000. Additional information on the City of San Buenaventura�s long-term obligations is located in Note 9 to the basic financial statements on pages 58-67 of this report.
The City Charter states that the City shall not incur an indebtedness evidenced by general obligation bonds greater than 15% of the total assessed valuation of all real and personal property within the City. The level of debt is significantly below Charter requirements.
ECONOMIC FACTORS AND NEXT YEAR�S BUDGETS AND RATES
Economy and Budget Plan
The lack of an improving national, statewide and local economy was the main issue affecting the development of the FY 2010-11 and FY 2011-12 budgets. To address the downturn in revenue due to the economy, the City Council directed staff to prepare a fiscal plan that would result in the City living within its means. In other words, instead of proceeding with a budget that relied on spending money the City did not have and utilizing borrowing or spending cash reserves, spending levels were reduced to match projected revenue levels. This resulted in a budget that continued to reflect a reduction of expenses. These reductions eliminated the projected gap between revenue and expenses. This was accomplished by using a long-range approach called �Budgeting for Outcomes�, in which all City-provided services were prioritized, with the highest priority going to public safety and rebuilding prosperity by promoting high-wage, high value jobs in the private sector. Lower-priority expenses and programs were reduced and/or eliminated. The information created in this process and used for developing the FY 2010-11 budget was readdressed and updated for FY 2011-12. The FY 2011-12 budget was designed to reflect a predicted flattening of the economic recovery for the local economy. As a result, the FY 2011-12 budget was conservatively built and did not predict any real growth in revenue. During FY 2010-11, considerable staff time was directed towards updating and understanding the revenue stream on an ongoing basis in an effort to create an early warning system in the event that revenue did not meet expectations. So far, sales tax revenue for FY 2011-12 is running better than expected, but property tax is expected to come in lower. The City continues to remain committed to providing the very best municipal services within its means.
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Budget Challenges
In delivering a balanced budget plan for the upcoming FY 2011-12, the City followed City Council direction to balance additional spending reductions with prudent use of one-time revenue sources. The goal is to ensure we live within our means without further eroding core services and our ability to deliver them.
For residents and local business, the bottom line is that the City will be �holding the line� on services. On the one hand, there are no more visible or damaging reductions in services if we meet our conservative revenue projections. On the other hand, we cannot afford to restore even the most hurtful cuts, such as reductions in our Police staffing and closure of Fire Station 4.
The City Council has ratified three-year union contracts for 90% of our workforce (with the remaining soon to follow.) All require employees to begin paying at least 4.5% of their pay toward rising pension costs. While this will not entirely offset the impact of covering investment losses by the State pension plan (CalPERS) during the Great Recession, it does set us on a more sustainable course for the future. All new hires will come under a reduced pension formula that will be less costly in the long run.
In addition to challenges in the General Fund, the City is facing critical challenges in its Capital and Water/Wastewater/Stormwater budgets. The City Council recently unanimously adopted the 2011-17 Capital Improvement Plan, called �Building Ventura�s Future.� Over the past fifteen years, Ventura has made impressive investments in rebuilding, replacing and upgrading its key infrastructure � all the myriad public facilities we too often take for granted: sewer pipes; water treatment plants; street pavement; emergency back-up generators; traffic signals; disabled access ramps; energy efficient lighting; stormwater retention basins; baseball diamonds; solar power panels; park paths and trails; and water wells.
The City is continuing to do so, but in too many areas, its investments are falling short of the needs. Confronted with the brutal reality of a closed library and fire station and reduced staffing for everyday needed services, it is unthinkable to carve out deeper cuts to fund investments with long-term pay-offs. However, Ventura would not be the livable community it is today if earlier generations had not made sacrifices to build and maintain facilities and assets that long outlasted them.
In the area of water, the City cannot afford complacency either. While the City is proposing no immediate water or wastewater increases despite rising costs, it must embark on a serious, long-term discussion of the costs and uses of the water needed for its homes and businesses. At the supermarket, water sold by the gallon costs about a dollar. The cost for that same gallon is one fifth of a penny delivered by Ventura Water. The community has an exemplary record of water conservation and cost-effective local self-sufficiency when it comes to water. Yet, in the years ahead, the City is going to have to use less and pay more because of real and direct threats to its current way of doing business. Whether it is protecting public health, keeping seawater from leeching into its groundwater or safeguarding its fragile local environment, the City is going to face difficult and costly changes. In the long run, however, the City will be in a much better position to continue to ensure both the safe delivery of clean water and its responsible and beneficial disposal.
All these challenges have a common thread: sustainability. Living within our means; safeguarding our future quality of life and standard of living; creating a healthier and �greener� economy; prudently investing in long-term facilities and assets; partnering with our community and its institutions to work together toward common goals; and making wise decisions despite political pressures to defer or deny them � all these are vital to working toward �sustainable prosperity� for Ventura.
The City faces great challenges ahead as it continues its path toward sustainable prosperity.
15
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of San Buenaventura�s finances for all those with an interest in the government�s finances. Questions concerning any of the information contained herein should be addressed to Jay Panzica, Chief Financial Officer, via E-mail at [email protected], or P.O. Box 99 - Room 101, Ventura, CA 93002-0099, (805) 654-7812.
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2011
City of San BuenaventuraStatement of Net AssetsJune 30, 2011
Governmental Business-TypeActivities Activities Total
ASSETSCurrent assets:
Cash and investments 85,004,973$ 45,680,544$ 130,685,517$ Restricted cash and investments 6,006,374 5,105,697 11,112,071 Accounts receivable, net 313,769 5,530,435 5,844,204 Interest receivable 328,900 - 328,900 Due from others 3,525,356 618,586 4,143,942 Due from other governments 6,200,035 255,031 6,455,066 Internal balances 2,020,993 (2,020,993) - Inventory 19,140 - 19,140 Prepaid items 6,426 - 6,426 Deferred charges 492,589 - 492,589 Land and buildings held for resale 540,880 - 540,880
Total current assets 104,459,435 55,169,300 159,628,735 Noncurrent assets:Restricted cash and investments - 880,989 880,989 Loans and notes receivable, net 13,975,587 - 13,975,587
Deferred charges - 1,029,747 1,029,747 Equity interest in SCAT 8,591,606 - 8,591,606 Capital assets
Non-depreciable 35,138,954 33,801,499 68,940,453 Depreciable, net 106,106,656 165,150,795 271,257,451 Total capital assets 141,245,610 198,952,294 340,197,904 Total noncurrent assets 163,812,803 200,863,030 364,675,833 Total assets 268,272,238 256,032,330 524,304,568
LIABILITIESCurrent liabilities:
Accounts payable 4,124,263 2,124,940 6,249,203 Accrued payroll liabilities 1,603,872 - 1,603,872 Interest payable 1,592,213 603,947 2,196,160 Due to other governments 4,923,800 4,146 4,927,946 Deposits held for others 13,205,077 591,765 13,796,842 Unearned revenue 661,301 - 661,301 Capital leases payable 177,192 - 177,192 Claims and judgments payable 2,538,315 - 2,538,315 Compensated absences payable 533,183 - 533,183 Long-term debt - due within one year 3,360,922 2,214,060 5,574,982 Total current liabilities 32,720,138 5,538,858 38,258,996
Noncurrent liabilities:Capital leases payable 177,192 - 177,192 Claims and judgments payable 6,201,188 - 6,201,188 Compensated absences payable 4,575,844 - 4,575,844 Interest payable 157,500 - 157,500 Long-term debt - due in more than one year 63,176,893 58,857,466 122,034,359
Total noncurrent liabilities 74,288,617 58,857,466 133,146,083 Total liabilities 107,008,755 64,396,324 171,405,079
NET ASSETSInvested in capital assets, net of related debt 77,321,482 141,883,333 219,204,815 Restricted for:
Capital projects 25,301,353 30,121,497 55,422,850 Debt service 5,057,004 1,380,174 6,437,178 Community development 2,978,975 - 2,978,975 Special projects 1,415,817 - 1,415,817
Total restricted 34,753,149 31,501,671 66,254,820 Unrestricted 49,188,852 18,251,002 67,439,854
161,263,483$ 191,636,006$ 352,899,489$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Total net assets
17
City of San BuenaventuraStatement of ActivitiesFor the year ended June 30, 2011
Operating CapitalCharges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total
Primary government: Governmental activities:
General government 2,938,785$ 952,233$ -$ -$ 952,233$ Human resources 757,721 132,793 - - 132,793 Finance and technology 8,974,168 1,725,803 61,591 1,787,394 Community development 9,784,289 1,048,606 751,973 1,800,579 Community services 12,857,684 2,693,611 143,334 2,836,945 Public safety - police 29,709,223 2,742,998 648,606 3,391,604 Public safety - fire 15,218,015 3,311,170 279,402 3,590,572 Public works 17,150,786 2,146,823 8,704,594 1,475,426 12,326,843 Interest on long-term debt 5,057,876 - - - -
Total governmental activities 102,448,547 14,754,037 10,589,500 1,475,426 26,818,963
Business-type activities:
Wastewater 17,091,823 16,326,078 - - 16,326,078 Water 20,940,661 20,946,374 - - 20,946,374 Golf 4,737,086 4,465,557 - - 4,465,557
Total business-type activities 42,769,570 41,738,009 - - 41,738,009
Total primary government 145,218,117$ 56,492,046$ 10,589,500$ 1,475,426$ 68,556,972$
General Revenues:Taxes:
Property taxesUtility users taxesTransient occupancy taxesFranchise taxesOther taxes
Total taxes Intergovernmental Revenues:
Sales taxes - intergovernmental unrestrictedMotor vehicle license - intergovernmental unrestricted
Total intergovernmental revenues
Investment earningsMiscellaneous
Transfers:
Total general revenues and transfers
Change in net assets
Net assets - beginning of year as restated
Net assets - end of year
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Program Revenues
18
Governmental Business-TypeActivities Activities Total
(1,986,552)$ -$ (1,986,552)$ (624,928) - (624,928)
(7,186,774) - (7,186,774) (7,983,710) - (7,983,710)
(10,020,739) - (10,020,739) (26,317,619) - (26,317,619) (11,627,443) - (11,627,443)
(4,823,943) - (4,823,943) (5,057,876) - (5,057,876)
(75,629,584) - (75,629,584)
- (765,745) (765,745) - 5,713 5,713 - (271,529) (271,529)
- (1,031,561) (1,031,561)
(75,629,584) (1,031,561) (76,661,145)
23,498,798 - 23,498,798 8,774,360 - 8,774,360 3,435,953 - 3,435,953 3,278,467 - 3,278,467 2,075,351 - 2,075,351
41,062,929 - 41,062,929
19,171,669 - 19,171,669 8,342,441 - 8,342,441
27,514,110 - 27,514,110
1,136,757 301,096 1,437,853 514 - 514
1,823,954 (1,823,954) -
71,538,264 (1,522,858) 70,015,406
(4,091,320) (2,554,419) (6,645,739)
165,354,803 194,190,425 359,545,228
161,263,483$ 191,636,006$ 352,899,489$
and Changes in Net AssetsNet (Expense) Revenue
19
2011
2011
2011
2011
City of San BuenaventuraBalance SheetGovernmental FundsJune 30, 2011
Certificates ofGas Tax Park and Participation Capital
General Special Recreation Debt Obligation ImprovementFund Revenue Special Revenue Debt Service Capital Projects
ASSETSCash and investments 33,114,213$ 21,490,920$ 4,980,634$ -$ 1,778,397$ Restricted cash and investments - - - 2,577,099 - Investment in bonds 200,000 - - - - Accounts receivable, net 117,992 32,015 - - - Interest receivable 328,900 - - - - Due from other funds 2,837,161 1,169,935 - - 388,901 Due from others 3,391,478 - - - - Due from other governments 3,083,532 303,636 - - 1,807,921 Prepaid items 926 - - - - Inventory 19,140 - - - - Loans and notes receivable 1,070,114 - - - - Land and buildings held for resale - - - - - Advances to other funds 5,538,076 - - - -
Total assets 49,701,532$ 22,996,506$ 4,980,634$ 2,577,099$ 3,975,219$
LIABILITIES AND FUND BALANCESLiabilities:
Accounts payable 1,181,138$ 659,515$ 61$ -$ 749,141$ Due to other funds 1,996,413 - - 40,079 - Due to other governments 6,879 - 4 - 22 Deposits held for others 13,205,077 - - - - Advances from other funds - - - - - Deferred revenue 1,283,688 337,400 - - 1,489,643
Total liabilities 17,673,195 996,915 65 40,079 2,238,806
Fund balances (deficit):Nonspendable 6,630,047 - - - - Restricted 5,260,641 21,542,404 - 2,537,020 - Committed 15,873,858 - - - - Assigned 4,263,791 457,187 4,980,569 - 1,736,413 Unassigned - - - - -
Total fund balances (deficit) 32,028,337 21,999,591 4,980,569 2,537,020 1,736,413
Total liabilities and fund balances 49,701,532$ 22,996,506$ 4,980,634$ 2,577,099$ 3,975,219$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Major Funds
20
Housing andCommunity Development Redevelopment Other Total Block Grant Agency Governmental Governmental
Capital Projects Capital Projects Funds Funds
255,281$ 320,682$ 4,971,285$ 66,911,412$ - - 3,429,275 6,006,374 - - - 200,000 - - 31,475 181,482 - - - 328,900 - 283,758 - 4,679,755 - 126,569 592 3,518,639
418,549 13,209 48,471 5,675,318 - - - 926 - - - 19,140
6,016,154 5,737,974 - 12,824,242 - 540,880 - 540,880 - - 1,181,742 6,719,818
6,689,984$ 7,023,072$ 9,662,840$ 107,606,886$
109,577$ 29,367$ 145,335$ 2,874,134 283,758 816,168 1,541,792 4,678,210
4,916,491 5 8 4,923,409 - - - 13,205,077 - 6,719,818 - 6,719,818 - - - 3,110,731
5,309,826 7,565,358 1,687,135 35,511,379
816,398 5,737,974 1,181,742 14,366,161 466,472 540,880 3,821,507 34,168,924
97,288 - 2,661,612 18,632,758 - - 1,542,283 12,980,243 - (6,821,140) (1,231,439) (8,052,579)
1,380,158 (542,286) 7,975,705 72,095,507
6,689,984$ 7,023,072$ 9,662,840$ 107,606,886$
Major Funds
21
City of San BuenaventuraReconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net AssetsJune 30, 2011
Total Fund Balances - Total Governmental Funds 72,095,507$
Amounts reported for governmental activities in the Statement of Net Assets were different because:
Equity interest in SCAT is not a current financial resource and not reported in the Governmental Funds Balance Sheet. 8,591,606
Capital assets used in governmental activities are not current financial resources. Therefore, they are not reported in the Governmental Funds Balance Sheet. Except for the internal service funds reported below, the capital assets are adjusted as follow
Non-depreciable 35,127,863 Depreciable 214,583,207 Accumulated depreciation (116,032,401)
Total capital assets 133,678,669 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. (1,749,713)
Deferred revenue is reported as revenue on the accrual basis in the Government-Wide Statement of Net Assets. 2,533,943
Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the
Information Technology Fund 1,282,348 Fleet Maintenance Fund 11,348,510 Facilities Maintenance Fund 1,830,474 Reproduction Services Fund 179,506 Workers' Compensation Fund (153,231) Employee Fringe Benefits Fund (3,731,944) Risk Management Fund 1,226,772
Total internal service funds 11,982,435
Long-term liabilities are not due and payable in the current period. Therefore, they are not reported in the Governmental Funds Balance Sheet. Long-term debt reported in the Internal Service Funds is included in the adjustment above.
Premium on issuance on long-term debt recorded as revenue on governmental, but is a liability on the Government-Wide Statement of Net Assets (1,066,553) Debt issuance cost recorded as an expenditure in govermental fund, but are recorded as deferred charges in the Government-Wide Statement of Net Assets 492,589 Long-term liabilities - due within one year (3,310,000) Long-term liabilities - due in more than one year (61,985,000)
Total long-term liabilities (65,868,964) Net Assets of Governmental Activities 161,263,483$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
22
2011
City of San BuenaventuraStatement of Revenues, Expenditures and Changes in Fund BalancesGovernmental FundsFor the year ended June 30, 2011
Certificates ofGas Tax Park and Participation Capital
General Special Recreation Debt Obligation ImprovementFund Revenue Special Revenue Debt Service Capital Projects
REVENUES:
Taxes 56,877,384$ 770,890$ 328,053$ -$ 113,011$ Licenses and permits 2,103,379 - - - - Intergovernmental 9,176,456 3,843,665 - - 2,041,475 Charges for services 7,604,749 - - - 260,625 Fines and forfeitures 1,634,251 - - - - Use of money and property 1,486,905 181,379 87,789 32,575 163,535 Other revenue 2,769,381 259 2,722 - 298,500
Total revenues 81,652,505 4,796,193 418,564 32,575 2,877,146
EXPENDITURES:
Current:General government 2,677,327 - - - - Human resources 758,217 - - - - Finance and technology 7,305,876 - - - - Community development 7,014,408 - - - - Community services 11,217,429 - - - - Public safety - police 27,712,849 - - - - Public safety - fire 14,460,517 - - - - Public works 6,954,028 - - - - Capital outlays 400,263 4,875,498 6,186 13,184 5,592,576
Debt service:Principal retirement - - - 10,500,000 - Debt issuance cost - - - 492,589 - Interest and other charges - - - 2,370,224 -
Total expenditures 78,500,914 4,875,498 6,186 13,375,997 5,592,576
REVENUES OVER (UNDER) EXPENDITURES 3,151,591 (79,305) 412,378 (13,343,422) (2,715,430)
OTHER FINANCING SOURCES (USES):Issuance of certificates of participation - - - 20,615,000 - Premium on issuance of debt - - - 1,066,553 - Payment to refunded bond escrow agent - - - (11,728,764) - Transfers in 1,621,971 50,990 3,680 4,465,765 2,365,201 Transfers out (6,146,894) (127,180) (425,000) (141,710) (68,690)
Total other financing sources (uses) (4,524,923) (76,190) (421,320) 14,276,844 2,296,511
Net change in fund balances (1,373,332) (155,495) (8,942) 933,422 (418,919)
FUND BALANCES (DEFICIT):
Beginning of year 33,401,669 22,155,086 4,989,511 1,603,598 2,155,332
32,028,337$ 21,999,591$ 4,980,569$ 2,537,020$ 1,736,413$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
End of year
Major Funds
23
Housing andCommunity Development Redevelopment Other Total Block Grant Agency Governmental Governmental
Capital Projects Capital Projects Funds Funds
-$ 3,408,602$ 114,157$ 61,612,097$ - - - 2,103,379
713,847 7,331 29,991 15,812,765 - - 1,978,788 9,844,162 - - - 1,634,251
7,289 128,170 224,026 2,311,668 - 3,475 535 3,074,872
721,136 3,547,578 2,347,497 96,393,194
- - - 2,677,327 - - - 758,217 - - - 7,305,876 - - - 7,014,408 - - - 11,217,429 - - 542,647 28,255,496 - - - 14,460,517 - - 2,725,448 9,679,476
713,847 2,080,062 92,384 13,774,000
- - 755,000 11,255,000 - - - 492,589 - 385,148 1,330,007 4,085,379
713,847 2,465,210 5,445,486 110,975,714
7,289 1,082,368 (3,097,989) (14,582,520)
- - - 20,615,000 - - - 1,066,553 - - - (11,728,764) - - 2,156,847 10,664,454 - (1,177,626) (780,160) (8,867,260)
- (1,177,626) 1,376,687 11,749,983
7,289 (95,258) (1,721,302) (2,832,537)
1,372,869 (447,028) 9,697,007 74,928,044
1,380,158$ (542,286)$ 7,975,705$ 72,095,507$
Major Funds
24
City of San BuenaventuraReconciliation of the Governmental Funds Statement of Revenues, Expenditures,
and Changes in Fund Balances to the Government-Wide Statement of Activities For the year ended June 30, 2011
Net Change in Fund Balances - Total Governmental Funds (2,832,537)$
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, the cost of these assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlay exceed depreciation in the current period.
Capital outlay $6,208,744 Depreciation expense (6,062,336) Net of deletions (5,852) 140,556
The net loss in the equity interest in SCAT is reported in the Government-Wide Statement of Activities, but not current financial uses. Therefore, the net gain is not reported as revenue in Governmental Funds. is not a current financial resource and not reported in the Governmental Funds Balance Sheet. (889,073)
Deferred revenue is reported as revenue on the accrual basis in the Government-Wide Statement of Activities. The following amount represents the change in accrued deferred revenue from the prior year. 131,436
Repayment of bond principal is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the Government-Wide Statement of Net Assets. 22,983,764
Bond proceeds provided current financial resources to governmental funds, but issuing debt increased long-term liabilities in the Government-Wide Statement of Net Assets. (20,615,000)
Debt issuance cost are expenditures in the Governmental Statements, but the expenditures are capitalized and recorded as deferred asset in the Government-Wide Statement of Net Assets 492,589
Premium on issuance on long-term debt is recorded as revenue in Governmental Statements, but is a liability in the Government-Wide Statement of Net Assets (1,066,553)
Accrued interest expense on long-term debt is reported in the Government-Wide Statement of Activities, but does not require the use of current financial resources. Therefore, accrued interest expense is not reported as an expenditure in Governmental Funds. The following amount represents the change in accrued interest from the prior year. (972,498)
Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The net expense of the internal service funds is reported with governmental activities. (1,464,004)
Change in Net Assets of Governmental Activities (4,091,320)$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
25
2011
2011
City of San BuenaventuraStatement of Net AssetsProprietary FundsJune 30, 2011
Non-Major GovernmentalEnterprise Fund Activities
InternalWastewater Water Golf Total Service Funds
ASSETSCurrent assets:
Cash and investments 23,678,824$ 22,001,720$ -$ 45,680,544$ 17,893,561$ Restricted cash and investments 4,031,445 1,074,252 - 5,105,697 - Accounts receivable, net 2,322,739 3,207,696 - 5,530,435 132,287 Due from other funds - - - - 2,019,448 Due from others - 2,405 616,181 618,586 6,717 Due from other governments - 255,031 - 255,031 524,717 Prepaid items - - - - 5,500 Notes receivable - - - - 1,151,345
Total current assets 30,033,008 26,541,104 616,181 57,190,293 21,733,575 Noncurrent assets:
Restricted cash and investments 880,989 - - 880,989 - Deferred charges 519,815 509,932 - 1,029,747 - Capital assets:
Non-depreciable 22,418,210 10,744,408 638,881 33,801,499 11,091 Depreciable, net 56,926,975 93,305,463 14,918,357 165,150,795 7,555,850
Total capital assets 79,345,185 104,049,871 15,557,238 198,952,294 7,566,941 Total noncurrent assets 80,745,989 104,559,803 15,557,238 200,863,030 7,566,941
Total assets 110,778,997 131,100,907 16,173,419 258,053,323 29,300,516
LIABILITIESCurrent liabilities:
Accounts payable 777,336$ 1,052,479$ 295,125$ 2,124,940$ 1,250,129$ Accrued payroll liabilities - - - - 1,603,872 Unearned revenue - - - - 84,513 Interest payable 331,184 272,763 - 603,947 - Due to other funds - - 2,020,993 2,020,993 - Due to other governments 3,922 224 - 4,146 391 Deposits held for others - 591,765 - 591,765 - Capital leases payable - - - - 177,192 Claims and judgments payable - - - - 2,538,315 Compensated absences payable - - - - 533,183 Long-term debt - due within one year 745,000 1,469,060 - 2,214,060 50,922
Total current liabilities 1,857,442 3,386,291 2,316,118 7,559,851 6,238,517
Noncurrent liabilities:Capital leases payable - - - - 177,192 Claims and judgments payable - - - - 6,201,188 Compensated absences payable - - - - 4,575,844 Long-term debt - due in more than one year 20,244,341 38,613,125 - 58,857,466 125,340
Total noncurrent liabilities 20,244,341 38,613,125 - 58,857,466 11,079,564
Total liabilities 22,101,783 41,999,416 2,316,118 66,417,317 17,318,081
NET ASSETS
Invested in capital assets, net of related debt 62,358,409 63,967,686 15,557,238 141,883,333 7,025,204 Restricted for:
Capital projects 10,665,000 19,456,497 - 30,121,497 - Debt service 578,685 801,489 - 1,380,174 -
Unrestricted net assets (deficit) 15,075,120 4,875,819 (1,699,937) 18,251,002 4,957,231
Total net assets 88,677,214$ 89,101,491$ 13,857,301$ 191,636,006$ 11,982,435$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Major Enterprise Funds
26
City of San BuenaventuraStatement of Revenues, Expenses and Changes in Net AssetsProprietary FundsFor the year ended June 30, 2011
Non-Major GovernmentalEnterprise Fund Activities
InternalWastewater Water Golf Total Service Funds
OPERATING REVENUES:
Utility service charges 16,326,078$ 20,946,374$ -$ 37,272,452$ -$ Golf fee charges - - 4,465,557 4,465,557 - Internal service charges - - - - 18,663,186 Other operating revenues - - - - 235,844
Total operating revenues 16,326,078 20,946,374 4,465,557 41,738,009 18,899,030
OPERATING EXPENSES:
Salaries and benefits 4,108,193 4,825,528 173,382 9,107,103 3,731,187 Contractual services 2,005,401 66,895 3,284,732 5,357,028 2,284,548 Materials and supplies 2,241,872 1,358,012 22,893 3,622,777 2,097,642 General and administrative 4,473,707 8,853,316 342,445 13,669,468 2,208,430 Insurance premiums and settlements - - - - 8,581,080 Depreciation 3,252,299 4,317,268 913,634 8,483,201 1,495,550
Total operating expenses 16,081,472 19,421,019 4,737,086 40,239,577 20,398,437
OPERATING INCOME (LOSS) 244,606 1,525,355 (271,529) 1,498,432 (1,499,407)
NONOPERATING REVENUES (EXPENSES):
Investment income 225,582 75,514 - 301,096 116,605 Loss on disposal of assets - - - - (54,934) Loss on investments - - - - (43,000) Interest expense (1,010,351) (1,519,642) - (2,529,993) (10,028)
Total nonoperating revenues (expenses) (784,769) (1,444,128) - (2,228,897) 8,643 Income (loss) before transfers (540,163) 81,227 (271,529) (730,465) (1,490,764)
Transfers in - 1,007,343 5,610 1,012,953 94,911 Transfers out (1,311,039) (438,641) (1,087,227) (2,836,907) (68,151)
Change in net assets (1,851,202) 649,929 (1,353,146) (2,554,419) (1,464,004)
NET ASSETS:
Beginning of year 90,528,416 88,451,562 15,210,447 194,190,425 13,446,439
End of year 88,677,214$ 89,101,491$ 13,857,301$ 191,636,006$ 11,982,435$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Major Enterprise Funds
27
City of San BuenaventuraStatement of Cash FlowsProprietary FundsFor the year ended June 30, 2011
Non-Major GovernmentalEnterprise Fund Activities
InternalWastewater Water Golf Course Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:Cash received from customers/other funds 16,428,620$ 21,091,530$ 4,167,028$ 41,687,178$ 18,945,539$ Cash payments to suppliers for goods and services (7,730,977) (8,754,886) (2,692,321) (19,178,184) (867,782) Cash (payments) receipts for interfund services (1,773,092) (2,183,986) (252,258) (4,209,336) (5,558,722) Cash payments to employees for services (4,108,193) (4,825,528) (173,383) (9,107,104) (3,731,187) Insurance premiums and settlements - - - - (9,985,227) Other operating revenues - - - - 320,357
Net cash provided (used) by operating activities 2,816,358 5,327,130 1,049,066 9,192,554 (877,022)
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIES:
Employee housing loans made - - - - (16,729) Payment of employee housing loans - - - - 117,163 Transfers to other funds (1,311,039) (438,641) (1,087,227) (2,836,907) (68,151) Transfers from other funds - 1,007,343 5,610 1,012,953 94,911
Net cash provided (used) by noncapital (1,311,039) 568,702 (1,081,617) (1,823,954) 127,194 financing activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Purchase of capital assets (6,644,553) (1,926,151) - (8,570,704) (508,403) Payment of long-term debt - - - - (95,836) Proceeds (loss) from sale of assets - - 32,551 32,551 64,040 Repayment of capital leases - - - (177,192) Repayment of state water loan - (838,891) - (838,891) - Repayment of revenue bonds (720,000) (590,000) - (1,310,000) - Interest paid on revenue bonds and contracts (1,018,753) (1,524,304) - (2,543,057) -
Net cash provided (used) by capitaland related financing activities (8,383,306) (4,879,346) 32,551 (13,230,101) (717,391)
CASH FLOWS FROM INVESTING ACTIVITIES:Investment income (loss) 225,582 75,514 - 301,096 73,605
Net cash provided (used) by investing activities 225,582 75,514 - 301,096 73,605 Net increase (decrease) in cash and cash equivalents (6,652,405) 1,092,000 - (5,560,405) (1,393,614)
CASH AND INVESTMENTS:Beginning of year 34,362,674 21,983,972 - 56,346,646 19,244,175 End of year 27,710,269$ 23,075,972$ -$ 50,786,241$ 17,850,561$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NETCASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating income (loss) 244,606$ 1,525,355$ (271,529)$ 1,498,432$ (1,499,407)$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:
Depreciation 3,252,299 4,317,268 913,634 8,483,201 1,495,550 Changes in assets and liabilities:
Accounts receivable 102,542 393,651 - 496,193 24,506 Due from other funds - - - - 178,445 Due from other governments - (248,305) - (248,305) 80,952 Due from others - (191) (298,529) (298,720) (1,549) Prepaid items - - - - 6,600 Deferred charges 97,584 53,856 - 151,440 - Accounts payable (882,518) (452,407) 284,795 (1,050,130) 157,651 Accrued payroll liabilities - - - - (1,694,686) Deferred revenue - - - - 84,513 Due to other funds - - 420,695 420,695 - Due to other governments 1,845 92 - 1,937 (136) Deposits held for others - (262,189) - (262,189) - Claims and judgments payable - - - - 98,510 Compensated absences payable - - - - 192,029
Total adjustments 2,571,752 3,801,775 1,320,595 7,694,122 622,385 Net cash provided (used) by operating activities 2,816,358$ 5,327,130$ 1,049,066$ 9,192,554$ (877,022)$
Noncash financing activities:Employee housing loans written off -$ -$ -$ -$ 43,000$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Major Enterprise Funds
28
2011
City of San BuenaventuraStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2011
Agency FundsASSETS
Cash and investments 1,281$ Accounts receivable 113,054 Due from others 21,953
136,288$
LIABILITIES
Due to others 83,225$ Deposits held for others 53,063
136,288$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
29
2011
2011
City of San Buenaventura Index to the Notes to the Basic Financial Statements For the year ended June 30, 2011
Page Note 1 - Summary of Significant Accounting Policies ............................................................................. 32
A. Description of the Reporting Entity ........................................................................................... 32 B. Basis of Accounting and Measurement Focus ......................................................................... 33 C. Use of Restricted/Unrestricted Net Assets ............................................................................... 37 D. Cash, Cash Equivalents and Investments.................................................................................. 37 E. Restricted Cash and Investments ............................................................................................... 37 F. Inventory and Prepaid Items ....................................................................................................... 37 G. Assets Held for Resale .................................................................................................................. 37 H. Interfund Transactions ................................................................................................................. 37 I. Capital Assets ................................................................................................................................ 38 J. Compensated Absences ............................................................................................................... 38 K. Long-Term Debt ............................................................................................................................ 39 L. Interest Payable ............................................................................................................................. 40 M. Property Taxes ............................................................................................................................... 40 N. Net Assets ...................................................................................................................................... 40 O. Fund Balances ............................................................................................................................... 40 P. Use of Estimates ............................................................................................................................ 40
Note 2 � Cash and Investments ..................................................................................................................... 41
A. Cash and Investments ................................................................................................................. .41 B. Investments Authorized by the California Government Code and the City�s Investment Policy ......................................................................................................................... 41 C. Investments Authorized by Debt Agreements ......................................................................... 42 D. Disclosures Relating to Interest Rate Risk ................................................................................. 42 E. Disclosures Relating to Credit Risk ........................................................................................... 43 F. Concentration of Credit Risk ....................................................................................................... 43 G. Custodial Credit Risk ................................................................................................................... 44 H. Investment in State Investment Pool .......................................................................................... 44
Note 3 � Loans and Notes Receivable .......................................................................................................... 45
A. City Home ...................................................................................................................................... 45 B. Chapel Lane Senior Housing Project ......................................................................................... 45 C. Business Assistance Program ...................................................................................................... 46 D. City Officials .................................................................................................................................. 46 E. Redevelopment Agency ............................................................................................................... 47 F. Affordable Housing Development ............................................................................................. 48 G. Homebuyer Assistance Program (City) ..................................................................................... 49 H. Housing Preservation Program ................................................................................................. 49
Note 4 - Interfund Transactions .................................................................................................................... 49
30
City of San Buenaventura Index to the Notes to the Basic Financial Statements For the year ended June 30, 2011
Page
Note 5 � Land and Buildings Held for Resale ........................................................................................... 54 Note 6 � Capital Assets ................................................................................................................................... 54 Note 7 � Leases ................................................................................................................................................. 57
Note 8 � State Water Project .......................................................................................................................... 58
Note 9 � Long-Term Debt ............................................................................................................................... 58
A. Governmental Activities Long-Term Debt ................................................................................ 58 B. Long-Term Debt of Business-Type Activities and Proprietary Funds .................................. 65
Note 10 � Deferred Revenues ........................................................................................................................ 68 Note 11 � Fund Balances for Governmental Funds ................................................................................... 69 Note 12 � Self-Insurance Accrued Liabilities ............................................................................................. 72 Note 13 � Pension Plans ................................................................................................................................ 73 Note 14 � Joint Venture Transactions .......................................................................................................... 74 Note 15 � Commitments and Contingencies .............................................................................................. 74 Note 16 � Jobs Investment Fund ................................................................................................................. 75
Note 17 � Deferred Fees ................................................................................................................................ 75
Note 18 � Restatement of the Financial Statements ................................................................................ 76 Note 19 � Deficit Fund Balances and Net Assets ..................................................................................... 76 Note 20 � Related Organizations ................................................................................................................ 77 Note 21 � Recent Changes in Legislation Affecting California Redevelopment Agencies ............. 77
31
City of San Buenaventura Notes to the Basic Financial Statements For the year ended June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of the City of San Buenaventura (Ventura), California (City) have been prepared in conformity 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. Description of the Reporting Entity The City, incorporated as a town on March 10, 1866, was recognized as a city in the State of California by election on December 4, 1905, and was certified on January 5, 1906. The initial City Charter was adopted January 7, 1932, and was revised most recently on November 7, 1995. The City operates under an elected Council and appointed City Manager form of government and provides the following services as authorized by its charter: public safety (police and fire), public works (maintenance services and utilities), community services, and general administrative services. As required by GAAP, these basic financial statements present the City and its component units (entities for which the City is considered to be financially accountable). Blended component units, although legally separate entities are, in substance, part of the City�s operations and data from these units are combined with data of the City. Each blended component unit has a June 30 year-end. The City had no discretely presented component units. The following entities are reported as blended component units:
The Redevelopment Agency of the City of Ventura (Agency) was created by the Ventura City Council (City Council) in August 1961. The Agency was formed for the purpose of preparing and carrying out plans for improvement, rehabilitation and redevelopment of blighted areas within the territorial limits of the City. The City Council acts as the Agency�s governing board and exerts significant influence over its operations. The funds of the Agency have been included in the governmental activities of the financial statements. Complete financial statements for the Redevelopment Agency may be obtained from the City of Ventura, P.O. Box 99, Ventura, California 93002-0099. Ventura Public Facilities Financing Authority (Authority) was established by ordinance, pursuant to the City Charter and Constitution of the State of California, as a public body, corporate and politic, acting to facilitate serving the public purposes of the City. The ordinance was adopted on May 28, 1985, and became effective July 1, 1985. The governing body of the Authority is comprised of the consenting members of the City Council. The Authority is empowered to construct, acquire, maintain and improve public facilities and improvements within the City and to sell, lease, exchange, transfer, encumber or otherwise dispose of any interest in property. The Authority's activities presently consist of providing financial assistance to the City through the issuance of certificates of participation and the leasing of assets to the City. At the end of the lease term, all assets revert to the City. The funds of the Authority have been included in the governmental activities of the financial statements.
32
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures or expenses, as appropriate. Governmental 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. Government - Wide Financial Statements The City�s government-wide financial statements include a Statement of Net Assets and a Statement of Activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. The 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. Grant revenues are recognized when all eligibility requirements have been met. 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/from other funds Advances to/from other funds Transfers in/out
The City applies all applicable GASB pronouncements (including all NCGA Statements and Interpretations currently in effect).
33
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Governmental Fund Financial Statements Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund balances and change in fund balances as presented in these statements to the net assets and change in net assets presented in the government-wide financial statements. The City has presented all major funds that met the applicable criteria. In addition, the City has presented certain funds as major funds because the City believes the financial position and activities of these funds are significant to the City as a whole. The following is a list of these major funds:
General Fund - The general fund was established to account for sources and uses of financial resources traditionally associated with governments, which are not required to be accounted for in another fund. Gas Tax Special Revenue Fund - To account for revenue received from the State of California Gas Tax, and other sources to be used for street maintenance and improvements only. Park and Recreation Special Revenue Fund - To account for park and recreation facilities tax and intergovernmental revenue to be used only for planning, acquisition, improvements, or expansion of public parks, playgrounds, or other recreational facilities. Certificates of Participation (COP) Debt Obligation Debt Service Fund - To account for the accumulation of resources and payment of long-term debt principal and interest for COP issues by the Public Facilities Financing Authority. Capital Improvement Capital Projects Fund - To account for financial resources assigned for the purchase or construction of major capital improvements (other than those funded through proprietary or special revenue funds). Housing and Community Development Block Grant Fund - To account for the revenue and expenditures related to Federal community development block grants. Redevelopment Agency Capital Projects Fund - To account for tax resources restricted for the economic revitalization and redevelopment of the City through acquisition and development of City property determined to be in declining condition.
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 Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. 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 property tax, sales tax, intergovernmental revenues and other taxes,
34
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued interest, and charges for services. 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. 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 each major proprietary fund. The following is a list of the proprietary funds:
Wastewater Fund � To account for all wastewater activities and treatment services provided to the City of Ventura, including, but not limited to administration, operations, maintenance, laboratory, and debt service. Water Fund � To account for all water activities and water treatment services provided to the City of Ventura and some residents of the County. Such activities include but are not limited to administration, maintenance, distribution, customer service, production, purification, and debt service. Golf Fund � To account for revenue and costs related to the operation of two municipal golf courses for use by the general public. Golf fund is a non-major fund. Internal Service Funds A separate column representing internal service funds is also presented in these statements; however, internal service balances and activities have been combined with the governmental activities in the government-wide financial statements. The following is a list of the internal service funds:
Information Technology Fund - To account for costs related to the replacement and maintenance of the City�s computer infrastructure. Costs are recovered through a monthly user fee charged to City departments. Fleet Maintenance Fund - To account for costs related to operations of the central fleet maintenance system which provides vehicles for all City departments. Costs are recovered through a monthly user fee charged to City departments. Facilities Maintenance Fund - To account for costs related to providing building maintenance services to all City departments. A monthly fee, based on square footage, is charged to City departments to recover these costs.
35
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued
Digital Publishing Fund - To account for costs related to printing and reproduction of materials by all City departments. Costs are recovered through a monthly fee charged to City departments using the service. Workers� Compensation Fund - To account for costs and liabilities related to the Workers� Compensation Program. Costs are recovered through a monthly fee based on employee-type charges to City departments. Employee Fringe Benefits Fund - To account for costs and liabilities related to health, life, dental and disability insurances, public employees� retirement system, federal and state taxes, association dues, leave time benefits and miscellaneous deductions paid by the City on behalf of the employees. A bi-weekly employee benefit charge, based on a percentage of gross payroll, is charged to City departments to recover these costs. Risk Management Fund - To account for costs of providing public liability insurance coverage to operating funds. Costs are recovered from those funds that benefit from the insurance coverage.
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 non-current) are included on the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in 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 the liability is incurred. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses. Fiduciary Fund Financial Statements Fiduciary fund financial statements include a Statement of Fiduciary Assets and Liabilities. The City's fiduciary funds represent agency funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Agency funds are reported using the accrual basis of accounting. The City currently reports three fiduciary funds detailed below:
Portobello Assessment District Fund - To account for the funds held in trust by the City as collected from property assessments to be used for payment of debt service on special assessment bonds issued to fund improvements and maintenance of the Portobello Canal. Property Based Improvement District Fund - To account for the funds held in trust by the City as collected from property assessments to be used for the improvements and maintenance of the Downtown Property Based Improvement District. Ventura Oxnard Camarillo Tourism Business Improvement District Fund - To account for the funds held in trust by the City as collected from hotel assessments. VOCTBID is a benefit assessment district proposed to help fund marketing and sales promotional efforts of lodging businesses.
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
C. Use of Restricted/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. D. Cash, Cash Equivalents and Investments The City pools its available cash for investment purposes. The City�s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as Cash and Investments. 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. Guaranteed investment contracts are stated at 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. For purposes of reporting cash flows, the City considers each fund�s share in the cash and investments pool to be cash and cash equivalents. E. Restricted Cash and Investments Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. Cash and investments are also restricted for deposits held for others within the enterprise funds. The restricted cash and investments are separated from unrestricted cash and investments and displayed as Restricted Cash and Investments. F. Inventory and Prepaid Items Inventory is valued at cost using first in, first out method. Inventory in the governmental funds consists of expendable supplies held for future consumption. The cost is recorded as expenditure as inventory items are consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. G. Assets Held for Resale Land and buildings held for resale are recorded at the lower of cost or estimated net realizable value, only determined upon the execution of a disposition and development agreement. Fund balances are restricted in amounts equal to the carrying value of land and buildings held for resale, because the proceeds from such assets are restricted to finance the City�s redevelopment activities. H. Interfund Transactions Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either �due to/from other funds� (i.e., the current portion of interfund loans) or �advances to/from other funds� (i.e., the non-current portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as �internal balances.�
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued H. Interfund Transactions, Continued
Advances to other funds, reported in the governmental fund financial statements, are offset by a fund balance nonspendable account in applicable governmental funds to indicate that they are not in spendable form and are not expendable available financial resources. I. Capital Assets
The City�s assets are capitalized at historical cost or estimated historical cost. City policy has set the capitalization threshold for reporting capital assets, including infrastructure assets, at $10,000. Gifts or contributions of capital assets are recorded at fair value when received. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows:
Buildings and improvements 10 � 76 years Improvements other than buildings 10 � 75 years Machinery and equipment 2 � 75 years Infrastructure 5 � 50 years
In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34, which requires the inclusion of infrastructure capital assets in local governments� basic financial statements. In accordance with Statement No. 34, the City has included the value of all infrastructure in the basic financial statements.
The City defines infrastructure as the basic physical assets that allow the City to function. These assets include the streets, water purification and distribution system, sewer collection and treatment system, park and recreation lands and improvement system, storm water conveyance system, and buildings combined with site amenities such as parking and landscaped areas used by the City in the conduct of its business. 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, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems are not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems. Interest incurred during capital asset construction, if any, is capitalized net of any interest earned for the business-type activities and proprietary funds as part of the asset cost. There was no interest capitalized during the fiscal year. J. Compensated Absences The City accrues the cost of annual vacation leave as earned for all eligible employees. The City accrues the cost of sick leave for all employees following ten (10) years of continuous City service, when employees become eligible for a payout of the balance of unused sick leave upon separation (resignation or retirement). The amount of payout varies by employee group as follows:
Employees covered by SEIU Supervisory (S) and Professional (Q) Unit agreements shall, after ten years of continuous City service, be eligible to receive an amount equivalent to 25 percent of their accrued sick leave upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. The maximum sick leave accrual is 480 hours.
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued J. Compensated Absences, Continued
Employees covered by the Ventura Fire Management Association (VFMA) agreement shall, after ten years of continuous City service, be eligible to receive an amount equivalent to 25 percent of their accrued sick leave upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. After twenty years of continuous City service, they shall be eligible to receive an amount equivalent to 50 percent of their accrued sick leave upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. The maximum sick leave accrual is 1,440 hours (2,016 hours when assigned to a 56-hour work week). Employees in the Executive (E), Management (M), Confidential (C) and Administrative Confidential (U) salary schedules shall, after ten years of continuous City service, be eligible to receive an amount equivalent to 25 percent of their accrued sick leave upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. Notwithstanding the foregoing, employees in Salary Schedule "E" shall, after twenty years of continuous City service, be eligible to receive an amount equivalent to 50 percent of their accrued sick leave upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. The maximum accrual is 480 hours.
All police shall, after ten years of continuous City service, be eligible to receive an amount equivalent to 2.5 percent of their accrued sick leave for each completed year of service and will be received upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. After twenty years of continuous City service, they shall be eligible to receive an amount equivalent to 3 percent of their accrued sick leave for each completed year of service (not to exceed 75 percent). This benefit will be received upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. The maximum accrual is 1,440 hours. All fire (excluding management) shall, after ten years of continuous City service, be eligible to receive an amount equivalent to 25 percent of their accrued sick leave upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. After twenty years of continuous City service, they shall be eligible to receive an amount equivalent to 50 percent of their accrued sick leave upon resignation, or retirement from employment or in the case of death to the employee's beneficiary. The maximum accrual is 2,016 hours.
Vacation and sick leave benefits are accrued and recorded in the Employee Fringe Benefits Internal Service Fund. Compensated absences are generally liquidated in the Internal Service Fund.
K. Long-Term Debt In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental and business-type activities. Bond premiums, discounts, and deferred losses on refunding, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium, discount, and deferred loss on refunding. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the period in which bonds are issued. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued K. Long-Term Debt, Continued while discounts on debt issuance are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. L. Interest Payable In the government-wide financial statements, interest payable on long-term debt is recognized as the liability is incurred for governmental and business-type activities. In the fund financial statements, proprietary funds recognize the interest payable when the liability is incurred. M. Property Taxes Property taxes are levied based on a fiscal year (July 1 � June 30). The property tax assessments are formally due on November 1 and February 1, and become delinquent after December 10 and April 10, respectively. Taxes become a lien on the property effective January 1 of the preceding year. N. Net Assets In the government-wide financial statements, net assets are classified in the following categories:
Invested in Capital Assets, net of Related Debt � This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt attributed to the acquisition, construction, or improvement of the assets. Restricted Net Assets � This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments, enabling legislation, or constitutional provisions. At fiscal year-end June 30, 2011, the restricted net assets balance was $34,282,425 for governmental activities, of which $5,817,106 was restricted by enabling legislation. Unrestricted Net Assets � This amount is all net assets that do not meet the definition of �invested in capital assets, net of related debt� or �restricted net assets.�
O. Fund Balances In the fund financial statements, governmental fund balances are classified based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. See Note 11 for further detail on fund balance reporting. P. Use of Estimates
The preparation of the basic financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.
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2. CASH AND INVESTMENTS A. Cash and Investments Cash and investments as of June 30, 2011, are classified in the accompanying financial statements as follows:
Fiduciary Fund Statement of Net Assets: Cash and Investments 1,281$ Government-Wide Statement of Net Assets: Cash and investments 130,685,517 Restricted cash and investments (held by bond trustee): Current amount 11,112,071 Noncurrent amount 880,989 Total cash and investments 142,679,858$
Cash and investments as of June 30, 2011, consist of the following:
Cash on hand 32,152$ Deposits with financial institutions 7,647,247 Investments 135,000,459 Total cash and investments 142,679,858$
B. Investments Authorized by the California Government Code and the City�s Investment Policy 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, and concentration of credit risk. This table does not address investment of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City�s investment policy.
Maximum Maximum Authorized Maximum Amt / Percent Investment
Investment Type Maturity of Portfolio* in One Issuer U.S. Treasury Obligations 5 years N/A N/A U.S. Agency Securities 5 years N/A N/A Banker�s Acceptances 180 days 20% 5% Commercial Paper 270 days 15% 5% Negotiable Certificates of Deposit 5 years 20% 5% Certificates of Deposit 5 years N/A $100K Certificates of Deposit Account Registry 5 years $5M $5M Repurchase Agreements 92 days 20% N/A Medium-Term Notes 5 years 20% $5M Money Market Mutual Funds N/A 20% 5% Local Agency Investment Fund (LAIF) N/A N/A $50 million**
* Excluding amounts held by bond trustee that are not subject to California Government Code restrictions. ** Maximum investment is per component unit.
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2. CASH AND INVESTMENTS, Continued C. Investments Authorized by Debt Agreements Investment of debt proceeds held by bond trustee is governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City�s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee and identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.
Maximum Maximum Authorized Maximum Percentage Investment
Investment Type Maturity Allowed in One Issuer U.S. Treasury Obligations 30 years N/A N/A Money Market Mutual Funds N/A N/A N/A Guaranteed Investment Contract 30 years N/A N/A Local Agency Investment Fund N/A N/A N/A
D. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair market value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair market value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time, as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair market 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:
Remaining Maturity (in Months)
City Portfolio 12 Months 13 to 24 25-59 > 60Investment Type Totals or Less Months Months Months
Federal Agency Securities 64,632,219$ 266,540$ 5,005,650$ 49,403,929$ 9,956,100$ Local Agency Investment Fund 51,872,861 51,872,861 - - - Medium Term Notes In Default 1,285,000 - 1,285,000 - - Municipal Debt 200,000 200,000 - - - Rabobank Money Market 5,017,320 5,017,320 - - - Held by bond trustee: Federal Agency Securities 2,200,710 - - 2,200,710 - Money Market Funds 2,532,226 2,532,226 - - - Investment Contracts 880,987 - - 880,987 - Local Agency Investment Fund 6,379,137 6,379,137 - - -
Total 135,000,460$ 66,268,084$ 6,290,650$ 52,485,626$ 9,956,100$
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2. CASH AND INVESTMENTS, Continued E. Disclosures Relating to 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 (where applicable) by the California Government Code, the City�s investment policy, debt agreements, and the actual rating as of year-end for each investment type:
F. Concentration of Credit Risk The City�s investment policy contains limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer that represent 5 percent or more of total City�s investments are as follows:
City Portfolio MinimumInvestment Type Totals Rating Aaa/AAA 1 Not Rated
Federal Agency Securities $ 64,632,219 N/A $ 64,632,219 -$ Municipal Debt 200,000 N/A - 200,000 Medium Term Notes: Medium Term Notes In Default2 1,285,000 N/A - 1,285,000 Local Agency Investment Fund 51,872,861 N/A - 51,872,861 Rabobank Money Market 5,017,320 N/A 5,017,320 - Held by bond trustee: Federal Agency Securities 2,200,710 N/A 2,200,710 - Money Market Funds 2,532,226 A 2,532,226 - Investment Contracts 880,987 N/A - 880,987 Local Agency Investment Fund 6,379,137 N/A - 6,379,137 Total $ 135,000,460 $ 74,382,475 $ 60,617,985
Ratings as of year-end
2: On September 14, 2008, Lehman Brothers Holdings Inc. (Lehman) filed a Chapter-11 bankruptcy proceeding to seek relief under the provisions of the United States Bankruptcy Code. The City holds a Lehman $5M Medium Term Corporate Note, classified as "senior unsecured debt". A policy decision was made to continue to hold the security in the City's third party safekeeping account until such time that the security is either sold or settlement occurs through bankruptcy proceedings or other lawsuits.
1. The ratings were with Moody's and S&P as of June 30, 2011. Subsequently, S&P reduced the rating of the Federal Agency Securities from AAA to AA+.
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2. CASH AND INVESTMENTS, Continued F. Concentration of Credit Risk, Continued
Issuer Investment Type Reported Amount
Federal Farm Credit Bank Federal Agency Securities $19,416,879 Federal National Mortgage Association Federal Agency Securities 34,972,400 Total $54,389,279
There are no limits on the above Federal Agency Securities. G. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits. H. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City�s investment in this pool is reported in the accompanying financial statements at amounts based upon the City�s pro-rata share of the fair market value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
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3. LOANS AND NOTES RECEIVABLE At June 30, 2011, loans and notes receivable consisted of the following:
Balance BalanceLoan Description Fund July 1, 2010 Additions Deletions June 30, 2011
City Home Fund 32 59,056$ -$ -$ 59,056$ Chapel Lane Senior Housing Project Fund 32 657,500 - - 657,500 Business Assistance Program: Micro Loan Fund 32 830,882 150,000 (87,109) 893,773 Code Compliance Assistance Fund 01 179,010 50,000 (47,057) 181,953 Commercial Rehabilitation Loan Fund 01 330,972 10,000 (96,420) 244,552 Economic Development Loan Fund 01 508,360 17,980 (52,940) 473,400 City Officials Fund 68 1,294,780 - (143,435) 1,151,345 Redevelopment Agency:
Disposition and Development Agreement - 1997 Fund 88 500,000 - (500,000) - Homebuyer Assistance Program (RDA) Fund 89 22,600 - - 22,600
Working Artists Community Fund 88 & 89 3,500,000 - (11,443) 3,488,557 CHFA HELP Program Loan Fund 89 16,171 - (2,304) 13,867 Affordable Housing Development: Soho Associates LP (City) Fund 32 350,000 50,000 - 400,000 Soho Associates LP (RDA) Fund 89 406,000 72,000 - 478,000 El Patio LP (City) Fund 32 408,000 - - 408,000 El Patio LP (RDA) Fund 89 306,400 28,550 - 334,950 Azahar Place Associates LP (CEDC) (City) Fund 32 900,000 200,000 - 1,100,000 Azahar Place Associates LP (CEDC) (RDA) Fund 89 1,100,000 300,000 - 1,400,000 Homebuyer Assistance Program (City) Fund 32 649,964 - - 649,964 Housing Preservation Program Fund 01 & 32 1,954,525 148,610 (85,065) 2,018,070
Total 13,974,220$ 1,027,140$ (1,025,773)$ 13,975,587$
A. City Home The general purpose of the City Home program is to promote neighborhood stabilization, stimulate private reinvestment, and broaden affordable housing opportunities. The Program is administered by the Housing Authority of Ventura and provides deferred loans, to low-income residents who are first-time homebuyers, for down-payment assistance. The maximum term of the loan is 45 years with interest being charged in the form of equity sharing equal to 50 percent of the value of the original loan. Provided that the participating owner occupies the property continuously for 45 years, all interest shall be forgiven. B. Chapel Lane Senior Housing Project The project includes 38 one and two-bedroom units for senior low and very low-income households. The project has commercial space dedicated to the City�s Housing Authority for office use. The maximum term of the loan is 45 years with interest being charged at 3 percent per annum.
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3. LOANS AND NOTES RECEIVABLE, Continued C. Business Assistance Program The interest rate will be fixed at the cost of City funds, plus two points. The borrower is responsible for repaying the entire loan, plus interest in a timely manner. The maximum term of the loan will not exceed 10 years. All loan programs must adhere to adopted Design Guidelines and Design Review Requirements where applicable. There are four components to the Business Assistance Program:
Micro Loan Program - The primary goal of this program is to create jobs and support the growth and success of small businesses in Ventura. This is a flexible program designed for existing and new small businesses. The minimum loan to any business is $10,000 with a maximum of $50,000.
Code Compliance Assistance Program - The Code Compliance Assistance Program is to support businesses with building code compliance requirements on existing commercial properties. This program is designed to encourage code compliance and public safety in conjunction with Inspection Services. Commercial Rehabilitation Loan Program - The Commercial Rehabilitation Loan Program is designed to encourage revitalization and renovation of older commercial districts while promoting physical enhancement of commercial property. The program goal is to foster business growth or retention through improving the physical appearance of qualified buildings. Qualified property owners and businesses may be eligible to receive below market rate loans for façade, construction, or building renovation. This program is targeted to the Downtown Redevelopment Area and the Westside Revitalization Area.
Economic Development Loan Program � The Economic Development Loan Program is designed to encourage and facilitate business growth in Ventura. This growth will increase sales tax revenues for the City and will fund the operations of the City and benefit the Ventura community.
D. City Officials The City Council established a mortgage assistance program as an important tool to enable key officials and other employees to live in the City. It was also intended to aid the City to recruit highly qualified employees and assist them in obtaining housing in the City. The City is not providing new mortgage assistance loans at this time. The City has seven loans outstanding for the purpose of mortgage assistance in the purchase of a home. The loans are secured by a deed of trust on the properties.
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3. LOANS AND NOTES RECEIVABLE, Continued D. City Officials, Continued The following table summarizes the loan activity:
* The City�s share of its equity interest in the Ventura Residences shall be due and payable in full: 1) immediately upon the sale of, or other transfer of title, to the Ventura Residence by Employee; 2) within 120 days of the Employee�s termination for any reason whatsoever; 3) within 120 days of the termination of Employee�s use of the Ventura Residence as a principal residence, or; 4) in some cases within 10 years of loan issue date. The interest rates vary from zero percent for equity sharing agreements to 7.7 percent. E. Redevelopment Agency Disposition and Development Agreement � 1997 - The Agency entered into a disposition and development agreement in October 1997 to loan $500,000 to a limited liability company to construct certain improvements on property within the Agency�s Downtown Redevelopment Project Area. The loan is secured by a deed of trust and bears no interest. The loan can be forgiven upon the occurrence of certain events. Required events have been met and the loan has been forgiven. The reconveyance was issued on September 7, 2011. The outstanding amount due to the Agency as of June 30, 2011 was zero. Homebuyer Assistance Program (RDA) - The Agency entered into an agreement annually for the Homebuyer Assistance Program. The maximum term of the loan is 45 years with interest being charged in the form of equity sharing equal to 50 percent of the value of the original loan. Provided that the participating owners occupy the property continuously for 45 years, all interest shall be forgiven. The outstanding amount due to the Agency as of June 30, 2011, was $22,600. Working Artists Community - In January 2008, the Agency loaned $1.5 million in proceeds from a CalHFA HELP loan to the Working Artists of Ventura (WAV) Apartments Partners at 3 percent simple interest for a term of 30 years (annual payments of $77,598 commencing May 1, 2010). On February 1, 2008, the Agency entered into a construction agreement with WAV Apartments Partners to acquire property and build affordable housing designed for artists. As part of this agreement, the Agency loaned additional $2,000,000 at 5percent simple interest to the WAV Apartments Partners for construction. This loan is to be repaid the earlier of December 1, 2016 or thirty days after the sale or transfer of the last unit per the most recent amendment. The total outstanding amount due to the Agency as of June 30, 2011, was $3,488,557.
OriginalDate Amount Term of Balance Balance
Issued of Loan Loan July 1, 2010 Additions Deletions June 30, 2011
2003 325,000$ * 325,000$ -$ -$ 325,000$ 2007 280,000 * 49,291 - - 49,291 2008 538,035 * 298,309 - (23,421) 274,888 2009 474,000 * 474,000 - (117,000) 357,000 2010 150,000 * 148,180 - (3,014) 145,166 Total 1,294,780$ -$ (143,435)$ 1,151,345$
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3. LOANS AND NOTES RECEIVABLE, Continued E. Redevelopment Agency, Continued CHFA HELP Loans - The primary goal of this program is for rental rehabilitation or seismic improvements of multifamily housing units in designated target areas. The City provided a 3 percent interest rate, fully amortizing loans for property rehabilitation to landlords for 15 to 30 years. Participating landlords agreed to fix maximum rents at fair market rates established for the HUD Section 8 Program during the term of the HELP Loan. Eligible developments must be occupied by a minimum of 51 percent low-income households as defined by HUD, at the initiation of negotiations between the Landlord and the City. The outstanding balance as of June 30, 2011, was $13,867. The program is no longer active and there is only one remaining loan. F. Affordable Housing Development Soho Associates LP - The Agency entered into an agreement on May 1, 2010 to loan $550,000 to a limited partnership to assist with the acquisition and development on an affordable housing project located outside the Downtown�s Redevelopment Project Area. The loan is to be disbursed over the course of three fiscal years (fiscal year 2009-10 $406,000; fiscal year 2010-11 $72,000; and fiscal year 2011-12 $72,000) from the Low and Moderate Housing Set-Aside Funds. The loan is secured by a deed of trust bearing simple interest at 3 percent commencing on the date of the initial disbursement. The term expires 55 years after the date of recordation of the affordability covenant against the property. Payments are due on May 1st of each year and with payment of the outstanding principal and accrued interest equal to the Agency�s pro-rata share of residual receipts. The project is funded in conjunction with a $450,000 City HOME funds loan that is being disbursed over three fiscal years (fiscal year 2009-10 $350,000; fiscal year 2010-11 $50,000 and fiscal year 2011-12 $50,000). El Patio LP - The Agency entered into an agreement on December 17, 2009 to loan $392,000 to a limited partnership to assist with the rehabilitation of property within the Agency�s Downtown Redevelopment Project Area. The loan is to be disbursed over the course of four fiscal years (fiscal year 2009-10 $306,400; fiscal year 2010-11 $28,550; fiscal year 2011-12 $28,550; and fiscal year 2012-13 $28,500) from the Low and Moderate Housing Set-Aside Funds. The loan is secured by a deed of trust bearing simple interest at 3 percent commencing on the date of the initial disbursement. The term expires 55 years after the date of recordation of the affordability covenant against the Property. Payments are due on September 30th of each year with payment of the outstanding principal and accrued interest equal to the Agency�s pro-rata share of residual receipts. Azahar Place Associates LP (CEDC) - The Agency entered into an Owner Participation Agreement on February 16, 2010 to loan $1,700,000 to a limited partnership to assist with the acquisition and development on an affordable housing project located outside the Downtown�s Redevelopment Project Area. The loan is to be disbursed over the course of three fiscal years (fiscal year 2009-10 $1,100,000; fiscal year 2010-11 $300,000; and fiscal year 2011-12 $300,000) from the Low and Moderate Housing Set-Aside Funds. Financial assistance is in the form of two loans: 1) Acquisition $1,100,000, and 2) Development $600,000 both secured by separate deeds of trust bearing simple interest at 3 percent commencing on the date of the initial disbursement. The term expires 55 years after the completion of construction. Payments are due on September 30th of each year with payment of the outstanding principal and accrued interest equal to the Agency�s pro-rata share of residual receipts.
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3. LOANS AND NOTES RECEIVABLE, Continued F. Affordable Housing Development, Continued The project is funded in conjunction with a $1,300,000 City HOME funds loan disbursed over three fiscal years (fiscal year 2009-10 $900,000; fiscal year 2010-11 $200,000 and fiscal year 2011-12 $200,000). G. Homebuyer Assistance Program (City) The City entered into a loan agreement on September 13, 1999. The maximum term of the loan is 45 years with interest being charged in the form of equity sharing equal to 50 percent of the value of the original loan. Provided that the participating owner occupies the property continuously for 45 years, all interest shall be forgiven. The outstanding amount due to the City as of June 30, 2011, was $649,964. H. Housing Preservation Program Under the Housing Preservation Program (HPP), low interest loans are available to qualifying low and moderate-income households to rehabilitate single-family owner-occupied properties. Special hardship grants are also available on an urgent need basis to address immediate threats to health and safety. The terms of these loans range from 15 to 45 years with interest being charged in either the form of equity sharing equal to 50 percent of the value of the original loan or based on the cost of funds to the City that shall not be less than 3 percent. The outstanding amount as of June 30, 2011, was $2,018,070. 4. INTERFUND TRANSACTIONS Fund Financial Statements Advances to/from Other Funds As of June 30, 2011, balances of advances to/from other funds were as follows:
OtherGeneral Governmental
Advances from other funds Fund Funds Total
Redevelopment Agency Capital Projects Fund 5,538,076$ 1,181,742$ 6,719,818$
The long-term advances consisted of the following:
Balance Balance7/1/2010 Additions Deletions 6/30/2011
Line of credit 5,771,750$ -$ (233,674)$ 5,538,076$ Public Art Fund Loan 1,125,469 56,273 - 1,181,742
6,897,219$ 56,273$ (233,674)$ 6,719,818$
Advances to other funds
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4. INTERFUND TRANSACTIONS, Continued The line of credit advances between the Agency and the City have been established through a cooperation agreement, first approved in 1980, describing the operation support provided to the Agency, and the terms and conditions for repayment of City loans or advances. In June 1992 and May 1997, a restated and amended cooperation agreement was adopted for the purpose of restructuring the financial aspects of the relationship. In 2004, an amended cooperation agreement was adopted to establish a predictable revenue stream into the General Fund and provide for accumulation of project funds for the Agency. In 2011, a second amended and restated cooperation agreement was adopted to update the status of the amounts paid to the City and the amount of existing indebtedness of the Agency owed to the City. The 2011 amended agreement calls for: 1) the Agency to reimburse the City with interest payments accruing at five percent on the total amount of principal owed by the Agency to the City beginning July 1, 2010; 2) the Agency to reimburse the City with principal installments of $562,364 from May 15, 2011 through May 15, 2015; and 3) in the event there is insufficient tax increment revenue to make a debt payment, the Agency may request to defer that portion that cannot be paid in the current year to an upcoming year. Any request shall be presented to City Council at a regular meeting, on or before June 30 of that year. The City may elect to reloan funds to the Agency, on an as-needed basis, through a line of credit as described in the agreement. Currently, the City supports the Agency by making advances for project costs and administrative expenses and classifies the payments as nonspendable advance to RDA in the City�s General Fund. The outstanding line of credit balance at June 30, 2011, was $5,538,076. The Agency�s liability with respect to the line of credit is also included in the Redevelopment Agency Capital Projects Fund in the basic fund financial statements. The City�s Public Art fund on January 26, 2008 loaned the Agency $1,000,000 at 5 percent compound interest for a term of 2 years for the WAV project. In 2011, a second amendment to the promissory note was adopted to modify and extend the terms for repayment of the loan. The loan was extended for a term that expires on the earlier of (a) December 1, 2016, or (b) thirty (30) days after the last unit in the project is sold. Further, the loan shall accrue simple interest at the rate of 3 percent per annum commencing on the date of disbursement with the exception of payment in default according to Section 7 of the original agreement. Due to/from Other Funds
As of June 30, 2011, balances of due to/from other funds were as follows:
Gas TaxSpecial
Due from other funds Revenue Total
General Fund -$ -$ -$ -$ -$ 1,996,413$ 1,996,413$ Certificates of Participation Debt Obligation Debt Service - - 17,044 - 23,035 - 40,079 Housing and Community Development Block Grant Capital Projects - - - 283,758 - - 283,758 Redevelopment Agency Capital Projects 816,168 - - - - 816,168
Other Governmental funds - 1,169,935 371,857 - - - 1,541,792
Golf course enterprise fund 2,020,993 - - - - - 2,020,993 Total 2,837,161$ 1,169,935$ 388,901$ 283,758$ 23,035$ 1,996,413$ 6,699,203$
Due to other funds
Redeve-lopment Agency
Captial Projects Internal Services
Facilities Mainten-
ance
Workers Compen-
sationGeneral
Fund
Capital Improve-
ment
50
4. INTERFUND TRANSACTIONS, Continued Due to/from Other Funds, Continued General Fund
The loan from the Workers� Compensation Fund was used for capital improvement projects.
Certificates of Participation Debt Obligation Debt Service
Capital improvement construction expenditures incurred this year will be reimbursed next year with debt financing funds.
Redevelopment Agency Capital Projects
The Redevelopment Agency SERAF payments in the prior fiscal year required cash from the general fund. This will be repaid when funds are available.
Other Governmental Funds Advances from the Gas Tax Traffic Mitigation Fund were used to fund the startup of the Downtown Parking District fund. Capital improvement construction expenditures to be reimbursed next year with debt financing funds. Redevelopment Agency revenues were used to fund the Home Match Program.
Golf Enterprise Fund
The Golf Enterprise Fund was in a negative cash position at year-end. This covers that negative cash positions.
Transfers
Transfers for the year ended June 30, 2011, were as follows:
Debt Service
Capital Project Funds
General Fund
Gas TaxSpecial
Revenue
Park and Recreat-
ion Special
Revenue
Certificates of Participa-
tion Debt Obligation
Capital Improve-
ment
Other Govern-mental Funds Water Golf
Internal Service Funds Total
Transfers OutGeneral Fund $ - $ - $ 3,680 $ 3,593,538 $ 1,560,333 $ 943,733 $ - $ 5,610 $ 40,000 6,146,894$ Special Revenue Funds:
Gas Tax 127,180 - - - - - - - 127,180 Parks and Recreation 425,000 - - - - - - - - 425,000
Debt Service Fund:
Certificates of Participation-Debt Obligation - - - - 106,950 - - - 34,760 141,710
Capital Projects Funds:CIP General 42,000 - - - - 26,690 - - - 68,690 Redevelopment Agency - - - - - 1,177,626 - - - 1,177,626
Other Governmental Funds: 122,242 - - - 657,918 - - - - 780,160 Enterprise Funds:
Wastewater 277,436 23,400 - - 2,860 1,007,343 - - 1,311,039 Water 405,113 27,590 - - 5,938 - - - 438,641 Golf Course 215,000 - 872,227 - - - - 1,087,227
Internal Service Funds: 8,000 - - 40,000 - 20,151 68,151 Total $ 1,621,971 $ 50,990 $ 3,680 $ 4,465,765 $ 2,365,201 $ 2,156,847 $ 1,007,343 $ 5,610 $ 94,911 $ 11,772,318
Major Funds
Enterprise
Transfers In
51
4. INTERFUND TRANSACTIONS, Continued Transfers, Continued The transfers were for the following purposes:
General Fund transfers to:Parks and Recreation 3,680$ For reimbursement of funding provided for improvement projects
financed through prior debt financing for Parks and Receation improvements.
Certificates of Participation Debt Obligation 3,593,538 For payment of the annual debt service requirements.
Capital Improvement 1,560,333 For reimbursement of funding provided for improvement projects financed through prior debt financing for Police Fire Emergency Generator, Surfers Point, and City Hall Energy Efficiency Chillers improvement projects.
Enterprise Funds 5,610 For reimbursement of funding provided for improvement projects financed through prior debt financing for Golf improvements.
Internal Service Funds 40,000 For information technology extra help services.
Other Governmental Funds 943,733 To cover Law Enforcement (Fund 14) project revenue shortfall.6,146,894$
Gas Tax transfers to:
General Fund 127,180$ For reimbursement of Gas Tax eligible expenditures-Traffic Safety.127,180$
Park and Recreation transfers to:General Fund 425,000$ To provide for Westside Revitalization and for reimbursement of
funding provided for improvement projects financed through prior debt financing.
425,000$
Certificate of Participation Debt Obligation transfers to:Capital Improvement 106,950$ For reimbursement of funding provided for improvement projects
financed through prior debt financing for City Hall capital improvements.
Internal Service Funds 34,760 For reimbursement of funding provided for improvement projects financed through prior debt financing for City Hall capital improvements.
141,710$
CIP General transfers to:General Fund 42,000$ To reimburse General fund for software SYMPRO purchases.Other Governmental Funds 26,690 For funding of future public art projects.
68,690$
Redevelopment Agency transfers to:Other Governmental Funds 1,177,626$ To provide for RDA project for Debt issued.
1,177,626$
52
4. INTERFUND TRANSACTIONS, Continued Transfers, Continued Other Governmental Funds transfers to:
General Fund 122,242$ To provide for City overhead expenses.
Capital Improvement 657,918 For reimbursement of funding for improvement projects financed through prior debt financing for park capital improvements.
780,160$
Wastewater transfers to:General Fund 277,436$ Annual Ventura Water right-of-way payment.Gas Tax 23,400 To provide for Contruction In Progress street resurfacing-manhole
improvements.Water 1,007,343 For reimbursement of the Ventura Water administration and billing
expenses shared by Wastewater.Other Governmental Funds 2,860 For funding of future public art projects.
1,311,039$
Water transfers to:General Fund 405,113$ For annual Ventura Water right-of-way payment, web services,
and storm drain impacts.Gas Tax 27,590 To provide for Contruction In Progress street resurfacing-water
valve improvements.Other Governmental Funds 5,938 For funding of future public art projects.
438,641$
Golf Course transfers to:General Fund 215,000$ For annual land lease payment.Certificates of Participation Debt Obligation 872,227 For payment of the annual debt service requirements.
1,087,227$
Internal Service Funds transfers to:
General Fund 8,000$ For payment of annual physical exams.Capital Improvement 40,000 For information technology extra help services.Internal Service Funds 20,151 For annual payment of shared warehouse services.
68,151$
53
5. LAND AND BUILDINGS HELD FOR RESALE Land and buildings held for resale are recorded at the lower of cost or estimated net realizable value, only determined upon the execution of a disposition and development agreement. The available fund balance is restricted in an amount equal to the carrying value of land and buildings held for resale because such assets are restricted for specific purpose stipulated by redevelopment law. The amount recorded as assets held for resale and the corresponding restricted fund balance as of June 30, 2011, was $540,880. 6. CAPITAL ASSETS Government-Wide Financial Statements At June 30, 2011, the City�s capital assets consisted of the following:
Government Business-TypeActivities Activities Total
Non-depreciable assets:Land 19,102,058$ 497,497$ 19,599,555$ Water rights - 1,221,838 1,221,838 Construction in progress 16,036,896 32,082,164 48,119,060
Total non-depreciable assets 35,138,954 33,801,499 68,940,453
Depreciable assets:Buildings and improvements 64,897,710 70,147,462 135,045,172 Improvements other than buildings 19,458,089 62,138,897 81,596,986 Machinery and equipment 47,675,210 130,509,356 178,184,566 Infrastructure 101,878,155 1,614,700 103,492,855
Total depreciable assets 233,909,164 264,410,415 498,319,579
Less accumulated depreciation for:Buildings and improvements (27,292,666) (23,599,491) (50,892,157) Improvements other than buildings (6,845,054) (32,433,427) (39,278,481) Machinery and equipment (24,973,216) (42,916,241) (67,889,457) Infrastructure (68,691,572) (310,461) (69,002,033)
Total accumulated depreciation (127,802,508) (99,259,620) (227,062,128)
Total depreciable assets, net 106,106,656 165,150,795 271,257,451
Total capital assets 141,245,610$ 198,952,294$ 340,197,904$
54
6. CAPITAL ASSETS, Continued The following is a summary of changes in capital assets for governmental activities:
Depreciation expense in governmental activities for capital assets for the year ended June 30, 2011, is composed of the following:
General Government 758,146$ Finance and Technology 331,352 Community Development 29,354 Parks, Recreation and Community Partnerships 1,658,356 Public Safety 553,445 Public Works 2,731,683 Internal Service Fund depreciation charged to functions 1,495,550
7,557,886$
Balance BalanceJuly 1, 2010 Additions Deletions June 30, 2011
Governmental Activities:Capital assets, not being depreciated:
Land 19,102,058$ -$ -$ 19,102,058$ Construction in progress 10,260,434 5,776,462 - 16,036,896
Total capital assets,not being depreciated 29,362,492 5,776,462 - 35,138,954
Capital assets, being depreciated:Buildings and improvements 64,912,901 - (15,191) 64,897,710 Improvements other than buildings 19,460,023 - (1,934) 19,458,089 Machinery and equipment 47,576,368 940,686 (841,844) 47,675,210 Infrastructure 101,878,155 - - 101,878,155
Total capital assets,being depreciated 233,827,447 940,686 (858,969) 233,909,164
Less accumulated depreciation for:Buildings and improvements (25,911,197) (1,396,660) 15,191 (27,292,666) Improvements other than buildings (6,163,741) (683,247) 1,934 (6,845,054) Machinery and equipment (22,169,209) (3,521,024) 717,017 (24,973,216) Infrastructure (66,734,617) (1,956,955) - (68,691,572)
Total accumulated depreciation (120,978,764) (7,557,886) 734,142 (127,802,508)
Total capital assets,being depreciated, net 112,848,683 (6,617,200) (124,827) 106,106,656
Total governmental activities 142,211,175$ (840,738)$ (124,827)$ 141,245,610$
55
6. CAPITAL ASSETS, Continued The following is a summary of changes in capital assets for business-type activities:
Depreciation expense in business-type activities for capital assets for the year ended June 30, 2011, is composed of the following:
Wastewater 3,252,299$ Water 4,317,268 Golf Course 913,634
Total depreciation expense 8,483,201$
Balance BalanceJuly 1, 2010 Additions Deletions June 30, 2011
Business-Type Activities:
Capital assets, not being depreciated:Land 497,497$ -$ -$ 497,497$ Water rights 1,221,838 - - 1,221,838 Construction in progress 23,619,816 8,462,348 - 32,082,164
Total capital assets,not being depreciated 25,339,151 8,462,348 - 33,801,499
Capital assets, being depreciated:Buildings and improvements 70,179,257 - (31,795) 70,147,462 Improvements other than buildings 62,138,897 - - 62,138,897 Machinery and equipment 130,680,113 108,358 (279,115) 130,509,356 Infrastructure 1,614,700 - - 1,614,700
Total capital assets,being depreciated 264,612,967 108,358 (310,910) 264,410,415
Less accumulated depreciation for:Buildings and improvements (22,135,710) (1,495,576) 31,795 (23,599,491) Improvements other than buildings (31,068,247) (1,365,180) - (32,433,427) Machinery and equipment (37,619,513) (5,543,292) 246,564 (42,916,241) Infrastructure (231,308) (79,153) - (310,461)
Total accumulated depreciation (91,054,778) (8,483,201) 278,359 (99,259,620)
Total capital assets,being depreciated, net 173,558,189 (8,374,843) (32,551) 165,150,795
Total business-type activities 198,897,340$ 87,505$ (32,551)$ 198,952,294$
56
7. LEASES
Capital Leases The City entered into a lease agreement in December 2007 to finance the acquisition of Computer Aided Dispatch and Mobile System upgrade to the existing system. There are five annual payments due starting on January 1, 2009 and ending on January 1, 2013. This lease agreement is considered a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the inception date. The asset acquired through this capital lease is as follows:
Decreases to Capital Leases Payable were as follows:
The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2011, are as follows:
Amounts AmountsBalance Balance Due Within Due in More
July 1, 2010 Additions Deletions June 30, 2011 One Year than One Year
Governmental Activities:2009 Lease Agreement 531,577$ -$ (177,193)$ 354,384$ 177,192$ 177,192$
Classification
Governmental Activities
Asset:Machinery and equipment $ 885,961Less: Accumulated depreciation (265,788)
Total $ 620,173
Year Ending June 30Governmental
Activities
2012 177,192$ 2013 177,192
Total minimum payments 354,384$
57
8. STATE WATER PROJECT On July 6, 1971, the City executed a contract with the Casitas Municipal Water District (CMWD) for the allocation of fifty (50) percent of CMWD�s annual entitlement of available water from the State of California Water Project. In turn, the City assumed the burden of costs, both past and future, in the same proportion. The City�s share of existing costs as of the inception of the contract was covered by a contract payable over a twenty (20) year period at four (4) percent interest, and was paid as of June 30, 1990. The current agreement runs through June 30, 2035, with the right to extend the agreement for continued service. Under this agreement, the City�s share of current project costs is paid on an annual basis. This agreement allows the City the option to maintain its right to beneficial use of water from the State Water Line Project. The costs for this project are adjusted semiannually by the State and have been increasing annually. Since most of the costs are associated with operation and maintenance, the City elected to expense these costs. The total cost for the year ended June 30, 2011 was $1,392,498. 9. LONG-TERM DEBT A. Governmental Activities Long-Term Debt The Summary of Changes in Long-Term Debt for Governmental Activities for the year ended June 30, 2011, is as follows:
Amounts AmountsBalance Balance Due Within Due in More
July 1, 2010 Additions Deletions June 30, 2011 One Year than One Year
Governmental Activities:CalHFA HELP Loan - 2008 1,500,000$ -$ -$ 1,500,000$ -$ 1,500,000$ Certificates of Participation - 2001 Series A 1,580,000 - (1,580,000) - - - Certificates of Participation - 2001 Series C 13,740,000 - (7,155,000) 6,585,000 410,000 6,175,000 Certificates of Participation - 2002 Series B 11,345,000 - (9,890,000) 1,455,000 1,455,000 - Certificates of Participation - 2002 Series D 13,670,000 - (2,985,000) 10,685,000 240,000 10,445,000 Certificates of Participation - 2007 Series E 10,165,000 - (450,000) 9,715,000 470,000 9,245,000 Certificates of Participation - 2010 Series F - 20,615,000 - 20,615,000 400,000 20,215,000 Tax Allocation Bonds - 2003 6,545,000 - (270,000) 6,275,000 275,000 6,000,000 Tax Allocation Bonds - 2008 8,500,000 (35,000) 8,465,000 60,000 8,405,000 California Energy Commission 2004 Loan 150,999 - (12,586) 138,413 13,073 125,340 California Energy Commission 2007 Loan 111,070 - (73,221) 37,849 37,849 -
Subtotal governmental activities 67,307,069 20,615,000 (22,450,807) 65,471,262 3,360,922 62,110,340
Claims and judgments payable (Note 12) 8,640,993 2,820,236 (2,721,726) 8,739,503 2,538,315 6,201,188 Compensated absences payable (Note 1J ) 4,916,998 2,393,436 (2,201,407) 5,109,027 533,183 4,575,844
Total governmental activities 80,865,060$ 25,828,672$ (27,373,940)$ 79,319,792$ 6,432,420$ 72,887,372$
Classification
58
9. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued CalHFA HELP Loan - 2008 The City entered into a loan agreement on December 21, 2007 with the California Housing Finance Agency (CALHFA) to borrow $1.5 million at a 3.5 percent interest rate for a term of 10 years for the WAV project. Payment of principal and all simple interest is due on the tenth anniversary of the agreement. Certificates of Participation � 2001 Series A Certificates of Participation in the amount of $2,925,000 were issued on December 1, 2001. The Certificates were issued to provide for: (1) the defeasance of $2,960,000 of the City of Ventura 1987 Refunding Certificates of Participation (Capital Improvement Project); (2) to acquire debt service reserve surety bond for the Series A Certificates; and (3) to pay costs in connection with the execution and delivery of the Series A Certificates. The Certificates were defeased in January 2011 from the proceeds of the Certificates of Participation, Series F, which were issued in July 2010. Series F proceeds were used to advance-refund $1,380,000 of the Series A certificates, with a $13,800 premium on redemption. The City�s non-defeased portion of the COPs was repaid during the year and there was no outstanding balance at year-end. At June 30, 2011, the total outstanding defeased Certificates totaled $1,380,000. The Certificates will be repaid from the funds placed in escrow with a third party trustee. Certificates of Participation � 2001 Series C Certificates of Participation in the amount of $16,345,000 were issued on December 1, 2001. The Certificates were issued to provide for: (1) improvements to the Ventura Community Park, the City Hall Terra Cotta Restoration Project, heating and ventilation improvements to City Hall and city-wide street median improvement programs; (2) to acquire a debt service reserve surety bond for the Certificates; and (3) to pay costs in connection with the execution and delivery of the Series C Certificates. The Certificates were partially defeased from the proceeds of the Certificates of Participation, Series F, which were issued in July 2010. Series F proceeds were used to advance-refund $6,760,000 of the Series C certificates, with a $67,600 premium on redemption. The remaining Certificates are due in annual principal installments ranging between $0 and $1,025,000 through 2031. Interest rates range from 3.00 percent to 4.725 percent and interest is payable semi-annually on February 1 and August 1. The funding source for the repayment is lease payments made by the City to the Authority. The total amount outstanding as of June 30, 2011, was $6,585,000. At June 30, 2011 the total outstanding defeased Certificates totaled $6,760,000. The Certificates will be repaid from the funds placed in escrow with a third party trustee.
59
9. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Certificates of Participation � 2001 Series C, Continued The annual debt service requirements for the 2001 Series C Certificates of Participation outstanding at June 30, 2011, were as follows:
Certificates of Participation � 2002 Series B Certificates of Participation in the amount of $19,765,000 were issued on October 3, 2002. The Certificates were issued to provide funds for: 1) the defeasance of 1993 Refunding Certificates of Participation and related City lease payment obligations; 2) to acquire a debt service reserve surety bond for the Series B Certificates; and 3) to pay certain costs incurred in connection with the execution and delivery of the Series B Certificates. The Certificates were partially defeased from the proceeds of the Certificates of Participation, Series F, which were issued in July 2010. Series F proceeds were used to advance-refund $8,505,000 of the Series B certificates, with an $85,050 premium on redemption. There is one remaining principal installment due January 1, 2012. The interest rate on the non-defeased debt is 2.5 percent to be paid on July 1, 2011 and January 1, 2012. The funding source for the repayment is lease payments made by the City to the Authority. The total amount outstanding as of June 30, 2011, was $1,455,000. At June 30, 2011 the total outstanding defeased Certificates totaled $8,505,000. The Certificates will be repaid from the funds placed in escrow with a third party trustee. The annual debt service requirements for the 2002 Series B Certificates of Participation outstanding at June 30, 2011, were as follows:
Year EndingJune 30 Principal Interest Total
2011-12 1,455,000$ 36,375$ 1,491,375$
Total 1,455,000$ 36,373$ 1,491,373$
Y ear E nd ing
Ju ne 30 Princip al Interest T ota l
2012 410 ,000$ 342,638$ 752,638$ 2013 - 324,187 324,187 2014 - 324,188 324,188 2015 - 324,187 324,187 2016 - 324,188 324,188
2017-2021 - 1 ,620,937 1 ,620,937 2022-2026 1 ,545 ,000 1 ,581,300 3 ,126,300 2027-2031 4 ,630 ,000 754,162 5 ,384 ,162
T otal 6 ,585 ,000$ 5 ,595,788$ 12 ,180,788$
60
9. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Certificates of Participation � 2002 Series D Certificates of Participation in the amount of $15,930,000 were issued on December 1, 2002. The Certificates were issued to provide funds for: 1) improvements to the Buenaventura Golf Course and the Olivas Park Golf Course; 2) to acquire debt service reserve surety bond for the Certificates; 3) to fund capitalized interest; and 4) to pay certain costs incurred in connection with the execution and delivery of the Certificates. The Certificates were partially defeased from the proceeds of the Certificates of Participation, Series F, which were issued in July 2010. Series F proceeds were used to advance-refund $2,755,000 of the Series D certificates, with no premium on redemption. The remaining Certificates are due in annual principal installments of $0 to $980,000 through 2032. Interest rates range from 1.65 percent to 5.00 percent and is payable semi-annually on February 1 and August 1. The funding source for the repayment is lease payments made by the City to the Authority. The total amount outstanding as of June 30, 2011, was $10,685,000. At June 30, 2011 the total outstanding defeased Certificates totaled $2,605,000. The Certificates will be repaid from the funds placed in escrow with a third party trustee. The annual debt service requirements for the 2002 Series D Certificates of Participation outstanding at June 30, 2011, were as follows:
Certificates of Participation � 2007 Series E On December 1, 2007, the City issued $11,420,000 in Certificates of Participation (Series E) with an average interest rate ranging from 3.0 percent to 4.5 percent to: 1) provide for the advance refunding of the $7,090,000 City of Ventura Public Facilities Financing Authority 1995 Refunding Lease Revenue Bonds with an interest rate ranging from 4.55 percent to 5.75 percent and a principal balance of $3,455,000, 2) finance the acquisition of unencumbered fee title to a public parking structure, 3) finance certain public park improvements, 4) fund the Reserve Fund, and 5) pay certain costs incurred in connection with the execution and delivery of the Certificates. The Certificates were executed and delivered by and among the Bank of New York Trust Company, N.A. as Trustee. As a result, the 1995 Refunding Lease Revenue Bonds discussed in (1) above are considered to be defeased, and the liability for those bonds has been removed from the financial statements. The total amount outstanding as of June 30, 2011, was $9,715,000.
Year EndingJune 30 Principal Interest Total
2012 240,000$ 523,375$ 763,375$ 2013 255,000 514,075 769,075 2014 - 503,875 503,875 2015 - 503,875 503,875 2016 - 503,875 503,875
2017-2021 1,650,000 2,443,375 4,093,375 2022-2026 3,320,000 1,817,750 5,137,750 2027-2031 4,240,000 902,250 5,142,250
2032 980,000 49,000 1,029,000 Total 10,685,000$ 7,761,450$ 18,446,450$
61
9. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Certificates of Participation � 2007 Series E, Continued The annual debt service requirements for the 2007 Series E Certificates of Participation outstanding at June 30, 2011, were as follows:
Certificates of Participation � 2010 Series F On July 28, 2010, the City issued $20,615,000 in Certificates of Participation, Series F with interest rates ranging from 2 percent to 4.75 percent to: 1) provide for the advance refunding and defeasance of a portion of the $2,925,000 2001 Refunding Certificates of Participation, Series A; a portion of the $19,765,000 2002 Refunding Certificates of Participation, Series B; a portion of the $16,345,000 Certificates of Participation, Series C; and a portion of the $15,930,000 2002 Certificates of Participation, Series D; 2) finance certain public golf course improvements; 3) acquire a reserve fund surety policy; and 4) pay certain costs incurred in connection with the execution and delivery of the Certificates. The Certificates were executed and delivered by and among the Bank of New York Trust Company, N.A. as Trustee. The refunding resulted in a reduction in total debt service payments by approximately $1.2 million and an economic gain (difference between the present value of the old and new debt service payments) of $807,175. The total amount outstanding as of June 30, 2011, was $20,615,000. The annual debt service requirements for the Certificates of Participation, 2010 Series F outstanding at June 30, 2011:
Year EndingJune 30 Principal Interest Total
2012 470,000$ 434,031$ 904,031$ 2013 485,000 415,231 900,231 2014 510,000 395,831 905,831 2015 215,000 375,432 590,432 2016 225,000 366,831 591,831
2017-2021 1,270,000 1,690,825 2,960,825 2022-2026 1,560,000 1,398,781 2,958,781 2027-2031 1,955,000 1,006,050 2,961,050 2032-2036 2,460,000 495,663 2,955,663
2037 565,000 26,838 591,838
Total 9,715,000$ 6,605,513$ 16,320,513$
Year EndingJune 30 Principal Interest Total
2012 400,000$ 730,938$ 1,130,938$ 2013 2,320,000 692,137 3,012,137 2014 2,925,000 613,388 3,538,388 2015 3,005,000 520,625 3,525,625 2016 3,125,000 409,312 3,534,312
2017-2021 6,190,000 922,688 7,112,688 2022-2026 2,015,000 273,912 2,288,912 2027-2031 - 150,812 150,812 2031-2033 635,000 45,244 680,244
Total $ 20,615,000 $ 4,359,056 $ 24,974,05662
9. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Tax Allocation Bonds � 2003 Tax Allocation Bonds (TABs) in the amount of $8,000,000 were issued by the Agency on June 1, 2003. The bonds were issued to provide funds to: 1) repay certain advances made by the City to the Agency; 2) fund a reserve account for the bonds; and 3) pay costs of issuance of the bonds. The bonds are due in annual principal installments of $205,000 to $495,000 through 2028. Interest rates range from 2.00 percent to 4.25 percent and interest is payable semi-annually on February 1 and August 1. The funding source for the repayment is tax increment revenue. The total amount outstanding as of June 30, 2011, was $6,275,000. The 2003 TABs are special obligations of the Agency, which are secured by an irrevocable pledge of tax increment revenues payable to the Agency. The principal and interest remaining on the bonds is $8,674,473, payable through August 2028. For the current year, principal and interest payments totaled $516,464. The annual debt service requirements for the 2003 Tax Allocation Bonds outstanding at June 30, 2011, were as follows: Tax Allocation Bonds � 2008 Tax Allocation Bonds in the amount of $8,785,000 were issued by the Agency on December 18, 2008. The bonds were issued to provide funds to 1) repay certain advances made by the City to the Agency; 2) fund a reserve account for the bonds; and 3) pay costs of issuance of the bonds. The bonds are due in annual principal installments of $35,000 to $695,000 through 2039. Interest rates range from 3.00 percent to 8.00 percent and is payable semi-annually on February 1 and August 1. The funding source for the repayment is tax increment revenue. The total amount outstanding as of June 30, 2011, was $8,465,000. The 2008 TABs are special obligations of the Agency, which are secured by an irrevocable pledge of tax revenues payable to the Agency. The principal and interest remaining on the bonds is $18,512,991, payable through August 2039. For the current year, principal and interest payments totaled $653,513.
Year EndingJune 30 Principal Interest Total
2012 275,000$ 238,457$ 513,457$ 2013 285,000 230,058 515,058 2014 290,000 221,070 511,070 2015 300,000 211,295 511,295 2016 310,000 200,807 510,807
2017-2021 1,735,000 821,126 2,556,126 2022-2026 2,110,000 435,009 2,545,009 2027-2028 970,000 41,650 1,011,650
Total 6,275,000$ 2,399,473$ 8,674,473$
63
9. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued Tax Allocation Bonds � 2008, Continued The annual debt service requirements for the 2008 Tax Allocation Bonds outstanding at June 30, 2011, are as follows:
Total tax increment revenue for all tax allocation bonds for the year ended June 30, 2011 was $3,408,602. California Energy Commission � 2004 Loan On August 5, 2005, a low-interest loan was received from the California Energy Commission to install solar panels at the City�s Sanjon Yard facility to reduce energy use. The loan has an interest rate of 3.95 percent and a fifteen-year repayment schedule with 30 equal semi-annual payments of $9,214. The annual debt service requirements for this loan at June 30, 2011, are as follows:
Y ea r E n d in gJu n e 30 P rin cip al In tere st T o ta l
20 1 2 6 0 ,000$ 6 16 ,4 19$ 6 76 ,41 9$ 20 1 3 9 0 ,000 6 12 ,93 1 7 02 ,9 31 20 1 4 1 6 5 ,00 0 6 06 ,6 69 7 71 ,6 69 20 1 5 2 2 5 ,00 0 5 96 ,6 37 8 21 ,6 37 20 1 6 2 6 5 ,00 0 5 83 ,2 78 8 48 ,2 78
2 01 7-20 21 1 ,73 0 ,00 0 2 ,5 9 7 ,7 9 7 4 ,3 27 ,797 2 02 2-20 26 1 ,45 0 ,00 0 2 ,0 4 2 ,4 7 8 3 ,4 92 ,478 2 02 7-20 31 1 ,73 5 ,00 0 1 ,4 2 6 ,3 8 1 3 ,1 61 ,381 2 03 2-20 36 1 ,51 5 ,00 0 8 13 ,0 00 2 ,3 28 ,000 2 03 7-20 41 1 ,23 0 ,00 0 1 52 ,4 00 1 ,3 82 ,400
T o tal 8 ,46 5 ,0 00$ 1 0 ,0 47 ,99 1$ 18 ,5 12 ,9 91$
Year Ending June 30 Principal Interest Total
2012 13,073$ 5,354$ 18,427$ 2013 13,609 4,818 18,427 2014 14,152 4,275 18,428 2015 14,717 3,711 18,428 2016 15,296 3,132 18,428
2017-2019 67,566 6,145 73,711 Total 138,413$ 27,436$ 165,849
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9. LONG-TERM DEBT, Continued A. Governmental Activities Long-Term Debt, Continued California Energy Commission � 2007 Loan On October 13, 2006, a low-interest loan was received from the California Energy Commission to install energy efficient lights at various City facilities and energy efficient pumps and motors on the heating and cooling systems at City Hall and Police/Fire Headquarters. The loan has an interest rate of 4.5 percent and a six-year repayment schedule with 11 equal semi-annual payments of $38,703. The annual debt service requirements for the October 13, 2006, California Energy Commission loan outstanding at June 30, 2011, are as follows:
B. Long-Term Debt of Business-Type Activities and Proprietary Funds The summary of changes in long-term debt of business-type activities for the year ended June 30, 2011, is as follows:
Amounts AmountsBalance Balance Due Within Due in More
July 1, 2010 Additions Deletions June 30, 2011 One Year than One YearBusiness-Type Activities:
Wastewater Revenue Refunding COPs $ 21,765,000 -$ $ (720,000) $ 21,045,000 $ 745,000 $ 20,300,000Less unamortized :
Bond premium 203,146 - (8,464) 194,682 - 194,682 Deferral on refunding (333,787) - 83,447 (250,340) - (250,340)
Wastewater Revenue Refunding COPs, net $ 21,634,359 - (645,017) 20,989,342 745,000 20,244,342
Water Revenue Refunding COPs 23,840,000 - (590,000) 23,250,000 610,000 22,640,000 Less unamortized :
Bond premium 371,917 - (33,811) 338,106 - 338,106 Deferral on refunding (720,460) - 65,496 (654,964) - (654,964)
Water Revenue Refunding COPs, net 23,491,457 - (558,315) 22,933,142 610,000 22,323,142
Safe Drinking Water Loan 17,987,933 - (838,891) 17,149,042 859,060 16,289,982
Total business-type activities $ 63,113,749 -$ $ (2,042,223) $ 61,071,526 $ 2,214,060 $ 58,857,466
Classification
Year Ending June 30 Principal Interest Total
2012 37,849$ 854$ 38,703$
Total 37,849$ 854$ 38,703$
65
9. LONG-TERM DEBT, Continued B. Long-Term Debt of Business-Type Activities and Proprietary Funds, Continued Wastewater Revenue Refunding 2004 Certificates of Participation Certificates of Participation in the amount of $25,075,000 were issued on December 16, 2004. The Certificates were issued to provide for: 1) the defeasance of $7,125,000 million of the City of Ventura 1996 Wastewater Revenue Refunding Bonds; 2) finance improvements to the City�s water reclamation facility upgrade; 3) fund a reserve fund for the Certificates; and 4) pay costs in connection with the execution and delivery of the Certificates. The Certificates are due in annual principal installments of $625,000 to $1,405,000 through 2034. Interest rates range from 2.50 percent to 5.00 percent and is payable semi-annually on September 1 and March 1. The funding source for the repayment is lease payments made by the City to the Authority. The total amount outstanding as of June 30, 2011, was $21,045,000. The Wastewater Revenue Refunding Certificates of Participation is secured by an irrevocable pledge of wastewater revenue. The principal and interest remaining on the certificates of participation is $34,993,675, payable through fiscal year 2034. For the current year, principal and interest payment and pledged revenue were $1,738,750 and $244,606, respectively. Total Wastewater Revenue Refunding Certificates of Participation outstanding as of June 30, 2011, net of unamortized bond premium were as follows:
The annual debt service requirements for the 2004 Wastewater Revenue Refunding Certificates of Participation outstanding at June 30, 2011, were as follows:
Principal outstanding at June 30, 2011 $ 21,045,000Add unamortized bond premium 194,682 Less unamortized deferral on refunding (250,340)
Net Bonds outstanding at June 30, 2011 $ 20,989,342
Year EndingJune 30 Principal Interest Total
2012 745,000$ 993,550$ 1,738,550$ 2013 775,000 965,612 1,740,612 2014 800,000 936,550 1,736,550 2015 835,000 904,550 1,739,550 2016 605,000 871,150 1,476,150
2016-2020 3,420,000 3,955,763 7,375,763 2021-2025 4,330,000 3,053,750 7,383,750 2026-2030 5,515,000 1,859,250 7,374,250 2031-2034 4,020,000 408,500 4,428,500
Total 21,045,000$ 13,948,675$ 34,993,675$
66
9. LONG-TERM DEBT, Continued B. Long-Term Debt of Business-Type Activities and Proprietary Funds, Continued Water Revenue Refunding Certificates of Participation Certificates of Participation in the amount of $27,410,000 were issued on March 1, 2004. The Certificates were issued to provide for: (1) the defeasance of $12,615,000 of the City of Ventura 1993 Water Revenue Refunding Bonds; (2) finance improvements to the City�s water system; (3) fund a reserve fund for the Certificates; and (4) pay costs in connection with the execution and delivery of the Certificates. The Certificates are due in annual principal installments of $505,000 to $1,610,000 through 2034. Interest rates range from 3.00 percent to 5.00 percent and is payable semi-annually on October 1 and April 1. The funding source for the repayment is revenues from the Water Fund that provide cash for the lease payments to the Authority. The total amount outstanding as of June 30, 2011, totaled $23,250,000. The Water Revenue Refunding Certificates of Participation is secured by an irrevocable pledge of water revenue. The principal and interest remaining on the certificates of participation is $38,514,275, payable through fiscal year 2034. For the current year, principal and interest payment and pledged revenue were $1,689,375 and $1,525,355, respectively. Total Water Revenue Refunding Certificates of Participation outstanding as of June 30, 2011, net of unamortized bond premium and deferral on refunding were as follows:
The annual debt service requirements for the Water Revenue Refunding Certificates of Participation outstanding at June 30, 2011, were as follows:
Principal outstanding at June 30, 2011 $ 23,250,000Add unamortized bond premium 338,106 Less unamortized deferral on refunding (654,964)
Net Bonds outstanding at June 30, 2011 $ 22,933,142
Year EndingJune 30 Principal Interest Total
2012 610,000$ 1,078,375$ 1,688,375$ 2013 630,000 1,055,888 1,685,888 2014 655,000 1,030,975 1,685,975 2015 680,000 1,004,275 1,684,275 2016 705,000 976,575 1,681,575
2017-2021 3,995,000 4,397,862 8,392,862 2022-2026 4,975,000 3,387,325 8,362,325 2027-2031 6,395,000 1,980,125 8,375,125 2032-2034 4,605,000 352,875 4,957,875
Total 23,250,000$ 15,264,275$ 38,514,275$
67
9. LONG-TERM DEBT, Continued B. Long-Term Debt of Business-Type Activities and Proprietary Funds, Continued Safe Drinking Water Loan The City has entered into a funding agreement with the State of California Department of Water Resources for a construction loan under the Safe Drinking Water State Revolving Fund Law of 1997. The loan has an interest rate of 2.39 percent and a 20-year repayment schedule with 40 equal payments of $631,910. 10. DEFERRED REVENUES
Deferred revenues at June 30, 2011, consist of:
Year EndingJune 30 Principal Interest Total
2012 859,060$ 404,760$ 1,263,820$ 2013 879,714 384,106 1,263,820 2014 900,865 362,955 1,263,820 2015 922,524 341,295 1,263,819 2016 944,705 319,115 1,263,820
2017-2021 5,075,343 1,243,756 6,319,099 2022-2026 5,715,523 603,576 6,319,099 2027-2028 1,851,308 44,421 1,895,729
Total 17,149,042$ 3,703,983$ 20,853,026$
General Fund:Recreational activities 606,788$ Grants 676,900
Total General Fund 1,283,688
Special Revenue Funds: Gas Tax: Department of Transportation 337,400 Total Special Revenue Funds 337,400
Capital Projects Funds:Capital Improvement:
CEC loan 164,499 Olivas Adobe 175,751 Surfer's Point 1,149,393
Total Capital Projects Funds 1,489,643
Total Deferred Revenues 3,110,731$
68
11. FUND BALANCES FOR GOVERNMENTAL FUNDS Fund Balances The City has adopted the provisions of GASB 54. The objective of the statement is to enhance the usefulness of fund balance information by providing fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. The City has evaluated the use of the Special Revenue, Debt Service and Capital Projects Funds under the criteria set forth in GASB 54 and has determined there is no change needed. As prescribed by GASB 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. As of June 30, 2011, fund balance for governmental funds consist of the following: Nonspendable Fund Balance � includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The �not in spendable form� criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, and long-term notes receivable. Restricted Fund Balance � includes amounts that are restricted for specific purposes stipulated by external resources providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. Committed Fund Balance � includes amounts that can only be used for the specific purposes determined by a formal action of the City�s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City Council taking the same formal action that imposed the constraint originally (for example: resolution and ordinance). Assigned Fund Balance � includes amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by 1) City Council, or 2) a body (a budget, finance committee, or management (City Executive Leadership Team, which consists of City Manager and Executive Department Heads) to which the assigned amounts are to be used for specific purposes. Assigned amounts also include all residual amounts in governmental funds (except negative amounts) other than the General Fund, that are not classified as nonspendable, restricted, or committed. Unassigned Fund Balance � the residual classification for the General Fund and includes all amounts not contained in the other classifications. Governmental funds report residual negative balances as unassigned fund balance. In circumstances where an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted, committed, assigned, and unassigned. In all cases, encumbrance amounts have been assigned for specific purposes for which resources already have been allocated. Fund balances at June 30, 2011, for the governmental funds are nonspendable, restricted, committed, assigned, or unassigned for the following purposes:
69
11. FUND BALANCES FOR GOVERNMENTAL FUNDS, Continued
Housing and
Certificates of Community
Gas Tax Park and Participation Capital Development Redevelopment Major
General Special Recreation Debt Obligation Improvement Block Grant Agency Governmental
Fund Revenue Special Revenue Debt Service Capital Projects Capital Projects Capital Projects Funds
Fund Balances:
Nonspendable:
Loans and Notes Receivable 1,070,114$ -$ -$ -$ -$ 816,398$ 5,737,974$ 7,624,486$
Advance to RDA 5,559,007 - - - - - - 5,559,007
Prepaids 926 - - - - - - 926
Subtotal 6,630,047 - - - - 816,398 5,737,974 13,184,419
Restricted for:
Assets Held for Resale - - - - - - 540,880 540,880
Capital Projects 5,260,641 8,199,850 - - - - - 13,460,491
Debt Service - - - 2,537,020 - - - 2,537,020
Housing & Community Development - - - - - 466,472 - 466,472
Public Protection - - - - - - - -
Transportation & Highways - 13,342,554 - - - - - 13,342,554
Subtotal 5,260,641 21,542,404 - 2,537,020 - 466,472 540,880 30,347,417
Committed to:
Building & Safety 85,839 - - - - - - 85,839
Capital Projects - - - - - - - -
Contingencies 12,000,000 - - - - - - 12,000,000
Jobs Investment 3,256,226 - - - - - - 3,256,226
Other Miscellaneous 19,140 - - - - - - 19,140
Public Art - - - - - - - -
Revenue Enhancement 512,653 - - - - - - 512,653
Subtotal 15,873,858 - - - - - - 15,873,858
Assigned to:
Capital Projects - - 807,000 - 1,736,413 - - 2,543,413
Code Compliance Loans 74,219 - - - - - - 74,219
Downtown Commercial Rehabilitation 493,566 - - - - - - 493,566
Encumbrances 2,327,245 457,187 - - - 97,288 - 2,881,720
Housing Preservation 441,837 - - - - - - 441,837
Investment Portobello 164,933 - - - - - - 164,933
Other Miscellaneous 10,531 - - - - - - 10,531
Park and Recreation - 4,173,569 - - - - 4,173,569
Public Protection 751,459 - - - - - - 751,459
Portobello Assessment - - - - - - - -
Subtotal 4,263,791 457,187 4,980,569 - 1,736,413 97,288 - 11,535,248
Unassigned: - - - - - - (6,821,140) (6,821,140)
Total fund balances 32,028,337$ 21,999,591$ 4,980,569$ 2,537,020$ 1,736,413$ 1,380,158$ (542,286)$ 64,119,802$
Major Funds
Restricted to Future Capital Projects Street resurfacing-Main st-Mills to Telephone Rd. 2,003,780$ Street resurfacing-N. Catalina neighborhood 1,567,044
Cemetery Memorial park improvement 263,867$ ASM - Fairview neighborhood 708,976 Police/Fire emergency generator 96,825 HWY 126 Harmon barranca bike path connection 706,569 HVAC City Hall West 1,096,429 Green street demonstration - S. Catalina 674,588 Marina Park boating docks renovation 295,299 Street resurfacing - 2011 slurry/cape seal 580,791 Marina Park restroom repl & park improvement 339,549 Olivas park drive extension 534,674 City Hall photovoltaic power system 250,000 Traffice signal infrastructure modernization 503,693 Fire station energy efficiency improvements 200,000 Telegraph road - Claremont street traffic signal 329,799 Energy efficiency light replacements 249,994 Left turn lane 5 Points intersection 255,844 City Hall East first floor refurbishment 1,018,462 Access ramps 2009 186,886 Surfers Point improvements 444,186 Bus center & shelters 111,928 Comm park energy savings improvements 1,006,029 California street bridge upgrade 34,979
General Fund CIP Total 5,260,640$ Gas Tax CIP Total 8,199,550$
Community Park Softball Field lights 310,000$ CMP & Drainage infrastructure replacement 100,000$ Transfer to General Fund (Debt Repayment) 150,000 Harbor area public safety facility 380,000 Westside Community Pool 148,000 Beach Water Quality improvements 713,229 Ocean Park/Thompson Connection 199,000 Promenade repair and improvements 543,184
Park and Recreation CIP Total 807,000$ Capital Improvement Capital Projects Total 1,736,413$
Assigned to Future Capital Projects
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11. FUND BALANCES FOR GOVERNMENTAL FUNDS, Continued
Capital Projects
Supplemental Total
Law Downtown Maintenance Street Municipal Other Total
Enforcement Law Public Parking Assessment Lighting Improvement Redevelopment Portobello Governmental Governmental
Services Enforcement Art District District District Revenue Bonds Agency Dredging Funds Funds
-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 7,624,486$
- - 1,181,742 - - - - - - 1,181,742 6,740,749
- - - - - - - - - - 926
- - 1,181,742 - - - - - - 1,181,742 14,366,161
- - - - - - - - - - 540,880
- - - - - - - - - - 13,460,491
- - - - - - 2,417,685 1,382,961 - 3,800,646 6,337,666
- - - - - - - - - - 466,472
20,861 - - - - - - - - 20,861 20,861
- - - - - - - - - - 13,342,554
20,861 - - - - - 2,417,685 1,382,961 - 3,821,507 34,168,924
- - - - - - - - - - 85,839
- - 1,069,866 - - - - - - 1,069,866 1,069,866
- - - - - - - - - - 12,000,000
- - - - - - - - - - 3,256,226
- - - - 223,115 - - - - 223,115 242,255
- - 718,604 - 664,027 - - - - 1,382,631 1,382,631
- - - - - - - - - - 512,653
- - 1,788,470 - 887,142 - - - - 2,675,612 18,549,470
- - - - - - - - - - 2,543,413
- - - - - - - - - - 74,219
- - - - - - - - - - 493,566
- - - - - - - - - - 2,881,720
- - - - - - - - - - 441,837
- - - - - - - - - - 164,933
- 4,351 - - - - - - - 4,351 14,882
- - - - - - - - - - 4,173,569
- 114,790 - - - - - - - 114,790 866,249
- - - - - - - - 1,409,142 1,409,142 1,409,142
- 119,141 - - - - - - 1,409,142 1,528,283 13,063,531
- - - (1,180,834) - (50,605) - - - (1,231,439) (8,052,579)
20,861$ 119,141$ 2,970,212$ (1,180,834)$ 887,142$ (50,605)$ 2,417,685$ 1,382,961$ 1,409,142$ 7,975,705$ 72,095,507$
Special Revenue Debt Service
Committed to Future Capital Projects
Public Art - California street bridge 124,000$ Public Art - Mission Park gateway 87,000 Public Art - Promenade/Surfer's point 17,000 Public Art - Harbor wastewater wetlands phase I 244,000 Public Art - Conservation 20,000 Public Art - Harbor Wastewater wetlands phase II 400,000 Public Art - Wells neighborhood park 60,000 Public Art - Streetscape murals bus shelters phase II 25,000 Public Art - Administration 41,398 Public Art - Municipal art acquisition 28,727 Public Art - Place community arts projects 17,741 Public Art - Community response 5,000
Public Art CIP Total 1,069,866$
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12. SELF-INSURANCE ACCRUED LIABILITIES The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City is self-insured for the first $500,000 in loss for each workers� compensation claim and the first $1,000,000 for each general liability claim and up to $25,000 for property damage claims. The City accounts for and finances its self-insured risks of loss in the Workers� Compensation Fund and Public Liability Fund. Excess insurance is purchased from commercial carriers for each workers� compensation and general liability claim losses in excess of the self-insured retention levels. The outstanding claim liabilities in each of the self-insurance internal service funds are based on independent claims evaluation and also the results of separate actuarial studies and include amounts for claims incurred but not reported. Claims liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. General and workers� compensation liabilities are carried at an actuarially determined rate. It is the City�s practice to obtain full actuarial studies biannually for general liability and workers� compensation coverage. Premiums are charged by the internal service self-insurance funds using various allocation methods that include actual costs, trends in claims experience, claim severity and claims frequency. Revenues of the internal service self-insurance funds are expended to provide adequate resources to allay program administrative costs, preventative measures and to meet liabilities as they become due. Claims and judgments are generally liquidated by the internal service funds. During the past three fiscal (claims) years, none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. The aggregate change in the balance of claims liabilities for the internal service self-insurance funds were as follows:
2011 2010
Unpaid claims, beginning of year $ 8,640,993 $ 7,219,595Incurred claims and changes in estimates 2,820,236 3,641,402 Claim payments (2,721,726) (2,220,004)
Unpaid claims, end of year $ 8,739,503 $ 8,640,993
Current portion $ 2,538,315 $ 2,282,412Noncurrent portion 6,201,188 6,358,581
Total claims and judgements payable $ 8,739,503 $ 8,640,993
June 30
At June 30, 2011, total estimated claims payable were as follows:
General Liability 1,787,214$ Workers' Compensation 6,952,289
Total 8,739,503$
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13. PENSION PLANS 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 percent of their annual salary if a Miscellaneous member, and 9 percent if a Safety member. The employees contribute 2percent of their required contribution and the City pays the remaining required employee contributions for all Miscellaneous employees and Safety employees in the Fire, Police, Police Management and for the Fire Chief and Police Chief (Fire Management Unit employees pay their own 9 percent). The City�s employer required contributions rate for Safety employees was 31.295 percent and Miscellaneous was 10.309 percent for the fiscal year. Annual Pension Cost - Required contributions were determined as part of the June 30, 2008, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included: (a) 7.75 percent investment rate of return (net of administrative expenses), (b) projected salary increases range from 3.55 percent to 14.45 percent for miscellaneous employees and 3.55 percent to 13.15 percent for safety employees depending on age, service, and type of employment, and (c) 2 percent per year cost-of-living adjustments. Both (a) and (b) included an inflation component of 3.0 percent. 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 payrolls on a closed basis. These assumptions are the same that were used in computing the schedule of funding progress below in 2010. The amortization period at June 30, 2010, was 21 years for miscellaneous employees. The amortization period at June 30, 2010, was 29 years for safety employees.
THREE-YEAR TREND INFORMATION FOR PERS
Fiscal Year
Miscellaneous Pension Cost
(APC)
Safety Pension Cost
(APC)
Total Pension Cost
(APC) APC
Contributed Net Pension Obligation
6/30/2009 $2,843,559 $6,318,871 $9,162,430 100% -
6/30/2010 2,771,846 6,356,675 9,128,521 97% $388,095
6/30/2011 2,857,655 6,299,911 9,157,566 100% -
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13. PENSION PLANS, Continued A schedule of funding progress is presented below: Underfunded (Overfunded) Underfunded Actuarial Entry Age (Overfunded) Liability as Actuarial Actuarial Actuarial Actuarial Percentage of Valuation Asset Accrued Accrued Funded Covered Covered Date Value Liability Liability Ratio Payroll Payroll Miscellaneous Employees Group 06/30/10 $171,259,629 $192,586,854 $21,327,225 88.9% $27,786,031 76.8% Safety
Employees Group 06/30/10 190,490,790 258,876,170 68,385,380 73.6% 20,216,386 338.3% The required schedule of funding progress immediately following the Notes to the basic financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 14. JOINT VENTURE TRANSACTIONS South Coast Area Transit The City is a participant in a joint venture agreement with the cities of Port Hueneme, Ojai, Oxnard, and the County of Ventura for investment in a public bus transportation system, South Coast Area Transit (SCAT). As of June 30, 2011, the City held a 31.93 percent interest in SCAT based upon the number of service miles in the City. The City�s net equity in SCAT, accounted for under the equity method, was $8,591,606 or 38.18 percent at June 30, 2011. The City�s share of SCAT�s net operating loss was $975,378 for the fiscal year ended June 30, 2011, and the City�s share of SCAT�s capital grants was $86,305 resulting in a net $889,073 decrease in equity in fiscal year 2011. Complete separate financial statements are available from the SCAT office at 301 East Third Street, Oxnard, CA 93030. 15. COMMITMENTS AND CONTINGENCIES The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City business. City management believes, based upon consultation with the City Attorney, that the case listed below is the only case that could result in a material adverse financial impact on the City. Not withstanding the case below, City management believes that the City�s insurance programs are sufficient to cover any potential losses if an unfavorable outcome materializes from any of the other cases. The City was a named defendant in Wishtoyo Foundation/Ventura Coastkeeper vs. City of Ventura, U.S. District Court Case No.: CV10-02072- K(PJWx). This action seeks declaratory and injunctive relief and civil penalties against the City for alleged unlawful discharge of treated sewage effluent and raw sewage into waters of the United States in violation of the Clean Water Act and Ventura�s NPDES permit. Among the relief requested was an order declaring that Ventura has violated and is in continued violation of the Clean Water Act; enjoining Ventura from discharging raw sewage to waters of the United States; and ordering Ventura to pay civil penalties of up to $32,500 per day per violation for all Clean Water Act
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15. COMMITMENTS AND CONTINGENCIES, Continued violations occurring between January 5, 2005 and January 12, 2009, and up to $37,500 per day per violation for all Clean Water Act violations occurring since January 12, 2009. In August 2011, the City agreed to resolve this case. Analysis is currently underway of the potential remediation costs. However, the City expects that any costs associated with the settlement will be borne by the City�s Wastewater Fund and not the General Fund. The City does not expect that the case will have a material adverse effect on the General Fund or obligations payable from the General Fund, including lease payments. 16. JOBS INVESTMENT FUND During fiscal year 2007-08, the City entered into an agreement with DFJ Frontier Fund as a limited liability partner to invest a total of $3 million in high-tech, start-up companies throughout the state of California, excluding Silicon Valley. The purpose of this venture capital arrangement is to promote economic growth within the State. When these start-up companies sell after maturing, investors will receive a percentage of the equity based upon their investment. Between fiscal year 2008 and 2011, the City expended $1,650,000 of the $3 million set-aside for this purpose. The City has treated this as an expenditure rather than an investment. In addition, the City set aside $1.6 million for the Ventura Jobs Coinvestment Account with DFJ Frontier Fund to invest in high-tech, start-up companies within the City of Ventura. DFJ Frontier has agreed to match the City�s contributions in funding these companies. The City has expended $180,000 of the $1.6 million set aside for this purpose. The City has treated this as an expenditure rather than an investment. There were no expenditures in fiscal year 2010-11 Finally, $682,000 has been expended to establish and provide start-up funding for the Ventura Technology Center incubator. The City displays the money set-aside for the Jobs Investment Fund as committed fund balance within the General Fund (see Note 11). 17. DEFERRED FEES Due to the slowing California economy, the City entered into an agreement, during fiscal year 2007-08, with Working Artists of Ventura (WAV) Apartments Partners (69 units of rental housing restricted to low and very low income households) to defer $1,483,914 in planning and permitting fees. The deferred fees are scheduled to be repaid over 55 years beginning in 2010. Because of the long-term repayment schedule with WAV, no receivable has been recorded for these deferred fees.
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18. RESTATEMENT OF THE FINANCIAL STATEMENTS The accompanying financial statements contain a restatement of net assets and fund balance. The beginning net assets at July 1, 2010 were restated to report a change in interest payable for the CALHFA HELP loan 2008. The beginning net assets reported in the financial statements at July 1, 2010 were restated as follows:
Net AssetsGovernmental
Activities
Ending net assets, June 30, 2010, as previously reported (15,639,504)$ Accrued interest payable adjustment (105,000) Beginning net assets, July 1, 2010, as restated (15,744,504)$
19. DEFICIT FUND BALANCES AND NET ASSETS Below are plans to eliminate deficit fund balances and net assets: Downtown Parking District The deficit of $1,180,834 includes substantial initial start up costs and capital expenditures, and these costs will be covered by future anticipated revenues. Street Lighting District The deficit of $50,605 will be covered by transfers from the General fund. Employee Fringe Benefits The rate of collections for this fund is reviewed and adjusted annually during the budget development. This process will be used to increase rates in future years in order to cover the deficit of $3,734,203 in this fund. Workers� Compensation The rate of collections for this fund is reviewed and adjusted annually during the budget development. This process will be used to increase rates in order to cover the deficit of $153,231 in this fund. Redevelopment Agency Capital Projects The deficit of $542,286 will be covered by future tax increment revenue.
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20. RELATED ORGANIZATIONS The Housing Authority of the City of Ventura�s (Housing Authority) Board of Commissioners is appointed by the Mayor, while the Ventura Port District�s Board of Commissioners is appointed by the City Council. However, these entities do not qualify as component units of the City pursuant to GASB Statements No. 14 and 39 because the City cannot impose its will on these entities and there is no potential for these entities to provide specific financial benefits to, or impose specific financial burdens on, the City. As a result, the Housing Authority and the Ventura Port District are considered as related organizations of the City. 21. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT
AGENCIES On June 29, 2011, the Governor of the State of California signed Assembly Bills 1X 26 and 27 as part of the State�s budget package. Assembly Bill 1X 26 requires each California redevelopment agency to suspend (effective July 1, 2011) nearly all activities except to implement existing contracts, meet already-incurred obligations, preserve its assets and prepare for the impending dissolution of the agency. Assembly Bill 1X 27 provides a means for redevelopment agencies to continue to exist and operate by means of a Voluntary Alternative Redevelopment Program. Under this program, each city would adopt an ordinance agreeing to make certain �community remittance� payments to the County Auditor Controller in fiscal year 2011-12 and annual payments each fiscal year thereafter. Assembly Bill 1X 26 indicates that the city �may use any available funds not otherwise obligated for other uses� to make this community remittance payment. The City of Ventura (�City�) intends to use tax increment allocable to its redevelopment agency for this purpose per Resolution #2011-050 and #RA2011-008. The amounts to be paid after fiscal year 2011-12 have yet to be confirmed by the State Legislature. The League of California Cities and the California Redevelopment Association (CRA) filed a lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the California Supreme Court to overturn Assembly Bills 1X 26 and 27 on the grounds that they violate the California Constitution. On August 11, 2011, the California Supreme Court issued a stay of all of Assembly Bill 1X 27 and most of Assembly Bill 1X 26. The California Supreme Court stated in its order that �the briefing schedule is designed to facilitate oral argument as early as possible in 2011, and a decision before January 15, 2012.� A second order issued by the California Supreme Court on August 17, 2011 indicated that certain provisions of Assembly Bills 1X 26 and 27 were still in effect and not affected by its previous stay, including requirements to file an appeal of the determination of the community remittance payment by August 15, the requirement to adopt an Enforceable Obligations Payment Schedule (�EOPS�) by August 29, 2011, and the requirement to prepare a preliminary draft of the initial Recognized Obligation Payment Schedule (�ROPS�) by September 30, 2011. Because the stay provided by Assembly Bill 1X 26 only affects enforcement, each agency must adopt an EOPS prior to September 30, as required by the statute. Enforceable obligations include bonds, loans and payments required by the federal or State government; legally enforceable payments required in connection with agency employees such as pension payments and unemployment payments, judgments or settlements; legally binding and enforceable agreements or contracts; and contracts or agreements necessary for the continued administration or operation of the agency that are permitted for purposes set forth in AB1X 26. The Agency adopted the EOPS on August 22, 2011. Assembly Bill 1X 26 directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the
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20. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT AGENCIES, Continued
expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by Assembly Bill 1X 26. In the event that Assembly Bill 1X 26 is upheld, the receivable recognized by funds of the City that had previously loaned or advanced funds to the redevelopment agency may become uncollectible with a loss recognized by the advancing funds. Funds of the City may also be impacted by the elimination of reimbursements previously paid to the City by the redevelopment agency for shared administrative services. On August 1, 2011, City Ordinance No. 2011-011 was adopted, indicating that the City will comply with the Voluntary Alternative Redevelopment Program in order to permit the continued existence and operation of the agency, in the event Assembly Bills 1X 26 and/or 27 are upheld as constitutional. The initial payment by the City is estimated to be $1,191,458 with one half due on January 15, 2012 and the other half due May 15, 2012. Thereafter, an estimated $300,920 will be due annually. The amounts to be paid after fiscal year 2011-12 have yet to be confirmed by the state legislature. The semi-annual payments will be due on January 15 and May 15 of each year and would increase or decrease with changes in tax increment. Additionally, an increased amount would be due to schools if any new debt were incurred. Assembly Bill 1X 27 allows a one-year reprieve on the agency�s obligation to contribute 20 percent of tax increment to the low-and-moderate-income housing fund so as to permit the Agency to assemble sufficient funds to make its initial payments. On September 26, 2011, the City and Agency issued resolutions approving and authorizing a conditional agreement for the community remittance payments, and the Agency approved a resolution (#RA2011-009) conditionally reducing its Low and Moderate Income Housing Fund for FY 2011-2012 to accommodate the community remittance payment. Management believes that the Agency will have sufficient funds to pay its obligations as they become due during the fiscal year ending June 30, 2012. The nature and extent of the operation of redevelopment agencies in the State of California beyond that fiscal year are dependent upon the outcome of litigation surrounding the actions of the state. In the event that Assembly Bills 1X 26 and/or 27 are specifically found by the courts to be unconstitutional, there is a possibility that future acts of the California State legislature may create new challenges to the existence and funding of redevelopment agencies. This is based on the California State legislature�s declared intent to eliminate redevelopment agencies and to reduce their funding.
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2011
City of San Buenaventura Required Supplementary Information For the year ended June 30, 2011
1. BUDGETARY INFORMATION Through the budget, the City Council sets the direction of the City, allocates its resources and establishes its priorities. The Annual Budget assures the efficient and effective use of the City's economic resources, as well as establishing that the highest priority objectives are accomplished. The Annual Budget serves the fiscal period July 1 to June 30 and is a vehicle that accurately and openly communicates these priorities to the community, businesses, vendors, employees, and other public agencies. Additionally, it establishes the foundation of effective financial planning by providing resource planning and controls that permit the evaluation and adjustment of the City's performance. The City prepares a one-year budget. The annual budgets are adopted on a basis consistent with generally accepted accounting principles for the General, special revenue, and debt service funds. All annual appropriations expire at the end of the year. Capital projects funds adopt project-length plans. The Finance and Technology Department, working with all operating departments and the City Manager, develops a preliminary budget. On or before May 1 each year, the City Manager transmits the proposed budget to the City Council. The proposed budget includes both the sources and types of funds for the proposed expenditures. The City Council conducts public hearings on the proposed budget prior to June 30. On or before July 1, the budget is adopted and enacted by the City Council. The appropriated budget is prepared by fund, department and division. City department heads may make transfers of appropriations within their department. All transfers between departments require approval of the City Council. The legal level of budgetary control is at the department level for the General Fund and at the fund level for all other governmental funds. Appropriation revisions made during the year ended June 30, 2011, were not significant. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year-end are reported as reservations of fund balances and do not constitute expenditures or liabilities. The commitments will be re-appropriated and honored in the subsequent year.
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City of San Buenaventura Required Supplementary Information For the year ended June 30, 2011
1. BUDGETARY INFORMATION, Continued Following are the budget comparison schedules for the General Fund and all major special revenue funds. Budget Comparison Schedule, General Fund
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 33,401,669$ 33,401,669$ 33,401,669$ -$
Resources (inflows):Taxes 58,589,958 58,589,958 56,877,384 (1,712,574) Licenses and permits 1,069,489 1,069,489 2,103,379 1,033,890 Intergovernmental 8,470,796 10,857,806 9,176,456 (1,681,350) Charges for services 8,334,404 8,297,112 7,604,749 (692,363) Fines and forfeitures 1,968,801 1,968,801 1,634,251 (334,550) Use of money and property 1,843,387 1,801,909 1,486,905 (315,004) Other revenue 2,581,457 2,799,510 2,769,381 (30,129) Transfers from other funds 2,236,743 2,810,866 2,037,691 (773,175) Amount available for appropriations 85,095,035 88,195,451 83,690,196 (4,505,255)
Charges to appropriations (outflows):General government 3,055,601 3,281,812 2,677,327 604,485 Human resources 1,006,014 955,780 758,217 197,563 Finance and technology 7,817,371 7,670,168 7,305,876 364,292 Community development 6,238,083 7,192,698 7,014,408 178,290 Community services 11,923,071 12,113,518 11,217,429 896,089 Public safety - police 27,187,398 27,777,527 27,712,849 64,678 Public safety - fire 14,388,133 14,787,295 14,460,517 326,778 Public works 8,408,802 9,467,756 6,954,028 2,513,728 Capital outlays 248,000 711,003 400,263 310,740 Transfers to other funds 5,139,195 12,411,232 6,562,614 5,848,618
T Total charges to appropriations 85,411,668 96,368,789 85,063,528 11,305,261
Excess of resources over (under)charges for appropriations (316,633) (8,173,338) (1,373,332) 6,800,006
Fund balance, June 30 33,085,036$ 25,228,331$ 32,028,337$ 6,800,006$
Budgeted Amounts
80
City of San Buenaventura Required Supplementary Information For the year ended June 30, 2011
1. BUDGETARY INFORMATION, Continued Budget Comparison Schedule, Gas Tax Special Revenue Fund
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 22,155,086$ 22,155,086$ 22,155,086$ -$
Resources (inflows):Taxes - - 770,890 770,890 Intergovernmental 7,470,063 7,116,669 3,843,665 (3,273,004) Use of money and property 65,731 65,731 181,379 115,648
Other revenue - - 259 259
Transfers from other funds 339,344 398,734 133,306 (265,428) Amount available for appropriations 7,875,138 7,581,134 4,929,499 (2,651,635)
Charges to appropriations (outflows):Capital outlays 11,713,835 18,977,109 4,875,498 14,101,611 Transfers to other funds 961,185 671,969 209,496 462,473
Total charges to appropriations 12,675,020 19,649,078 5,084,994 14,564,084
Excess of resources over (under)charges for appropriations (4,799,882) (12,067,944) (155,495) 11,912,449
Fund balance, June 30 17,355,204$ 10,087,142$ 21,999,591$ 11,912,449$
Budgeted Amounts
81
City of San Buenaventura Required Supplementary Information For the year ended June 30, 2011
1. BUDGETARY INFORMATION, Continued Budget Comparison Schedule, Park and Recreation Special Revenue Fund
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 4,989,511$ 4,989,511$ 4,989,511$ -$
Resources (inflows):Taxes - - 328,053 328,053 Intergovernmental - - - - Use of money and property - - 87,789 87,789
Other revenue 218,965 218,965 2,722 (216,243)
Transfers from other funds - 1,009,709 3,680 (1,006,029) Amount available for appropriations 218,965 1,228,674 422,244 (806,430)
Charges to appropriations (outflows):Current:
Capital outlays 1,308,932 1,486,797 6,186 1,480,611 Transfers to other funds 150,000 425,000 425,000 -
Total charges to appropriations 1,458,932 1,911,797 431,186 1,480,611
Excess of resources over (under)charges for appropriations (1,239,967) (683,123) (8,942) 674,181
Fund balance, June 30 3,749,544$ 4,306,388$ 4,980,569$ 674,181$
Budgeted Amounts
82
City of San Buenaventura Required Supplementary Information For the year ended June 30, 2011
2. SCHEDULE OF FUNDING PROGRESS - DEFINED BENEFIT PENSION PLAN A schedule of funding progress for the most recent years available, four actuarial valuations are presented below.
Underfunded(Overfunded)
Underfunded ActuarialEntry Age (Overfunded) Liability as
Actuarial Actuarial Actuarial Actuarial Percentage ofValuation Asset Accrued Accrued Funded Covered Covered
Date Value Liability Liability Ratio Payroll Payroll
Miscellaneous 06/30/08 157,529,148$ 167,837,616$ 10,308,468$ 93.9% 30,850,606$ 33.4% Employees Group 06/30/09 165,040,339 184,806,501 19,766,162 89.3% 28,935,608 68.3%
06/30/10 171,259,625 192,586,854 21,327,225 88.9% 27,786,031 76.8%
Safety 06/30/08 177,314,177 223,938,241 46,624,064 79.2% 19,855,299 234.8% Employees Group 06/30/09 184,660,390 248,929,746 64,269,356 74.2% 21,898,681 293.5%
06/30/10 190,490,790 258,876,170 68,385,380 73.6% 20,216,386 338.3%
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2011
2011
2011
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualCertificates of Participation Debt Obligation Debt Service FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 1,603,598$ 1,603,598$ 1,603,598$ -$
Resources (inflows):Use of money and property 89,064 89,064 32,575 (56,489)
Other revenue - - 1,066,553 1,066,553 Issuance of certificates of participation - - 20,615,000 20,615,000
Transfers from other funds 4,375,068 4,375,068 4,465,765 90,697
Amount available for appropriation 4,464,132 4,464,132 26,179,893 21,715,761
Charges to appropriations (outflows):Capital outlays 10,000 508,882 505,773 3,109 Principal retirement 2,360,000 10,500,000 10,500,000 - Interest and fiscal charges 2,005,068 2,370,236 2,370,224 12
Payment to refunded bond escrow agent - - 11,728,764 (11,728,764) Transfers to other funds 845,398 1,889,213 141,710 1,747,503
Total charges to appropriations 5,220,466 15,268,331 25,246,471 (9,978,140)
Excess of resources over (under) charges to appropriations (756,334) (10,804,199) 933,422 11,737,621
Fund balance, June 30 847,264$ (9,200,601)$ 2,537,020$ 11,737,621$
Budgeted Amounts
84
2011
2011
2011
City of San BuenaventuraCombining Balance SheetNon-Major Governmental Funds June 30, 2011
SupplementalLaw Downtown Maintenance
Enforcement Law Public Parking AssessmentServices Enforcement Art District District
ASSETS
Assets:Cash and investments -$ 120,989$ 1,790,708$ 3,254$ 891,903$ Restricted cash and investments - - - - - Accounts receivable, net - 408 - 1,833 5,872 Due from others - - - 592 - Due from other governments 20,861 - - - 11,283 Advances to other funds - - 1,181,742 - -
Total assets 20,861$ 121,397$ 2,972,450$ 5,679$ 909,058$
LIABILITIES AND FUND BALANCES
Liabilities:Accounts payable -$ 2,256$ 2,238$ 16,570$ 21,916$ Due to other funds - - - 1,169,935 - Due to other governments - - - 8 -
Total liabilities - 2,256 2,238 1,186,513 21,916
Fund Balances:Nonspendable - - 1,181,742 - - Restricted 20,861 - - - - Committed - - 1,774,470 - 887,142 Assigned - 119,141 14,000 - - Unassigned - - - (1,180,834) -
Total fund balances (deficit) 20,861 119,141 2,970,212 (1,180,834) 887,142
Total liabilities and fund balances 20,861$ 121,397$ 2,972,450$ 5,679$ 909,058$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Special Revenue
85
Special Revenue Capital ProjectsTotal
Street Municipal OtherLighting Improvement Redevelopment Portobello GovernmentalDistrict Revenue Bonds Agency Dredging Funds
12,151$ 743,138$ -$ 1,409,142$ 4,971,285$ - 2,046,370 1,382,905 - 3,429,275
23,272 34 56 - 31,475 - - - - 592
16,327 - - - 48,471 - - - - 1,181,742
51,750$ 2,789,542$ 1,382,961$ 1,409,142$ 9,662,840$
102,355$ -$ -$ -$ 145,335$ - 371,857 - - 1,541,792 - - - - 8
102,355 371,857 - - 1,687,135
- - - - 1,181,742 - 2,417,685 1,382,961 - 3,821,507 - - - - 2,661,612 - - - 1,409,142 1,542,283
(50,605) - - - (1,231,439)
(50,605) 2,417,685 1,382,961 1,409,142 7,975,705
51,750$ 2,789,542$ 1,382,961$ 1,409,142$ 9,662,840$
Debt Service
86
City of San BuenaventuraCombining Statement of Revenues, Expenditures and Changes in Fund BalancesNon-Major Governmental FundsFor the year ended June 30, 2011
SupplementalLaw Downtown Maintenance
Enforcement Law Public Parking AssessmentServices Enforcement Art District District
REVENUES:
Taxes 107,814$ -$ -$ -$ 3,067$ Intergovernmental - 29,991 - - - Charges for services - - - 434,849 675,383 Use of money and property - 1,504 70,300 57,244 11,770 Other revenue - - - - 535
Total revenues 107,814 31,495 70,300 492,093 690,755
EXPENDITURES:
Current:Public works - - - 1,114,728 345,399 Public safety - police 366,452 176,195 - - -
Capital outlays - - 91,788 - - Debt service:
Principal retirement - - - - - Interest and other charges - - - - -
Total expenditures 366,452 176,195 91,788 1,114,728 345,399
REVENUES OVER (UNDER) EXPENDITURES (258,638) (144,700) (21,488) (622,635) 345,356
OTHER FINANCING SOURCES (USES):Transfers in 257,865 131,551 35,488 - - Transfers out - - - - (122,241)
Total other financing sources (uses) 257,865 131,551 35,488 - (122,241)
Net change in fund balances (773) (13,149) 14,000 (622,635) 223,115
FUND BALANCES:
Beginning of year 21,634 132,290 2,956,212 (558,199) 664,027
End of year 20,861$ 119,141$ 2,970,212$ (1,180,834)$ 887,142$
See Independent Auditor's Report and Accompanying Notes to Basic Financial Statements.
Special Revenue
87
Special Revenue Capital ProjectsTotal
Street Municipal OtherLighting Improvement Redevelopment Portobello GovernmentalDistrict Revenue Bonds Agency Dredging Funds
3,276$ -$ -$ -$ 114,157$ - - - - 29,991
868,556 - - - 1,978,788 2,413 28,986 13,559 38,250 224,026
- - - - 535
874,245 28,986 13,559 38,250 2,347,497
1,265,321 - - - 2,725,448 - - - - 542,647 - - - 596 92,384
- 450,000 305,000 - 755,000 - 456,031 873,976 - 1,330,007
1,265,321 906,031 1,178,976 596 5,445,486
(391,076) (877,045) (1,165,417) 37,654 (3,097,989)
404,317 150,000 1,177,626 - 2,156,847 - (657,919) - - (780,160)
404,317 (507,919) 1,177,626 - 1,376,687
13,241 (1,384,964) 12,209 37,654 (1,721,302)
(63,846) 3,802,649 1,370,752 1,371,488 9,697,007
(50,605)$ 2,417,685$ 1,382,961$ 1,409,142$ 7,975,705$
Debt Service
88
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualSupplemental Law Enforcement Services Special Revenue FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 21,634$ 21,634$ 21,634$ -$
Resources (inflows):Taxes 200,000 200,000 107,814 (92,186) Use of money and property 1,682 1,682 - (1,682) Transfer from other funds 252,412 252,412 257,865 5,453
Amount available for appropriation 454,094 454,094 365,679 (88,415)
Charges to appropriations (outflows):Public safety - police 454,094 454,094 366,452 87,642
Total charges to appropriations 454,094 454,094 366,452 87,642
Excess of resources over (under) charges to appropriations - - (773) (773)
Fund balance, June 30 21,634$ 21,634$ 20,861$ (773)$
Budgeted Amounts
89
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualLaw Enforcement Special Revenue FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 132,290$ 132,290$ 132,290$ -$
Resources (inflows):Intergovernmental 50,000 50,000 29,991 (20,009) Use of money and property 26 26 1,504 1,478 Transfers from other funds 100,138 100,138 131,551 31,413
Amount available for appropriation 150,164 150,164 163,046 12,882
Charges to appropriations (outflows):Public safety - police 150,164 210,164 176,195 33,969
Total charges to appropriations 150,164 210,164 176,195 33,969
Excess of resources over (under) charges to appropriations - (60,000) (13,149) 46,851
Fund balance, June 30 132,290$ 72,290$ 119,141$ 46,851$
Budgeted Amounts
90
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualPublic Art Special Revenue FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 2,956,212$ 2,956,212$ 2,956,212$ -$
Resources (inflows):Use of money and property - - 70,300 70,300 Transfers from other funds - 35,488 35,488 -
Amount available for appropriation - 35,488 105,788 70,300
Charges to appropriations (outflows):Capital outlays 631,339 1,097,659 91,788 1,005,871
Total charges to appropriations 631,339 1,097,659 91,788 1,005,871
Excess of resources over (under) charges to appropriations (631,339) (1,062,171) 14,000 1,076,171
Fund balance, June 30 2,324,873$ 1,894,041$ 2,970,212$ 1,076,171$
Budgeted Amounts
91
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualDowntown Parking Special Revenue FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 (558,199)$ (558,199)$ (558,199)$ -$
Resources (inflows):Charges for services 901,230 939,088 434,849 (504,239) Use of money and property - 41,478 57,244 15,766
Amount available for appropriation 901,230 980,566 492,093 (488,473)
Charges to appropriations (outflows):Public works 2,083,035 1,700,264 1,114,728 585,536
Total charges to appropriations 2,083,035 1,700,264 1,114,728 585,536
Excess of resources over (under) charges to appropriations (1,181,805) (719,698) (622,635) 97,063
Fund balance, June 30 (1,740,004)$ (1,277,897)$ (1,180,834)$ 97,063$
Budgeted Amounts
92
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualMaintenance Assessment District Special Revenue FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 664,027$ 664,027$ 664,027$ -$
Resources (inflows):Taxes - - 3,067 3,067 Charges for services 654,114 672,606 675,383 2,777 Use of money and property 1,529 1,529 11,770 10,241 Other revenue - - 535 535
Amount available for appropriation 655,643 674,135 690,755 16,620
Charges to appropriations (outflows):Public works 551,894 551,894 345,399 206,495 Transfers to other funds 103,749 122,241 122,241 -
Total charges to appropriations 655,643 674,135 467,640 206,495
Excess of resources over (under) charges to appropriations - - 223,115 223,115
Fund balance, June 30 664,027$ 664,027$ 887,142$ 223,115$
Budgeted Amounts
93
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualStreet Lighting Special Revenue FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 (63,846)$ (63,846)$ (63,846)$ -$
Resources (inflows):Taxes 10,703 10,703 3,276 (7,427) Charges for services 869,632 869,632 868,556 (1,076) Use of money and property 8,702 8,702 2,413 (6,289) Transfers from other funds 404,317 404,317 404,317 -
Amount available for appropriation 1,293,354 1,293,354 1,278,562 (14,792)
Charges to appropriations (outflows):Public works 1,293,354 1,293,354 1,265,321 28,033
Total charges to appropriations 1,293,354 1,293,354 1,265,321 28,033
Excess of resources over (under) charges to appropriations - - 13,241 13,241
Fund balance, June 30 (63,846)$ (63,846)$ (50,605)$ 13,241$
Budgeted Amounts
94
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualMunicipal Improvement Revenue Bonds Debt Service FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 3,802,649$ 3,802,649$ 3,802,649$ -$
Resources (inflows):Use of money and property 132,269 132,269 28,986 (103,283) Transfers from other funds 150,000 150,000 150,000 -
Amount available for appropriation 282,269 282,269 178,986 (103,283)
Charges to appropriations (outflows):Principal retirement 450,000 450,000 450,000 - Interest and other charges 456,532 456,532 456,031 501 Transfers to other funds 1,591,595 2,012,755 657,919 1,354,836
Total charges to appropriations 2,498,127 2,919,287 1,563,950 1,355,337
Excess of resources over (under) charges to appropriations (2,215,858) (2,637,018) (1,384,964) 1,252,054
Fund balance, June 30 1,586,791$ 1,165,631$ 2,417,685$ 1,252,054$
Budgeted Amounts
95
City of San BuenaventuraSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualRedevelopment Agency Debt Service FundFor the year ended June 30, 2011
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Fund balance, July 1 1,370,752$ 1,370,752$ 1,370,752$ -$
Resources (inflows):Use of money and property - - 13,559 13,559 Transfers from other funds 1,178,976 1,178,976 1,177,626 (1,350)
Amount available for appropriation 1,178,976 1,178,976 1,191,185 12,209
Charges to appropriations (outflows):Principal retirement 305,000 305,000 305,000 - Interest and other charges 873,976 873,976 873,976 -
Total charges to appropriations 1,178,976 1,178,976 1,178,976 -
Excess of resources over (under) charges to appropriations - - 12,209 12,209
Fund balance, June 30 1,370,752$ 1,370,752$ 1,382,961$ 12,209$
Budgeted Amounts
96
2011
2011
City of San BuenaventuraCombining Statement of Net AssetsInternal Service FundsJune 30, 2011
Information Fleet Facilities Digital Technology Maintenance Maintenance Publishing
Current assets:Cash and investments 920,287$ 5,339,430$ 1,751,316$ 149,490$ Accounts receivable, net - 66,879 4,340 199 Due from other funds - - 23,035 - Due from others - 3,642 - - Due from other governments - - 84,513 - Prepaid items 5,500 - - - Notes receivable - - - -
Total current assets 925,787 5,409,951 1,863,204 149,689
Noncurrent assets: Capital assets:
Non Depreciable, net - 11,091 - - Depreciable, net 833,478 6,176,626 493,594 38,213
Total noncurrent assets 833,478 6,187,717 493,594 38,213
Total assets 1,759,265 11,597,668 2,356,798 187,902
Current liabilities:Accounts payable 122,523 249,146 265,528 8,361 Accrued payroll liabilities - - - - Deferred revenue - - 84,513 - Capital leases payble 177,192 - - - Due to other governments 10 12 21 35 Claims and judgments payable - - - - Compensated absences payable - - - - Long term debt - due within one year - - 50,922 -
Total current liabilities 299,725 249,158 400,984 8,396
Noncurrent liabilities:Capital leases payble 177,192 - - - Claims and judgments payable - - - - Compensated absences payable - - - - Long term debt - due in more than one year - - 125,340 -
Total noncurrent liabilities 177,192 - 125,340 -
Total liabilities 476,917 249,158 526,324 8,396
Invested in capital assets, net of related debt 479,094 6,176,626 317,332 38,213 Unrestricted 803,254 5,171,884 1,513,142 141,293
Total net assets 1,282,348$ 11,348,510$ 1,830,474$ 179,506$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
ASSETS
LIABILITIES
NET ASSETS
97
Workers' Employee RiskCompensation Fringe Benefits Management Total
4,817,913$ 2,314,758$ 2,600,367$ 17,893,561$ - 60,869 - 132,287
1,996,413 - - 2,019,448 - 3,075 - 6,717 - - 440,204 524,717 - - - 5,500 - 1,151,345 - 1,151,345
6,814,326 3,530,047 3,040,571 21,733,575
- - - 11,091 - 2,259 11,680 7,555,850
- 2,259 11,680 7,566,941
6,814,326 3,532,306 3,052,251 29,300,516
15,207 551,139 38,225 1,250,129 - 1,603,872 - 1,603,872 - - - 84,513 - - - 177,192
61 212 40 391 2,209,949 - 328,366 2,538,315
- 533,183 - 533,183 - - - 50,922
2,225,217 2,688,406 366,631 6,238,517
- - - 177,192 4,742,340 - 1,458,848 6,201,188
- 4,575,844 - 4,575,844 - - - 125,340
4,742,340 4,575,844 1,458,848 11,079,564
6,967,557 7,264,250 1,825,479 17,318,081
- 2,259 11,680 7,025,204 (153,231) (3,734,203) 1,215,092 4,957,231
(153,231)$ (3,731,944)$ 1,226,772$ 11,982,435$
98
City of San BuenaventuraCombining Statement of Revenues, Expenses and Changes in Fund Net AssetsInternal Service FundsFor the year ended June 30, 2011
Information Fleet Facilities DigitalTechnology Maintenance Maintenance Publishing
OPERATING REVENUES:
Internal service charges 2,020,909$ 4,077,747$ 3,380,419$ 340,245$ Other operating revenues 4,077 37,927 103,043 -
Total operating revenues 2,024,986 4,115,674 3,483,462 340,245
OPERATING EXPENSES:
Salaries and benefits 955,156 808,871 671,684 206,657 Contractual services 377,975 265,916 1,096,008 48,284 Materials and supplies 282,780 1,497,571 251,865 35,960 General and administrative 629,501 196,523 1,066,023 21,045 Insurance premiums and settlements - - - - Depreciation 159,008 1,278,756 37,918 17,592
Total operating expenses 2,404,420 4,047,637 3,123,498 329,538
OPERATING INCOME (LOSS) (379,434) 68,037 359,964 10,707
NONOPERATING REVENUES (EXPENSES):Investment income 1,958 (87,214) (11,312) (1,575) Loss on disposal of assets 139 (55,172) - - Loss on investment - - - - Interest expense - - (10,028) -
Total nonoperating revenues (expenses) 2,097 (142,386) (21,340) (1,575) Income (loss) before transfers (377,337) (74,349) 338,624 9,132
Transfers in 40,000 20,151 34,760 - Transfers out (40,000) - (20,151) -
Change in net assets (377,337) (54,198) 353,233 9,132
NET ASSETS:
Beginning of year 1,659,685 11,402,708 1,477,241 170,374
End of year 1,282,348$ 11,348,510$ 1,830,474$ 179,506$
See Independent Auditor's Report and Accompanying Notes to Basic Financial Statements.
99
Workers' Employee RiskCompensation Fringe Benefits Management Total
1,002,225$ 6,340,309$ 1,501,332$ 18,663,186$ 58,883 12,080 19,834 235,844
1,061,108 6,352,389 1,521,166 18,899,030
108,652 789,588 190,579 3,731,187 320,011 94,395 81,959 2,284,548
29,434 - 32 2,097,642 319,565 93,176 (117,403) 2,208,430
2,209,949 5,208,546 1,162,585 8,581,080 - 602 1,674 1,495,550
2,987,611 6,186,307 1,319,426 20,398,437
(1,926,503) 166,082 201,740 (1,499,407)
51,746 123,433 39,569 116,605 99 - - (54,934)
- (43,000) - (43,000) - - - (10,028)
51,845 80,433 39,569 8,643 (1,874,658) 246,515 241,309 (1,490,764)
- - - 94,911 (8,000) - - (68,151)
(1,882,658) 246,515 241,309 (1,464,004)
1,729,427 (3,978,459) 985,463 13,446,439
(153,231)$ (3,731,944)$ 1,226,772$ 11,982,435$
100
City of San BuenaventuraCombining Statement of Cash FlowsInternal Service FundsFor the year ended June 30, 2011
Information Fleet FacilitiesTechnology Maintenance Maintenance
CASH FLOWS FROM OPERATING ACTIVITIES:Cash received from customers/other funds 2,023,469$ 4,037,567$ 3,271,839$ Cash payments to suppliers for goods and services (1,319,353) (1,699,482) (2,284,867) Cash payments for interfund services (19,596) (110,813) (105,018) Cash payments to employees for services (955,156) (808,871) (671,684) Insurance premiums and settlements - - - Other operating revenues 4,077 37,927 187,556
Net cash provided (used) by operating activities (266,559) 1,456,328 397,826
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Employee housing loans made - - - Payment of employee housing loans - - - Transfers to other funds (40,000) - (20,151) Transfers from other funds 40,000 20,151 34,760
Net cash provided (used) by noncapital - 20,151 14,609 financing activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Purchase of capital assets - (480,103) - Payment of Long-Term Debt (95,836) Proceeds from sale of assets 138 63,803 Repayment of capital leases (177,192) - -
Net cash (used) by capital and related financing activities (177,054) (416,300) (95,836)
CASH FLOWS FROM INVESTING ACTIVITIES:Investment income Gain (loss) 1,958 (87,214) (11,312)
Net cash provided (used) by investing activities 1,958 (87,214) (11,312)
Net increase (decrease) in cash and cash equivalents (441,655) 972,965 305,287
CASH AND INVESTMENTS:Beginning of year 1,361,942 4,366,465 1,446,029 End of year 920,287$ 5,339,430$ 1,751,316$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NETCASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating income (loss) (379,434)$ 68,037$ 359,964$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:
Depreciation 159,008 1,278,756 37,918 Changes in assets and liabilities:
Accounts receivable 2,560 (41,071) (2,947) Due from other funds - - (21,555) Due from others - 891 435 Due from other governments - - (84,513) Prepaid items 6,600 - - Accounts payable (55,297) 149,995 24,022 Accrued payroll liabilities - - - Deferred Revenue - - 84,513 Claims and judgments payable - - - Compensated absences payable - - - Due to other Gov't 4 (280) (11)
Total adjustments 112,875 1,388,291 37,862 Net cash provided (used) by operating activities (266,559)$ 1,456,328$ 397,826$
Noncash financing activities:Employee housing loans written off -$ -$ -$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
101
Digital Workers' Employee RiskPublishing Compensation Fringe Benefits Management Total
340,756$ 1,202,225$ 6,405,843$ 1,663,841$ 18,945,539$ (86,653) (599,752) 5,054,394 67,930 (867,782) (20,480) (64,282) (5,222,879) (15,654) (5,558,722)
(206,657) (108,652) (789,588) (190,579) (3,731,187) - (2,048,281) (6,711,203) (1,225,743) (9,985,227) - 58,883 12,080 19,834 320,357
26,966 (1,559,859) (1,251,353) 319,629 (877,022)
- - (16,729) - (16,729) - - 117,163 - 117,163 - (8,000) - - (68,151) - - - - 94,911 - (8,000) 100,434 - 127,194
(28,300) - - - (508,403) - - - - (95,836) - 99 - - 64,040 - - - - (177,192)
(28,300) 99 - - (717,391)
(1,575) 51,746 80,433 39,569 73,605 (1,575) 51,746 80,433 39,569 73,605
(2,909) (1,516,014) (1,070,486) 359,198 (1,393,614)
152,399 6,333,927 3,342,244 2,241,169 19,244,175 149,490$ 4,817,913$ 2,271,758$ 2,600,367$ 17,850,561$
10,707$ (1,926,503)$ 166,082$ 201,740$ (1,499,407)$
17,592 - 602 1,674 1,495,550
511 - 65,453 - 24,506 - 200,000 - - 178,445 - - (2,875) - (1,549) - - 2,956 162,509 80,952 - - - - 6,600
(1,853) 4,915 18,994 16,875 157,651 - - (1,694,686) - (1,694,686) - - - - 84,513 - 161,668 - (63,158) 98,510 - - 192,029 - 192,029 9 61 92 (11) (136)
16,259 366,644 (1,417,435) 117,889 622,385 26,966$ (1,559,859)$ (1,251,353)$ 319,629$ (877,022)$
-$ -$ 43,000$ -$ 43,000$
102
2011
2011
City of San BuenaventuraCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2011
Ventura OxnardPortobello Property Based Camarillo Tourism
Assessment Improvement Business Improvement District District District Totals
ASSETS
Cash and investments -$ 1,281$ -$ 1,281$ Accounts receivable 83,225 29,829 - 113,054 Due from others - 2,018 19,935 21,953
83,225$ 33,128$ 19,935$ 136,288$
LIABILITIES
Due to others 83,225$ -$ -$ 83,225$ Deposits held for others - 33,128 19,935 53,063
83,225$ 33,128$ 19,935$ 136,288$
See Independent Auditor's Report and Accompanying Notes to Basic Financial Statements.
Agency Funds
103
City of San BuenaventuraCombining Statement of Changes in Assets and LiabilitiesFiduciary FundsFor the year ended June 30, 2011
Balance BalanceJuly 1, 2010 Additions Deductions June 30, 2011
Assets:Cash and investments 26,246$ -$ 26,246$ -$ Accounts receivable - 83,225 - 83,225
26,246$ 83,225$ 26,246$ 83,225$
Liabilities:
Due to others 26,246$ 83,225$ 26,246$ 83,225$ 26,246$ 83,225$ 26,246$ 83,225$
Assets:Cash and investments -$ 1,281$ -$ 1,281$ Accounts receivable 25,247 29,829 25,247 29,829 Due from others - 2,018 - 2,018
25,247$ 33,128$ 25,247$ 33,128$
Liabilities:Deposits held for others 25,247$ 33,128$ 25,247$ 33,128$
Assets:Due from others -$ 19,935$ -$ 19,935$
-$ 19,935$ -$ 19,935$
Liabilities:Deposits held for others -$ 19,935$ -$ 19,935$
-$ 19,935$ -$ 19,935$
Assets:Cash and investments 26,246$ 1,281$ 26,246$ 1,281$ Accounts receivable 25,247 113,054 25,247 113,054 Due from others - 21,953 - 21,953
Total Assets 51,493$ 136,288$ 51,493$ 136,288$
Liabilities: Due to others 26,246$ 83,225$ 26,246$ 83,225$
Deposits held for others 25,247 53,063 25,247 53,063
Total Liabilities 51,493$ 136,288$ 51,493$ 136,288$
See Independent Auditor's Report and accompanying notes to the basic financial statements.
Portobello Assessment District
Totals - All Agency Funds
Property Based Improvement District
Ventura Oxnard Camarillo Tourism Business Improvement District
104
2011
City of San Buenaventura Index to the Statistical Section For the year ended June 30, 2011
STATISTICAL SECTION Page 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.
A. Net Assets by Component � Last Nine Fiscal Years ..................................................................... 107
B. Changes in Net Assets � Last Nine Fiscal Years ............................................................................ 109
C. Fund Balances of Governmental Funds � Last Nine Fiscal Years ............................................... 113
D. Changes in Fund Balances of Governmental Funds � Last Nine Fiscal Years .......................... 115
Revenue Capacity
These schedules contain information to help the reader assess the government�s most significant local revenue
source, the property tax.
A. Assessed Value and Estimated Actual Value of Taxable Property � Last Ten Fiscal Years .... 117
B. Direct and Overlapping Property Tax Rates � Last Ten Fiscal Years ......................................... 118
C. Principal Property Taxpayers � Current Year and Ten Years Ago ............................................. 120
D. Property Tax Levies and Collections � Last Ten Fiscal Years ...................................................... 121
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.
A. Ratios of Outstanding Debt by Type � Last Ten Fiscal Years ...................................................... 122
B. Direct and Overlapping Debt � June 30, 2011 ................................................................................ 124
C. Legal Debt Margin Information � Last Ten Fiscal Years .............................................................. 125
D. Pledged Wastewater Revenue Coverage � Last Ten Fiscal Years ............................................... 126
E. Pledged Water Revenue Coverage � Last Ten Fiscal Years .......................................................... 127
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment
within the government�s financial activities take place.
A. Demographic and Economic Statistics � Last Ten Calendar Years ............................................. 128
B. Full-Time City Employees by Function � Last Ten Fiscal Years .................................................. 129
C. Principal Employers � Current Year and Ten Years Ago ............................................................. 130
D. Investment Portfolio Statistics � Last Ten Fiscal Years ................................................................ 131
105
City of San Buenaventura Index to the Statistical Section For the year ended June 30, 2011
Operating Information
These schedules contain service and infrastructure data to help the reader understand how information in the
government�s financial report relates to the services the government provides and the activities it performs.
A. Operating Indicators by Function � Last Ten Fiscal Years ........................................................... 132
B. Capital Assets Statistics by Function � Last Ten Fiscal Years ...................................................... 133
C. Wastewater Service Rates � Last Ten Fiscal Years ........................................................................ 134
D. Wastewater Customers � Current Year and Eight Years Ago ..................................................... 135
E. Water Sold by Type of Customer � Last Ten Fiscal Years ............................................................ 136
F. Water Rates � Last Ten Fiscal Years ................................................................................................. 137
G. Water Customers � Current Year and Eight Years Ago ............................................................... 138
Annual Continuing Disclosure Requirements
On November 10, 1994, the Securities and Exchange Commission adopted a regulation requiring annual
disclosure for most municipal securities issued on and after July 3, 1995. The schedules in this section
contain the Annual Continuing Disclosure Requirements for all outstanding obligations issued since that
time. The specific requirements are identified in each of the financing documents specific to each outstanding
issue.
A. Public Facilities Financing Authority � Summary of Certificates of Participation .................. 139
B. 2002 COP, Series D � Buenaventura and Olivas Links Historic Operating Results ................ 140
C. 2004 COP, Wastewater Revenue � Historic Operating Results .................................................. 142
D. 2004 COP, Wastewater Revenue � Historic Usage, Connections, and Flow Charges ............. 143
E. 2004 COP, Wastewater Revenue � Top Ten Customers .............................................................. 144
F. 2004 COP, Water Revenue � Historic Operating Results ............................................................ 145
G. 2004 COP, Water Revenue � Historic and Projected Water Supply. .......................................... 146
H. 2004 COP, Water Revenue � Historic Service Charges and Sales Revenues ............................ 147
I. 2004 COP, Water Revenue � Top Ten Customers ......................................................................... 148
J. 2004 COPs, Water and Wastewater � Utility Rates ...................................................................... 149
K. Employee Relations and Collective Bargaining ............................................................................ 150
106
2011
City of San BuenaventuraNet Assets by ComponentLast Nine Fiscal Years(accrual basis of accounting)
2011 2010 2009Governmental activities: Invested in capital assets, net of related debt 77,321,482$ 75,888,305$ 74,354,906$ Restricted 34,753,149 35,392,720 39,856,243 Unrestricted 49,188,852 54,178,778 56,553,682 Total governmental activities net assets 161,263,483 165,459,803 170,764,831
Business-type activities: Invested in capital assets, net of related debt 141,883,333 135,783,591 129,877,532 Restricted 31,501,671 36,598,184 26,051,636 Unrestricted 18,251,002 46,699,760 60,072,866 Total business-type activities net assets 191,636,006 219,081,535 216,002,034
Primary government: Invested in capital assets, net of related debt 219,204,815 211,671,896 204,232,438 Restricted 66,254,820 71,990,904 65,907,879 Unrestricted 67,439,854 100,878,538 116,626,548 Total primary government net assets 352,899,489$ 384,541,338$ 386,766,865$
Source: The Comprehensive Annual Financial Report.
Fiscal Year
107
2008 2007 2006 2005 2004 2003
80,359,775$ 72,471,553$ 61,243,588$ 50,801,739$ 34,465,491$ 25,439,081$ 38,634,489 43,023,154 37,975,503 42,284,534 54,603,313 69,157,207 60,090,236 62,093,970 72,493,990 68,406,238 69,085,204 61,914,134
179,084,500 177,588,677 171,713,081 161,492,511 158,154,008 156,510,422
128,436,041 127,477,656 111,965,178 102,241,593 42,586,428 58,294,483 58,901,995 58,695,479 61,527,419 67,471,175 27,709,014 15,195,286 28,380,491 28,607,819 33,995,113 26,305,567 113,413,435 102,739,490
215,718,527 214,780,954 207,487,710 196,018,335 183,708,877 176,229,259
208,795,816 199,949,209 173,208,766 153,043,332 77,051,919 83,733,564 97,536,484 101,718,633 99,502,922 109,755,709 82,312,327 84,352,493 88,470,727 90,701,789 106,489,103 94,711,805 182,498,639 164,653,624
394,803,027$ 392,369,631$ 379,200,791$ 357,510,846$ 341,862,885$ 332,739,681$
Fiscal Year
108
City of San BuenaventuraChanges in Net AssetsLast Nine Fiscal Years(accrual basis of accounting)
2011 2010 2009 2008Expenses: Governmental activities: General government 2,938,785$ 4,057,019$ 5,384,838$ 8,326,371$ Human resources 757,721 998,303 2,104,947 816,553 Finance and Technology 8,974,168 7,211,920 7,784,466 5,707,691 Community development 9,784,289 8,061,820 6,671,042 8,294,180 Community services 12,857,684 7,662,891 7,593,435 7,913,144 Public safety - police 29,709,223 30,974,131 31,303,086 28,193,355 Public safety - fire 15,218,015 19,261,764 19,799,105 18,632,555 Public works 17,150,786 21,904,812 20,250,029 20,915,867 Depreciation expense - - - - Interest on long term debt 5,057,876 3,804,449 3,996,201 8,984,125 Total governmental activities expenses 102,448,547 103,937,109 104,887,149 107,783,841
Business-type activities: Wastewater 17,091,823 15,095,598 16,135,143 15,511,917 Water 20,940,661 20,196,960 21,685,740 20,433,068 Golf course 4,737,086 4,735,269 4,732,020 5,623,585 Paramedic services - - - - Total business-type activities expenses 42,769,570 40,027,827 42,552,903 41,568,570
Total primary government expenses 145,218,117 143,964,936 147,440,052 149,352,411
Program revenues: Governmental activities: Charges for services: General government 952,233 837,862 864,588 976,334 Human resources 132,793 132,913 147,832 143,389 Finance and Technology 1,725,803 1,886,441 2,002,324 1,833,833 Community development 1,048,606 783,815 946,668 1,116,341 Community services 2,693,611 2,464,904 2,422,566 2,497,263 Public safety - police 2,742,998 2,914,190 4,388,325 2,731,049 Public safety - fire 3,311,170 2,695,415 3,237,931 3,363,936 Public Works 2,146,823 2,377,214 3,082,181 3,117,158 Operating grants and contributions 10,589,500 12,243,054 11,703,876 12,396,400 Capital grants and contributions 1,475,426 1,713,185 825,577 2,847,047 Total governmental activities program revenues 26,818,963 28,048,993 29,621,868 31,022,750
Business-type activities: Charges for services: Sewer and sanitation 16,326,078 16,978,451 16,015,727 16,068,806 Water 20,946,374 21,828,283 21,283,447 20,710,539 Golf course 4,465,557 4,620,035 4,805,842 4,942,555 Paramedic services - - - - Operating grants and contributions - 16,467 21,433 32,284 Total business-type activities program revenues 41,738,009 43,443,236 42,126,449 41,754,184
Total primary government program revenues 68,556,972 71,492,229 71,748,317 72,776,934
Net revenues (expenses): Governmental activities: (75,629,584) (75,888,116) (75,265,281) (76,761,091) Business-type activities: (1,031,561) 3,415,409 (426,454) 185,614 Total net revenues (expenses): (76,661,145)$ (72,472,707)$ (75,691,735)$ (76,575,477)$
Fiscal Year
109
2007 2006 2005 2004 2003
8,886,145$ 7,363,125$ 6,328,043$ 4,483,013$ 2,440,653$ 3,301,372 1,794,494 2,432,266 1,918,203 901,052 4,491,565 4,214,527 4,406,547 4,299,847 5,269,505 7,441,301 5,843,104 4,195,179 4,581,043 4,596,322 6,342,292 5,914,499 7,670,919 4,324,879 5,281,398
27,092,687 26,149,759 24,818,010 23,340,765 21,459,057 16,325,884 15,259,270 15,090,774 14,285,426 12,799,179 14,143,598 16,523,873 17,314,971 23,212,404 20,451,528
- - - - 5,347,724 4,158,887 4,348,870 4,142,812 4,138,041 5,780,698
92,183,731 87,411,521 86,399,521 84,583,621 84,327,116
13,513,120 11,348,681 11,087,744 10,230,723 11,053,245 16,959,117 15,400,319 14,909,543 12,644,461 13,674,156
4,631,771 3,379,722 2,197,409 2,817,574 849,715 262,033 266,570 186,185 169,527 232,667
35,366,041 30,395,292 28,380,881 25,862,285 25,809,783
127,549,772 117,806,813 114,780,402 110,445,906 110,136,899
2,299,623 462,378 1,068,960 402,116 410,111 135,020 144,571 132,194 127,726 124,711
1,334,412 1,114,838 966,173 1,425,317 1,414,906 965,890 911,326 585,546 822,509 672,508
2,622,700 2,196,637 1,703,281 1,745,879 1,835,602 2,607,633 2,416,250 2,479,415 2,155,053 2,119,463 3,423,109 3,302,653 2,943,316 2,584,789 2,022,572 2,727,787 2,449,364 2,695,192 2,933,850 3,197,619
11,424,010 13,773,429 12,862,868 14,185,310 13,151,737 2,827,598 1,445,341 2,278,540 178,520 112,223
30,367,782 28,216,787 27,715,485 26,561,069 25,061,452
15,460,227 14,144,570 14,042,047 13,430,212 12,677,123 20,533,851 17,838,573 17,642,997 16,924,727 16,103,697
3,088,836 3,201,831 2,764,339 3,380,562 1,492,267 513,823 450,002 321,190 192,384 193,253
16,079 - - - - 39,612,816 35,634,976 34,770,573 33,927,885 30,466,340
69,980,598 63,851,763 62,486,058 60,488,954 55,527,792
(61,815,949) (59,194,734) (58,684,036) (58,022,552) (59,265,664) 4,246,775 5,239,684 6,389,692 8,065,600 4,656,557
(57,569,174)$ (53,955,050)$ (52,294,344)$ (49,956,952)$ (54,609,107)$
Fiscal Year
110
City of San BuenaventuraChanges in Net AssetsLast Nine Fiscal Years, Continued(accrual basis of accounting)
2011 2010 2009 2008
General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes 23,498,798$ 21,562,198$ 21,207,266$ 23,783,852$ Sales taxes 19,171,669 19,629,415 20,132,921 22,613,278 Utility users taxes 8,774,360 8,719,232 9,019,829 8,796,097 Transient occupancy taxes 3,435,953 3,468,286 3,707,592 4,078,171 Franchise taxes 3,278,467 2,984,316 3,713,057 2,770,318 Other taxes 2,075,351 2,165,157 2,125,750 2,752,235 Grants & contributions not restricted to specific programs - - - - Motor vehicle license - intergovernmental unrestricted 8,342,441 8,194,617 8,480,754 8,308,227 Investment earnings (loss) 1,136,757 1,859,859 (3,332,065) 3,329,387 Gain (loss) on sale of assets - - (78,105) 2,960 Other general revenues 514 113 206 885 Transfers 1,823,954 1,999,895 1,968,407 1,038,110 Total govermental activities 71,538,264 70,583,088 66,945,612 77,473,520
Business-type activities: Investment income 301,096 1,663,987 2,678,368 2,573,463 Gain on sale of assets - - - - Transfers (1,823,954) (1,999,895) (1,968,407) (1,038,110) Total business-type activities (1,522,858) (335,908) 709,961 1,535,353
Total primary government 70,015,406 70,247,180 67,655,573 79,008,873
Changes in net assets Governmental activities: (4,091,320) (5,305,028) (8,319,669) 712,429 Business-type activities: (2,554,419) 3,079,501 283,507 1,720,967 Total primary government (6,645,739)$ (2,225,527)$ (8,036,162)$ 2,433,396$
Source: The Comprehensive Annual Financial Report.
Fiscal Year
111
2007 2006 2005 2004 2003
22,182,764$ 20,216,123$ 18,800,820$ 16,732,650$ 15,240,502$ 21,336,603 24,447,868 21,413,725 20,407,600 19,714,453
- - - - - - - - - - - - - - -
18,118,646 17,556,734 16,107,077 15,288,753 14,452,401 - - - - 34,342
7,887,568 7,697,659 7,909,188 4,770,850 5,922,778 3,976,243 2,568,014 2,330,922 1,266,955 2,931,952
969 914,131 28,567 142,835 19,562 2,580 62,058 135,399 47,720 42,090
86,987 (4,047,284) (4,703,159) 1,008,775 - 73,592,360 69,415,303 62,022,539 59,666,138 58,358,080
3,133,456 2,182,407 1,216,607 422,793 1,393,503 - - - - 1,920
(86,987) 4,047,284 4,703,159 (1,008,775) - 3,046,469 6,229,691 5,919,766 (585,982) 1,395,423
76,638,829 75,644,994 67,942,305 59,080,156 59,753,503
11,776,411 10,220,569 3,338,503 1,643,586 (907,584) 7,293,244 11,469,375 12,309,458 7,479,618 6,051,980
19,069,655$ 21,689,944$ 15,647,961$ 9,123,204$ 5,144,396$
Fiscal Year
112
City of San BuenaventuraFund Balances of Governmental FundsLast Nine Fiscal Years(modified accrual basis of accounting)
2011 2010 2009 2008General fund:
Nonspendable 6,630,047$ 6,888,290$ -$ -$ Restricted 5,260,641 613,989 - - Committed 15,873,858 16,304,014 - - Assigned 4,263,791 3,341,324 - - Unassigned - 6,254,052 - - Reserved - - 9,856,595 17,975,245
Unreserved, designated - - 19,002,989 19,925,883 Unreserved, undesignated - - 4,374,390 199,613
Total general fund 32,028,337$ 33,401,669$ 33,233,974$ 38,100,741$
All other governmental funds:Nonspendable 7,736,114$ 1,894,668$ -$ -$ Restricted 28,908,283 34,416,429 - - Committed 2,758,900 2,548,364 - - Assigned 8,716,452 10,935,174 - - Unassigned (8,052,579) (8,268,260) - -
Reserved - - 15,653,881 16,213,150 Unreserved, designated Reported in special revenue funds - - 6,134,572 22,025,619 Reported in capital project funds - - 1,350,390 6,126,887 Unreserved, undesignated: Reported in special revenue funds - - 20,890,119 6,429,326 Reported in capital project funds - - 2,811,406 (10,210,981)
Total all other governmental funds 40,067,170$ 41,526,375$ 46,840,368$ 40,584,001$
The City of Ventura implemented GASB 54 for the fiscal year ended June 30, 2010.
Source: The Comprehensive Annual Financial Report.
Fiscal Year
113
2007 2006 2005 2004 2003
-$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - -
18,783,034 18,837,506 17,352,143 17,004,738 17,859,686 24,013,323 24,763,519 28,907,664 26,009,715 32,025,719
17,316 3,965,697 2,386,387 4,085,445 174,963
42,813,673$ 47,566,722$ 48,646,194$ 47,099,898$ 50,060,368$
-$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - -
15,000,171 19,812,878 25,881,240 35,734,823 44,459,376
17,575,235 11,956,497 15,385,351 20,801,758 22,981,747 6,277,234 8,591,515 6,128,690 8,643,217 9,504,999
12,443,532 13,971,840 9,416,759 7,741,802 7,751,988 (8,769,673) (11,026,685) (8,498,950) (8,998,681) (8,683,767)
42,526,499$ 43,306,045$ 48,313,090$ 63,922,919$ 76,014,343$
Fiscal Year
114
City of San BuenaventuraChanges in Fund Balances of Governmental FundsLast Nine Fiscal Years(modified basis of accounting)
2011 2010 2009 2008Revenues: Taxes 61,612,097$ 60,192,659$ 63,653,856$ 66,216,070$ Licenses and permits 2,103,379 1,466,512 1,004,297 1,429,502 Intergovernmental 15,812,765 15,410,869 14,533,194 17,710,064 Charges for services 9,844,162 9,324,261 11,869,844 9,896,330 Fines and forfeitures 1,634,251 1,867,339 2,226,912 1,945,958 Use of money and property 2,311,668 3,311,893 5,432,453 6,071,537 Other revenues 3,074,872 2,678,112 3,016,857 4,303,991 Total revenues 96,393,194 94,251,645 101,737,413 107,573,452
Expenditures: Current: General government 2,677,327 3,291,986 4,701,884 7,698,414 Human resources 758,217 958,777 1,952,090 1,923,705 Finance and Technology 7,305,876 6,364,935 6,499,052 4,741,342 Community development 7,014,408 3,632,431 4,432,927 7,302,655 Community services 11,217,429 6,473,828 6,608,893 6,612,536 Public safety - police 28,255,496 27,887,580 30,576,837 29,429,286 Public safety - fire 14,460,517 17,478,861 19,398,973 18,391,152 Public works 9,679,476 15,529,183 16,967,429 17,223,138 Capital outlays 13,774,000 12,621,513 11,156,906 18,305,935 Debt service: Principal retirement 11,255,000 3,235,000 2,845,000 4,573,857 Debt issuance cost 492,589 - - - Interest and other charges 4,085,379 3,962,293 3,787,781 9,048,333 Total expenditures 110,975,714 101,436,387 108,927,772 125,250,353
Revenues over (under) expenditures (14,582,520) (7,184,742) (7,190,359) (17,676,901)
Other financing sources (uses): Issuance of certificates of participation 20,615,000 - - - Premium on issuance of debt 1,066,553 - - - Payment to refunded bond escrow agent (11,728,764) - - - Proceeds from long-term debt - - 8,785,000 9,413,899 Loss on investments - - (4,943,206) - Transfers in 10,664,454 11,493,910 20,335,387 11,892,935 Transfers out (8,867,260) (9,455,466) (15,597,222) (10,798,959) Total other financing sources (uses) 11,749,983 2,038,444 8,579,959 10,507,875
Net change in fund balances (2,832,537)$ (5,146,298)$ 1,389,600$ (7,169,026)$
Debt service as a percentage of noncapital expenditures 14.6% 7.6% 6.5% 12.3%
Source: The Comprehensive Annual Financial Report.
Fiscal Year
115
2007 2006 2005 2004 2003
66,434,879$ 63,438,858$ 59,388,852$ 55,517,938$ 52,312,822$ 1,880,019 1,780,881 1,579,719 1,337,911 1,124,381
16,011,106 14,339,327 15,485,211 10,541,690 13,496,819 8,987,034 9,029,969 7,287,355 7,736,141 7,073,747 1,865,739 1,802,109 1,820,848 1,734,950 1,568,361 6,395,623 6,152,912 4,127,490 3,355,993 5,065,327 4,420,729 3,257,395 4,844,575 3,672,874 2,733,981
105,995,129 99,801,451 94,534,050 83,897,497 83,375,438
8,276,104 6,707,261 5,706,403 3,964,093 2,458,220 1,867,800 2,597,156 2,402,167 2,163,885 2,365,650 4,357,976 4,039,047 4,308,317 4,117,355 5,674,665 4,284,899 3,249,855 3,360,216 2,953,387 2,942,465 6,066,137 5,780,510 5,825,207 5,575,664 5,195,320
27,504,321 27,560,257 26,243,467 24,352,859 21,698,793 16,505,456 15,816,543 15,828,561 14,878,097 12,913,181 15,494,191 14,638,986 13,964,871 13,205,851 12,636,440 18,894,966 14,167,948 21,175,816 22,230,168 14,605,554
2,885,689 2,864,960 2,748,074 2,371,232 21,221,361 - - - - -
4,199,188 4,382,321 4,174,214 4,130,575 5,013,445 110,336,727 101,804,844 105,737,313 99,943,166 106,725,094
(4,341,598) (2,003,393) (11,203,263) (16,045,669) (23,349,656)
- - - - - - - - - - - - - - - - - - - 43,695,000 - - - - -
18,084,380 10,686,822 16,914,994 13,465,071 31,800,410 (19,275,377) (14,769,946) (19,775,264) (12,471,296) (31,800,410)
(1,190,997) (4,083,124) (2,860,270) 993,775 43,695,000
(5,532,595)$ (6,086,517)$ (14,063,533)$ (15,051,894)$ 20,345,344$
8.4% 9.0% 8.9% 9.1% 39.8%
Fiscal Year
116
City of San BuenaventuraAssessed Value and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years(in thousands of dollars)
Fiscal Year Taxable Taxable TotalEnded Assessed Less: Assessed Direct Tax June 30 Local Secured Utility Unsecured Value Secured Unsecured Exemptions Value Rate
2002 6,687,434$ 3,626$ 579,842$ 7,270,902$ 192,306$ 25,963$ (630)$ 217,639$ 0.0197%
2003 7,273,077 5,594 580,029 7,858,700 209,337 27,155 (630) 235,862 0.0221%
2004 7,970,154 1,207 474,987 8,446,348 234,799 24,575 (707) 258,667 0.0192%
2005 8,685,289 1,363 510,098 9,196,750 267,968 23,193 (795) 290,366 0.0171%
2006 9,576,759 1,207 546,406 10,124,372 301,493 25,722 (805) 326,410 0.0161%
2007 10,631,830 1,078 571,736 11,204,644 333,500 26,320 (790) 359,030 0.0136%
2008 11,475,209 659 596,099 12,071,967 371,109 35,375 (809) 405,674 0.0127%
2009 11,919,084 659 591,251 12,510,994 395,229 28,207 (790) 422,646 0.0137%
2010 11,530,310 659 613,347 12,144,316 404,241 21,334 (770) 424,805 0.0142%
2011 11,539,817 439 553,851 12,094,107 395,003 20,491 (720) 414,774 0.0136%
Note: Data is stated at 100% of actual value as required under Section 135 of the Revenue and Tax Code. Exemptions are netted directly against the city property categories.
Source: Ventura County Auditor-Controller's Office
City Redevelopment Agency
117
2011
City of San BuenaventuraDirect and Overlapping Property Tax RatesLast Ten Fiscal Years(Rate per $100 of assessed value)
2011 2010
City Direct Rates: City Basic Rate 0.0136$ 0.0142$ Redevelopment Agency 0.0004 0.0004
Total City Direct Rate 0.0140 0.0146
Overlapping Rates: Ventura County Community College District 0.1242 0.1246 Ventura Unified School District 0.8118 0.8370 Oxnard Union High School District 0.0001 0.0001 Mesa Union School District 0.0022 0.0023 Oxnard School District 0.0002 0.0002 Rio School District 0.0001 0.0001 City of San Buenaventura 1915 Act Bonds 1.0000 1.0000 Ventura County General Fund Obligations 0.1242 0.1246 Ventura County Pension Obligations 0.0000 0.0000 Ventura County Superintendent of Schools Certificates of Participation 0.1242 0.1246 Ventura County Library Authority 0.0000 0.0000 Ventura County Community College District Certificates of Participation 0.0000 0.0000 Ventura Unified School District Certificates of Participation 0.8118 0.8370 Oxnard Union High School District Certificates of Participation 0.0001 0.0002 Oxnard School District Certificates of Participation 0.0002 0.0002 Rio School District Certificates of Participation 0.0001 0.0001 City of San Buenaventura General Fund Obligations 1.0000 1.0000
Total Direct Rate 4.0132$ 4.0655$
Source: California Municipal Statistics, Inc.
118
2009 2008 2007 2006 2005 2004 2003 2002
0.0137$ 0.0127$ 0.0136$ 0.0161$ 0.0171$ 0.0192$ 0.0221$ 0.0197$ 0.0004 0.0003 0.0003 0.0004 0.0004 0.0004 0.0004 0.0004
0.0140 0.0130 0.0140 0.0165 0.0175 0.0196 0.0225 0.0200
0.1252 0.1242 0.1242 0.1246 0.1245 0.1252 0.1255 0.00000.8363 0.8479 0.8448 0.8449 0.8435 0.8528 0.8507 0.84930.0001 0.0001 0.0002 0.0002 0.0002 0.0002 0.0002 0.00030.0023 0.0020 0.0021 0.0022 0.0024 0.0027 0.0000 0.00000.0002 0.0002 0.0003 0.0028 0.0004 0.0005 0.0005 0.00080.0000 0.0000 0.0001 0.0001 0.0001 0.0001 0.0001 0.00011.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00000.1252 0.1242 0.1241 0.1246 0.1245 0.1252 0.1254 0.12520.0000 0.0000 0.1241 0.1246 0.1245 0.1252 0.1254 0.12520.1252 0.1242 0.1241 0.1246 0.1245 0.1252 0.0000 0.12520.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.20370.0000 0.0000 0.0000 0.0000 0.1245 0.1252 0.1255 0.12530.8363 0.8479 0.8448 0.8449 0.8435 0.8528 0.8507 0.84930.0001 0.0001 0.0002 0.0002 0.0002 0.0002 0.0002 0.00030.0002 0.0002 0.0003 0.0003 0.0004 0.0005 0.0005 0.00080.0000 0.0000 0.0001 0.0001 0.0001 0.0001 0.0001 0.00011.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
4.0652$ 4.0842$ 4.2031$ 4.2104$ 4.3308$ 4.3554$ 4.2274$ 4.4258$
119
City of San BuenaventuraPrincipal Property TaxpayersCurrent Year and Ten Years Ago
Taxable Percent of Total Taxable Percent of TotalAssessed City Taxable Assessed City Taxable
Taxpayer Value (1) Assessed Value (2) Value (3) Assessed Value (4)
ASN Ventura LLC 135,976,600$ 1.18% -$ **
Community Memorial Hospital 89,137,951 0.77% 56,658,228 0.92%
Macerich Buenaventura, LTD 81,812,609 0.71% 72,684,591 1.19%
Jefferson at Pelican Point 59,313,000 0.51% ** **
Ventura Pines Associates, LLC 41,579,500 0.36% 20,498,359 0.33%
MBL Golf Course, LLC 30,442,999 0.26% ** **
Ventura Beach Ventures LLC 28,419,915 0.25% ** **
Center Promenade, LLC 28,250,000 0.24% ** **
Poinsettia Plaza, LLC 27,124,190 0.24% ** **
Newport Beach North LLC 26,010,300 0.23% ** **
Archstone Communities Trust ** ** 30,230,947 0.49%
Program 87A Ltd. ** ** 25,764,841 0.42%
County Center Ltd. ** ** 24,845,366 0.41%
May Department Stores Co. ** ** 23,948,784 0.39%
Telephone & Main Assoc. LLC. ** ** 22,956,000 0.37%
Sears Roebuck & Co. ** ** 16,879,470 0.28%
Koussay Okko ** ** 16,269,000 0.27%
412,090,464$ 3.57% 310,735,586$ 5.07%
(1) Source: Ventura County Assessor's Office(2) 2010-11 Local Secured Assessed Valuation: $11,539,816,985
(3) Source: Ventura County Assessor's Office(4) 2000-01 Local Secured Assessed Valuation: $6,131,887,597
** Data not available
2011 2001
120
City of San Buenaventura
Fiscal Year Taxes Levied Collections in Total Collections To-Date Ended for the Percent Subsequent PercentJune 30 Fiscal Year (1) Amount of Levy Years (2) Amount (2) of Levy
2002 12,491,663$ 12,114,098$ 96.98% 38,967$ 12,153,065$ 97.29%
2003 13,607,563 13,353,034 98.13% 57,854 13,410,888 98.55%
2004 14,679,933 14,549,118 99.11% 55,629 14,604,747 99.49%
2005 16,188,791 16,103,883 99.48% 39,942 16,143,825 99.72%
2006 17,598,566 17,226,875 97.89% 46,130 17,273,005 98.15%
2007 19,687,798 18,946,723 96.24% 59,258 19,005,981 96.54%
2008 20,806,443 19,969,645 95.98% 92,015 20,061,660 96.42%
2009 21,360,643 20,751,346 97.15% 174,888 20,926,234 97.97%
2010 20,369,228 17,640,817 86.61% 171,406 17,812,223 87.45%
2011 20,255,387 19,794,163 97.72% 103,915 19,898,078 98.24%
Source: (1) Ventura County Assessor's Office (2) Finance and Technology Department, City of San Buenaventura
Fiscal Year of Levy
Property Tax Levies and CollectionsLast Ten Fiscal Years
Collected within the
121
City of San Buenaventura
Fiscal Year Tax Total Wastewater WaterEnded Certificates of Allocation Governmental Revenue RevenueJune 30 Participation Bonds Loans Activities Bonds Bonds
2002 39,250,000$ -$ 8,449,886$ 47,699,886$ 7,602,671$ 13,535,000$
2003 54,355,000 8,000,000 7,963,812 70,318,812 7,186,696 13,085,000
2004 52,635,000 8,000,000 7,312,580 67,947,580 6,750,721 26,871,342
2005 50,760,000 7,795,000 6,852,506 65,407,506 24,569,447 26,023,027
2006 48,825,000 7,555,000 6,151,224 62,531,224 24,019,430 25,549,712
2007 46,830,000 7,310,000 5,806,898 59,946,898 23,444,413 25,056,399
2008 55,780,000 7,060,000 1,922,830 64,762,830 22,859,395 24,548,084
2009 53,190,000 15,590,000 1,844,206 70,624,206 22,254,376 24,029,771
2010 50,500,000 15,045,000 1,762,069 67,307,069 21,634,359 23,491,458
2011 49,055,000 14,740,000 1,676,262 65,471,262 20,989,341 22,933,142
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
** Data not available
Source: The Comprehensive Annual Financial Report.
Governmental Activities
Ratios of Outstanding Debt by TypeLast Ten Fiscal Years
Business-Type Activities
122
Safe Total Total Percentage DebtDrinking Business-Type Primary of Personal Per
Water Loan Activities Government Income Capita
-$ 21,137,671$ 68,837,557$ 2.26% 669
- 20,271,696 90,590,508 ** **
- 33,622,063 101,569,643 3.46% 966
- 50,592,474 115,999,980 3.84% 1099
13,156,599 62,725,741 125,256,965 4.10% 1194
20,000,000 68,500,812 128,447,710 4.04% 1213
19,209,485 66,616,964 131,379,794 3.88% 1235
18,399,964 64,684,111 135,308,317 4.07% 1286
17,987,933 63,113,750 130,420,819 3.64% 1186
17,149,042 61,071,525 126,542,787 3.53% 1151
Business-Type Activities
123
City of San BuenaventuraDirect and Overlapping DebtJune 30, 2011
2010-11 Assessed Valuation: 12,094,107,122$ Redevelopment Incremental Valuation: 330,375,182 Adjusted Assessed Valuation: 11,763,731,940$
Total Debt Percentage City's Share of6/30/2011 Applicable (1) Debt 6/30/2011
OVERLAPPING TAX AND ASSESSMENT DEBT Ventura County Community College District 314,522,814$ 12.420% 39,063,733$ Ventura Unified School District 67,275,000 81.180% 54,613,845 Oxnard Union High School District 92,889,913 0.014% 13,005 Mesa Union School District 7,695,000 0.223% 17,160 Oxnard School District 118,733,139 0.019% 22,559 Rio School District 15,653,540 0.013% 2,035 City of San Buenaventura 1915 Act Bonds 200,000 100.000% 200,000
Total Overlapping Tax and Assessment Debt 93,932,337
DIRECT AND OVERLAPPING GENERAL FUND DEBT: Ventura County General Fund Obligations 101,290,000$ 12.416% 12,576,166$ Ventura County Superintendent of Schools Certificates of Participation 12,140,000 12.416% 1,507,302 Ventura Unified School District Certificates of Participation 3,840,000 81.180% 3,117,312 Oxnard Union High School District Certificates of Participation 9,280,000 0.014% 1,299 Oxnard School District Certificates of Participation 5,285,900 0.019% 1,004 Rio School District Certificates of Participation 7,930,000 0.013% 1,031 City of San Buenaventura General Fund Obligations 48,925,000 100.000% 48,925,000
Total Direct and Overlapping General Fund Debt 66,129,114
Combined Total Debt 160,061,451$ (2)
(1) Percentage of overlapping agency's assessed valuation located within the boundaries of the city.(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
Source: California Municipal Statistics, Inc.
124
City of San BuenaventuraLegal Debt Margin InformationLast Ten Fiscal Years
(1)Total Net Debt Total Debt Applicable to Applicable to
Fiscal Year (2) Adjusted Limit:General the Limit as aEnded Assessed Conversion Assessed Debt Limit Obligation Legal Percentage ofJune 30 Valuation Precentage Valuation Percentage Debt Limit Bonds Debt Margin Debt Limit
2002 8,078,385,165$ 25% 2,019,596,291$ 15% 302,939,444$ -$ 302,939,444$ 0%
2003 8,817,820,626 25% 2,204,455,157 15% 330,668,273 - 330,668,273 0%
2004 9,579,866,892 25% 2,394,966,723 15% 359,245,008 - 359,245,008 0%
2005 10,514,075,917 25% 2,628,518,979 15% 394,277,847 - 394,277,847 0%
2006 11,616,549,581 25% 2,904,137,395 15% 435,620,609 - 435,620,609 0%
2007 11,204,644,465 25% 2,801,161,116 15% 420,174,167 - 420,174,167 0%
2008 12,071,967,113 25% 3,017,991,778 15% 452,698,767 - 452,698,767 0%
2009 12,510,994,901 25% 3,127,748,725 15% 469,162,309 - 469,162,309 0%
2010 12,144,316,207 25% 3,036,079,052 15% 455,411,858 - 455,411,858 0%
2011 12,094,107,122 25% 3,023,526,781 15% 453,529,017 - 453,529,017 0%
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. Each parcel is 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 bythe State of California for local governments located within the state.
Source: (1) Finance and Technology Department, City of San Buenaventura (2) Ventura County Tax Assessor's Office
125
City of San Buenaventura
Fiscal Year Less Net Ended Operating Operating Available TaxJune 30 Revenue Expenses Revenue Principal Interest Coverage Increment Principal Interest Coverage
2002 11,162,654$ 7,884,657$ 3,277,997$ 430,000$ 416,553$ 3.87 1,229,838$ -$ -$ -
2003 12,677,123 9,184,042 3,493,081 450,000 396,343 4.13 1,636,510 - - -
2004 13,430,212 8,563,847 4,866,365 470,000 408,768 5.54 1,935,314 - 173,519 11.15
2005 14,042,047 8,725,668 5,316,379 495,000 1,042,147 3.46 2,463,949 205,000 279,332 5.09
2006 14,144,570 9,882,656 4,261,914 625,000 1,108,375 2.46 2,686,766 240,000 274,882 5.22
2007 15,460,227 12,425,787 3,034,440 650,000 1,092,750 1.74 2,988,728 245,000 270,032 5.80
2008 16,068,806 14,440,917 1,627,889 660,000 1,076,500 0.94 3,527,287 250,000 265,082 6.85
2009 16,015,727 13,598,741 2,416,986 680,000 1,060,000 1.39 3,584,809 255,000 334,702 6.08
2010 16,978,451 14,062,948 2,915,503 695,000 1,039,599 1.68 3,558,045 545,000 877,126 2.50
2011 16,326,078 16,081,472 244,606 720,000 1,018,750 0.14 3,408,602 305,000 864,977 2.91
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation expenses.
Source: Finance and Technology Department, City of San Buenaventura
Last Ten Fiscal YearsPledged Wastewater and Tax Allocation Revenue Coverage
Debt Service
Wastewater Fund Revenue Bonds
Debt Service
Governmental Tax Allocation Bonds
126
City of San Buenaventura
Fiscal Year Less Net Ended Operating Operating AvailableJune 30 Revenue Expenses Revenue Principal Interest Coverage
2002 16,174,010$ 11,210,864$ 4,963,146$ 770,000$ 667,448$ 3.45
2003 16,494,638 11,437,328 5,057,310 450,000 628,343 4.69
2004 17,640,075 11,015,003 6,625,072 880,000 1,202,325 3.18
2005 17,642,997 13,561,877 4,081,120 880,000 1,347,666 1.83
2006 17,838,573 14,176,287 3,662,286 505,000 1,181,550 2.17
2007 20,549,930 15,418,196 5,131,734 525,000 1,166,100 3.03
2008 20,742,823 18,804,452 1,938,371 540,000 1,151,475 1.15
2009 21,304,880 18,946,447 2,358,433 550,000 1,136,475 1.40
2010 21,844,750 18,638,004 3,206,746 570,000 1,118,963 1.90
2011 20,946,374 19,421,019 1,525,355 590,000 1,099,375 0.90
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation expenses.
Source: Finance and Technology Department, City of San Buenaventura
Last Ten Fiscal YearsPledged Water Revenue Coverage
Debt Service
Water Fund Revenue Bonds
127
City of San BuenaventuraDemographic and Economic StatisticsLast Ten Calendar Years
Per CapitaCalendar Personal Income Personal Unemployment
Year Population (1) (in thousands) Income (1) Rate (2)
2002 102,938 3,041,200$ 29,544$ 4.5%
2003 ** ** ** 4.8%
2004 105,145 2,938,698 27,949 5.8%
2005 105,558 3,016,953 28,581 5.2%
2006 104,912 3,056,401 29,133 4.8%
2007 105,919 3,178,417 30,008 4.3%
2008 106,360 3,385,439 31,830 5.2%
2009 105,226 3,325,036 31,599 5.2%
2010 109,946 3,586,988 32,625 9.0%
2011 (3) 109,946 3,586,988 32,625 9.8%
(1) Source: Ventura City Economic Outlook by the UCSB Economic Forecast Project(2) Source: State Employment Development Department(3) For fiscal year 2011, the Population data and Per Capita Personal Income was from prior year since the Economic Outlook by UCSB is no longer available.
** Data not abailable for fiscal year 2003
128
City of San BuenaventuraFull-time City Employeesby FunctionLast Ten Fiscal Years
Function 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
General Government 14 18 26 25 25 23 17 17 17 17
Human resources 13 13 13 13 13 13 12 11 12 10
Finance and Technology 46 46 48 51 51 51 50 50 51 49
Community Development 47 29 34 35 35 34 34 30 30 30
Parks, Recreation & Community Partnerships 62 32 32 33 32 32 37 36 36 36
Public safety - police 161 172 185 181 176 179 184 182 183 193
Public safety - fire 74 104 112 111 108 106 105 103 102 101
Public Works 178 218 227 224 218 224 229 228 227 227
Total 595 632 676 673 657 660 667 657 657 662
Source: City Budget Office
Adopted Full-Time (FTE) Employees as of June 30th
129
City of San BuenaventuraPrincipal EmployersCurrent Year and Ten Years Ago
Percent of Percent ofNumber of Total Number of Total
Employer (1) Employees Employment (2) Employees Employment (3)
County of Ventura 7,991 35.29% 7,500 **
Ventura County Health Care Agency 2,493 11.01% 1,820 **
Ventura Unified School District 1,916 8.46% 2,342 **
Ventura County Community College 1,913 8.45% 2,000 **
Community Memorial Healthy System 1,881 8.31% 1,440 **
Argon St Inc 990 4.37% ** **
City of San Buenaventura 595 2.74% 650 **
Employer's Depot Inc. 550 2.43% ** **
Meditech Healthy Services Inc. 400 1.77% ** **
Judicial Council of California 370 1.63% ** **
(1) Principal employers are located within City limits. (2) "Total Employment" as used above represents the total employment of all employers located within City limits.(3) 2011 data shown is as prior year due to the UCSB Economic Forecast is no longer available.
Source: Ventura City Economic Outlook by the UCSB Economic Forecast Project
2011 2001
130
City of San BuenaventuraInvestment Portfolio StatisticsLast Ten Fiscal Years
Year ended Average Average Effective Average Average EffectiveJune 30 Portfolio Rate of Return Portfolio Rate of Return
2002 143,093,161$ 4.40% 15,385,789$ 4.08%
2003 145,180,617 3.15% 32,710,919 3.00%
2004 140,789,775 2.61% 42,722,911 2.54%
2005 137,034,504 2.56% 53,012,582 2.62%
2006 138,953,579 3.30% 52,508,444 2.91%
2007 141,555,410 4.11% 37,076,372 3.90%
2008 140,351,262 4.63% 30,318,080 3.85%
2009 135,394,186 3.62% 26,498,280 3.70%
2010 134,577,573 2.09% 21,328,504 1.74%
2011 121,893,067 1.61% 29,625,916 0.63%
Source: Finance and Technology Department, City of San Buenaventura
City Trustee - Debt Financing Reserves
131
City of San BuenaventuraOperating Indicatorsby FunctionLast Ten Fiscal Years
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Police: Arrests (number of persons) 5,473 5,751 6,009 5,772 5,633 5,400 5,314 5,483 4,750 ** Parking citations issued 10,304 12,830 12,768 12,981 12,597 9,690 13,478 10,624 7,480 9,196
Fire: Number of emergency calls 11,506 11,662 11,607 11,343 10,655 9,990 9,986 9,213 9,167 9,020 Inspections 11,151 14,807 15,638 17,999 21,697 25,083 25,440 20,209 20,518 11,699
Public works: Street resurfacing (lane miles) 91 26 63 60 36 45 109 51 94 71
Parks and recreation: Number of recreation courses 1,438 1,434 1,163 1,481 1,449 1,631 1,308 1,193 1,366 1,284 Number of facility rentals per event 521 987 1,259 1,312 1,282 1,255 947 19 26 24 Number of park rental reservations per attendees (in thousands) 298 315 537 537 777 1,256 1,445 585 ** **
Water: Total system connections 30,311 30,289 30,279 30,222 30,199 29,929 29,420 29,420 29,420 29,591 Average daily consumption (million gallons per day) 12.2 13.1 13.9 15.0 15.9 14.1 15.2 14.8 15.1 14.7
Wastewater: Total system connections 25,197 25,178 25,163 25,131 25,115 24,865 24,475 24,475 24,475 24,317 Average daily sewage treatment (million gallons per day) 8.8 8.8 8.6 8.5 9.4 9.4 9.3 9.4 9.1 9.1
Golf courses: Buenaventura golf rounds played 66,569 68,522 65,254 67,895 77,507 77,650 65,929 23,086 (1) 78,637 81,227 Olivas Park golf rounds played 59,879 65,387 61,422 54,078 11,670 - (2) 57,656 88,902 81,602 84,383
(1) Buenaventura Golf Course was closed for renovation from May 16, 2004 to March 17, 2005. (2) Olivas Park Golf Course was closed for renovation from October 2005 to May 17, 2007.
** Data not available due to system conversion.
Source: City of Ventura
Fiscal Years
132
City of San BuenaventuraCapital Assets Statisticsby FunctionLast Ten Fiscal Years
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Police: Station 1 1 1 1 1 1 1 1 1 1
Fire: Fire stations 6 6 6 6 6 6 6 6 6 6
Public works: Street (miles) 297 297 297 294 294 294 294 294 294 294 Streetlights 1,058 1,058 1,058 1,058 1,058 1,058 1,058 1,058 1,058 1,050 Traffic signals 133 133 133 132 132 132 132 132 132 129
Parks and recreation: Parks 33 33 33 33 33 33 26 26 26 26 Community centers 4 4 4 3 3 3 3 3 3 3
Water: Water mains (miles) 380 380 380 500 500 500 500 400 400 400 Maximum daily capacity (million gallons per day) 30 30 30 30 30 30 30 30 30 30
Wastewater: Sanitary sewers (miles) 290 290 290 475 475 475 475 475 475 475 Storm sewers (miles) 100 100 100 310 310 310 310 310 310 310 Maximum daily treatment capacity (million gallons per day) 14 14 14 14 14 14 14 14 14 14
Golf course: Municipal golf courses 2 2 2 2 2 2 2 2 2 2
Source: City of Ventura
Fiscal Years
133
City of San BuenaventuraWastewater Service RatesLast Ten Fiscal Years
Fiscal (1)Year Ended Tier Tier Tier Tier Tier Tier Non-
June 30 1 2 3 4 5 6 Residential
2002 20.95$ 25.70$ 30.44$ 35.18$ 39.93$ 44.67$ 13.46$
2003 23.67 29.04 34.40 39.76 45.12 50.48 15.20
2004 24.14 29.62 35.09 40.56 46.02 51.49 17.63
2005 25.11 30.81 36.49 42.18 47.86 53.55 16.12
2006 26.49 32.50 38.50 44.50 50.49 56.50 17.01
2007 27.55 33.80 40.04 46.28 52.51 58.76 17.70
2008 30.00 36.98 43.78 50.57 57.36 64.16 13.95
2009 32.04 39.50 46.75 54.01 61.26 68.52 14.90
2010 34.27 42.24 50.00 57.76 65.51 73.27 16.07
2011 34.27 42.24 50.00 57.76 65.51 73.27 16.07
NOTE:1 HCF = 748 gallonsThe City bills bi-monthly and by hundred cubic feet (HCF).Rates are based on 3/4" meter, which is the standard household meter size.The tier structure is in place to encourage wastewater conservation by customers.
(1) Commercial Group 1 (1-8 HCF)
Source: Ventura Water Division
Wastewater Volume Rates Per Hundred Cubic Feet (HCF)Residential
134
City of San BuenaventuraWastewater CustomersCurrent Year and Eight Years Ago
Percent of Total Percent of TotalWastewater Customers Wastewater Wastewater Wastewater Wastewater
Based on Revenue Revenues Revenues Revenues Revenues
Community Memorial Hospital 123,956$ 0.76% 129,276$ 1.02%
Jefferson At Ventura APTs 120,300 0.74% ** **
Ventura County 118,046 0.72% 56,772 0.45%
CPM Peppertree HOA 109,944 0.67% 70,452 0.56%
Crown Plaza VTA 104,412 0.64% 51,984 0.41%
Buenaventura Gardens HOA 97,730 0.60% ** **
Archstone Smith 94,800 0.58% ** **
Saticoy Lemon 94,678 0.58% ** **
Ventura Pines 88,065 0.54% ** **
Ventura Community College 86,556 0.53% ** **
1,038,487$ 6.36% 308,484$ 2.44%
(1) 2003 was the earliest year this data was available.
Source: Ventura Water Division
** Data not available
2003 (1)2011
135
City of San BuenaventuraWater Sold by Type of CustomerLast Ten Fiscal Years(in Hundred Cubic Feet)
Fiscal Year Total DirectEnded Rate perJune 30 Residential Commercial Industrial Municipal Other Total HCF HCF
2002 4,684,036 1,575,168 104,660 152,269 673,707 7,189,840 1.99$
2003 4,712,158 1,593,584 128,434 212,437 739,117 7,385,730 2.05
2004 4,757,729 1,602,611 101,379 188,047 900,914 7,550,680 2.17
2005 4,800,912 1,701,385 70,985 178,051 968,369 7,719,702 2.15
2006 4,510,956 1,508,515 63,691 201,674 797,963 7,082,799 2.40
2007 5,157,275 1,676,746 83,423 251,689 849,979 8,019,112 2.40
2008 4,918,824 1,584,420 73,926 270,013 772,258 7,619,441 2.67
2009 4,688,698 1,518,433 50,373 262,832 423,340 6,943,676 3.07
2010 4,507,579 1,358,768 27,980 215,015 386,140 6,495,482 3.36
2011 4,330,911 1,326,449 29,763 194,651 208,416 6,090,190 3.44
Note:1 HCF (hundred cubic feet) = 748 gallons
Source: Ventura Water Division
HCF by Type of Customer
136
City of San BuenaventuraWater RatesLast Ten Fiscal Years
Fiscal Bi-Monthly Single Family Single Family Single FamilyYear Service HCF 1-16 HCF 17-42 HCF 43+
Ended Charge Multiple Family Multiple Family Multiple Family Non-ResidentialJune 30 Base Rate HCF 1-10 HCF 11-24 HCF 25+
2002 7.97$ 1.29$ 1.72$ 2.75$ 1.72$
2003 8.69 1.41 1.87 3.00 1.87
2004 8.69 1.41 1.87 3.00 1.87
2005 9.40 1.53 2.02 3.24 2.02
2006 9.82 1.60 2.11 3.39 2.11
2007 10.22 1.67 2.20 3.53 2.20
2008 11.14 1.82 2.40 3.85 2.40
2009 12.94 1.91 2.52 4.04 2.52
2010 15.03 2.02 2.66 4.27 2.66
2011 15.03 2.02 2.66 4.27 2.66
NOTE:1 HCF = 748 gallonsThe City bills bi-monthly and by hundred cubic feet (HCF).Rates are based on 3/4" meter, which is the standard household meter size.The tier structure is in place to encourage water conservation by customers.
Source: Ventura Water Division
Residential
Water Volume Rates Per Hundred Cubic Feet (HCF)
137
City of San BuenaventuraWater CustomersCurrent Year and Eight Years Ago
Percent of Percent of Water Customers Water Total Water Water Total Water
Based on Revenue Revenues Revenues Revenues Revenues
Aera Energy LLC 255,582$ 1.22% $ ** **
Dairy Farmers of America 232,842 1.11% ** **
Calif. Mushroom Farm 134,091 0.64% 127,235 0.79%
Community Memorial Hospital 129,006 0.62% ** **
Ventura County 125,178 0.60% ** **
Harris Water Conditioning 96,283 0.46% ** **
Ventura County Medical Center 88,771 0.42% 55,876 0.35%
Peppertree HOA 83,569 0.40% 69,340 0.43%
Jefferson At Ventura Apts 76,065 0.36% ** **
USA Petrochem 61,782 0.29% ** **
1,283,169$ 6.13% 252,451$ 1.57%
(1) 2003 was the earliest year this data was available
Source: Ventura Water Division
** Data not available
2003 (1)2011
138
City of San BuenaventuraAnnual Continuing Disclosure RequirementsSummary of All Certificates of ParticipationsFor the year ended June 30, 2011
San Buenaventura Public Facilities Financing Authority Summary of All Issues:
Amount Outstanding General Fund
6,585,000$ 2001 Certificates of Participation, Series C, $16,345,000
1,455,000 2002 Refunding Certificates of Participation, Series B, $19,765,000
10,685,000 2002 Refunding Certificates of Participation, Series D, $15,930,000
9,715,000 2007 Refunding Certificates of Participation, Series E, $11,420,000
20,615,000 2010 Refunding Certificates of Participation, Series F, $20,615,000
Wastewater Fund
21,045,000$ 2004 Revenue Certificates of Participation, $25,075,000
Water Fund
23,250,000$ 2004 Revenue Certificates of Participation, $27,410,000
· No significant or material events to report for the above financings.
Source: Finance and Technology Department, City of San Buenaventura
139
City of San BuenaventuraAnnual Continuing Disclosure RequirementsSan Buenaventura Public Facilities Financing AuthorityFor the year ended June 30, 2011
2011 2010 2009 2008 2007 2006Operating Revenues:
Charges for Services:Greens Fees - Buena 1,450,336$ 1,473,052$ 1,474,056$ 1,614,122$ 1,811,017$ 1,715,579$ Electric Carts - Buena 370,734 315,580 360,710 407,240 442,144 421,151 Coffee Shop - Buena 116,000 116,000 116,000 116,870 92,136 60,239 Pro Shop - Buena 105,639 92,449 134,820 161,431 191,987 182,654
Greens Fees - Olivas (3) 1,604,167 1,765,304 1,754,540 1,829,224 402,278 469,294 Driving Range - Olivas 241,410 147,431 82,778 120,533 39,193 60,594 Electric Carts - Olivas 297,487 286,570 320,583 339,162 79,611 125,559 Coffee Shop - Olivas 53 45,381 22,097 100,878 1,024 105,658 Pro Shop - Olivas 132,577 272,548 324,495 253,094 21,440 61,103
Total charges for services 4,318,403 4,514,315 4,590,079 4,942,555 3,080,829 3,201,831
Other Operating Revenues 147,154 105,720 215,763 - - -
Total Operating Revenues 4,465,557 4,620,035 4,805,842 4,942,555 3,080,829 3,201,831
Operating Expenses:Personal Services 173,382 196,927 202,617 168,445 202,040 189,322 Contractual Services (1) 3,284,732 3,381,398 3,234,707 4,143,377 3,444,301 2,820,708 Materials & Supplies 22,893 6,769 25,302 4,199 625 2,398 General & Administrative 342,445 226,510 339,063 366,507 604,377 236,925 Depreciation 913,634 917,206 917,443 917,621 370,732 130,369
Total Operating Expenses 4,737,086 4,728,810 4,719,132 5,600,149 4,622,075 3,379,722
Operating Income (Loss) (271,529) (108,775) 86,710 (657,593) (1,541,246) (177,891)
Non-Operating Revenues (Expenses):
Interest Income (2) - - - 10,452 126,331 88,854 Interest Expense - (6,459) (12,888) (23,436) (9,696) - Gain on Sale of Assets - - - - 8,007 - Total Non-Operating Revenues (Expenses): - (6,459) (12,888) (12,985) 124,642 88,854
Net Income (Loss) (271,529)$ (115,234)$ 73,822$ (670,578)$ (1,416,604)$ (89,037)$
Notes:(1) Fiscal year 2002 includes $335,836 in preliminary golf course renovation design.(2) Interest income includes unrealized gain (loss) on investments.(3) Olivas Park Golf Course was closed for renovation from October 2005 to May 2007.
Source: The Comprehensive Annual Financial Report.
Actuals
Buenaventura & Olivas Links Golf Courses$15,930,000 2002 Certificates of Participation, Series D
Ten-Year Historic Operating ResultsFiscal Year Ended June 30
140
2005 2004 2003 2002
554,290$ 806,148$ 490,485$ 506,195$ 54,358 218,737 135,399 137,278 13,624 38,751 54,772 55,268 17,753 71,549 - -
1,179,281 1,290,011 565,499 586,017 233,536 212,288 89,216 88,472 310,371 336,533 138,553 148,825 262,851 262,522 18,343 22,601 138,276 144,023 - -
2,764,338 3,380,562 1,492,267 1,544,656
- - - -
2,764,338 3,380,562 1,492,267 1,544,656
143,794 177,652 167,161 172,740 1,669,598 2,202,983 236,471 591,890
348 344 329 583 304,033 373,100 371,379 391,471
79,636 63,495 74,375 56,841
2,197,409 2,817,574 849,715 1,213,525
566,929 562,988 642,552 331,131
111,149 53,461 184,467 296,288 - - - - - - - -
111,149 53,461 184,467 296,288
678,078$ 616,449$ 827,019$ 627,419$
Actuals
141
City of San Buenaventura Annual Continuing Disclosure Requirements, ContinuedWastewater Fund - $25,075,000-2004 Wastewater Revenue Certificates of ParticipationFor the year ended June 30, 2011
2011 2010 2009 2008 2007 2006 2005 2004 2003REVENUESService Charges and Sale Revenues $ 16,326,078 $ 16,978,451 $ 16,015,727 $ 16,068,806 $ 15,460,227 $ 14,144,570 $ 14,042,047 $ 13,430,212 $ 12,677,123 Transfers In - 18,690 109,519 - - 7,003 56,789 - - Gain on Sale of Assets - - - - - - - - 373 Investment Income 225,582 1,104,443 1,771,660 1,734,356 1,797,241 1,513,379 574,053 262,306 817,907 TOTAL REVENUES 16,551,660 18,101,584 17,896,906 17,803,162 17,257,468 15,664,952 14,672,889 13,692,518 13,495,403
OPERATION AND MAINTENANCE EXPENSE 16,081,472 14,062,948 13,598,741 14,440,917 12,425,787 9,882,656 10,045,597 9,893,922 10,630,077
NET REVENUES 470,188 4,038,636 4,298,165 3,362,245 4,831,681 5,782,296 4,627,292 3,798,596 2,865,326
DEBT SERVICE1993 Bonds (1) - - - - - - 880,738 878,768 880,368 2004 COP 1,738,750 1,734,599 1,740,000 1,736,500 1,742,750 1,733,375 230,911 - - TOTAL DEBT SERVICE 1,738,750 1,734,599 1,740,000 1,736,500 1,742,750 1,733,375 1,111,649 878,768 880,368
DEBT SERVICE COVERAGE 0.27 2.33 2.47 1.94 2.77 3.34 4.16 4.32 3.25
NET REVENUES AVAILABLE FOR SUBORDINATE DEBT SERVICE $ (1,268,562) $ 2,304,037 $ 2,558,165 $ 1,625,745 $ 3,088,931 $ 4,048,921 $ 3,515,643 $ 2,919,828 $ 1,984,958
Of Participation on Dec. 1, 2004.(1) 1996 Sewer Revenue Refunding Bonds were refinanced into 2004 Wastewater Revenue Certificates
Source: The Comprehensive Annual Financial Report.
WASTEWATER SYSTEMNINE-YEAR HISTORIC OPERATING RESULTS
FISCAL YEAR ENDED JUNE 30
142
City of San Buenaventura Annual Continuing Disclosure Requirements, ContinuedWastewater Fund - $25,075,000-2004 Wastewater Revenue Certificates of ParticipationFor the year ended June 30, 2011
Fiscal Year Ended June 30
Daily Average Flow (Million Gallons per
Daily) Increase (Decrease)
2002 9.20 -3.36%2003 9.11 -0.98%2004 9.26 1.65%2005 9.31 0.54%2006 9.40 0.97%2007 8.98 -4.47%2008 8.73 -2.78%2009 8.56 -1.95%2010 8.80 2.80%2011 8.81 0.11%
Fiscal Year Ended June 30 Service Connections Increase (Decrease)
2002 24,317 1.38%2003 24,475 0.65%2004 24,475 0.00%2005 24,475 0.00%2006 24,865 1.59%2007 25,155 1.17%2008 25,131 -0.10%2009 25,163 0.13%2010 25,178 0.06%2011 25,197 0.08%
Fiscal Year Ended June 30Service and Flow Charge Revenues Increase (Decrease)
2002 $ 11,162,655 -2.93%2003 12,677,123 13.57%2004 13,430,212 5.94%2005 14,042,047 4.56%2006 14,144,570 0.73%2007 15,460,227 9.30%2008 16,068,806 3.94%2009 16,015,727 -0.33%2010 16,978,451 6.01%2011 16,326,078 -3.84%
Source: Water Division, City of San Buenaventura, and the Comprehensive Annual Financial Report.
HISTORIC WASTEWATER SYSTEM USAGE
HISTORIC WASTEWATER SYSTEM SERVICE CONNECTIONS
HISTORIC WASTEWATER SYSTEM SERVICE AND FLOW CHARGE REVENUES
143
City of San Buenaventura Annual Continuing Disclosure Requirements, ContinuedWastewater Fund - $25,075,000-2004 Wastewater Revenue Certificates of ParticipationFor the year ended June 30, 2011
Percent of Wastewater Customers Classification Average HCF (1) Total Wastewate
Based on Volume Per Day Revenues
Peppertree HOA Residential 173.0 0.67%
Ventura Pines Residential 142.0 0.54%
Community Memorial Hospital Commercial 129.0 0.76%
Ventura County Commercial 123.0 0.72%
Jefferson At Ventura Apts. Residential 90.0 0.74%
Ventura County Medical Center Commercial 88.0 0.67%
Buenaventura Gardens HOA Residential 70.0 0.60%
Vedder Community Mgmt-Lemonwood MH Residential 66.0 0.67%
Paseo Del Mar Residential 63.0 0.67%
Ventura Marina MHP Residential 62.0 0.67%
(1) HCF stands for Hundred Cubic Feet.
Source: Water Division, City of San Buenaventura, and the Comprehensive Annual Financial Report.
Top 10 Wastewater Customers for 2010-2011
144
City of San Buenaventura Annual Continuing Disclosure Requirements, ContinuedWater Fund - $27,410,000-2004 Water Revenue Certificates of ParticipationFor the year ended June 30, 2011
2011 2010 2009 2008 2007 2006 2005 2004 2003REVENUESService Charges & Sale Revenues $ 20,946,374 $ 21,844,750 $ 21,304,880 $ 20,742,823 $ 20,549,930 $ 17,838,573 $ 17,642,997 $ 16,924,727 $ 16,103,697
Transfers In 1,007,343 865,525 916,459 840,954 675,517 619,089 854,927 901,249 - Gain on Sale of Assets - - - - - - - - 1,547 Investment Income 75,514 559,544 906,708 828,655 1,193,564 573,009 529,375 106,757 390,941 TOTAL REVENUES 22,029,231 23,269,819 23,128,047 22,412,432 22,419,011 19,030,671 19,027,299 17,932,733 16,496,185
OPERATION AND MAINTENANCE EXPENSE 19,421,019 18,638,004 18,946,447 18,804,452 15,418,196 14,176,287 13,561,877 12,128,513 13,050,651
NET REVENUES 2,608,212 4,631,815 4,181,600 3,607,980 7,000,815 4,854,384 5,465,422 5,804,220 3,445,534
DEBT SERVICE1993 Bonds (1) - - - - - - - 1,078,328 1,078,343 2004 COP 1,689,375 1,688,963 1,686,475 1,691,475 1,691,100 1,686,550 2,082,325 209,340 - TOTAL DEBT SERVICE 1,689,375 1,688,963 1,686,475 1,691,475 1,691,100 1,686,550 2,082,325 1,287,668 1,078,343
DEBT SERVICE COVERAGE 1.54 2.74 2.48 2.13 4.14 2.88 2.62 4.51 3.20
NET REVENUES AVAILABLE FOR SUBORDINATE DEBT SERVICE $ 918,837 $ 2,942,852 $ 2,495,125 $ 1,916,505 $ 5,309,715 $ 3,167,834 $ 3,383,097 $ 4,516,552 $ 2,367,191
FISCAL YEAR ENDED JUNE 30NINE-YEAR HISTORIC OPERATING RESULTS
WATER SYSTEM
Source: The Comprehensive Annual Financial Report.
(1) 1993 Water Revenue Refunding Bonds were refinanced into 2004 Water Revenue Certificates Of Participation on January 1, 2004.
145
City of San Buenaventura Annual Continuing Disclosure Requirements, Continued
For the year ended June 30, 2011
Fiscal Year Ended June 30 Pumped Water
Purchased Water (1) Total
2002 13,330 6,043 19,3732003 13,020 6,178 19,1982004 16,030 5,964 22,0032005 12,337 7,867 20,2042006 11,657 6,658 18,3152007 12,818 6,120 18,9382008 12,923 6,079 19,0022009 12,211 5,364 17,5752010 10,877 6,002 16,8792011 10,077 6,041 16,118
Fiscal Year Ended June 30 Pumped Water
Purchased Water Total
2006 18,300 8,000 26,3002007 18,300 8,000 26,3002008 18,300 8,000 26,3002009 20,562 8,000 28,5622010 21,900 8,000 29,9002011 21,900 8,000 29,9002012 21,900 8,000 29,9002013 21,900 8,000 29,9002014 21,900 8,000 29,9002015 21,900 6,000 27,9002016 16,000 6,000 22,000
Source: Water Division, City of San Buenaventura, and the Comprehensive Annual Financial Report.
(1) Reflects Casitas Municipal Water District certification letters
PROJECTED WATER SUPPLY(in Acre-feet per year)
Water Fund - $27,410,000-2004 Water Revenue Certificates of Participation
(in Acre-feet per year)HISTORIC WATER SUPPLY
146
City of San Buenaventura Annual Continuing Disclosure Requirements, ContinuedWater Fund - $27,410,000-2004 Water Revenue Certificates of ParticipationFor the year ended June 30, 2011
2002 $ 15,353,505 2.12%
2003 16,103,697 4.89%
2004 16,924,727 5.10%
2005 17,642,997 4.24%
2006 17,838,573 1.11%
2007 20,549,930 15.20%
2008 20,742,823 0.94%
2009 21,304,880 2.71%
2010 21,844,750 2.53%
2011 20,946,374 -4.11%
Source: The Comprehensive Annual Financial Report.
Service Charges and Sales Revenues Increase
Fiscal Year Ended June 30
HISTORIC WATER SYSTEM SERVICE CHARGES AND SALES REVENUES
147
City of San Buenaventura Annual Continuing Disclosure Requirements, ContinuedWater Fund - $27,410,000-2004 Water Revenue Certificates of ParticipationFor the year ended June 30, 2011
Percent of Water Customers Classification Average HCF (1) Total WaterBased on Volume Per Day Revenues
Olivas Links Golf Course Reclaimed 2,212 0.31%
Aera Energy LLC Ground 355 1.14%
Buenaventura Golf Course Reclaimed 209 0.21%
CHM-Peppertree HOA Residential 173 0.43%
Ventura Pines Residential 142 0.65%
Dairy Farmers of America Commercial 138 0.40%
Calif. Mushroom Farm Commercial 135 0.98%
Community Memorial Hospital Commercial 129 0.64%
Ventura County Commercial 123 0.25%
Harris Water Conditioning Commercial 98 0.52%
(1) HCF stands for Hundred Cubic Feet.
Source: Water Division, City of San Buenaventura, and the Comprehensive Annual Financial Report.
Top 10 Water Customers for 2010-2011
148
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149
Employee Relations and Collective Bargaining
Salary ScheduleNumber of Regular Employees Covered Term of MOU
Maintenance Unit (Non-Supervisory Maintenance, Operations and Laboratory Employees)
121 Jul. 1, 2010 � Jun. 30, 2013
General Unit (Non-Supervisory Clerical, Technical, Para-professional, Inspectors and Civilian Public Safety Employees)
127 Jul. 1, 2010 � Jun. 30, 2013
Supervisor Unit (Supervisory Employees) 75 Jul. 1, 2010 � Jun. 30, 2013
Professional Unit (Professional Employees) 30 Jul. 1, 2010 � Jun. 30, 2013
Police Unit (Police Officers, Corporals and Sergeants) 115 Jul. 1, 2010 � Jun. 30, 2013
Fire Unit (Basic Unit: Firefighter Trainee, Firefighter/Paramedic Trainees/ Firefighter, Firefighters/Paramedics and Fire Engineers) and (Fire Captain�s Unit: Fire Captain)
54 Jan. 1, 2011 � Dec. 31, 2013
Police and Fire Recruits (1) (Police Officer Trainee, Firefighter-Paramedic Recruit and Firefighter Recruit. Trainees in unit for less than six months)
3 No MOU
Police Management Unit (Police Commander and Assistant Police Chiefs)
6 Jul. 1, 2010 � Jun. 30, 2012
Fire Management Unit (Fire Battalion Chiefs, Assistant Fire Chiefs)
5 Jan. 1, 2011 � Dec. 31, 2013
Executive (Department Heads, City Attorney, City Manager)
11 No MOU - Unrepresented
Management (Division Heads and other managers) 27 No MOU - Unrepresented
Administrative Confidential (Administrative professional)
5 No MOU - Unrepresented
Confidential (Administrative Secretaries, Human Resources non-analyst staff, Legal Administrative Secretaries)
19 No MOU - Unrepresented
Source: Human Resource Division, City of San Buenaventura
For the year ended June 30, 2011
City employees are divided into thirteen (13) separate salary schedules (excluding temporary support staff) for the purpose of salary and benefit administration, eight (8) of which are represented by a bargaining union/association. These salary schedule groups are listed below:
(1) The positions within this unit are non-safety trainee positions that upon completion of required training are promoted to either Police or Fire Unit represented positions.
City of San BuenaventuraEmployee Relations and Collective Bargaining
150
www. c i t yo f v e n t u r a . n e t
D-1
APPENDIX D
BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC�s book-entry only system has been obtained from sources that the Authority, the City and the Underwriter believe to be reliable, but neither the Authority, the City nor the Underwriter take any responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value, if any, and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.
The Depository Trust Company (�DTC�), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC�s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.
DTC, the world�s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a �banking organization� within the meaning of the New York Banking Law, a member of the Federal Reserve System, a �clearing corporation� within the meaning of the New York Uniform Commercial Code, and a �clearing agency� registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC�s participants (�Direct Participants�) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants� accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (�DTCC�). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (�Indirect Participants�). DTC has Standard & Poor�s rating of �AA+.� The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC�s records. The ownership interest of each actual purchaser of each Bond (�Beneficial Owner�) is in turn to be recorded on the Direct and Indirect Participants� records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive Bonds representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC�s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC�s records reflect only the identity of the Direct Participants to whose accounts
D-2
such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC�s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC�s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.�s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC�s practice is to credit Direct Participants� accounts upon DTC�s receipt of funds and corresponding detail information from the Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC�s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in �street name,� and will be the responsibility of such Participant and not of DTC, the Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant�s interest in the Bonds, on DTC�s records, to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC�s records and followed by a book-entry credit of tendered Bonds to the Trustee�s DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.
The Authority may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered to DTC.
THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.
E-1
APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate, dated as of June 1, 2012 (the �Disclosure Certificate�) is executed and delivered by the City of San Buenaventura (the �City�) in connection with the execution and delivery of the San Buenaventura Public Facilities Financing Authority�s (the �Authority�) $16,450,000 2012 Refunding Lease Revenue Bonds, Series A (the �Series A Bonds�) and the $1,365,000 2012 Taxable Refunding Lease Revenue Bonds, Series B (the �Series B Bonds� and, together with the Series A Bonds, the �Bonds�).
WHEREAS, the Bonds are being issued pursuant to an Indenture, dated as of June 1, 2012 (the �Indenture�), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the �Trustee�).
WHEREAS, the Bonds are payable from the lease payments to be made by the City under the Lease Agreement, dated as of June 1, 2012 (the �Lease Agreement�), between the City, as lessee, and the Authority, as lessor; and
WHEREAS, this Disclosure Certificate is being executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with the Rule (defined below).
NOW, THEREFORE, the City covenants as follows:
SECTION 1. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
�Annual Report� shall mean any Comprehensive Annual Financial Report provided by the City pursuant to, and as described in, Sections 2 and 3 of this Disclosure Agreement.
�Beneficial Owner� shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
�Disclosure Representative� shall mean the City Manager of the City, the Finance Director of the City or their designee, or such other officer or employee as the City shall designate in writing from time to time.
�Dissemination Agent� shall mean the City, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
�Listed Events� shall mean any of the events listed in Section 5(a) and (b) of this Disclosure Certificate.
�MSRB� shall mean the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.
�Official Statement� shall mean the Official Statement relating to the Bonds, dated December 3, 2011.
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�Participating Underwriters� shall mean the original Underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds.
�Repository� shall mean the Municipal Securities Rulemaking Board, which can be found at http://emma.msrb.org.
�Rule� shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
�State� shall mean the State of California.
SECTION 2. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the 270 days after the end of its fiscal year commencing April 2013 (the �Annual Report Date�), with the report for the 2011-12 fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate, with a copy to the Trustee. Not later than five (5) Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent, if other than the City. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate. If the City�s fiscal year changes, the City, upon becoming aware of such change, shall give notice of such change in the same manner as for a Listed Event under Section 5(c). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report.
(b) If by five (5) Business Days prior to the Annual Report Date, the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall notify the City of such non-receipt.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the Annual Report Date, the Dissemination Agent shall provide to the MSRB (with a copy to the Trustee and the Participating Underwriters) a notice, in substantially the form attached as Exhibit A.
(d) Unless the City has done so pursuant to Section 3(a) above, the Dissemination Agent (if other than the City) shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a certificate with the City to the effect that the Annual Report has been provided pursuant to this Disclosure Certificate, stating, to the extent it can confirm such filing of the Annual Report, the date it was provided.
SECTION 3. Content of Annual Reports. The City�s Annual Report shall contain or include by reference the following:
(a) The City�s audited financial statements for the prior fiscal year, prepared in accordance with generally accepted auditing standards for municipalities in the State of California. If the City�s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial
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statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The City shall clearly identify each such other document so included by reference.
SECTION 4. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten (10) days after the event, if material:
1. Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; 3. Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Issuance by the Internal Revenue Service of proposed or final determination of
taxability or of a Notice of Proposal Issue (IRS Form 5701-TEB); 6. Tender Offers; 7. Defeasances; 8. Rating changes; and 9. Bankruptcy, insolvency, receivership or similar proceedings.
Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material in a timely manner not more than ten (10) days after occurrence:
1. unless described in Section 5(a)(5), adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Series A Bonds or other material events affecting the tax status of the Series A Bonds;
2. modifications to the rights of Bondholders;
3. optional, unscheduled or contingent Bond calls;
4. release, substitution or sale of property securing repayment of the Bonds;
5. non-payment related defaults;
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6. the consummation of a merger, consolidation, or acquisition involving the City or the Authority or the sale of all or substantially all of the assets of the City or the Authority, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; and
7. appointment of a successor or additional trustee or the change of the name of a trustee.
(c) If the City determines that knowledge of the occurrence of a Listed Event under subsection (b) would be material under applicable federal securities laws, and if the Dissemination Agent is other than the City, the City shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to file a notice of such occurrence with the MSRB in an electronic format as prescribed by the MSRB in a timely manner not more than ten (10) Business Days after the event.
(d) If the City determines that the Listed Event under subsection (b) would not be material under applicable federal securities laws and if the Dissemination Agent is other than the City, the City shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence.
(e) The City hereby agrees that the undertaking set forth in this Disclosure Agreement is the responsibility of the City and, if the Dissemination Agent is other than the City, the Dissemination Agent shall not be responsible for determining whether the City�s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.
SECTION 5. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
SECTION 6. Termination of Reporting Obligation. The obligations of the City, the Trustee and the Dissemination Agent under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).
SECTION 7. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent may resign by providing thirty days written notice to the City and the Trustee. The Dissemination Agent shall not be responsible for the content of any report or notice prepared by the City and shall have no duty to review any information provided to it by the City. The Dissemination Agent shall have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any report not provided to it by the City in a timely manner and in a form suitable for filing.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule; provided, the Dissemination Agent shall have first consented to any amendment that modifies or increases its duties or obligations hereunder. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the
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accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 4(c), and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Bond to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Agreement, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the City to comply with this Disclosure Agreement shall be an action to compel performance.
No Bond holder or Beneficial Owner may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time.
SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees, to the extent permitted by law, to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorney�s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent�s negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. In performing its duties hereunder, the Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders, or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
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SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, if any, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
CITY OF SAN BUENAVENTURA
By: __________________, City Manager
ATTEST:
____________________, City Clerk
APPROVED AS TO FORM:
___________________, City Attorney
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EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: San Buenaventura Public Facilities Financing Authority
Name of Issue: San Buenaventura Public Facilities Financing Authority 2012 Lease Agreement Revenue Refunding Bonds, Series A and San Buenaventura Public Facilities Financing Authority 2012 Taxable Lease Agreement Revenue Refunding Bonds, Series B
Date of Issuance: _____________, 2012
NOTICE IS HEREBY GIVEN that the City of San Buenaventura (the �City�) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate, dated as of June 1, 2012, executed by the City. [The City anticipates that the Annual Report will be filed by __________.]
Dated: __________
CITY OF SAN BUENAVENTURA
By:
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APPENDIX F
FORM OF OPINION OF BOND COUNSEL SERIES A
June 5, 2012 City of San Buenaventura Public Facilities Financing Authority 501 Poli Street Ventura, California 93002
OPINION: $16,450,000 City of San Buenaventura Public Facilities Financing Authority 2012 Refunding Lease Revenue Bonds, Series A
Members of the Authority:
We have acted as bond counsel to the City of San Buenaventura Public Facilities Financing Authority (the �Authority�) in connection with the issuance by the Authority of its City of San Buenaventura Public Facilities Financing Authority 2012 Refunding Lease Revenue Bonds, Series A in the aggregate principal amount of $16,450,000 (the �Series A Bonds�), under an Indenture of Trust dated as of June 1, 2012 (the �Indenture�), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee, and under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code. The Series A Bonds are secured by Revenues as defined in the Indenture, including certain lease payments made by the City of San Buenaventura (the �City�) under a Lease Agreement dated as of June 1, 2012 (the �Lease Agreement�) between the Authority as lessor and the City as lessee. We have examined the Indenture, the Lease Agreement, the Bond Law and such certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture, the Lease Agreement and in the certified proceedings, and upon other certifications furnished to us, without undertaking to verify the same by independent investigation. Based upon our examination, we are of the opinion, under existing law, as follows:
1. The Authority is a a public body corporate and politic duly organized and existing under Ordinance No. 85-17 adopted by the City Council of the City of San Buenaventura on May 28, 1985, and under the Constitution and laws of the State of California, with power to enter into the Indenture and the Lease Agreement, to perform the agreements on its part contained therein and to issue the Series A Bonds.
2. The Series A Bonds constitute legal, valid and binding special obligations of the Authority enforceable in accordance with their terms and payable solely from the sources provided therefor in the Indenture.
3. The Indenture and the Lease Agreement have been duly approved by the Authority and constitute the legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms.
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4. The Indenture establishes a valid first and exclusive lien on and pledge of the Revenues (as that term is defined in the Indenture) and other funds pledged thereby for the security of the Series A Bonds, in accordance with the terms of the Indenture.
5. The City is a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, with power to enter into the Lease Agreement and to perform the agreements on its part contained therein. The Lease Agreement has been duly approved by the City and constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms.
6. Interest on the Series A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinions set forth in the preceding sentence are subject to the condition that the Authority and the City comply with all requirements of the Tax Code which must be satisfied subsequent to the issuance of the Series A Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority and the City have covenanted in the Indenture, the Lease Agreement and in other instruments relating to the Series A Bonds to comply with each of such requirements, and the Authority and the City have full legal authority to make and comply with such covenants. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series A Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Series A Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Series A Bonds.
7. Interest on the Series A Bonds is exempt from California personal income taxation.
The rights of the owners of the Series A Bonds and the enforceability of the Series A Bonds, the Indenture and the Lease Agreement may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors� rights heretofore or hereafter enacted and their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity.
Respectfully submitted, A Professional Law Corporation
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FORM OF OPINION OF BOND COUNSEL SERIES B
June 5, 2012 City of San Buenaventura Public Facilities Financing Authority 501 Poli Street Ventura, California 93002
OPINION: $1,365,000 City of San Buenaventura Public Facilities Financing Authority 2012 Taxable Refunding Lease Revenue Bonds, Series B
Members of the Authority:
We have acted as bond counsel to the City of San Buenaventura Public Facilities Financing Authority (the �Authority�) in connection with the issuance by the Authority of its City of San Buenaventura Public Facilities Financing Authority 2012 Taxable Refunding Lease Revenue Bonds, Series B in the aggregate principal amount of $1,365,000 (the �Series B Bonds�), under an Indenture of Trust dated as of June 1, 2012 (the �Indenture�), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee, and under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code. The Series B Bonds are secured by Revenues as defined in the Indenture, including certain lease payments made by the City of San Buenaventura (the �City�) under a Lease Agreement dated as of June 1, 2012 (the �Lease Agreement�) between the Authority as lessor and the City as lessee. We have examined the Indenture, the Lease Agreement, the Bond Law and such certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture, the Lease Agreement and in the certified proceedings, and upon other certifications furnished to us, without undertaking to verify the same by independent investigation. Based upon our examination, we are of the opinion, under existing law, as follows:
1. The Authority is a a public body corporate and politic duly organized and existing under Ordinance No. 85-17 adopted by the City Council of the City of San Buenaventura on May 28, 1985, and under the Constitution and laws of the State of California, with power to enter into the Indenture and the Lease Agreement, to perform the agreements on its part contained therein and to issue the Series B Bonds.
2. The Series B Bonds constitute legal, valid and binding special obligations of the Authority enforceable in accordance with their terms and payable solely from the sources provided therefor in the Indenture.
3. The Indenture and the Lease Agreement have been duly approved by the Authority and constitute the legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms.
4. The Indenture establishes a valid first and exclusive lien on and pledge of the Revenues (as that term is defined in the Indenture) and other funds pledged thereby for the security of the Series B Bonds, in accordance with the terms of the Indenture.
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5. The City is a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, with power to enter into the Lease Agreement and to perform the agreements on its part contained therein. The Lease Agreement has been duly approved by the City and constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms.
6. Interest on the Series B Bonds is exempt from California personal income taxation.
The rights of the owners of the Series B Bonds and the enforceability of the Series B Bonds, the Indenture and the Lease Agreement may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors� rights heretofore or hereafter enacted and their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity.
To ensure compliance with requirements imposed by the United States Internal Revenue Service, we inform you that any U.S. federal tax advice contained herein for the Series B Bonds (including any attachments) (a) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code of 1986, as amended, and (b) is written to support the promotion or marketing of the transactions or matters addressed herein.
Respectfully submitted, A Professional Law Corporation
CITY OF SAN BUENAVENTURA Ptmuc FACILITIES FINANCING AUTHoRITY • 2012 REFUNDING LEASE REVENUE BoNDs, SEJUEs A AND 2012 TAXABLE REFUNDING LEASE REVENUE BoNDs, SEBIES B
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