HomeMy WebLinkAbout2008/02/05 RDA Item 3
CITY COUNCIL &
REDEVELOPMENT AGENCY
AGENDA STATEMENT:
~\ff:. CITVOF
.~C~
FEBRUARY 5, 2008, Item~
SUBMITTED BY:
REVIEWED BY:
CONSIDERATION OF AUDITED FINANCIAL STATEMENTS FOR
FISCAL YEAR ENDED JUNE 30, 2007
DIRECTOR OF FINANC / SURER'l1k.,
CITY MANAGER
ITEM TITLE:
4/5THS VOTE: YES D NO ~
SUMMARY
Presented for City Council, Redevelopment Agency and Public Financing Authority information
and acceptance are the Audited Financial Statements for the fiscal year ended June 30, 2007, as
prepared by the independent audit firm of Moreland and Associates, Inc. The audit reports
submitted for the City, Agency and the Authority have received unqualified (clean) opinions :from
the independent audit firm.
ENVIRONMENTAL REVIEW
Not applicable
RECOMMENDATION
That Council, Agency and the Authority accept the fiscal year 2006/2007 Financial Statements.
BOARDS/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
Pursuant to the City Charter Section 1017, an annual audit is performed of the City's financial
records by an independent accounting firm. The reports are included as attachments. The firm of
Moreland and Associates, Inc. has examined the general purpose financial statements of the City of
Chula Vista, the Redevelopment Agency and the Public Financing Authority and has issued their
opinion that those statements "present fairly, in all material respects, the financial position of the
City as of June 30, 2007 and the results of its operations and cash flows for the year then ended in
conformity with generally accepted accounting principles".
The audit did not result in any material adjustments to previously reported year-end figures for the
General Fund. The General Fund available fund balance was verified to be $10.4 million as of June
30, 2007, a decrease of approximately $4.5 million :from the prior year ending balance of $14.9
million. This reserve level represents 6.3 percent of the operating budget as compared to the
Council policy minimum target level of 8 percent.
3-1
February 5, 2008, Item_
Page 2 of2
In order to form a basis for their opinion, Moreland and Associates, Inc. evaluated the internal
control procedures of the City and found no reportable conditions.
This was Moreland and Associates second year serving as the City's auditors. The audit firm was
very professional and efficient in their work, and provided fresh insight and ideas that were
incorporated into City's Consolidated Annual Financial Report (CAFR).
DECISION MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site
specific and consequently the 500 foot rule found in California Code of Regulations section
I 8704.2(a)(1) is not applicable to this decision.
FISCAL IMPACT
There is no fiscal impact to the City/Agency/Authority from this action. The contract for audit
services totaled $81,000 for the year reported.
ATTACHMENTS
Attachment I-Fiscal Year 2006/2007 Comprehensive Annual Financial Report
Attachment 2- Fiscal Year 2006/2007 Single Audit Report
Attachment 3- Fiscal Year 2006/2007 Redevelopment Agency, Basic Financial Statements and
Auditor's Report
Attachment 4- - Fiscal Year 2006/2007 Public Financing Authority, Basic Financial Statements
and Auditor's Report
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/177/tcf/drtV 1/
Comprehensive Annual
Financial Report
For The Fiscal Year Ended
June 30,2007
Compiled under the direction of
Maria Kachadoorian
Director of Finance/Treasurer
CITY OF CHULA VISTA
Comprehensive Annual Financial Report
June 30, 2007
TABLE OF CONTENTS
INTRODUCTORY SECTION
PAGE
Letter of Transmittal........ ...................... ................................. ........................... ....................... i
Principal Officials..................... .................................... .................................. ....................... xii
Organization Chart ................ ........................ ............ ................................................ ...........xiii
Certificate of Achievement for Excellence in Financing Reporting - GFOA .................... xiv
FINANCIAL SECTION
Independent Auditors' Report......... ...... ...... ....... ............... ......... ............ ................ ................. 1
Management's Discussion and Analysis (Unaudited) ............................................................ 3
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Assets............................................................................................... l7
Statement of Activities............................... ............. ............... ................... ................... l8
Fund Financial Statements:
Balance Sheet - Governmental Funds......... ............................................. ...... .............20
Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Assets .....................................................................22
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds....................................................................24
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances to the Statement of Activities..................................................... 26
Statement of Net Assets - Proprietary Funds.............................................................. 28
Statement of Revenues, Expenses and Changes
in Net Assets - Proprietary Funds ..........................................................................29
Statement of Cash Flows - Proprietary Funds ............................................................30
Statement of Net Assets - Fiduciary Funds ................................................................ 32
Notes to the Financial Statements ....................................................................................33
Required Supplementary Information (Unaudited)
PERS Schedule of Funding Progress.... .......... ..... ............... .......... ........ ......77
General Fund- Budgetary Comparison Schedule.................... ...................... .78
Sewer Special Revenue Fund - Budgetary Comparison Schedule................. ....... ..80
Note to Required Supplementary Information.................................................................8l
CITY OF CHULA VISTA
Comprehensive Annual Financial Report (Continued)
June 30, 2007
TABLE OF CONTENTS
PAGE
SupplementaJy Information:
Major Funds BudgetaJy Comparison Schedules:
RDA Debt Service Fund - BudgetaJy Comparison Schedule .........................................84
City Debt Service Fund - BudgetaJy Comparison Schedule........................................... 85
Nonmajor Funds:
Combining Balance Sheet - Nonmajor Governmental Funds......................................... 90
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances - Nonmajor Governmental Funds ................................................96
Transportation Grants Special Revenue Fund - Budgetary Comparison Schedule ......102
Parking Meter Special Revenue Fund - BudgetaJy Comparison Schedule. . . . .. . . .. .... 103
Traffic Safety Special Revenue Fund - BudgetaJy Comparison Schedule...............I 04
Town Centre I Special Revenue Fund - BudgetaJy Comparison Schedule.................. 105
Open Space Districts Special Revenue Fund -
BudgetaJy Comparison Schedule ..............................................................................106
Housing Programs Special Revenue Fund - BudgetaJy Comparison Schedule... ......107
Sundry Grants Special Revenue Fund - BudgetaJy Comparison Schedule......... .....I 08
Traffic Signals Special Revenue Fund - Budgetary Comparison Schedule......... ....109
Redevelopment Agency Special Revenue Fund - BudgetaJy Comparison Schedule ..110
Transportation Sales Tax Special Revenue Fund - Budgetary Comparison Schedule. III
Public Financing Authority Debt Service Fund - BudgetaJy Comparison Schedule ...112
1994 POB Debt Service Fund - BudgetaJy Comparison Schedule............................... 113
Notes Payable Debt Service Fund- BudgetaJy Comparison Schedule .............................114
SD County Regional Comm System Debt Service Fund-
BudgetaJy Comparison Schedule ..............................................................................115
Internal Service Funds:
Combining Statement of Net Assets ..............................................................................118
Combining Statement of Activities and Changes
in Net Assets ..............................................................................................................119
Combining Statement of Cash Flows............................................................................. 120
Fiduciary Funds:
Statement of Changes in Fiduciary Net Assets -Agency Funds ..................................124
STATISTICAL SECTiON (Unaudited)
Financial Trends:
Net Assets by Component - Last Five Fiscal Years ......................................................128
Changes in Net Assets - Last Five Fiscal Years............................................................ 130
Fund Balances of Governmental Funds - Last Five Fiscal Years................................. 134
Changes in Fund Balances of Governmental Funds - Last Five Fiscal Years.............. 136
CITY OF CHULA VISTA
Comprehensive Annual Financial Report (Continued)
June 30, 2007
TABLE OF CONTENTS
PAGE
STATISTICAL SECTION (Unaudited) (Continued)
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property _
Last Ten Fiscal years.................................................................................................138
Direct and Overlapping Property Tax Rates -
Last Ten Fiscal years.................................................................................................140
Principal Property Taxpayers - Current and Nine Years Ago....................................... 142
Property Tax Levies and Collections -Last Ten Fiscal Years...................................... 143
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ......................................145
Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years........................... 146
Direct and Overlapping Debt.............. ... ... .............................................. ........................ 147
Legal Debt Margin - Last Ten Fiscal Years .................................................................. 148
Pledged-Revenue Coverage - Last Ten Fiscal Years .................................................... 150
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Calendar Years .............................. 152
Principal Employers - Current and Nine Years Ago .....................................................154
Operating Information:
Full-time and Part-time City Employees by Function-
Last Ten Fiscal years................................................................................................. 155
Operating Indicators by Function - Last Ten Fiscal Years ........................................... 156
Capital Asset Statistics by Function - Last Ten Fiscal years........................................ 158
INTRODUCTORY SECTION
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CITYOf'
CHUb\VlSTA
FINANCE DEPARTM[;~ft
December .18, 2007
TQ thCl Iloll.orJlb~ MjJyor. .J\tell'll~ers oftbeCity Council
And Citizens of the City ofCbulaVista, California
The .<\+1nual FimmcialRepon (the Report) of tbe City ofCbllla Vista for tile fhca.i year ended
June 3u, 2007. is hereby submitted in accordance with. City Charter sect Lon 1017 .ind section
25253 of the Gov<'JJlment Code orlhe State of Caii10ritia The accLlracyMthe d.'tta])resented
:md the completeness. and illlmess of tJie presentatiml, incltidil1g all disclosures, are the
responsihility oftheCity. TIle Re(..'Ort h'lSbeen preparedin accordance v>ith Generalis Accepted
Accounting Principles (GAAP} asptOJUulgated by the Govemmenta! Accol.!Ilti;J,g Stimdards
BOlJrd (GASB).. 11 Lsbellcvedthat Ihedata reportedis accurate in <1lt material re,sp<.><:ts, .tha:!. it is
presented ilia ffilllUu-)t designed lOtltirly represent the fiMl1cial txlsitionandresu.ltsofopcl'lll.tons
oIthe City as mea)uredb~i the I1nuncial activity in its various Funds, andtbmalldisclosures
necessary to enab!e the reader to gall maxhnmn uncterstandingofthe City's tinancialaffairs as
00ul1e30, 2007 have been included,
TI1e independent auditing fm:n of Moreland and Associates, Inc.. has iSSUed an unqualitied
r\:1e.'ln")op.lnh;11l0n tJ;\", City ofChula Vis!.a'sfinandal statements for the year endedlune 30,
2001. 1be independentsllditor's :,eport is located at the front of the tlmmclal SeCtlOl] brthis
report.
The Report is organized .(l1to two major StlellOO$llS 1011ows:
Financial. Section;
ThisseCtion im:ludesiheindependent auditors' report the
managementdiscllsslon & ;malysh~report, the bllSLC
financial statement,> and notes tathese ststemer.ts. followed
by Supp1etIlentary. information.
Sta1iS!i~l Section:
This5eet1(ln cQ11tain$botlJ fim1.lieiaI andnllfJ-lIHancia1 (rend
d!tta about the c.ity and its. operations.
i
:i!1B FOURTHA\lENUE. CHlIlA\1STA. CAUFORi""!I 9191<1' (S,S) 69,'!;{\;;1 '. FA.1((lH9)5lliii-W1l5
~-f~.e:!,,,,,,,,!,,,",,,,,:'~~~"'W..d!f'!
Per GenereHy ACqepred Accounting Prilll'lples, all Statcand Local governments required to
com ply wilh GA,SB 34 must pl'epare a Mailagement Di$l)usslclnlmd Analysis (MD&A) report
which provides an overview antl3,Il amtl)'"sis!oliCcompany tm: financial statements. This
t~lit\al le.t\er is designed to complement tbe MD&A, which islocated immecll3telyfoltowin,g
the ltldepeudel'it a.udit,)r's report.
AISQ, "''> a recipienl of:federal anJ.1 slate finaneiaJ assistan;;e, the eil)' isrequiredto havca"Sing!e
Audit" pedonnedby Qur indepeudenl.audit firnl. The Single Audit was designed to meet the
special needs Qffederal grantor agencies. The standard.. gnvcl'ningSingle Audit engagements
require that the independent a"ditor report not only .on the fair presentlUionof thefinaneiaJ
statements, but also on the audited govemment' s internal controls and eomJ)liancc with legal
requiremenr:;,witb special emphasis on Internal controls <lildlegal requirements invot"ing the
administration of federal a;\'rttds, These reports are available in the Cil)i'sseparately issued
Single Audit Report 'rhe result of the City's Single Audit for the fiscal year ended June 30,
20Q7noted no lllJltedall'ieakne.'tSes in !he framework of internal controls, or signitjC:{lllt
vlolatioM cfappiicilble laws and regulations.
GOVER.1'1\MENT
Chttla Vista Was incOrpUrated in 1911 i and functions under a City Charter with a
COllrlcillMatlager form of glwernment The Cily is governl~ by a four member CQunciland a
Mayor, who serve four year overlapping terIDS, . and are dected on a citywide basis, The. Cit)'
Council appoints the City Manager, City Attorney and City clerk. Municlpalserv tcespl'Ovided
include police, fire, parks; recreation, libraries, planning & building, housing programs, street
and drainage (;(mstrUctlon &rnaintellIDlce, sewer services, etc.
'tIIE REPORTlNC; EN1'ITY
(Activltl6 htthtded iu the Report)
The Report Includes all activltiesearried illItbytheCityas a IegaleJ1tity,atidalso lndudestbe
actlvities 01' eertllin othe>' entities for which theeit}' Coundl is financialLy accountable as
derern11lled llnderthe g,jidelines ofll1eGovertimental Accounting StanClltrds Bo:it~L Although
legaUy separateel1tities, these wealled "COmpDProf urtil!;" areumler tl:-e City'$ .uTlibrel111. of
acrountability,arid thereJcre,ihelr tmanciaI posilion a.l'jdresl.l!i,~ ofti~ratioils arereflecledin tile
Report,
~. cQ<01poncntunit;; included intneReport are:
... .
The R;ldeve!opmeotAgency cHile City of Chub Vista
The Chula Vista Industrial. De,'elopment Authority
The Chula Vista Public FinancingAuthorhy
tI
ACCOUNTING SYSTElv:rs AND.BI.JDGETARY CONTROL
Thcbllliic financial statements arepl'eSented on an ''ecunomic resOUl'l:es" measurementfOCuSilnd
theacCtual basis of~l;"ounting, Accordingly,aU orlhe City's. asselS Md JiabilillCS,. including
capital assets as well as Infrastructure assets andkmg.lermliabilities, . ateinc1uded. in the
accomplluying.Staternent of Net As:rets. The Statement ofActiYities Pftsentscbwges innet
assets. Under ~aC('.fUld basis of &C\)Ollllling, tevenues ate recognized in the p,."riodinwhich
they are earned while expenses arc teeognlzedh1the period in Which theliabHity isinC1lJTed.
An gOVeIllillelital furu!:> area,CCl;JUntl;1d. for on a spending or "c\.llTentfinancialresoutctS"
measurement .fu.c4$ .","td the m<XIinedaccnmI basis {If accounting, Accordingly, only current
assets and current liabilities are included on me balanoosheeL The StmeitJent of ReYeTIlle5,
E:q)(:f',ditureumd Changes in FUlld Balallcespresent increases (tevertueand othti:r financing
sources)and d.,'creases (e.xpenditures and other financing uS€> )i11 flercurrelltMSets. tJnder the
mod Wed accrual basis ofaccoonting, revenues are recognized in theaccoontillg pe'rioclinwhich
they become both measurable .and ,'l;vailablc to.fil)allCe e:wendituresof.the. Cllrrent .perioo,
lnadministeringtheCity's (looounting sYste!n$, prlli,ary comrr!1:rationis given to tJleadequacy
of.illlernal accounting controls, which include an array of adminislrati ve procedures. Tftese
controls are designed. to provide reasonable,. but. not. absolute, assurance regarding the
safeguarding ofasser,<; agllil11itloss fu)m unauthorized U5e Dr disposition, asweUas the reliability
offinaneiaJ iecQrds b ace~lFll<<: and fairpresenlation {If fillahe.ial reporls" Tbe concept of
reasonableasstltance recogni.reslhat the. costofspecitkcontro!sshouid not exceed the benefits
likely to be derived fromex.ercising the oontrols, and tbat this evalulltion necessarilyinvo!ves
estimates $djudgmentsby management. Ilis believed that the City'sintel:lllil acCOl.llltltlg
controlsadequatdy safeguard CityassetsandprovidereasQnable assurance of proper recl)[ding
offirnmcialln\nsactiot!s,
The City Charter assig,nsthe DirectorofFinanee""iih the responsibility tosupervis;eand be
respOlisib]e lbr fuedisbursement MaUntonies and have eolitrQlover aJlexpenditures toellsure
thatblldget appmpriatiollsare ll{lt ex~eded. TIie levelofbudgetaty contrpl, tillltis, the level at
\vhieh ei>lpendimres are not to exceed O.iUtlcilaWroved approPriations, isest.abliabed by
department at the Caleg.lry level. Anellcurnbrance(c{)ll1mitlnetIt) accQuntfugsystem is utilized
asa technique to enhance budgetarYC<lntrol during the year, Appn:tp.riatiOllll encumbered
(committed)al yt'.aI' end al.lt6matiealIycarry forward and are available to be. used Jorthase.
comrnllmenrsduring tIle St\bsequentyeal w'hileuns~l> lu\.en.:ul~ appropriatiollsJapse at
year end andbe<;otrl<: genel'aU;y' available for re.appropriatioo thHolbwing year.
The City CAJunci! adoptsthefonnalbudgel aHhebeginning of eaQn JiscaJ year and rnayamelidit
rhroughQut the year as necessa,)'. .E~dituresmaynot exceed.budgeted figuIesatfuecategol'Y
level (Personnel, Sllflplie$ and Setvi<::~, Other Expenses, C..apitiil) by d'1Panment.Fiscal status
reports sutmnarizingtbe yearto date Gel1emlFund revenues and expenditures ate presented to
theeity ('Quncil ollaqWlrterly basis.
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CiTY :QFCHULAV1STA
LOCAL ECUNQMY A.\lD PROSPEL"rSFOR l'HI!: FUTURE
The Chy of Chula Vista, lllwrp<Jtated in 19 U, iSllcily of great diveJ;>ity,both geographi{'ldly
and demographically. His. a CQrn.tJIJ.!l1ity of many choices andOp~1ffiU1jti~The CitY (,re'nuta
Vista is lOCl\tedeigbt miles south oftr'le City of San Piegoands~enmilesnort.h of the Mexico
borde(. Chulll Vista's city IjJ:nimcoverapprm;:imateiy50squ.aremiJes,.whichspans from the
beautifulshm'eline of San Diego!3ay tothebrcathtaking mountain vie....os intheeastem sectiilll of
the city, Chula VistaresidentsenjoyaJ:J the benetlts ofa major dty along \vitltsmall WV.ll
friendliness, affurdable hiJusing and near perfect weather. The most recent data available
indicates that the medianfllmily Il1Come in Chula Vista 18$64.110.
Theelty.ofCb\IUl Vista, with a population .of.!l101'e than 227,723,1$ thesecQnd largest
communityipSat) j)iegoCounty, SanpiegoAssociatiOll ofQovemments tSANDAG) projects
tl.. .l.l\.t. theCm. ' ofCh...lIla Vistawil! reacbapo. .. p. \llation of "P.PrQ;\dmatel). '. 280,OOObylhe ycar2030.
1JJ.2003, based Ol1POpllllltioneStimate$ rohlased by the Census Bureau, Chub Vista .was
identil'iedMilie 7" fastestgr~;ng city in theUrutoo States.. More recent estimates released by
tbe Cen.'lUS B\lreauidentij)' Chula Vista as the 28th fastest growing dty""itha population of
100,000,11 rnorefur fueverkxl aUIlly 1; 2004 to July 1,2005 .&ANDAG's Preliminary 2030
Growth Forecastindic.ates thattbe South ({mntysubregio.nwill continue to host asubstartt!al
amount of the region's projecterlgrowthover the next 25 yeMS, primarily through new
dcvelQpmenl ill meeastem portion. The nmnbetQf residential units built hit.ltn aUtim.ehigh
duringcalendaryears 1999-2004, Due to th.esigni ficantsl.oW dov,'lIintheoousing IJlln'ket, those
numbers have ckamatiJ:a1lydropped beginning in 100S. The follw<1..'1g gtaphliliows the actw.H
muilberofhousing lUIi!s co.inpleted during dw last II calendar years.
Residential Building Units
Call1ndal," YearS 1997.2007
t~'
.""",
:';5QO .
.
,!r<""
"S ..
)""
.
,I,,,,,
.t~.
""
~Nf i9$t 1m: ~ .~~ ~ l~ ~. >>>> aooe'Xm:
1..iar
iv
Tbe,~low down in residential permitl> has been sOlllev.uatoffset by theincrease4 cOmmercial
development in thepait year. Commercia! development has brought much needed
enrert.'\illluent, r~aur<lfltsand shopping VemJeS to the regkm g~nemtji1gaddjtional sales lax
revenues to hell' pay fQrCity services.
The health ~.fChula Yista'sooollomy is based on itsdiversificarion. . Rated one ofCalifomia's
bestcities iOrbusiness by CallfornlaCEO magazine, the ciryis home t<.'l the Ainedcan eQtpOl'llte
headquarters ofDNP Electronics, whk:h alsGhaSmanutacttJril1g OIl site, Hitachi Hon1e
Electronics, mMufacfuring facilities suehas Raytheon, and Goodrich as Wt~n as research and
developmentfadHties s~h as lheLeviUm facHjtyineastemC:hula Vista,
Sates Tiixes,'
The City receives I %in sales and use tax fevemu:d'rom all taxabIeretaiI sales occurring within
City Jjtllits.Th~e fimds are c~.llected by the State along wiih their Q,5%eomponent of the sales
and use iaxand Q,25%designate~ fortraJisportation foutDta!s<l.lest;1xraCe within Sim Diego
Counlyof7.75%. Sales auduse tax revenue is the City'ssingIe largestgeneral tundrevenue
sQtltce, In Dscal Yellr .lOlli, sales taxes represented 17.&% aftowl general fund revenues.
'I'begrowth in retail operators has made, signifkanrcootributionsto Chula Vista's sales lax base.
Over a ten-year period bcrwet.'l1 1998..2007, Chula Vista's sales tax revenues havegro\\<1l
approximatety 142% (it! current $)wimlllO$t of thaI groWth Occurring >lfter l1s~ year 1997.
Dutil1gtisca! year 20(.17, Chula \lisla'ssales taxreVertl1e experience.dvery hCiJIU,y grD\J.W over
the previo).lsfiscaJ year at a rate of? .9%. We anticipate salesta.1l revenues tocontinuegrowil1g
over thenc:.:! rew years alth...,ugh ilt a slOWer PJlcethan in ihepast due tilthe slowdown iJ,the
ecOMmy because of the openings oftne Otay RanchTown Centre MalJ, tlJeVUlageWalkthat
indudesTr<jder Jqe 'sand a Henry 'sMarketand the tOlrtinuedexpansion of the Chula Vista Auto
Parkthat currentry includes Ford,CheYrolet, To~'Qta. Dodge, ChryslerandJeepdealerships. The
DpeningQf IDclt.!lg allticIpaled State RO(lte 125 in November 1007 is nowprovidlngeasicl'
aCCcilS to. Chl.l.la Vista's retail centers and encourage fu:rther commercial development oillie
. freeway corridor.
v
Clrf OF-GHULA ViSTA
Sales Tax "RJ;venues
FiscalY ell rs 1997.9!lto2006-07
(inn1H[ions) .
i.. t9llll..2O<lO 2001 1~ ZQQ3 l1>>l
~ 2007
PrOOef'Ot Tates:
Under Statel~.shlce 1979,ptopet1y "Vies for general govel11UJent purposes art lUIlitl:\dlo t % of
themarketvalue onIle ptopertyassessed. lnSeprember2007, the median sales pri.;.eof a single
farnilyclel~ched home was $435,0(10 .Ill westemChulli Vista and $532,500 in easlettl ChillI.\.
Vista, whlch wercd<xreases over the median pticesin 2006 of $545,000 and $614,000
reSPectively.
Due to the historic.al illtre;l$e& il1the price of homes in Southern Califoinill.frOrtl 1999~20Q6
cDupled....'illrthe growth oCl:urring inthe eastern sel:tion of the City, pttl]Jerty ilIx revenu(~ have
growuat bistQTIcaIlybigh rates over the. past frve years. InJiscal year 2007, property tax
ri;Wlmesgtewby20. J %ftom the. previous fiscal year. According tothellwstre~entCQunty of
$anDiegu Assessor'sUffice Report, assessed values in Chula Vista haveiIlcreased by 14.22%
forfiscnl year 2008. This is the 9th "lmight year that the City has seen dm(ble-digitgrowth in
ass<:ssed values.
vi
PmpcttyTax Rtvenue
Fiseal Vea~ 1997-98 to" ZOO6-07
(ill millions)
52<8
$N
$2Q
$12
$a
$4
$a
1SNi 1a91il '2QOO'2001 =, 2~ '21>>1, 2tI* '2006 2001
LOl1f{"Term Financial Plw.J1ing:
Long"tenn, tile City is in ag~1Od financial position benefrting from <l vibrant and growing San
Diego area economy. The City considersitessential toftmd itsfinlUlcial n:~rves at a level that
c<tnenuure a Hmlted economic recession witlltmt unp&:ting service lev;:ls and capital
lllai nt'enaru:;eprogtanls. The (:ouJj-ciJ' s General Fund minimum reserve level policy of 8%,
which became effective in 1996; was est',thlishedto prudentJyprotect the fiscal solvllncy of the
City. ,Resenre$ are imjXlrtllltt rnorder to mitigate the negative impact on revenues from
economic f1lilclulUiOllS, to witb$4md Stale budget grabs and to rum! unforesecllcxpenditure
requiremenl.$c
Howeve.r"the recent do...mturn in the economy had impact<!d weity's devek~pment revenues,
sales lax and franchise fees significantly. Although the city took immediate tictionby
implementing a hiring freeze and acros.~ the hOilrd cti!sthc teserveshad tQbeuti lized to balance
the fiscal year 2007 budget. As a result the, City's GeneralFlmd reserve is now at 6.3%, v.tdel:t is
belQW the reserve policy.leve1 of8%.,
During flSc.'!.lyear;;;Otl7,t-loe Finance Department updated and reissued the Gen.eral Fund Five
Year, FUlalldal Forecast report to assess the Genera! Fund's ability QVerlhe nex.t five y",ars to
continue e1lfl:el1tsetviee levelS tJased on ai1ticip,'\ted gr<)\"thc The Finance Department ",'ill
continue 10 update the five-year fOrecast report,a$projeetiolls are refined, ThisJbrecast \Viii
serve as thefoundatiQll for the City's Long Term fmanciaJPlan. whieh is ,m process. The
Government Finance Officef$ AS1>OGlation (GFOA) recognizes the I mportance of combining the
forecasting of rev~mieS~hd expenditures illto a single t1nancial forecast. TI'le DrOA also
recolllmel1<l.s tniiU" gQvernmcnt slloulohavQ a financial pUmning proc~ss Ihatassesses ltmg-term
financial itnplicatkms of current and proposedpoIicie., pr()grarns,andasswnptiol1s thllt\ievelop
approprilltestnlte,gies to achieve its goals.
\1:ij
C!TY- or: (::HUU\' V!S't~
CASH MANAGEMENT POLICIES
In order to nllL'tlmize investmentleverage, his the City'spl'tl.ctice'ro"pool" available cashtrom
all F~lllds fudlWfJstmentpul'pOses [nau:ordanee withtlteadopted ir.vestmel11 pQllcy,avaHable-
cash is lnvested\\<ltb the goal of safety, meaningprolectiM ofpdncipal, a5the first priority,
ensuring adequate U_Mdil'Yasthe sf)j;Ntd ptlority,and In.v'imh:illg yield l\.$ t!l.e third priority,
1'heaverage yield on the pOOled investmentpol'tfulioduringthefiscal :'earending JundO, 2007
was 4.01%, BllmcreaSe ifilln the prk'll' year yield ofH6% due to ali increasing mterest rate
environment
RISK MANAGEMENT
T11eCily is self-immred fur genera! liability up to $250,000 and worker's compensation up to
$5{lO,OOn per claim. As a member of the San Diego' Pooled Insurance Program. Authority
(SANnPIPA),.the City is insured for generalliabiIity claill1$betw~en $Z$O,OOO $l\d $2 milllon.
InadditiOO, fol' genemlliab!lity clajms between $2 milHi:>J1 and $37nri\liCi1, the City is c~veted
by <::xcess lnsura'I\t~ew\'erage obtainedthl'Ol.gh $A.."'.rDPfPA. Forworker'$eOlllpellsation clah'tlS.
the City ha, ptttch!l$ed ex;;e$$ in$.tirance for claims excee\ling $250;nOO.
The.probableBmOl.iJ1Is oflossas estilllatedbythe City's Risk Manager and Altorney,irIcl1wing
anl:lSthnate .of iIWurred-but.n()trepmted losses, have been recllrded as liabilities in the ba~ic
fuiartcial statementihThere were ,to re.Qudiolls ili instl.r<!ilce coverage from the prior year ana
there were llo.insurallcesett!ements which exceeded covet'&ge. in each ofthe past three years,
Addition.al infQm'lll.tion Pl1 the City's risk management activity call Oil found troder note
disdosu,e9 to tl1efinancial.st~el1ts.
viii
, MAJORfNJTIATIVES
TlJe('ity completed some maj{}r capital projects duriug ,fiscal year 2007. These projects reflect
C.o 1.10 dl '" cont!m.led commitl'l)(mt to lfle reilewa! ofexisting facUities and infrastrUCll)re al'ld to
provide theimprovemenls llCl.'essary to respond to growth being experienced by the: City.
Established neighborhoods and business atensCOtltinue to benefit from Clll,lla Vis1,a;:;
l;ommitmeJ11 to maintailritsinfrasl:r\.1()!l1re. Fiscal year 2005.06 saw ihewIIipf.:tion of eight new
parkE, Phase 1 oftheCivicCenl-er renovlltiOnand s.ignifkantimprovements toO existing
infraslrijOt:ure, The primary focus in 2007 was. tncomplete col1stntctionofthe CivicCerrter
Phase 2 and begitnhe Phase 3 rel10VUnollS.
· CivicCl."nter Complex (l'base2) -Renovatinnslothe
Public Seriiccs BuHdingwere completed in February
2007. The $12.3 milfioo project involved a totlll
makeover ol.theinterior of the btiUdiilg that included
the remOVAl and recotUitrnction of the tOnne!' Cit)'
C{Illl1cil Chambers area. The EngitlCeringatlcJ
Planning &: Building Departments occupy thcPublic
Service:; building. One of (!1emajorimprovements: 10
the building is a(;()llsplidal.~ cO~lIlter area that is
expec.te(!to-simplifY the process ofdamg business witb .
both dt'Partme~ll'i"
· Civic Center Complex (.PltllStl3)- Thetenovatibns to
the fonner police department facility lil..-ganimrnediately' following the opening of the
Public Services building. At aoost of approximately $15.0 million,.thereMvatoo facility
will house ,the BUlnar! Resources,. Redeveloptll..nit Agency and. HOusing, Authority,
Information Technology Servkes, Qf1}ce ofConSen",ltionaml Environmental Services,
somePlal1111ng and Building stjjffllndthe Chula Vista EmpIQ)'ee5Credit Union. Phase 3
is funded by it combinatiOlh1fPcvelopmcnl Impact Fees (93.68%}andthe Gener.u Ftmd
(6.32%) and, Was !lot fjJ)~ed through ,a bond issue.
In 2007, the City saw the open ing$Qftwo Tlew shopping cenrersand San Diego COUllty's tits!
t(ll) road, \vhich is an extensiot1of State Route 125, '
TheOtayRandl Tow'll Center is Lfie thr major shopping and entena!llment ccnterto come 10 the
SaIl Diego metropolitan market .in mpre than 20 yeary. FortheSl)lrth 1,3<ly area, it completely
redefines the manner in which public gatheting$!;!aces blendwith.f.ishiotmble;fun stores, white-
table..,cloth dlningand entert<llllffient. Visitol'swaikcJoW\il.irba!ie, bltStlillg.(}l-~IH~ir,sborrlined
sidewalks with on-stre<.,<:parklng, Qutdoorcafes and grand tauntaim" Apel~ftiendly scttiogand
adjacent doggie park welcome 4-legged visitors, and '1\ celllWly locat~1 "chalk garden" and
POPpet fqutttaintbr ehilWeIimalce this destinlltiollespeplaTlyone'of+kllld. Amonglhe lO(l
shops and restaurants tastes aieserved, by Mac}'s, REI, l3l1Oles & Noble, Apple, Sephora and
Ix:
G1TY()FCIitJt:J\. V1~:t~
W1iite HQuseBlackMarket, to namejust aj\.~v. On rile center's westsidels a specialty fashion
aml:service village featuring GHa Rut A ved" Salon aM other l.!Diquefushions and services. To
. the u{}rth, AMC 'Theatres' 12scre<:ns will delight film buffs. Epictlreanst.'UlchooseJrom P..F.
Chw.g'sChinaBistro, Cheesecake Factor;y, King's Fish Hoose, CaHfomill Pil-za Kitchen .or
m311}'on-the"godining options.
TIle Village Walk ope\uedinMay 2007 and is~m
up$Calcboutique-styJe cOIDrnertial center t.hat is
nont" to Trader Joe's, Hemy's Markel, Border's
bookstore along wiLlirestaural11sthatinduOe Pat
and Oscarsand Trophy's.
The Sauth gay Ex:pres$way,isa lO-mile toll-
road that opened in 2007. San Diego County's
fitsttoU road is a ilOrths6llthtllQl'ollghfare that .. .... .. ...... .... . .
~isects . the ea~l area of !be City, The loll-road i$ Mpe(,;~d to dramatkaUy reduce traffic
tongesticm ahdtravel timeS for south i:lllYCQmm4oters. The road w1T1alsoproved a direct link to
!he may R~.nch T o....mCentennall and many of the city's01her Sbopping districts.
lNOEPENOEl"f'T AUDlT
Aniudependenl audit of the City's records is required by section.tO 17 of the City (,'harter and
was performed for the year. ended Jl.me 30, 20M by the certitled p\lblicaccountingfinn of
Moreland & Associates, Inc. The auditors report on the basic fInancial Sl"tements and.sclledules
is included in the Financial Sectiollofthe Report In general, the auditors conclurledth"t the
t1nancial statements llnd schedules referred to abovepresJ:'tlt faJrly,i11all material respects, th.e
fulancialposition (If the City ofChula Vista as ofJune30,2007, and the results of Itsoper'<Itions
and cash flows of itsptoprletary fund types fottheyearthel1ended iru~onfol'inlty with generally
accepted 8.CCOltliting principles. the professionalism and knowledge exhibited byMor~land &
ASSQCiiltes, Inc. during meir audit \vork isgreat!y apprecIated.
AWARD
The. Goveml)1entFir~ijfl(;e Officers' Association of the UrJted States and. Canada (OFOA)
aW:ilrded a C~j1Gate Qf A<:hi<:ivernent for Excellencein financialRepNting to the City ofChula
Vista forits comprehensiw annUlI! fu1ancialreportforthcfiscalyearendedJune 30, 2006. !n
order to beawllrdeda CertfficateofAchievement, a government fllUlo'tpublish an easily readable
!lTldefficiently orgamzedc;.:lmprehenslve anllual financial report TIlls report musts;:rtisfY both
generaliyacceptcdaccolmting principles anda.ppl lcllble kgal.reqllirements,
A Certificate ofAch.ievement i$ validfor a period of one year only- We believe that our current
e.Qmprehellliive an.n.md financial report c.ontioties to meet tbeCel1ificllte of AChievement
f'rograln'sreql.lirementsand we are. submitting it 10 the GFOA t,) !lete.mine il~eljgibi lity fot
a.nothercertitka.te,
x
The .City has ,a[S{) receivoo a :rHs~inguisheq Budge! .!~:iA{al'ci: frQU1 :the.QoverTLL'lleQ.t:Finnn~e
Officers Association ortne UnitedStmes al1dCMad~lli.1T lheJiscal yet;tl'S 200i'iand 20l)7budgeL
1r. tlrGer to rccei 'if tl1is budget a\.vard, &taffhadlolUootru>tiOl'mlly recogni<edguidelines tnwWch
(1; governments! ullit must pmdtwea budg'C! docUmetltt:1;ltmee!5 pr\)gram <#teriaas a policy
ck~ument. 'Operations guic-e~ .Gnandal plan~ andcN:nu1m-I1C2J.rOflS devi:ce~_ 'JJus: a\v~,f(i_ft.,~~$ent1 a
significant achievement {lfid retki."1s tbe City', commi!1llenUo meetrne highest principles of
go Ye.'"Dlllemlll budg"lli1g,
SimiJarly;the City received the California Society ;.)fMulllcipa1 Officers (CS.lVlFO) BxceHenl::e
A"''2rd in Blldgetiug for tiw Ope,n1tingBudget fbrflSCal yeats 2006 a.ld 2007. Thebudge!
!lv,'ardspragramVr1l.s designeJ to rewgrJzeagencies tlh'1t prepare theiroudget dc.cutnel1!sto ll1~t
ahig!11e,'el ofcdtetiain the quality of budget deeumentaii01L
ACk~O"'Lli:DGMENTS
Pre.paration of the Report and moreimportantr;, maintainingtbe City's &:COunting records in a
manner SUftiCif,11t to e;'Imrhe at1;lr~entiQned auditors opiniQn is only al'1<;{Hnplished wHh the"
continuous .::ol1certed cfthrtQf Qach <md everystaffmernber in the Finance DepartnlCtlt.Assuct",
Iexp.r~nny .incer'~appreciallon lbrllieir dedicated ser.-i<:e, [would also lib'"!" th~'1k the City
Council for their c{Jl'ltimled stlJ:+x>rt in aChieving excellence in fmandai mauagement.
Respectfully,
! tli. /J/}. ..,n. ,- -.' - f/~" L ".Jt' I'~
\.....1 ,Jr~:'):~ r\t..t~~}~
Maria Kachadoorian, CPA, MPA
Director ofFinlIDce/Trea~<.1rer
.xi.
CITY OF CHlJLA VIS''''
CityofChula Vista
Lh~t of City OffiCiate
June 30, ;2007
City Council
.~J t- 'dlt " .......
StlWh.,mC. Padilla Mayor
Jerry Rindone Deputy Mayor
Steve Castaneda. CouncJlmember
John McCann Councilmen1ber
Rudy RamirezCouncUinember
Administration
-,-
DavidGarcia City Manager
Soott Tullocn Ac;tlngAsslstant City Manager
DaVid Palmer AssiS~nfCftyManager
Ann Moore City Attorney
Susan Bigelow CityClerll:
Oepartnlent Heads
EdwardVaneeno.o Director of Budget & Analysis
Ann Hix Acting Director Of CommunltyDevelopment
!\4aria Kachadoorian Director of Financerrreasurer
DouglasPerry Fire Chief
Jack Griffin Director of Genl':!tal SeNites
Marcia Raskin Director aT Human Resources
David Palmer Dit€lctor.ofUprary
Louie VlgnapianoDirector aT Information Technology Services,
Daniel D. l3eintema DirectDt of NaMe Center
Jim Sandoval Director of Planning & Buikling
Richard Emersan Chief of Police
Dalte Byers Director of Public Works
BUCk Martin Director of Recreation
xii
, CJty Affilmey
I
AsS!. Citv Mngr.
Gomm.my
'S<!ii'iices
I
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L-~
I
~
qklzeh .4\.d\Fi~$'(JlY L
Boatds ~
,
Inlo<m_ """
TeChnQiQg~ .
S.........
Nat\n:Cenhu
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2"~'-t
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atvQf
'CHULAVlSTA
ORGANIZATION CHART
CITIZENS OF
CHl1LAVISTA
MaYClr
City Council
Ea>..'Wmie
L~t
011;0",
I.... C.f~eo,~~~OfY:.'
Comtl'lis:alon:s, ,
City Manager
G~vemrnent
R<ll<li_U""",,,
IF$oooe' !
.~
""'''''
Olli<:e of Budget
J"'l"-'.a!Y'ls
1
Oilico..Q/
com~
:ilii
C"""""",It'f
O....oi>me'nt
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! c"""",,: &o.wce. I
t ". !
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_P~~'a"d
'8<JiIdfrlg
Cily Cieri(
AsStCiI~Mrigr.
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111 ~mp.g ,
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Oll\I"~f~:&
--,,..
.-.
flub&.WOrk$-
operat!~_~_T~J
Certificate of
Achievement
for Excellence
in Financial
Reporting
Pre$enied .10
CityQf Chula Vista
California
F()f its Comprehensive Aonllill
Financial Report
ror tl::e FlSCal Year Ended
June 30, 2006
.1,. ~ Qf~~t.wr lJ,(~Uence>ml'~iaJ
R~lip~by.\h<l(Wv~t~~o~
A$;l~l ",\h<lQrttte<iS"""'- and Canada 10
g(>v~-.t~~..P\lbllc~k1:y",,~nt
&ys__ Wh<lse~ ~ftnanoiol
repar!li{CA."t<..} ""Move tho highost
iI1l.."".rm.in ~ :i:ccouDthg
and fi"i""';.lrcpolw:g.
~ ~. .C?x
President
~.tf'~
Executive Director
xiv
FINANCIAL SECTION
This page has been left blank intentionally.
Moreland & ,W(J,j()('(,u!mJ /J'n,e.
1. CERTIFIED F'UBlIC ACCOUNTANTS
1201 DOVE STREET. SUITE 680
NEWPORT BEACH, CAUFORNIA 92660
570 RANCHEROS DRIVE. SUITE 260
S,ll,N MARCOS, CA 92069
m~HONE (949) 221-0025
December 18, 2007
The Honorable City Council
of the City ofChula Vista, California
Indeoendent Auditors' Reoort
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 Chula Vista, California, as of and for the year ended June 30, 2007, 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 Chula Vista'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
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
Chula Vista, California, as of June 30, 2007, and the respective changes in financial position
and cash flows, where applicable, thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditinl! Standards, we have also issued our report dated
December 18, 2007 on our consideration of the City of Chula Vista's internal control over
financial reporting and our tests of its compliance with certain provisions of laws,
regulations, contracts, 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 Auditinl! Standards and should be considered in assessing the
results of our audit.
1
The management's discussion and analysis and other required supplementary information
identified in the accompanying table of contents are not a required part of the basic financial
statements but are supplementary information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the
required supplementary information. However, we did not audit the information and express
no opinion on it
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying introductory
section the major fund budgetary comparison schedules and the combining and individual
nonmajor fund financial statements and schedules listed as supplementary information in the
table of contents, and statistical section are presented for purposes of additional analysis and
are not a required part of the basic fmancial statements. The major fund budgetary
comparison schedules and the combining and individual nonmajor fund financial statements
and schedules have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated, in all material respects, in relation
to the basic fmandal 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 on them.
~~~~;'~~AC.
2
MANAGEMENT AND DISCUSSION ANALYSIS
This page has been left blank intentionally.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management of the City of Chula Vista (the "City") provides this Management Discussion
and Analysis of the City's Comprehensive Annual Financial Report (CAFR) for readers of
the City's financial statements. This narrative overview and analysis of the financial
activities of the City is for the fiscal year ended June 30, 2007. We encourage readers to
consider this information in conjunction with the additional information that is furnished in
the letter of transmittal, which can be found preceding this narrative, and with the City's
financial statements, which follow.
Financial Highlights - Primary Government
Government-Wide Highlights:
Net Assets - The assets of the City exceeded its liabilities at fiscal year ending June
30, 2007 by $916.6 million. Of this amount, $126.4 million was reported as
"unrestricted net assets" and may be used to meet the government's ongoing
obligations to citizens and creditors.
Changes in Net Assets - The City's total net assets increased by $75.7 million in
fiscal year 2007. Net assets of governmental activities increased by $76.7 million,
while net assets of the business type activities decreased by $1.0 million.
Fund Highlights:
Governmental FundI. -Fund Balances- As of the close of fiscal year 2007, the City's
governmental funds reported a combined ending fund balance of $213.7 million, a
decrease of $19.7 million from the prior year. Of this amount, $125.8 million
represents "unreserved fund balances" available for appropriation.
General Fund - The unreserved fund balance of the general fund on June 30, 2007
was $13.3 million, a decrease of $4.8 million from the prior year. Included in these
figures is $2.9 million unreserved fund balance accounted for in funds, such as the
Public Liability Reserve Fund, which are considered general fund type funds for
financial reporting purposes.
Long-Term Debt:
The City's total debt obligations were decreased by $5.0 million or 2.4% during fiscal
year 2007. For the 2007 fiscal year, the Redevelopment Agency issued Tax
Allocation Bonds totaling $25.8 million that refunded the 1994 Tax Allocation Bonds
Series A, C and D of $24.8 million. The remaining change is attributable to other
payments of bond principal ($10.5 million) and the increase in compensated absences
($5.0 million) and a bond discount of (-$0.5 million).
3
City Highlights
The City completed some major capital projects during fiscal year 2007. These projects
reflect Council's continued commitment to the renewal of existing facilities and
infrastructure and to provide the improvements necessary to respond to growth being
experienced by the City. Established neighborhoods and business areas continue to benefit
from Chula Vista's commitment to maintain its infrastructure. Fiscal year 2005-06 saw the
completion of eight new parks, Phase 1 of the Civic Center renovation and significant
improvements to existing infrastructure. The primary focus in 2007 was to complete
construction of the Civic Center Phase 2 and begin the Phase 3 renovations.
. Civic Center Complex (Phase 2) - Renovations to the Public Services Building were
completed in February 2007. The $12.3 million project involved a total makeover of
the interior of the building that included the removal and reconstruction of the former
City Council Chambers area. The Engineering and Planning & Building Departments
occupy the Public Services building. One of the major improvements to the building
is a consolidated counter area that is expected to simplify the process of doing
business with both departments.
. Civic Center Complex (Phase 3) - The renovations to the former police department
facility began immediately following the opening of the Public Services building. At
a cost of approximately $15.0 million, the renovated facility will house the Human
Resources, Redevelopment Agency and Housing Authority, Information Technology
Services, Office of Conservation and Environmental Services, some Planning and
Building staff and the Chula Vista Employees Credit Union. Phase 3 is funded by a
combination of Development Impact Fees (93.68%) and the General Fund (6.32%)
and was not fmanced through a bond issue.
In 2007, the City saw the openings of two new shopping centers and San Diego County's
first toll road, which is an extension of State Route 125.
. The Otay Ranch Town Center is the first major shopping and entertainment center to
come to the San Diego metropolitan market in more than 20 years. For the South Bay
area, it completely redefines the manner in which public gathering spaces blend with
fashionable, fun stores, white-table-cloth dining and entertainment Visitors walk
down urbane, bustling, open-air, shop-lined sidewalks with on-street parking, outdoor
cafes and grand fountains. A pet-friendly setting and adjacent doggie park welcome
4-legged visitors, and a centrally located "chalk garden" and popper fountain for
children make this destination especially one-of-a-kind. Among the 100 shops and
restaurants tastes are served by Macy's, REI, Barnes & Noble, Apple, Sephora and
White House Black Market, to name just a few. On the center's west side is a
specialty fashion and service village featuring Gila Rut Aveda Salon and other unique
fashions and services. To the north, AMC Theatres' 12 screens will delight fIlm buffs.
Epicureans can choose from P. F. Chang's China Bistro, Cheesecake Factory, King's
Fish House, California Pizza Kitchen or many on-the-go dining options.
4
· The Village Walk opened in May 2007 and is an upscale boutique-style commercial
center that is home to Trader Joe's, Henry's Market, Border's bookstore along with
restaurants that include Pat and Oscars and Trophy's.
· The South Bay Expressway, is a 10-mile toll-road that opened in 2007. San Diego
County's fIrst toll road is a north south thoroughfare that bisects the eastern area of
the City. The toll-road is expected to dramatically reduce traffIc congestion and
travel times for south bay commuters. The road will also provide a direct link to the
Otay Ranch Town Center mall and many of the city's other shopping districts.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic
fInancial statements. The City's basic fInancial statements are comprised of three
components: I) government-wide fInancial statements, 2) fund fmancial statements, and 3)
notes to the fmancial statements. This report also contains other supplementary information
in addition to the basic fmancial statements themselves.
Government-wide Financial Statements
The government-wide fInancial statements are designed to provide readers with a broad
overview of the City's fmances, in a manner similar to private-sector business. They are
comprised of the Statement of Net Assets and Statement of Activities and Changes in Net
Assets.
The Statement of Net Assets presents information on all of the City's assets and liabilities,
with the difference between the two reported as net assets. Over time, increases or decreases
in net assets may serve as a useful indicator of whether the fmancial position of the City is
improving or deteriorating. This statement combines and consolidates governmental fund's
current fInancial resources with capital assets and long-term obligations.
The Statement of Activities and Changes in Net Assets presents information showing how the
government's net assets changed during the fIscal year. All changes in net assets are
reported as soon as the underlying event giving rise to the change occurs, regardless of the
timing of the related cash flows. Thus revenues and expenses are reported in this statement
for some items that will only result in cash flows in future fIscal periods (e.g. uncollected
taxes and earned but unused vacation leave).
Both of the above fmancial statements have separate sections for three different types of
programs or activities. These three types of activities are:
Governmental Activities - The activities in this section are mostly supported by taxes and
charges for services. The governmental activities of the City include General Government,
Public Safety, Public Works, Parks and Recreation and Library.
5
Business-Type Activities - These functions normally are intended to recover all or a
significant portion of their costs through user fees and charges to external users of goods and
services. The business-type activities of the City include only Transit Operations.
Discretely Presented Component Units - The City of Chula Vista has no discretely presented
component units to report upon.
The government-wide financial statements can be found on pages 17 through 19 of this
report.
Fund Financial Statements and Major Component Unit Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that
have been segregated for specific activities or objectives. The City, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
The fund financial statements provide detailed information about each of the City's most
significant funds, called Major Funds. The concept of Major Funds, and the determination of
which are major funds, was established by GASB Statement 34 and replaces the concept of
combining like funds and presenting them in total. Instead, each Major Fund is presented
individually, with all Non-major Funds summarized and presented in a single column.
Further detail on the Non-major funds is presented on pages 90 through 115 of this report.
Governmental Funds - Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide fmancial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may
be useful in evaluating a government's near-term financial capacity.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for government funds
with similar information presented for governmental activities in the government-wide
financial statements. By doing so, 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. These reconciliations are presented on the page immediately
following each governmental fund fmancial statement.
The City has thirty-six governmental funds, of which seven are considered major funds for
presentation purposes. Each major fund is presented separately in the governmental fund
balance sheet and in the governmental fund statement of revenues, expenditures, and changes
in fund balances. The City's remaining governmental funds are combined into a single,
aggregated presentation. The basic governmental fund financial statements can be found on
6
pages 20 through 32 of this report. Individual fund data for each of these non-major
governmental funds is provided in the form of combining statements on pages 90 through
101 of this report.
Proprietary Funds - The City maintains two different types of proprietary funds _ enterprise
funds and internal service funds. Enterprise funds are used to report the same functions
presented as business-type activities in the government-wide financial statements. The City
uses an enterprise fund to account for its Transit activities. Internal service funds are used to
accumulate and allocate costs internally among the City's various functions. The City uses
internal service funds to account for its fleet of vehicles, stores inventory, its information
systems and equipment replacement program. Because these services predominantly benefit
governmental rather than business-type functions, they have been included within
governmental activities in the governmental-wide fmancial statements.
Proprietary funds provide the same type of information as the government-wide fmancial
statements, only in more detail. Like the government-wide fmancial statements, proprietary
fund fmancial statements use the accrual basis of accounting. There is no reconciliation
needed between the government-wide financial statements for business-type activities and
the proprietary fund financial statements.
The basic proprietary fund financial statements can be found on pages 28 through 32 of this
report.
Fiduciary Funds - Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government-wide
financial statements because the resources of those funds are not available to support the
City's own programs.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund fmancial statements. The notes to the financial
statements can be found on pages 33 through 73 of this report.
Required Supplementary Information
In addition to the basic fmancial statements and accompanying notes, this report also
presents certain required supplementary information providing a budgetary comparison
statement for the general fund and sewer fund. Required supplementary information can be
found on pages 75 and 81 of this report.
7
GOVERNMENT-WIDE FINANCIAL ANALYSIS
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 of Chula Vista, combined net assets (government
and business type activities) totaled $916.6 million at the close of the fiscal year ending June
30,2007. This is an increase of$75.7 million or 9.0% from the previous fiscal year.
City or Chala Vista Net Assets
Fi,cal Year Ending June 30
Gtwcrmncntll) Activities Busincss.typc Activities Total
2007 2006 2007 2006 2007 2006
Current assets S 223.334.984 S 278.414.886 S 3,028,409 S l843.522 S 226.363,393 S 281.258,408
Noncurrent assets 38.856.344 2,260,925 38.856,344 2.260,925
Capimlassct:S 898,132,366 808,604.369 903,790.799 815,144,883
ToralAssct.~ 1,160,323,694 1,089,280,180 3,028,409 2,843.522 1,169,010.536 1,098,664,216
Currcntliabilitics 38,002,184 49,208.461 2,692,585 2.343.223 40,694,769 51.551,684
Long-term liabilities 211,687,601 206,141.786 211,687,601 206,141,786
Total Liabilitics 249,689,785 255,350.247 2,692.585 2,343,223 252.382,370 257,693,470
Investments in capital
Net of related debt 715,090,838 662,230,041 5658433 6.540,514 720,749,271 668,770,555
Rcstrictc-d 69,516,915 75,916,972 69,516,915 75,916,972
Unrcsnictcd 126,026,156 95,782,921 335824 500,299 126,361,980 96,283,220
Total Net Assets S 910,633,909 S 833,929,934 S 5,994,257 S 7,040,813 S 916,628,166 S 840,970,747
By far the largest portion of the City's net assets (78.6%) reflects its investment in capital
assets (e.g. land, streets, sewers, buildings, machinery, and equipment), less any related debt
used to acquire those assets that are still outstanding. The City uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending.
Although the City investment in its 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
the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City's net assets (7.6%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net
assets, $126.4 million, may be used to meet the government's ongoing obligations to citizens
and creditors.
Changes in Net Assets
The City's net assets have increased by $75.7 million or 9.0%, from the prior fiscal year
primarily from developer contributed infrastructure. In fiscal year 2007, City expenses,
which include both governmental and business-type activities, exceeded program revenues
by $54.6 million resulting in the use of that amount of general revenues from the $13 1.3
million of total general revenues. Program revenues are those revenues that are derived
directly from the program itself and reduce the net cost of the function to be financed from
the government's general revenues. The City's expenses cover a range of services. The
8
largest expense categories were Public Works, Public Safety and General Government.
Further analysis IS provided within the governmental and business-type activity sections
below.
Ot)" of Chula \1sta
Changes in Net Assets
fitseal Year End1ngJDne 30
CJOvcrmncnlaJ Activities
2007 2006
Bu.'linCSNVPC Ac-uvilics
2007 2006
Tela!
2007
2006
Revenues:
Program revenues:
Charges for service!!
Oporlilling gr8l1L'l and conlribLllions
Capital grams and contributions
\1l..'I1craJrovcnur..'ll:
ProperLy t.a.\.Cll
Salcsl.axcs
FranchiscLa....cs
ULilily u..~cr taxes
Blll'lincss liccmm taxes
T ran.'liC'l1l Occupancy 18xCS
Prop...'l)'I.ran'lICrl.axCl'I
Con.'llTUC~On taxCll
MOlOT vchicle lic.cn.'~c
Mol.or vchicle licCT1.'lc in lieu
lnlcrgovcmmcnIBI
Invommonl carningll
MisccllancouR
Pn.'Jtlium on bonds issued
('rain on sale ofcapi181 aSSCL'l
TotalrovCl1ucs
EXpcrulCS:
General gO\icmmCrH
PublicsafcLy
Public works
Parks and rC-l,"TL"l'IUon
Library
lnLL'TCSt. on long-LL'Trn debt
Tran'lh opcral.iOIt.'l
Total expenses
lncrcallc.i(Dccrcasc) in
Net. aS9CL'l be-larc InmsfcT'!'l
Tran'lrors
Change in Net ASSCL'I
NC1AsSCL'l, BoginningorVcar
NCl^SSCL~, End or Year
Governmental Activities
s
1 00,3 36, 368 S
16,646,713
85,608,765
38,882,122
32,817,351
8,813,064
6,981,762
1,237,316
2,551,570
1,423,599
393,650
1,218,973
16,457,062
13,386,872
7,030,444
106,6%
333,892,327
45,249,650
77,136,782
103,117,608
9,353,280
10,320,817
12,032,833
257.210,970
s
76,681,357
22,618
76,703,975
833,929,934
910,633,909 S
Governmental activities increased the
City's net assets by $76.7 million
thereby accounting for all of the
City's total growth in net assets. A
comparison of the cost of services by
function for the City's governmental
activities is shown above, along with
the revenues used to cover the net
expenses of the governmental
activities.
127,932,860 S
19,464,389
57,074,381
32,873,671
30,915,515
9,492,759
6.363,446
1,234,912
2,336,204
2,122,860
668,761
4,153,331
14,201,508
10,924,754
4,189,465
66,920
324,015,736
53,566,425
72,887,220
102,122,564
8,085,160
10,412,973
12,263,808
259,338,150
64,677,587
122,588
64,800,175
769,129,760
833,929,935 S
2,433,008 S
3,677,603
167,734
131,968
6,410,313
7,434,251
7,434,251
(1,023,938)
(22,618)
0.046.556)
7,040,813
5,994,257 S
2,526,487 S
102,769,376
16,646,713
85,608,765
4,190,049
78,605
(101,966)
38,882,122
32,817,351
8,813,064
6,981,762
1,237,316
2,551,570
1,423,599
393,650
1,218,973
16,457,062
3,677,603
13,554.606
7,162,412
106,6%
6,693,175
340,302,640
7,533,988
7.533,988
45.249,650
77,136,781
103,117,608
9,353,280
10,320.811
12,032,832
7,434,251
264,645,219
(840.813)
(122,588)
(%3.401)
8,004,214
1,040,813 S
75,651,419
75,657,419
840,917,747
916,635.166
Governmental Expenditures by Activity
A.Jbic Works
40.1%
9
Interest on 009-
terrndebt
4.7%
Parks and
Recreation
3.6%
Ubrary
4.0010
F\Jbic Sat ety
30.0%
s
130,459,347
19,464,389
57,074,381
32,873,671
30,915,515
9,492,759
6,363,446
1,234,912
2,336,204
2,122,860
668,761
4,153,331
14,201,508
4,190.049
11,003,359
4,087,499
66,920
330,708,911
53,566,425
72,887,220
102,122,564
8,085,160
10,412,973
12,263,808
7,533,988
266,872,138
63,836,774
s
63,836,774
7n,133,974
840,970,748
Total governmental activity type expenses were $257.2 million in fiscal year 2007. The
largest expenses were incurred for Public Works, Public Safety and General Government.
These three activities combined account for 87.7% of all general activity expenses. These
expenses do not include capital outlays, which are reflected in the City's capital assets.
RcvcnUCl'l:
Program revenues:
Charges ror llcrviccs S
OIX-.,.adng granL~ and oomr1butions
Capital granL<I and conlribut.ion.q
C'rcncralrovcnucs:
Pro:fK-"!1.}' L8x.cs
SaICl'll.8XCll
Franchise ta.'(,Cll
U\.ili\.yu.u1.8XCS
Su.qiness licoTt'lc \.8XCS
Tnmqicnt occupancy \.8XCS
Prop...-ry translerl.8xcs
Comllrucuon \.axes
MO\.OTvchiclcliccn.qc
MOlar vehicle liccn.<lc in lieu
lnwrgovcmmcn181
lnvcsuncn\. earnings
Misccllaneous
Premium on bonds issued
C'rainon salc oJ'capiI81assc\.s
T Ola! revenues
ExpcnllCll:
\Jl..'Tlcnd govcmmcnl
PubliesafeLY
Public works
Park..q and rocrca1.ion
Library
lnl.CJ\.'l'lL on long."-.",, deb\.
Transh opC!llLionq
T0\.81 cxpcnSCl'l
lncrcasc!(Dccrcasc) in
Ne\. a..~scl.S before tramjbrs
Tran.'dL.'I1l
Change in NOl Nl!'lCl..<I
No\. ASSCL<I. Beginning ory car
Net ASSCL<I. End or Vest S
Cfty ofChula V1sbl
C..overnmental Aeti'\1tlell
F1.scal Year EndingJune30
GovommcnLal ACLivi\.ics
2007 2006
100,336,368 S
1 6,646,713
85,608,765
38,882,122
32,817,351
8,813,064
6,981,762
1,237,316
2.55t,570
1.423,599
393,650
1,218,973
16.457,062
13,386,872
7,030,444
106,6%
333,892.327
45,249,650
77,136,782
103,117,608
9,353,~O
10.320,817
12,032,833
257,210,970
76,681,357
22,618
76,703,975
833,929,934
910,633,909 S
1 27,932,860 S
19,464,389
57,074,381
32,873,671
30,915,515
9,492,759
6,363,446
1,234,912
2,336,204
2, 122,860
668,761
4,153,331
14,201,508
10,924,754
4,189,465
66.,920
324,015,736
53,566,425
72,887,220
102, 122,564
8,085,160
10,412,973
12,263,808
259,338,150
64,677,587
1""',588
64,800,175
769,129,760
833,929,935 S
BWliru..~-~ypc Activities
2007 2006
2,433,008 S
3,677,603
167,734
131,968
6,410.313
7,434,251
7,434,251
(1,023,938)
(22,618)
(1.046.556)
7,040,813
5,994,257 S
2,526,487 S
4,190,049
78,605
(101.966)
6,693,175
7,533,988
7,533,988
(840,813)
(122,588)
(963.401)
8,004,214
7,040,813 S
2007
102,769,376
16,646.713
85,608,765
38,882,122
32,817,351
8,813,064
6,981,762
1,237,316
2.551,570
1,423.599
393,650
1,218,973
16,457,062
3,677,603
13,554,606
7,162,412
106,6%
340.302.640
45,249,650
77,136,781
103,117,608
9,353,280
10,320,817
12,032,832
7,434,251
264,645.219
75,657,419
75,657,419
840.970,747
916,6~,166
Total
2006
s
130,459,347
19,464,389
57,074,381
32,873,671
30,915,515
9,492,759
6,363,446
1,234,912
2,336,204
2.122,860
668,761
4,153,331
14,201,508
4,190,049
11,003,359
4,087,499
66.920
330,708.911
53,566,425
72,887,220
1 02,122,564
8,085,160
10,412,973
12,263,808
7.533,988
266,872,138
63,836,774
s
63.836,774
777,133,974
840,970,748
Total program revenues from governmental activities were $202.6 million in fiscal year
2007. Per GASB 34, program revenues are derived directly from the program itself or from
parties outside the reporting government's taxpayers or citizenry. They reduce the net cost of
the function to be fmanced from the government's general revenues.
10
As reflected in the pie chart, 49.5% of the governmental program revenues came from
Charges for Services, which includes licenses and permits, plan checking fees, developer
fees, special assessments and several other
revenues. Program revenues under the
Operating Grants and Contributions
category totaled $16.6 million or 8.2% and
include restricted revenues such as Gas
Tax, Transportation Sales Tax, Asset
Seizure Funds and Federal/State Grants.
Capital Grants and Contributions are Capital Grants
primarily derived from contributed capital & Contribu1ions
from developers for infrastructure. Capital 42.3%
Grants and Contributions totaled $85.6 million or 42.3% of which $64.1 million or 74.8% is
related to roadways funded by developers and received by the City after completion.
Program Revenues for Governmental Activities
Charges for
SeNces
49.5%
Operating
Grants &
Contributioos
8.2%
General Revenues for Governmental Activities
Utility User Ta,,"s
5.3%
Sales Ta,,"s
25.0%
Miscellaneous
5.4%
Trans ient
OccupancyTa,,"s
1.9%
InYestm ent
Earnings
10.2%
Property Transfer
Ta>es
1.1%
Franchise Taxes
6.7%
Motor Vehicle
License
13.5%
Bus iness
License Taxes
0.9%
Property Ta,,"s
29.6%
General revenues are all other revenues not categorized as program revenues such as
property taxes, sales taxes and investment earnings. Total general revenues from
governmental activities were $131.3 million in fiscal year 2007. The largest percentage of
general revenues received during fiscal year 2007 for governmental activities were taxes of
$110.8 million, which included Property Taxes of $38.9 million and Sales Taxes of $32.8
million. A breakdown of all general revenues is shown in the chart above.
11
Business Type Activities
Net assets for business-type activities were $6.0 million, a decrease of $1.0 million from the
prior fiscal year. This decrease in net assets is primarily a result of depreciation expense of
$0.8 million and a decrease in charges for services revenue of $0.1 million. Total program
revenues for business-type activities were $2.4 million, which were for bus fares. Total
expenses for the business-type activities were $7.4 million during fiscal year 2007, which
were related to Transit Operations.
FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS
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 fmancial capacity. In particular, unreserved fund balance may serve as a useful
measure of a government's net resources available for spending at the end of the fiscal year.
As of the end of fiscal year 2007, the City's governmental funds reported combined ending
fund balances of $213.7 million. Approximately, $30.7 million of this amount constitutes
unreserved and undesignated fund balance, which is available for spending at the
government's discretion. The remainder of fund balance is reserved to indicate that it is not
available for spending because it has already been legally committed.
General Fund - Included as part of the general fund category for financial reporting
purposes is the General Fund, which includes the primary operating fund of the city, the
Workers Compensation Fund, Flexible Spending Account Fund and the Public Liability
Reserve Fund, which are considered general fund type funds for financial reporting purposes.
At the end of the current fiscal year, unreserved fund balance of the general fund was $13.3
million, while total fund balance reached $35.5 million. As a measure of the general fund's
liquidity, it may be useful to compare both unreserved fund balance and total fund balance to
total fund expenditures. Unreserved fund balance represents 7.8% of total general fund
expenditures including transfers out, while total fund balance represents 20.1 % of that same
amount.
During the current year, unreserved fund balance of the general fund, excluding the other
general fund type funds, decreased from $15.8 to $10.3 million. It should be noted that $0.5
million in designations for capital improvement projects are included in the total unreserved
fund balance of $10.3 million, bringing the net total available fund balance to $9.8 million.
The available fund balance represents 6.0% of the general fund operating budget for fiscal
year 2007. 1bis is below the City Council's targeted minimum reserve level of 8% of the
operating budget for the general fund.
12
There is no discussion of any significant budgetary variations between original and final
budget amounts and between fmal budget amounts and actual results because there were no
significant variances that were not already discussed in this document Management
considers a variance of 10% or greater as significant.
Sewer Fund- The Sewer Fund is used to account for a variety of sewer service related
revenues and expenditures. The Sewer Fund revenues increased by an overall $2.4 million.
Sewer Service Fees increased by $2.4 million from the previous year and Sewer Connection
Fees decreased by $1.5 million. Building permits issued declined significantly from the prior
year, which directly affected Sewer Connection Fees. Expenditures decreased $0.02 million
from the prior year due to reduced personnel expenditures in the fiscal year. At the end of
fiscal year 2007, the unreserved fund balance for the sewer fund was $24.2 million, which is
an increase of $3.3 million from the prior fiscal year.
Development Impact Fee Funds - This fund was established as a depository for various
development impact fees. The fees are levied against all new development in the City in
order to pay for the construction or improvement of public facilities as a result of City
growth. At the end of fiscal year 2007, the unreserved fund balance was $34.0 million,
which is a decrease of $17.8 million from the previous fiscal year due primarily to the
construction of the various phases of the civic center project. Since these funds are collected
for construction or improvements of public facilities, they have been fully designated for
specific projects.
Park Acquisition Development - This fund was established as a depository for fees collected
from property developers for the purpose of providing park and recreational facilities directly
benefiting and serving residents of the regulated subdivision. This in-lieu fee was adopted
by the City to acquire neighborhood and community parkland and to construct parks and
recreational facilities. The Parkland Acquisition and Development fee was increased in
October 2006 from $8,962 to $9,122 for Areas West ofl-805 and $16,644 to $16,804 for
Areas East of I-80S. The fund was a non-major fund in FY 2006 and is now considered a
major fund for financial reporting purposes. At the end of fiscal year 2007, the unreserved
fund balance was $36.3 million, which is an increase of $8.7 million due to continued
development and an increase in the fee for the fiscal year. Since these funds are collected for
providing parks and recreational facilities, they have been fully designated for specific
projects.
Redevelopment Agency Debt Service Fund - This fund was established to account for tax
levies, rentals, other revenues and payments of principal and interest on Redevelopment
Agency loans and outstanding bonds. In July 2006, the Redevelopment Agency issued the
2006 Senior Tax Allocation Refunding Bonds, Series A ($13,435,000) and Series B
($12,325,000) totaling $25,760,000 to refinance the 1994 Senior Tax Allocation Bonds
Series A, C, and D.
City Debt Service Fund - This fund was established to account for the principal and interest
payments on the City's long-term debt. There were no new issuances or other major fund
activity for the fiscal year.
13
Proprietary Funds
The City's proprietary funds provide the same type of information found in the govemment-
wide financial statements, but in more detail. As discussed previously in Business-Type
Activities, the City's net assets decreased by $1.0 million as a result of operations in the
proprietary funds. This decrease in net assets is primarily a result of depreciation expense of
$0.8 million and a decrease in charges for services revenue of $0.1 million.
GENERAL FUND BUDGETARY HIGHLIGHTS
The final amended general fund budget totaled $174.7 million, including $2.7 million in
budget amendments to the originally adopted budget and encumbrances of $0.8 million,
which will fund contractual obligations and outstanding purchase orders. The more
significant budget amendments are briefly summarized as follows:
.. $0.5 million for fIre related overtime.
. $0.1 million for the City's share of a park ranger station at the Otay Valley Regional
Park.
. $50,000 for two charter amendments on the November 2006 election.
.. $40,000 for costs incurred for administering a special municipal election
. The closure of several General Fund capital improvement projects ($164,267)
partially mitigated the net costs of those amendments.
Of the $2.7 million in mid-year appropriations, $2.2 million were covered by specifIc
funding sources. As discussed previously, the available fund balance of the general fund,
excludinl? the other general fund type funds, decreased to $10.4 million or by $4.5 million
from the prior year. The decrease is attributed to the various mid-year appropriations
discussed above net of offsetting revenues.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City's investment in capital assets for its governmental and business type activities as of
June 30, 2007, amounts to $903.8 million, net of accumulated depreciation of $287.7 million.
This investment in capital assets includes land, buildings, improvements, machinery and
equipment, infrastructure and construction in progress. Infrastructure assets are items that
are normally immovable and of value only to the City such as roads, bridges, streets and
sidewalks, drainage systems, lighting systems and similar items. The total additions to the
City's investment in capital assets for the current fIscal year was $125.4 million, net of
accumulated depreciation.
Major capital asset additions during the current fiscal are discussed in the City Highlights
section of this document.
14
Additional information on the City's capital assets can be found in Note D of the notes to the
financial statements.
Debt Administration
Long Term Debt - At the end of the 2007 fiscal year, the City had $201.1 million in debt
outstanding compared to the $206.1 million last year, a 2.4% net decrease. During the 2007
fiscal year the Redevelopment Agency issued the 2006 Senior Tax Allocation Refunding
Bonds, Series A ($13,435,000) and Series B ($12,325,000) totaling $25,760,000 to refinance
the 1994 Senior Tax Allocation Bonds Series A, C, and D.
The City has no outstanding general obligation debt. In 2007, the City was downgraded
from an "A" rating to an "A-" rating by Standard & Poors for Certificates of Participation,
which still represents a "stable outlook". The downgrade was based on a prolonged trend of
the city drawing down its reserves and falling below the council policy of 8% due to slower
than projected growth in the economy and city revenues.
The Redevelopment Agency maintains an "A-" rating for Tax Allocation Bonds from
Standard & Poors. Additional information on the City's long-term debt obligations can be
found in Note 6 of the notes to the financial statements.
ECONOMIC CLIMATE
Chula Vista, the second largest City in San Diego County, is a town in transition. Once
known as a bedroom community with a strong collection of small businesses, Chula Vista is
now attracting multi-national corporations. High tech companies like Hitachi, DNP America
and Leviton have opened new facilities in Chula Vista during the past few years. These
companies find the area a good location from which to manage their manufacturing and
distribution operations both in the United States and in Mexico.
The San Diego regional economy has undergone a remarkable transformation over the past
decade. The severe recession in the first half of the 1990s was the longest and deepest of the
past 60 years. The downturn, subsequent recovery and expansion were not mere business or
cyclical adjustments, but an extensive overhauling and restructuring of the region's basic
economic drivers.
From an economy largely dominated by defense and military expenditures, San Diego
industries transformed into a diversified mix of high-technology commercial endeavors.
Some of these sectors were by-products of defense-based efforts, as well as capitalization of
highly educated and skilled workers. Emerging growth areas include telecommunications,
electronics, computers, software, and biotechnology.
International trade also contributed to the local economic recovery and dynamic performance
in recent years. Cross border trade and interactions with Mexico provide tremendous
economic advantages and opportunities, becoming an increasingly important facet of the
local region's economic fortunes.
15
Mexico and Canada, U.S. partners under the North American Free Trade Agreement
(NAFTA), dominate San Diego's export markets by far, accounting for more than one-half
(55 percent) of all export production. San Diego clearly benefits from NAFTA, not only
because the agreement further opened up the markets of our two largest customers, but also
because Tijuana and Baja California, our border and economic partner, was greatly benefited
and stimulated by heightened trade and dollars flowing to the region.
As discussed in the transmittal letter, Chula Vista's property tax base remains very healthy
and growing, with assessed values increasing from $6.6 billion in 1998 to $21.8 billion in
fiscal year 2007. This portion of the region continues to attract a historically large
percentage of home- buyers due in large part to the median prices for existing homes in Chula
Vista being slightly less than the regional average. During the 2007 fiscal year, generally
regarded as a slow growth period, Chula Vista's sales tax revenue experienced steady growth
over the previous fiscal year at a rate of 7.9%. We anticipate sales tax revenues to continue
growing over the next few years due to the openings of the Otay Ranch Town Centre Mall,
the Village Walk that includes Trader Joe's and a Henry's Market and the continued
expansion of the Chula Vista Auto Park that currently includes Ford, Chevrolet, Toyota,
Dodge, Chrysler and Jeep dealerships. The opening of the long anticipated State Route 125
in 2007 is providing easier access to Chula Vista's retail centers and encourages further
commercial development of the freeway corridor.
REQUESTS FOR INFORMATION
This fmancial report is designed to provide a general overview of the City's fmances for all
of its citizens, taxpayers, customers, investors and creditors. Questions concerning any of
the information provided in this report or requests for additional information should be
addressed to the City of Chula Vista, Finance Department, 276 Fourth Avenue, Chula Vista,
CA 91910.
16
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF CHULA VISTA
Statement of Net Assets
June 30, 2007
Governmental Business-Type
Assets Activities Activities Total
Cash and investments $ 182,974,100 $ 2,800,279 $ 185,774,379
Receivables:
Taxes 13,290,246 13,290,246
Accounts 3,901,866 87,727 3,989,593
Interest 2,182,283 36,949 2,219,232
Loans 22,599,949 22,599,949
Other 532,075 532,075
Due from other governments 4,754,703 103,454 4,858,157
Inventory and prepaid items 68,857 68,857
Land held for resale 2,260,925 2,260,925
Other assets 490,469 490,469
Restricted cash and investments:
Held by City 4,801,774 4,801,774
Held by fiscal agents 24,334,081 24,334,081
Capital Assets:
Nondepreciable assets 118,242,071 118,242,071
Depreciable capital assets,
net of accumulated depreciation 779,890,295 5,658,433 785,548,728
Total Assets 1,160,323,694 8,686,842 1,169,010,536
Liabilities
Account payable and accrued liabilities 10,624,677 229,488 10,854,165
Interest payable 3,062,017 3,062,017
Unearned revenue 6,558,592 2,463,097 9,021,689
Deposits 14,456,898 14,456,898
Claims payable:
Due within one year 3,300,000 3,300,000
Due in more than one year 10,579,589 10,579,589
Noncurrent Liabilities:
Due within one year 12,387,128 12,387,128
Due in more than one year 188,720,884 188,720,884
Total Liabilities 249,689,785 2,692,585 252,382,370
Net Assets
lnvestments in capital assets,
net of related debt 715,090,838 5,658,433 720,749,271
Restricted for:
Capital projects 26,925,990 26,925,990
Debt service 13,042,072 13,042,072
Community development 29,548,853 29,548,853
Unrestricted 126,026,156 335,824 126,361,980
Total Net Assets $ 910,633,909 $ 5,994,257 $ 916,628,166
See Accompanying Notes to Financial Statements.
17
CITY OF CHULA VISTA
Statement of Activities
For the Year Ended June 30, 2007
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Service s Contributions Contributions
Governmental Activities:
General government $ 45,249,650 $ 27,579,681 $ 2,583,668 $ 177,054
Public safety 77,136,782 7,311 ,407 5,019,515
Public works 103,117,608 45,520,978 6,925,361 64,075,755
Parks and recreation 9,353,280 19,106,017 144,378 21,355,956
Library 10,320,817 818,285 1,973,791
lnterest on long-term debt 12,032,833
Total Governmental Activities 257,210,970 100,336,368 16,646,713 85,608,765
Business-type Activities:
Transit
Bayfront Trolley-Station
7,330,560
103,691
2,433,008
Total Business-type Activities 7,434,251 2,433,008
Total $ 264,645,221 $ 102,769,376 $ 16,646,713 $ 85,608,765
General Revenues:
Taxes:
Property taxes
Sales taxes
Property transfer taxes
Franchise taxes
Utility user taxes
Business license taxes
Transient occupancy taxes
Construction taxes
Motor vehicle licenses
Motor vehicle licenses in-lieu
lntergovernmental
lnvestment income
Miscellaneous
Gain (loss) on sale of assets
Transfers
Total General Revenues and Transfers
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
See Accompanying Notes to Financial Statements.
18
Net (Expense) Revenue and
Changes in Net Assets
Governmental Business-type
Activities Activities Total
$ (14,909,247) $ (14,909,247)
(64,805,860) (64,805,860)
13,404,486 13,404,486
31,253,071 31,253,071
(7,528,741) (7,528,741)
(12,032,833) (12,032,833)
(54,619,124) (54,619,124)
$ (4,897,552) (4,897,552)
(103,691) (103,691)
(5,001,243) (5,001,243)
(54,619,124) (5,001,243) (59,620,367)
38,882,122 38,882,122
32,817,351 32,817,351
1,423,599 1,423,599
8,813,064 8,813,064
6,981,762 6,981,762
1,237,316 1,237,316
2,551,570 2,551,570
393,650 393,650
1,218,973 1,218,973
16,457,062 16,457,062
3,677,603 3,677,603
13,386,872 167,734 13,554,606
7,030,444 131,968 7,162,412
106,696 106,696
22,618 (22,618)
131,323,099 3,954,687 135,277,786
76,703,975 (1,046,556) "75,657,419
833,929,934 7,040,813 840,970,747
$ 910,633,909 $ 5,994,257 $ 916,628,166
19
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CITY OF CHULA VISTA
Balance Sheet
Governmental Funds
June 30, 2007
Special Revenue
General Sewer Developer
Assets Fund Fund Deposits
Cash and investments $ 2,748,905 $ 20,725,822 $ 14,456,898
Receivables:
Accounts 269,729 3,410,226
Taxes 12,457,365 12,401
Interest 93,224 233,591
Loans 143,750
Other
Due from other funds 237,908
Due from other governments 3,237,273
Advances to other funds 30,321,245 16,861,747
Inventory and prepaid items 48,187
Restricted cash and investments
Held by City
Held by fiscal agent
Land held for resale
Total Assets $ 49,557,586 $ 41,243,787 $ 14,456,898
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities $ 5,462,933 $ 28,870
Due to other funds
Advances from other funds
Developer deposits $ 14,456,898
Deferred revenue 8,592,396 3,843,157
Total Liabilities 14,055,329 3,872,027 14,456,898
Fund Balances:
Reserved:
Encumbrances 328,560 172,845
Loans receivables and advances 21,872,599 13,018,590
Land held for resale
Debt service
Inventory and prepaid items 48,187
Total Reserved 22,249,346 13,191,435
Unreserved:
Designated for:
Contingency 2,982,950 346,022
Capital projects 577,129
Undesignated for:
General fund 9,692,832
Special revenue 23,834,303
Debt service
Capital projects
Total Unreserved 13,252,911 24,180,325
Total Fund Balances 35,502,257 37,371,760
Total Liabilities and Fund Balances $ 49,557,586 $ 41,243,787 $ 14,456,898
See Accompanying Notes to Financial Statements.
20
Capital
Debt Service Projects
RDA City Development Park Noumajer Total
Debt Service Debt Service Impact Acquisition Governmental Governmental
Fund Fund Fund Development Funds Funds
$ 2,294,184 $ 49,178,280 $ 36,515,541 $ 53,928,107 $ 179,847,737
221,911 3,901,866
820,480 13,290,246
21,242 851,031 374,551 580,543 2,154,182
22,456,199 22,599,949
524,465 524,465
2,074,716 2,312,624
1,483,285 4,720,558
913,419 5,714,936 53,811,347
48,187
4,801,774 4,801,774
3,303,909 21,030,172 24,334,081
2,260,925 2,260,925
$ 5,619,335 $ $ 51,467,195 $ 36,890,092 $ 115,373,048 $ 314,607,941
$ 736,348 $ 3,267 $ 3,813,426 $ 10,044,844
2,312,624 2,312,624
$ 35,345,886 $ 14,677,727 3,787,734 53,811,347
14,456,898
1,727,%1 6,073,062 20,236,576
35,345,886 14,677,727 6,252,043 3,267 12,199,112 100,862,289
10,311,158 615,020 1,520,125 12,947,708
913,419 23,856,564 59,661,172
2,260,925 2,260,925
13,042,072 13,042,072
48,187
11,224,577 615,020 40,679,686 87,960,064
149,476 3,478,448
33,990,575 36,271,805 20,787,973 91,627,482
9,692,832
40,513,883 64,348,186
(29,726,551) (14,677,727) (44,404,278)
1,042,918 1,042,918
(29,726,551) (14,677,727) 33,990,575 36,271,805 62,494,250 125,785,588
(29,726,551) (14,677,727) 45,215,152 36,886,825 103,173,936 213,745,652
$ 5,619,335 $ $ 51,467,195 $ 36,890,092 $ 115,373,048 $ 314,607,941
21
CITY OF CHOLA VISTA
Reconciliation of Governmental Funds Balance Sheet
to the Statement of Net Assets
June 30, 2007
Fund balance for governmental funds
Amounts reported for governmental activities in the Statement of Net
Assets are different because:
Capital assets used in governmental activities are not current resources.
Therefore, they were not reported in the Governmental Funds
Balance Sheet The capital assets of the internal service funds are
included in the adjustment below.
Nondepreciable capital assets
Depreciable capital assets
$ ]] 8,242,07]
778,055,691
Deferred revenues which are deferred because they are not available
currently are taken into revenue in the Statement of Activities and,
accordingly, increase the net assets on the Statement of Net Assets.
Interest payable on long-term debt does not require current fmancial
resources. Therefore, interest payable is not reported as a liability in
Governmental Funds Balance Sheet.
Long-term liabilities are not due and payable in the current period.
Therefore, they were not reported in the Governmental Funds
Balance Sheet. The long-term liabilities, excluding the internal
service funds which are included below, were adjusted as follows:
Claims payable
Long-term liabilities - due within one year
Long-term liabilities - due in more than one year
$ (13,879,589)
(12,387,]28)
(]88,638,]32)
Arbirtrage liability
Other long-term assets which are not considered available to pay for
current expenditures are not reported in the governmental funds.
Internal service funds are used by management to charge the costs of
certain activities, fleet managernent and technology services to
individual funds. The assets and liabilities of the internal service
funds are included in the Statement of Net Assets.
Net Assets of Governmental Activities
See Accompanying Notes to Financial Statements.
22
$ 213,745,652
896,297,762
13,677,985
(3,062,0] 7)
(2]4,904,849)
(147,924)
490,469
4,536,83 ]
$ 910,633,909
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23
CITY OF CHULA VISTA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2007
Special Revenue
General Sewer Developer
Fund Fund Deposits
Revenues:
Taxes $ 77,561,166
Intergovernmental 23,873,593
Licenses and permits 2,730,534 $ 115,161
Developer fees $ 12,408,124
Charge for services 16,259,086 27 ,334,561
Fines and forfeitures 1,315,262 9,300
Use of money and property 2,355,304 1,038,413
Other 21,970,468 380,338
Total Revenues 146,065,413 28,877,773 12,408,124
Expenditures:
Current:
General government 35,845,324
Public safety 72,343,819
Public works 38,270,890 16,285,605 12,408,124
Parks and recreation 7,268,640
Library 9,642,064
Capital outlay 400,584 970,852
Debt service:
Principal
Interest and fiscal charges
Bond issuance cost
Total Expenditures 163,771,321 17,256,457 12,408,124
Excess (Deficiency) of Revenues
Over (Under) Expenditures (17,705,908) 11,621,316
Other Financing Sources (U ses):
Issuance of debt
Bond discount
Transfers in 18,679,983 755,579
Transfers out (5,357,771) (9,403,487)
Total Other Financing
Sources (Uses) 13,322,212 (8,647,908)
Net Change in Fund Balances (4,383,696) 2,973,408
Fund Balances, Beginning of Year 39,885,953 34,398,352
Fund Balances, End of Year $ 35,502,257 $ 37,371,760 $
See Accompanying Notes to Financial Statements. 24
Debt Service Capital Projects
RDA City Development Park Nonmajor Total
Debt Service Debt Service Impact Acquisition Governmental Governmental
Fund Fund Fund Development Funds Funds
$ 2,327,101 $ 13,212,167 $ 93,100,434
255,300 1l,978,180 36, I 07,073
24,729 2,870,424
$ 3,669,875 $ 7,980,398 24,058,397
9,100,665 52,694,312
902,260 2,226,822
386,439 3,047,799 1,658,279 5,084,081 13,570,315
2,207 848,315 366,285 23,567,613
2,971,047 7,565,989 9,638,677 40,668,367 248,195,390
261,354 716,361 10,081,951 46,904,990
245,695 656,464 73,245,978
1,880,995 6,874,968 75,720,582
234,619 7,503,259
18,745 9,660,809
10,318,092 1,961,650 22,821,004 36,472,182
24,905,001 5,987,801 30,892,802
4,317,283 $ 593,617 62,927 7,316,081 12,289,908
514,994 514,994
29,998,632 593,617 13,224,070 1,961,650 53,991,633 293,205,504
(27,027,585) (593,617) (5,658,081) 7,677,027 (13,323,266) (45,010,114)
25,760,000 25,760,000
(505,884) (505,884)
17,373,176 112,455 560,905 16,418,447 53,900,545
(16,661,115) (10,1ll,022) (12,302,114) (53,835,509)
25,966,177 112,455 (9,550,117) 4,116,333 25,319,152
(1,061,408) (481,162) (15,208,198) 7,677,027 (9,206,933) (19,690,962)
(28,665,143) (14,196,565) 60,423,350 29,209,798 112,380,869 233,436,614
$ (29,726,551) $ (14,677,727) $ 45,215,152 $ 36,886,825 $ 103,173,936 $ 213,745,652
25
CITY OF CHULA VISTA
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2007
Net change in fund balance - total governmental funds:
$ (19,690,962)
Amounts reported for governmental activities in the Statement of
Activities are different because:
Deferred revenue does not provide for current financial resources and
therefore is not reported as revenues in the governmental funds.
2,610,124
Governmental Funds report capital outlay as expenditures. However, in
the Statement of Activities the costs of these assets is allocated over
their estimated useful lives and reported as depreciation expense.
This is the amount the capital outlay exceeded depreciation,
excluding internal service fund activity reported below.
Capital outlay
Contributed capital
Depreciation
$ 32,236,956
82,846,863
(24,502,017)
90,581,802
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-
term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net assets.
Changes in claims payable
Proceeds from long-term debt
Long-term debt repayments
Arbitrage liability
Bond issuance cost
Change in internal services
compensated absences
$ (1,261,541)
(30,279,982)
35,313,756
147,924
490,469
21,296
4,431,922
Internal service funds are used by management to charge the costs of
certain activities, including insurance and fleet management, to
individual funds. The net revenue of the Internal Service Funds is
reported with Governmental Activities.
(1,228,911)
Change in Net Assets of Governmental Activities
$ 76,703,975
See Accompanying Notes to Financial Statements.
26
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27
CITY OF CHULA VISTA
Statement of Net Assets
Proprietary Funds
June 30, 2007
Enterprise Funds Governmental
Bayfront Activities
Transit Trolley Internal
Fund Station Total Service Funds
Assets
Current Assets:
Cash and investments $ 2,650,765 $ 149,514 $ 2,800,279 $ 3,126,363
Receivables:
Accounts 87,727 87,727
Interest 35,837 1,112 36,949 28,101
Other 7,610
Due from other governments 103,454 103,454 34,145
Inventory and prepaid items 20,669
Total Current Assets 2,877,783 150,626 3,028,409 3,216,888
Noncurrent Assets:
Capital assets, net 5,658,433 5,658,433 1,834,604
Total Assets 8,536,216 150,626 8,686,842 5,051,492
Liabilities and Net Assets
Current Liabilities:
Accounts payable
and accrued liabilities 228,988 500 229,488 431,909
Unearned revenue 2,315,039 148,058 2,463,097
Compensated absences 82,752
Total Current Liabilities 2,544,027 148,558 2,692,585 514,661
Net Assets:
Invested in capital assets 5,658,433 5,658,433 1,834,604
Unrestricted 333,756 2,068 335,824 2,702,227
Total Net Assets $ 5,992,189 $ 2,068 $ 5,994,257 $ 4,536,831
See Accompanying Notes to Financial Statements.
28
CITY OF CHULA VISTA
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Funds
For the Year Ended June 30, 2007
Enterprise Funds Governmental
Bayfront Activities
Transit Trolley Internal
Fund Station Total Service Funds
Operating Revenues:
Charges for services $ 2,433,008 $ 2,433,008 $ 5,367,349
Other 131,968 131,968 35,514
Total Operating Revenues 2,564,976 2,564,976 5,402,863
Operating Expenses:
Operations and administration 6,449,073 $ 103,691 6,552,764 5,699,776
Depreciation 831,620 831,620 1,102,476
Total Operating Expenses 7,280,693 103,691 7,384,384 6,802,252
Operating Income (Loss) (4,715,717) (103,691) (4,819,408) (1,399,389)
Nonoperating Revenues (Expenses):
Intergove=ental 3,578,947 98,656 3,677,603
Interest income 162,699 5,035 167,734 97,740
(Loss) gain on sale of capital assets (49,867) (49,867) 115,156
Total Nonoperating Revenues 3,691,779 103,691 3,795,470 212,896
Income (Loss) Before Transfers (1,023,938) (1,023,938) (1,186,493)
Transfers out (22,618) (22,618) (42,418)
Changes in Net Assets (1,046,556) (1,046,556) (1,228,911)
Net Assets, Beginning of Year 7,038,745 2,068 7,040,813 5,765,742
Net Assets, End of Year $ 5,992,189 $ 2,068 $ 5,994,257 $ 4,536,831
See Accompanying Notes to Financial Statements.
29
CITY OF CHULA VISTA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30,2007
Enterprise Funds Governmental
Ba yfront Activities
Transit Trolley Internal
Fund Station Total Service Funds
Cash Flows from Operating Activities:
Cash received from customers $ 3,087,357 $ 16,512 $ 3,103,869
Cash received from other funds $ 5,369,808
Cash payments to suppliers
for goods and services (6,664,991) (104,416) (6,769,407) (4,548,211)
Cash payments to employee for services (1,222,188)
Other 131,968 131,968 35,514
Net Cash Provided (Used)
by Operating Activities (3,445,666) (87,904) (3,533,570) (365,077)
Cash Flows from Capital
and Related Financing Activities:
Acquisition of capital assets (76,256)
Proceeds from sale of capital assets 594 594 142,743
Net Cash Provided (Used) by Capital
and Related Financing Activities 594 594 66,487
Cash Flows from Noncapital Financing Activities:
Intergovernmental 3,475,493 98,656 3,574,149 (16,963)
Transfers out (22,618) (22,618) (42,418)
Net Cash Provided (Used)
by Noncapital Financing Activities 3,452,875 98,656 3,551,531 (59,381 )
Cash Flows from Investing Activities:
Interest revenue 141,670 4,378 146,048 110,839
Net Cash Provided (Used)
by Investing Activities 141,670 4,378 146,048 110,839
Net Increase
in Cash and Cash Equivalents 149,473 15,130 164,603 (247,132)
Cash and Cash Equivalents, Beginning of Year 2,501,292 134,384 2,635,676 3,373,495
Cash and Cash Equivalents, End of Year $ 2,650,765 $ 149,514 $ 2,800,279 $ 3,126,363
(Continued)
30
CITY OF CHULA VISTA
Statement of Cash Flows
Proprietary Funds (Continued)
For the Year Ended June 30, 2007
Reconciliation of Operating Income to Net
Cash Provided (Used) by Operating Activities:
Operating Ios s
Adjustments to reconcile operating loss to
net cash provided (used) by operating activities:
Depreciation
(Increase) decrease in accounts receivables
(Increase) decrease in other receivables
(Increase) decrease in inventories
Increase (decrease) in accounts payable and,
accrued liabilities
Increase (decrease) in unearned revenue
Increase (decrease)
in compensated absences
Enterprise Funds
Ba yfront
Trolley
Station
Transit
Fund
Total
Governmental
Activities
Internal
Service Funds
$ (4,715,717) $ (103,691) $ (4,819,408) $ (1,399,389)
Total Adjustments
Net Cash Provided (Used)
by Operating Activities
831,620
104,856
(215,918)
549,493
(725)
16,512
831,620
104,856
(216,643)
566,005
1,285,838
1,102,476
2,459
8,957
(92,214)
12,634
1,034,312
$ (3,445,666) $ (87,904) $ (3,533,570) $ (365,077)
See Accompanying Notes to Financial Statements.
1,270,051
15,787
31
CITY OF CHULA VISTA
Statement of Net Assets
Fiduciary Funds
June 30, 2007
Assets
Cash and investments $ 7,239,933
Restricted cash and investments
held by fiscal agents 171,370,947
Total Assets $ 178,610,880
Liabilities
Due to bondholders $ 178,610,880
Total Liabilities $ 178,610,880
See Accompanying Notes to Financial Statements.
32
CITY OF CHULA VISTA
Notes to Financial Statements
June 30, 2007
1. Summary of Significant Accounting Policies
A. Reporting Entity
The City of Chula Vista (City) was incorporated in 1911 under the general laws of the
State of California and enjoys all the rights and privileges pertaining to such "General
Law" cities. The City operates under a Council-Manager form of government and the
City Council is composed of five members. Among the services provided by the City
are the following: public safety, community services, engineering services, planning
services, public works, general administrative services and capital improvements.
As required by accounting principles generally accepted in the United States of
America, these financial statements present the City and its component units, entities for
which the City is considered to be financially accountable. The City is considered to be
financially accountable for an organization if the City appoints a voting majority of that
organization's governing body and the City is able to impose its will on that
organization or there is a potential for that organization to provide specific financial
benefits to or impose specific financial burdens on the City. The City is also considered
to be financially accountable if that organization is fiscally dependent (i.e. it is unable to
adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval
from the City). In certain cases, other organizations are included as component units if
the nature and significance of their relationship with the City are such that their
exclusion would cause the City's fmancial statements to be misleading or incomplete.
1. Blended Component Units
The Redevelopment Agency of the City of Chula Vista (Agency), the Chula Vista
Industrial Development Authority (Development Authority), and the Chula Vista
Public Facilities Financing Authority (Authority) component units are considered
to be blended component units. Blended component units, although legally
separate entities, are, in substance, part of the City's operations and so data from
these units are reported with the interfund data of the City.
Redevelopment Agencv of the Citv of Chula Vista - The City of Chula Vista
Redevelopment was established pursuant to the State of California Health and
Safety Code, Section 33000 entitled "Community Redevelopment Law." Its
purpose is to prepare and carry out plans for improvement, rehabilitation, and
redevelopment of blighted areas within the territorial limits of the City of Chula
Vista. Even though it is legally separate, it is reported as ifit were part of the City
because the City Council also serves as the governing board of the Agency.
Separate financial statements of the Agency can be obtained at City Hall.
33
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Chula Vista Industrial Development Authoritv - The Chula Vista Industrial
Development Authority was established in February 1982 for the purpose of
promoting and developing commercial, industrial and manufacturing enterprises
and encouraging employment. Even though it is legally separate, it is reported as
if it were part of the City because the City Council also serves as the governing
board of the Agency. Chula Vista does not produce separate financial statements
for the Development Authority.
Chula Vista Public Facilities Financing Authoritv - The Chula Vista Public
Facilities Financing Authority was established by ordinance, pursuant to the City
Charter and Constitution of the State of California, as a public body, acting to
facilitate serving the public purposes of the City. The ordinance was adopted on
April 4, 1995. The governing body of the Authority is comprised of the members
of City Council. The Authority is authorized to borrow money for the purpose of
financing the acquisition of bonds, notes and other obligations of, or for the
purpose of making loans to the City and/or to refinance outstanding obligations of
the City. Separate fmancial statements for the Authority can be obtained at City
Hall.
B. Government-wide and Fund Financial Statements
The government-wide fmancial statements (i.e. the statement of net assets and the
statement of activities) report information on all of the nonfiduciary activities of the
primary government and its component units. For the most part, the effect of interfund
activity has been removed from these statements. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and
charges for support Likewise, the primary government is reported separately from
certain legally separate component units for which the primary government is
financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment Program revenues
include 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, privileges provided by a given function or segment and 2) grants
and contributions that are restricted to meeting the operational or capital requirements
of a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds
and fiduciary funds, even though the latter are excluded from the government-wide
financial statements. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial statements.
34
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide, proprietary and fiduciary fund financial statements are reported
using the economic resources measurement focus and lhe accrual basis of accounting.
Revenues are recorded when earned and expenses are recorded when the liability is
incurred, regardless of lhe timing of lhe related cash flows. Property taxes are
recognized as revenues in lhe year for which lhey are levied. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
Governmental fund fmancial statements are reported using lhe current financial
resources measurement focus and the modified accrual basis of accounting. Under lhis
method, revenues are recognized when measurable and available. Revenues are
considered to be available when they are collectible wilhin lhe current period or soon
enough thereafter to pay liabilities of lhe current period. For lhis purpose, lhe
government considers revenues to be available if they are collected wilhin 60 days of
the end of lhe current fiscal year (7 monlhs for sales tax accrual). Expenditures
generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated
absences, claims and judgments are not recognized until paid.
Property taxes, charges for services, and interest associated wilh the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as
revenues of lhe current fiscal period. Only the portion of special assessments receivable
due wilhin the current fiscal period is considered to be susceptible to accrual as revenue
of the current period. All olher revenue items are considered to be measurable and
available only when cash is received by lhe government.
The City reports lhe following major funds:
General Fund - This is lhe general operating fund of the City. It is used to account for
financial resources except lhose required to be accounted for in anolher funds.
Sewer Special Revenue Fund - This fund consists of several funds that are used to
account for sewer activities:
The Sewer Income Fund is a depository for all monies collected to cover the cost of
connecting properties to lhe City's public sewer system. All monies received may be
used only for lhe acquisition, construction, reconstruction, maintenance and operation
of sanitation or sewerage facilities.
35
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
The Special Sewer Fund is used to account for the sale of the city's excess Metropolitan
Sewerage System capacity. Use of all monies in this fund is determined by the City
Council.
The Trunk Sewer Reserve Fund is used to account for sewerage facility participation
fees received from owner or person making application for a permit to develop or
modify use of any residential, commercial, industrial or other property, which increases
the volume of flow into the City sewer system. All monies received shall be used for
the enlargement of sewer facilities of the City so as to enhance efficiency of utilization
and/or adequacy of capacity and for planning and/or evaluating any futore proposals for
area wide sewage treatment and/or water reclamation systems or facilities.
The Sewer Service Revenue Fund is a depository for all monies collected from the
monthly sewer service charge. Monies in this fund may be used for any and all sewer
related activities.
Storm Drain Revenue Fund is a depository for all monies collected from the monthly
storm drain service charge. Monies in this fund may be used for storm drain purposes.
Developer Deposits Special Revenue Fund - This fund is used to account for revenues
received from various developers for development projects and is used to fund city staff
costs, and other costs related to specific projects.
Redevelopment Agency (RDA) Debt Service Fund - This fund was established to
account for principal and interest payments on redevelopment loans and outstanding
bonds.
City Debt Service Fund - This fund was established to account for principal and interest
payments on the City's long-term loans.
Development Impact Capital Proiects Fund - This fund was established as a depository
of various development impact fees. The fees are levied against all new development in
the City in order to pay for the construction or improvement of public facilities as a
result of City growth.
Park Acquisition Development - This fund is a depository for fees collected from
property developers for the purpose of providing park and recreational facilities directly
benefiting and serving residents of the regulated subdivision being developed. This in-
lieu fee was adopted by the City to acquire neighborhood and Community Parkland and
to construct parks and recreational facilities.
36
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Additionally the City reports the following fund types:
Soecial Revenue Funds - Special Revenue Funds are used to account for revenues
derived from specific sources which are usually required by law or administrative
regulation to be accounted for in a separate fund.
Debt Service Funds - Debt Service Funds are used to account for tax increment
revenues, bond proceeds required to be set aside for future debt service, and related
interest income. The funds are used to repay principal and interest on long-term
indebtedness of the City, Redevelopment Agency, and Public Financing Authority.
Caoital Proiects Funds - Capital Projects Funds are used to account for fmancial
resources to be used for the development and redevelopment projects within the City.
Such projects include street improvements, parks, and Redevelopment Agency activity.
The City reports the following major proprietary funds and internal service funds:
Transit Fund - This fund is used to account for the operations, maintenance and
development of the transit related projects.
Bavfront Trolley Station - This fund is used to account for the maintenance and
development of the Bayfront Trolley Station.
Internal Service Funds - loternal Service Funds are used to finance and account for the
purchase of motor vehicles and the related maintenance and insurance expense,
including liability insurance. Such costs are accumulated in these funds and charged to
the user departments on an estimated cost-reimbursement basis or through transfers.
Fiduciarv Funds
Agencv Funds - These funds are used to account for assets held by the City in a trustee
capacity for individuals, private organizations, other governments, and/or other funds.
Agency funds are custodial in nature (assets equal liabilities) and do not involve
measurement of results of operations.
Private-sector standards of accounting and fmancial reporting issued prior to December
1, 1989, generally are followed in both the government-wide and proprietary fund
financial statements to the extent that those standards do not conflict with or contradict
guidance of the Governmental Accounting Standards Board. Governments also have
the option of following subsequent private-sector guidance for their business-type
activities and enterprise funds, subject to this same limitation. The government has
elected not to follow subsequent private-sector guidance.
37
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
As a general rule the effect of interfund activity has been eliminated from the
government-wide financial statements. Exceptions to this general rule are payments-in-
lieu of taxes. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to members, customers or
applicants for goods, services, or privileges provided, 2) operating grants and
contributions, and 3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as program
revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the enterprise funds and the
City's internal service funds are charges to customers for sales and services. Operating
expenses for enterprise funds and internal services fund include costs of sales and
services, administrative expenses, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for use, it is the City's
policy to use restricted resources, first, then use unrestricted resources as needed
D. Assets, Liabilities and Net Assets or Equity
1. Cash and Investments
Investments are stated at fair value (quoted market price or best available estimate
thereof). Changes in fair value that occur during a fiscal year are recognized as
investment income reported for that fiscal year.
The City pools cash and investments of all funds, except for assets held by fiscal
agents. Each fund's share in this pool is displayed in the accompanying financial
statements as cash and investments. Investment income, earned by the pooled
investments, is allocated to the various funds based on each fund's average cash
and investment balance.
For purposes of the statement of cash flows, cash and cash equivalents are defined
as short-term, highly liquid investments that are both readily convertible to known
amounts of cash or so near their maturity that they present insiguificant risk of
changes in value because of changes in interest rates.
38
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
2. Receivables and Payables
Activity between funds that are representative of lendingfborrowing 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).
3. Inventories
Inventories are valued on an average-cost basis which are adjusted to annual
physical counts or estimates under the consumption method of accounting and are
recorded in the internal service funds.
4. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets
(e.g. roads, traffic signals, drainage systems, and similar items), are reported in the
applicable governmental or business-type activities column in the government-
wide financial statements. Capital assets are defined by the City as assets with an
initial cost of more than $5,000; and infrastructure with an initial cost of more than
$100,000. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed Donated capital assets area recorded at estimated fair
market value at the date of donation.
The cost of normal maintenance and repairs that do not add to the value of the
asset or materially extend asset lives are not capitalized
Property, plant, and equipment of the primary government, as well as the
component units, are depreciated using the straight-line method over the following
estimated useful lives:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure assets - Roadway network
50 years
50 years
5 to 12 years
30 to 75 years
5. Land Held for Resale
Land held for resale is recorded at the lower of cost or estimated net realizable
value. The available fund balance is reserved in an amount equal to the carrying
value of land and buildings held for resale because such assets are not available to
finance current operations. The amount recorded as assets held for resale and the
corresponding fund balance reserved as of June 30, 2007 was $2,260,925.
39
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
6. Long- Term Obligations
In the government-wide statements long-term obligations are recorded as
liabilities in the statement of net assets.
7. Compensated Absences
It is the City's policy to accumulate earned but unused vacation, sick and
compensatory time. The balance of unpaid vacation and compensatory time at
June 30, 2007 is recorded as a liability. Unpaid compensated absences in
proprietary fund types are recorded as a liability in those funds as vested benefits
accrued for the employees.
8. Property Taxes
Under California law, property taxes are assessed and collected by the counties up
to 1% of assessed value, plus other increases approved by the voters. The property
taxes go into a pool, and are then allocated to the cities based on complex formulas
prescribes by state statues. Accordingly, the City of Chula Vista accrues only
those taxes which are received within 60 days after year end.
Lien Date:
Levy Date:
January I
July I
Delinquent Date:
November I_1st Installment
March I - 2nd Installment
December 10- I st Installment
April I 0 - 2nd Installment
Due Date:
Taxes are collected by San Diego County and are remitted to the City periodically.
Dates and percentages are as follows:
December
January
April
May
July
30% Advance
Collection No. I
10% Advance
Collection No.2
Collection No.3
The City accrues only those taxes which are received within 60 days after the year
end. The City is a participant in the Teeter plan under the California Revenue and
Taxation Code. The County of San Diego has responsibility for the collection of
delinquent taxes and the City receives 100% of the levy.
40
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
9. Claims and Judgments
The City records a liability for litigation, judgments, and claims when it is
probable that an asset has been impaired or a liability has been incurred prior to
year end and the probable amount of loss (net of any insurance coverage) can be
reasonably estimated. Claims incurred but not reported are recorded as a liability
when the liability has been incurred or an asset has been impaired and the amounts
can be reasonably determined.
10. Fund Equity
In the fund financial statements, governmental funds report reservations of fund
balance for amounts that are not available for appropriation or are legally
restricted by outside parties for use for a specific purpose. Designations of fund
balance represent tentative management plans that are subject to change.
11. Estimates
The preparation of financial statements in confonnity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
II. Stewardship, Compliance and Accountability
A. Budgetary Accounting
An annual budget is adopted by the City Council prior to the first day of the fiscal year.
The budget process includes submittal of each department's budget request for the next
fiscal year, a detailed review of each department's proposed budget by the City
Manager and a fmal City Manager recommended budget that is transmitted to the City
Council for its review before the required date of adoption. A pubic hearing is held to
give the public the opportunity to comment upon the proposed budget. Notice of such
public hearing is given in a newspaper of general circulation.
The adoption of the budget is accomplished by the approval of a Budget Resolution.
The legal level of budgetary control is at the department level. Any budget
modification, which would result in an appropriation increase, requires City Council
approval. The City Manager and Finance Director are jointly authorized to transfer
appropriations within a departmental budget. Any appropriation transfers between
departments require City Council approval.
41
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Reported budget figures are as originally adopted or subsequently amended plus prior
year continuing appropriations. Such budget amendments during the year, including
those related to supplemental appropriations, did not cause these reported budget
amounts to be significantly different than the originally adopted budget amounts. All
appropriations which are not obligated, encumbered or expended at the end of the fiscal
year lapse and become part of the unreserved fund balance which may be appropriated
for the next fiscal year.
An annual budget for the year ended June 30, 2007 was adopted and approved by the
City Council for the general, most special revenue and debt service funds. These
budgets are prepared on the modified accrual basis of accounting except that
encumbrances outstanding at year-end are considered as expenditures. The budget of
the capital projects funds are primarily long-term budgets, which emphasize major
programs and capital outlay plans extending over a number of years. Because of the
long-term nature of these projects, annual budget comparisons are not considered
meaningful, and accordingly, no budgetary information for capital projects funds is
presented. In addition, no budgetary information is presented for the Developer
Deposits Special Revenue Fund.
B. Deficit Fund BalanceslNet Assets
These deficit balances will be eliminated through future repayment of advances.
The RDA Debt Service Fund has a deficit fund balance of $29,726,55 L The City Debt
Service Fund has a deficit fund balance of $14,677,727.
42
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Ill. Detailed Notes on All Funds
A. Cash and Investments
At June 30, 2007, cash and investments are classified in the accompanying fmancial
statements as follows:
Statement of Net Assets:
Cash and investments:
Restricted cash and investments
Held by City
Held by fiscal agents
$ 185,774,379
4,801,774
24,334,081
Fiduciary Funds:
Cash and investments
Cash and investments held by fiscal agents
Total Cash and Investments
7,239,933
171,370,947
$ 393,521,114
Cash and investments as of June 30, 2007 consist of the following:
Petty cash
Deposits with financial institutions
Investments
Investments held by bond trustee (fiduciary funds)
Total Cash and Investments
$ 4,750
34,028,754
188,116,663
171,370,947
$ 393,521,114
43
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
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, credit
risk, and concentration of credit risk. This table does not address investments of debt
proceeds held by bond trustee that are governed by the provisions of debt agreements of
the City, rather than the general provisions of the California Government Code or the
City's investment policy.
Authorized Investment Type
Banker's Acceptances
Negotiable Certificates of Deposit
Commercial Paper
State and Local Agency Bond Issues
U.S.Treasury Obligatious
U.S. Agency Securities
Repurchase Agreement
Reverse-Repurchase Agreements
Medium-Term Corporate Notes
Time Certificates of Deposit
Money Market Funds
Local Agency Investment Fund (LAIF)
Maximum
Maturity
180 days
5 years
270 days
5 years
5 years
5 years
90 Days
90 Days
5 years
3 years
5 years
N/A
Maximum
Percentage
of Portfolio*
40%
30%
25%
None
None
None
None
20%
30%
None
15%
None
Maximum
Investment
in One Issuer
30%
None
10%
None
None
None
None
None
None
None
None
$ 40 Million
* Excluding amounts held by bond trustee that are not subject to California
Government Code restrictions.
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or
the City's investment policy. The following table identifies the investment types that
are authorized for investments held by bond trustee. The table also identifies certain
provisions of these debt agreements that address interest rate risk, credit risk, and .
concentration of credit risk.
44
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio. in One Issuer
United States Treasury Obligations None None None
Federal Home Loan Mortgage Corporation None None None
Fartn Credit Banks None None None
Federal Home Loan Banks None None None
Federal National Mortgage Association None None None
Student Loan Marketing Association None None None
Financing Corporation None None None
Resolution Funding Corporation None None None
Certificates of Deposit, Time Deposits
and Bankers' Acceptances 30 Days None None
Co=ercial Paper 270 Days None None
Money Market Funds N/A None None
State Obligations None None None
Municipal Obligations None None None
Repurchase Agreements None None None
Investment Agreements None None None
Local Agency Investment Fund (LAIF) None None None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. One of the
ways that the City manages its exposure to interest rate risk is by purchasing a
combination of shorter term and longer term investments and by timing cash flows from
maturities so that a portion of the portfolio is maturing or coming close to maturity
evenly over time as necessary to provide the cash flow and liquidity needed for
operations.
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the City's investments by maturity:
45
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60
Investment Type or Less Months Months
LAlF S 45,318,323 S 45,318,323
Medium Term Corporate Notes 7,429,530 7,429,530
federal Home Loan Bank 63,837,500 35,870,000 S 11,990,000 S 15,977,500
federal National Mortgage Association 20,865,937 16,870,937 1,997,500 1,997,500
federal Home Loan Mortgage Corporation 37,734,435 16,756,425 14,983,470 5,994,540
federal farm Credit Bank 12,930,938 6,944,063 2,995,312 2,991,563
Held by Bond Trustee (fiduciary funds):
US Treasury 74,555,520 7,490,356 12,668,264 54,396,900
Local Agency Investment fund 17,895,760 17,895,760
Investment Agreements 18,984,030 10,918,880 8,065,150
Mutual funds 59,934,833 59,934,833
Cash with fiscal agent 804 804
Total S 359,487,610 S 225,429,911 S 44,634,546 S 89,423,153
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 by (where applicable) the California
Government Code, the City's investment policy, or debt agreements, and the actual
rating as of year end for each investment type:
Investment Type
Federal agency
securities
Medium corporate
lenn noles
Local agency
investment fund
Held by Bond
tnlslee (fiduciary funds):
USG (US Treasury
notes)
Local agency
investment fund
Investment
agreements
Mutual funds
Cash with fiscal
agent
Minimum No' Ratin~ as of Year End
Ralin~ Rated AAAfAAA AA2IAA
$ 135,368,810 N/A $ 135,368,810
7,429,530 A 5,938,910 $ 1,490,610
45,318,323 N/A $ 45,318,323
74,555,520 74,555,52lJ
17,895,760 17,895,760
18,984,030 1,628,278 17,355,752
59,934,833 59,934,833
804 N/A 804
$ 359,487,610 $ 63,214,887 $ 277,426,361 $ 18.846,362
46
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be
invested in anyone issuer beyond that stipulated by the California Government Code.
Investments in anyone issuer that represent 5% or more of total City's investments are
as follows:
Issuer
Investment Type
Reported
Amount
Federal National Mortgage Association
Federal Home Loan Bank
Federal Home Loan Mortgage Corp
Federal Farm Credit Bank
Federal agency securities $
Federal agency securities
Federal agency securi ties
Federal agency securities
20,865,937
63,837,500
37,734,435
12,930,938
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 and the City's investment policy do
not contain legal or policy requirements that would limit the exposure to custodial credit
risk for deposits or investments, other than the following provision for deposits: 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 1l0% 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% of the secured public deposits.
As of June 30, 2007 $Il,618,666 of the City's deposits with fInancial institutions in
excess of Federal Depository Insurance limits were held in collaterized accounts.
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 fmancial statements at amounts based upon the City's
47
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
pro-rata share of the fair 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.
B. Loans Receivable
At June 30, 2007, the City had the following loans receivable, including principal and
accrued interest:
South Bay Community Services
South Bay Co=unity Villas, L.P.
Girls and Boys Club Construction Loan
Rancho Vista Housing (Chelsea Investment)
St. Regis Park
Chula Vista Rehabilitation CHIP Loans
Civic Center Barrio Housing Corporation Loan
Mobile Home Assistance Programs
Chelsea Investment CorporationlSunbow Services
Alpha m Development Inc. (Main Plaza, L.P.)
Seniors on Broadway
Wakeland Housing and Development Corporation
Other loans receivable
Total
South Bav Community Services
$ 4,948,815
5,133,710
143,750
1,628,219
1,971,650
2,378,753
234,597
55,952
408,558
1,920,814
3,632,300
105,831
37,000
$ 22,599,949
The City and Agency entered into severalloan agreements with South Bay Community
Services, a California non-profit public benefit corporation. The loans were made to
enable South Bay Community Services to provide affordable housing to low income
families. Deeds of trust and assignment of rents secure the notes. Principal and interest
are payable annually out of any and all residual receipts derived from the property
and/or operation of the property. Interest accrues annually on the unpaid balance from
rates ranging from 3% to 6%. Interest of $1,438,731 has been deferred at June 30,
2007. The outstanding balance at June 30, 2007 is $4,948,815.
South Bay Communitv Villas. L.P.
The City entered into a loan agreement with South Bay Community Villas, L.P. for the
development of the Heritage Town Center multi-family rental housing project. Agency
assistance is in the form of residual receipt loan secured by a promissory note and deed
of trust. The outstanding principal and interest on the loan will be repaid over fifty five
48
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
years and shall accrue interest at 3% per annum. Payment of principal and interest on
the Agency loan shall be made on an annual basis out of a fund equal to fifty percent of
the net cash flow of the project (residual receipts) after debt service on bonds, payment
of deferred developers fee, and reasonable operating expense have been paid. Interest
of $733,710 has been deferred at June 30,2007. The outstanding balance of the loan as
of June 30, 2007 was $5,133,710.
Girls and Boys Club Construction Loan
The City has made a loan of $250,000 for construction of a new facility for the Boys
and Girls Club. The loan is interest free and will be repaid with equal annual payments
over 20 years, starting in February 1999. The outstanding balance of the loan as of June
30,2007 was $143,750.
Rancho Vista Housing
The City and Agency have loaned $1,500,000 to CIC Eastlake, L.P. for the
development and operation of Rancho Vista Housing project, a multifamily affordable
housing project. The loan will be secured by promissory notes and deeds of trust. The
outstanding principal and interest amount of the loan shall be repaid over fifty-five (55)
years and shall accrue at the simple interest rate of 3 % per annum. Payment of principal
and interest, or portions thereof, on the loan shall be made on an annual basis, out of a
fund equal to 50% of the net cash flow of the project. Interest of $128,219 has been
deferred at June 30, 2007. The outstanding balance of the loan as of June 30,2007 was
$1,628,219.
St. Regis Park
The Agency entered into a loan agreement with the Chelsea Investment Corporation for
the acquisition and rehabilitation of the 1l9-unit Pear Tree Apartments at 1025
Broadway. All units will be affordable to low-income households. The loan is secured
by a deed of trust and will accrue 6% interest for 52 years. Payment of principal and
interest shall be made on an annual basis out of a fund equal to 90% of the residual
receipts. Interest of $584,498 has been deferred at June 30, 2007. The outstanding
balance of the loan as of June 30, 2007 was $1,971,650.
Chula Vista Rehabilitation CHIP Loans
The Chula Vista Rehabilitation Community Housing Improvement Program (CHIP) is
under the direct control of the Agency. CHIP offers deferred and low interest rate home
improvement loans to qualified borrowers residing within a target area. Loan
repayments are re-deposited into the program cash accounts and are redistributed as
future loans. The program was originally funded entirely with Community
49
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Development Block Grant Federal funds. In recent years, the Agency began
supplementing the program due to decreased availability of Federal grants. Interest of
$200,508 was deferred as of June 30, 2007. The outstanding balance of the CHIP loans
as of June 30,2007 was $2,378,753.
Civic Center Barrio Housing Corooration Loan
In 1991, the Agency entered into a loan agreement with the Civic Center Barrio
Housing Corporation, a California non-profit public benefit corporation. The loan was
made for the purchase of land and the development of a 28-unit low income housing
project. During 1992, the loan was assigned to Park Village Apartments Ltd., a
California limited partnership in which Civic Center Barrio Housing Corporation is the
managing general partner. The loan is secured by a deed of trust on the property and
assignment of rents. Principal and interest are payable monthly. Interest accrues
annually at 5% of the unpaid principal balance of the note. The outstanding balance of
the loan as of June 30, 2007 was $234,597.
Mobile Home Assistance Programs
The Agency entered into agreements with eligible residents of the Orange Tree Mobile
Home Park, whereby the Agency loaned $250,030 as permanent financing assistance to
residents for the purpose of purchasing certain mobile home property. The loans are
secured by deeds of trust on the property and mature in 2017 or when the property is
sold. Contingent interest will be charged based on calculations specified in the
agreement. The outstanding balance of the loan as of June 30,2007 was $55,952.
Chelsea Investment CoroorationlSunbow Services Co.. LLC
The Agency entered into a residual receipts loan agreement with Chelsea Investment
CorporationlSunbow Services Company, LLC for the development of the proposed 132
unit Villa Serena senior affordable housing project. The loan amount of $275,000 was
funded by the Agency's Low & Moderate Income Housing Fund. Terms of the loan will
be for 52 years at 6% per annum. Principal and interest payments will be made on an
annual basis out of a fund equal to 90% of the "Residual Receipts." Interest of
$133,558 has been deferred at June 30,2007. The outstanding balance of the loan as of
June 30, 2007 was $408,558.
Aloha III Develooment Inc (Main Plaza. L.P.)
The Agency entered into a loan agreement with Main Plaza, LP (Borrower) to assist the
borrower in acquiring and improving certain real property for occupancy by very low,
lower and low and moderate income households. The loan bears an interest rate of 3 %
per annum. The loan shall be due and payable on the date that is 55 years from the date
50
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
of the Agency's issuance of the Certificate of Completion. Interest of $120,814 was
deferred as of June 30, 2007. The outstanding balance of the loan as of June 30,2007
was $1,920,814.
Seniors on Broadway
The Agency entered into a loan agreement with Seniors on Broadway Limited
Partnership to assist the borrower in acquiring and improving certain real property for
occupancy by very low, lower and low and moderate income households. The loan
bears an interest rate of 3% per annum. The loan shall be due and payable on the date
that is 55 years from the date of the Agency's issuance of the Certificate of Completion.
Interest of$121,106 was deferred as of June 30, 2007. The outstanding balance of the
loan as of June 30, 2007 was $3,632,300.
Wakeland Housing and Development Corporation
The Agency entered into a predevelopment loan agreement with Wakeland Housing and
Development Corporation to assist the borrower in constructing affordable multi family
apartment units for occupancy by extremely low, very low and lower income
households. The loan is interest free. Repayment of the predevelopment loan is subject
to the approval and execution of a Development and Loan Agreement within the
negotiating period as set forth in the Exclusive Negotiating Agreement (ENA). If the
Development and Loan Agreement is not approved or executed within the negotiating
period, the loan shall be immediately due and payable. The outstanding balance of the
loan as of June 30, 2007 was $105,831.
Other Loans Receivable
Other loans receivable amount to $37,000 and are loans to residents for the First Time
Home Buyers Program.
C. Interfund receivables, payables, and transfers
The purpose of the interfund transactions is to make short-term and long-term interfund
loans from one fund to another. Due to/from amounts are short term fmancing, the
advances are for longer fmancing.
51
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Due to/from other funds:
Receivable Fund
General
Nonmajor governmental funds
Payable Fund
Nonmajor governmental funds
Nonmajor gove=ental funds
Amount
$ 237,908
2,074,716
Total
$ 2,312,624
These interfund loans are to provide for negative cash balances at year-end and
operating cash flow.
Long-term Advances:
As of June 30, 2007, balances were as follows:
Advances to
Development Nonmajor
General Sewer Impact Governmental
Advances from Fund Fund Fund Funds Total
RDA Debt Service Fund $ 30,321,245 $ 5,024,641 $ 35,345,886
City Debt Service Fund $ 13,074,013 $ 913,419 690,295 14,677,727
Development Impact Fund 3,787,734 3,787,734
Total
$ 30,321,245 $ 16,861,747 $ 913,419 $ 5,714,936 $ 53,811,347
The Agency has entered into reimbursement agreements with the City to reimburse the
City for certain lease payments made by the City under various lease agreements. The
balance as of June 30, 2007, is $25,362,155.
The City Council authorized various loans to the Agency for operating purposes. The
terms of the loans are indefinite. The balance as of June 30, 2007, is $4,959,090.
The Bayfront Town Centre 1 Capital Projects Fund advanced funds to other capital
projects funds for operating purposes. The terms of the advances are indefinite. The
balance was $5,024,641 at June 30,2007.
The City Council authorized loans with indefmite terms to Storm Drain Fund for
$1,563,546; Special Assessment District Improvement Funds for $32,471; Salt Creek
for $15,956,025 and General Fund $913,419. The Assessment District Loans are due
and payable in 10 years, with the first payment due upon completion of the project.
52
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Interfund Transfers
Transfers for the year ended June 30, 2007 were as follows:
TnmstCrsOut
Development
&wcr RDA ",'"''''
Spccilll Doh, CapituJ Norllllll.jor Internal
('~"'"" Rcvcnue Service Projects Oovcrnmcntlll Tnmsit Service
Tnmsfcrsln Fund Funds Funds (;uncls Funds t'und Funds Tota'
Gcncr-.lI Fund $ 9,365,863 $ 4,OOO,00U $ 5.~1,9% $ 32,124 $ 18.67l},~3
Scv.'CI" Special
fkvcllUC Fund 755,579 755,579
RDA Debt Service
(;UnCI $ 15,635,139 1,738,037 17,373.176
City Debt SclVicc
Fund $ 1U3,.511l 8,937 112,.455
Dcvcloplncr'ltlmpu.cl
CllflituJ Projects hmd 560,9U5 560,905
Nonmajor
Governmental Fund; 5,254,:m 37,624 1,025,976 4,794,538: 5,273,144 $ 22,618 10,294 16,418,447
Tot" $ 5,357,nl $ 9,403.487 $ 16,661,115 $ 10,111,022 $ 12,302,114 $ 22,618 $ 4:2,418 $ 53,900,545
General Fund - Operating support to reimburse the general fund for City Staff services
and equipment. Total amount of reimbursement was $18,679,983.
Sewer Soecial Revenue Fund - Operating support from the Trunk Sewer Capital
Projects Fund for sewer operation in the amount of $755,579 from Development Impact
Capital Projects Funds.
RDA Debt Service Fund - Funding the debt service funds for repayment of various
long-term obligations amounted to $1,738,037 and refunding of the 94 TABS, Series A,
C and D with proceeds amounted to $15,635,139.
City Debt Service Fund -Funding debt service funds for repayment of various long-
term obligations amounted to $112,455.
Development Impact Capital Proiects - Funding the closure of four Development
Impact Fee components namely the Geographic Information System, Mainframe
Computer System, Telephone Switch Expansion and Records Management amounted to
$560,905.
Non-maior Governmental Funds - Funding debt service funds for repayment of various
long-term obligations amounted to $16,418,447.
53
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
D. Capital Assets
A summary of changes in Governmental Activities capital assets at June 30, 2007 is as
follows:
Beginning Ending
Balance Additions Retirements Balance
Governmental Activities:
Capital assets, not being depreciated:
Land $ 63,979,746 $ 17,268,514 $ (57,776) $ 81,190,484
Construction in progress 51,595,767 22,046,742 (36,590,922) 37,051,587
Total Capital Assets, not Being
Depreciated 115,575,513 39,315,256 (36,648,698) 118,242,071
Capital assets being depreciated:
Buildings 160,375,744 18,729,044 179,104,788
Improvements olber
!ban buildings 76,324,816 25,977,480 102,302,2%
Machinery and Eq uipment 36,122,102 1,634,530 (2,215,241) 35,541,391
Infrastructure 679,014,578 66,160,923 745,175,501
Total Capita] Assets, Being
Depreciated 95],837,240 112,501,977 (2,215,241) 1,062,123,976
Less accumulated depreciation:
Buildings (20,888,237) (3,211 ,207) (24,099,444)
Improvements olber
!ban buildings (25,137,480) (1,535,230) (26,672,710)
Machinery and Equipment (27,306,709) (3,322,212) 2,179,194 (28,449,727)
Infrastructure (185,475,957) (17,535,843) (203,01 ],800)
Total Accumulated
Depreciation (258,808,383) (25,604,492) 2,179,194 (282,233,681 )
Total Capital Assets, Being
Depreciated 693,028,857 86,897,485 (36,047) 779,890,295
Governmental Activities
Capital Assets, Net $ 808,604,370 $ 126,212,741 $ (36,684,745) $ 898,132,366
54
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Depreciation expense was charged to functions/programs of the governmental activities
as follows:
General government $ 1,087,485
Public safety 2,529,701
Public works 20,355,234
Parks and recreation 1,373,019
Library 259,053
Total $ 25,604,492
A summary of changes in Business-Type Activities capital assets at June 30, 2007 is as
follows:
Beginning
Balance
Additions
Retirements
Ending
Balance
Business-type Activities:
Capital assets, being depreciated:
Machinery and Equipment
$ 11,605,029
$ (504,615) $ 11,100,414
Less accumulated depreciation:
Machinery and Equipment
(5,064,515) $ (831,620)
454,154
(5,441,981)
Business-type Activities
Capital Assets, Net
$ 6,540,514 $ (831,620) $ (50,461) $ 5,658,433
55
CiTY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
E. Long-Term Debt
Changes in long-term debt for the year ended June 30, 2007 are as follows:
Beginning Ending Due Within
Balance Addi tions Repayments Balance One Year
Governmental Activities:
Tax allocation bonds $ 40,295,000 $ 25,760,000 $ 24,780,000 $ 41,275,000 $ 1,090,000
Pension obligation bonds 11,795,000 1,380,000 10,415,000 1,595,000
Certificates of participation 144,240,000 4,395,000 139,845,000 4,800,000
Bond premium 33,074 1,181 31,893 1,181
Bond discount (505,884) (24,090) (481,794) 24,090
ERAF loans 1,640,000 125,000 1,515,000 150,000
Notes payable 272,175 22,279 249,896 25,570
Capital1ea..o;es 1,862,154 190,522 1,671,632 201,287
Compensated absences 6,004,383 5,025,866 4,443,864 6,586,385 4,500,000
Total $ 206,141,786 $ 30,279,982 $ 35,313,756 $ 201,108,012 $ 12,387,128
Tax Allocation Bonds
Balance Debt Debt Balance
July 1,2006 Issue Retired June 30, 2007
1994 Senior Tax Allocation
Refunding Bonds, Series A $ 12,590,000 $ (12,590,000)
1994 Senior Tax Allocation
Refunding Bonds, Series D 4,945,000 (4,945,000)
1994 Subordinate Tax Allocation
Refunding Bonds, Series C 6,855,000 (6,855,000)
2000 Tax Allocation Bonds 15,905,000 (390,000) $ 15,515,000
2006 Senior Tax Allocation
Refunding Bonds, Series A $ 13,435,000 13,435,000
2006 Senior Tax Allocation
Refunding Bonds, Series B 12,325,000 12,325,000
Total $ 40,295,000 $ 25,760,000 $ (24,780,000) $ 41,275,000
56
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
1994 Senior Tax Allocation Refunding Bonds. Series A
In November 1994, the Agency issued $14,810,000 1994 Senior Tax Allocation
Refunding Bonds, Series A, to refund the 1986 Tax Allocation Bonds. The bonds
consist of $1,585,000 serial bonds which mature from 1998 to 2004 in amounts ranging
from $185,000 to $275,000 and $12,885,000 term bonds with mature in 2024. Interest
is payable semi-annually on March I and September I, at interest rates ranging from
5.85% to 7.625%. Bonds maturing on or after September I, 2006, are subject to
optional redemption on any interest payment date on or after September I, 2005, at
various redemption prices. The annual debt service is paid from property taxes
increment in the project area. The balance outstanding as of June 30, 2007 was $0.
This was refunded by 2006 Tax Allocation Refunding Bonds, Series A.
1994 Senior Tax Allocation Refunding Bonds. Series D
In February 1996, the Agency issued $5,680,000 1994 Senior Tax Allocation
Refunding Bonds, Series D, to refund the Agency's BayfrontfIown Centre
Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series B. The
1994 Bonds, Series B, were paid off with the bond proceeds. The bonds are term
bonds, which mature in 2024. Interest is payable semi-annually on March I and
September I at 8.625%. The bonds are subject to redemption prior to maturity on any
interest payment date, on or after September I, 2006, at various redemption prices. The
bonds are subject to mandatory sinking fund redemption prior to maturity, in part, by lot
on September I, 1997, and on each September I thereafter, without premium, from
1988 to 2024 in amounts ranging from $60,000 to $495,000. The annual debt service is
paid from property tax increment generated in the project area. The balance
outstanding at June 30, 2007 was $0. This was refunded by 2006 Tax Allocation
Refunding Bonds, Series B.
1994 Subordinate Tax Allocation Refunding Bonds. Series C
In November 1994, the Agency issued $8,195,000 1994 Subordinate Tax Allocation
Refunding Bonds, Series C to refund the 1986 Tax Allocation Bonds. The bonds
consist of $930,000 serial bonds which mature from 1998 to 2004 in amounts ranging
from $100,000 to $145,000 and term bonds of $2,255,000 and $4,925,000 which
mature in 2014 and 2024, respectively. Interest is payable semiannually on May I and
November I at interest rates ranging from 5.95% to 8.25%. The bonds are subject to
optional redemption on any interest payment date on or after May I, 2005, at various
redemption prices. The annual debt service is paid from property tax increment
generated in the project area. The balance outstanding at June 30, 2007 was $0. This
was refunded by 2006 Tax Allocation Refunding Bonds, Series B.
57
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
2000 Tax Allocation Bonds
In October 2000, the Agency issued $17,000,000 2000 Tax Allocation Bonds, to
provide funds to fund a reserve account to pay expense of the Agency in connection
with the issuance of the bonds and to finance or refinance certain redevelopment
activities. The proceeds of the bonds were used to fund the acquisition and construction
of certain capital improvements which are located in the Agency's Town Center I
Project Area. The bonds consist of $9,535,000 serial bonds which mature from 2001 to
2030 in amounts ranging from $100,000 to $715,000 and term bonds of $1,440,000 and
$6,025,000 which mature in 2022 and 2029, respectively. Interest is payable
semiannually on March 1 and September 1 at interest rates ranging from 4.30% to
5.375%. The bonds are subject to optional redemption on any interest payment date on
or after September 1,2004, at various redemption prices. The bonds are payable solely
from certain tax increment revenues of the Agency and other funds held under the
indenture. The balance outstanding at June 30,2007 was $]5,515,000.
The annual debt service requirements for the 2000 Tax Allocation Bonds outstanding at
June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 405,000 $ 787,605 $ 1,192,605
2009 425,000 769,760 1,194,760
2010 440,000 750,943 1,190,943
2011 460,000 730,913 1,190,913
2012 480,000 709,523 1,189,523
2013-2017 2,655,000 3,175,681 5,830,681
2018-2022 3,170,000 2,443,198 5,613,198
2023-2027 4,115,000 1,479,864 5,594,864
2028-2031 3,365,000 333,116 3,698,116
Total $ 15,515,000 $ 11,180,603 $ 26,695,603
58
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
2006 Senior Tax Allocation Refunding Bonds. Series A
In July 2006, the Agency issued $13,435,000 2006 Senior Tax Allocation Refunding
Bonds, Series A to refinance the Agency's outstanding BayfrontfTown Centre
Redeve]opment Project 1994 Senior Tax Allocation Refunding Bonds, Series A, and to
satisfY the reserve reqnirement for the Bonds and provide for the costs of issuing the
Bonds. The original bond proceeds were used in the acquisition of property,
demolition, relocation, public improvements and funding the Low and Mod Income
Housing Project. The bond consist of serial bonds which mature in 2028. Interest is
payable semiannually on March 1 and September 1 at interest rates ranging from 4.00%
to 4.60%. The bonds are subject to optional redemption on any interest payment date
on or after September 1, 2012, at various redemption prices. The bonds are payable
solely from certain tax increment revenues of the Agency and other funds held under
the indenture. The balance outstanding at June 30, 2007 was $13,435,000. The
economic gain of issuance of new debt was approximately $2.3 million.
The annual debt service requirements for the 2006 Tax Allocation Refunding Bonds,
Series A outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 395,000 $ 574,433 $ 969,433
2009 460,000 556,345 1,0] 6,345
2010 480,000 537,545 ] ,017,545
20]] 500,000 517,945 ],017,945
2012 520,000 497,545 1,017,545
2013-2017 2,950,000 2,120,993 5,070,993
2018-2022 3,620,000 1,430,010 5,050,010
2023-2027 3,995,000 547,265 4,542,265
2028 515,000 11,845 526,845
Total $ 13,435,000 $ 6,793,926 $ 20,228,926
59
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
2006 Subordinate Tax Allocation Refunding Bonds. Series B
In July 2006, the Agency issued $12,325,000 2006 Subordinate Tax Allocation
Refunding Bonds, Series B to refInance the Agency's outstanding Bayfront/Town
Centre Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series C
and D, and to satisfy the reserve requirement for the Bonds and provide for the costs of
issuing the Bonds. The original bond proceeds were used in the acquisition of property,
demolition, relocation, public improvements and funding the Low and Mod Income
Housing Project. The bonds consist of $7,995,000 serial bonds which mature from
2007 to 2021 in amounts ranging from $290,000 to $735,000 and term bonds of
$4,330,000 which mature in 2028. Interest is payable semiannually on April 1 and
October 1 at interest rates ranging from 4.00% to 6.00%. The bonds are subject to
optional redemption on any interest payment date on or after October 1,2012, at various
redemption prices. The bonds are payable solely from certain tax increment revenues of
the Agency and other funds held under the indenture. The balance outstanding at June
30, 2007 was $12,325,000. The economic gain of issuance of new debt was
approximately $2.4 million.
The annual debt service requirements for the 2006 Subordinate Tax Allocation
Refunding Bonds, Series B outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 290,000 $ 605,065 $ 895,065
2009 410,000 556,165 966,165
2010 425,000 569,199 994,199
2011 440,000 551,084 991,084
2012 460,000 531,384 991,384
2013-2017 2,630,000 2,311 ,806 4,941,806
2018-2022 3,340,000 1,578,622 4,918,622
2023-2027 3,830,000 607,163 4,437,163
2028 500,000 13,125 513,125
Total $ 12,325,000 $ 7,323,613 $ 19,648,613
60
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Pension Obligation Bonds
The Pension Obligation Bonds Series 1994, were issued by the City to pay the
obligations from the City to the California Public Employees Retirement System for the
City's unfunded pension liability. The total issue is comprised of the following: (I)
Current Interest Bonds with original amount due of$7,415,000. These bonds mature in
amounts ranging from $310,000 in 1996 to $1,820,000 in 2009. Interest is payable
semi-annually on February I and August 1, beginning February 1, 1996, at interest rates
ranging from 6.05% to 7.875% annually; (2) $7,000,000 Term Bonds are due August I,
2011, with a stated annual interest rate of 8.15% and are reflected in the annual debt
service schedule below; (3) Capital Appreciation Bonds matured in 2006.
The bonds mature in the initial principal amounts ranging from $800,000 in 2002 to
$1,095,000 in 2005 and $480,036 in 2006. The effective annual yield on these bonds
ranges from 7.690% to 8.34%. The bonds are not limited as to payment to any special
source of funds of the City. The accreted value of the Pension Obligation Bonds at June
30,2007 was $10,415,000.
The annual debt service requirements for the Pension Obligation Bonds outstanding at
June 30, 2007 are as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 1,595,000 $ 774,280 $ 2,369,280
2009 1,820,000 640,413 2,460,413
2010 2,020,000 486,688 2,506,688
2011 2,325,000 310,172 2,635,172
2012 2,655,000 107,859 2,762,859
Total $ 10,415,000 $ 2,319,412 $ 12,734,412
61
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Certificates of Participation
Balance
July 1, 2006
Additions
Deletions
Balance
hme 30, 2007
2000 COP, Series A
2002 COP
2003 Refunding COP
2004 COP Civic Center Phase 1
2006 COP Civic Center Phase 2
$ 20,150,000
59,020,000
7,505,000
37,240,000
20,325,000
$ (1,180,000) $
(1,160,000)
(1,280,000)
(775,000)
18,970,000
57,860,000
6,225,000
36,465,000
20,325,000
Total
$ 144,240,000 $
$ (4,395,000) $ 139,845,000
2000 COP. Series A
In October 2000, the Chula Vista Public Financing Authority (Authority) issued
$25,255,000 in 2000 Certificates of Participation, Series A, to provide funds to improve
the City's 800 Megahertz emergency communications system, improve the City's
Corporation Yard, fmance a reserve account for the certificates, and pay the costs of
issuance incurred in connection with the execution and delivery of the certificates. The
source of the repayments of the certificates is the lease payments to be made by the City
to the Authority. The certificates mature in amounts ranging from $855,000 to 2001 to
$1,790,000 in 2020. Interest is payable semi-armually on March I and September I, at
interest rates ranging from 4.25% to 5.25%. The certificates maturing after September
I, 2010, are subject to redemption at premiums ranging from zero to 2%. The
outstanding balance at June 30, 2007 is $18,970,000.
The armual debt service requirements for the 2000 Certificates of Participation
outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 1,235,000 $ 887,922 $ 2,122,922
2009 1,025,000 838,484 1,863,484
2010 1,070,000 792,523 1,862,523
2011 1,120,000 744,343 1,864,343
2012 1,165,000 693,490 1,858,490
2013-2017 6,700,000 2,574,262 9,274,262
2018-2021 6,655,000 716,502 7,371,502
Total $ 18,970,000 $ 7,247,526 $ 26,217,526
62
CiTY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
2002 COP
In June 2002, the Chula Vista Public Financing Authority issued $60,145,000 in 2002
Certificates of Participation to provide funds to construct the City's Police
Headquarters, fmance the reserve account of the certificates, to capitalize interest during
construction and to pay the cost of issuance of the certificates. The source of repayment
of the certificates is the lease payments to be made by the City to the Authority. Interest
is payable semiannually on February I and August I of each year commencing August
1,2005. As of June 30, 2007 the outstanding balance is $57,860,000.
The annual debt service requirements for the 2002 Certificates of Participation
outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 1,200,000 $ 2,714,146 $ 3,914,146
2009 1,240,000 2,671,346 3,911,346
2010 1,290,000 2,620,746 3,910,746
2011 1,340,000 2,568,146 3,908,146
2012 1,400,000 2,513,346 3,913,346
2013-2017 7,960,000 11,634,127 19,594,127
2018-2022 10,020,000 9,616,840 19,636,840
2023-2027 12,890,000 6,807,250 19,697,250
2028-2032 16,650,000 3,133,750 19,783,750
2033 3,870,000 96,750 3,966,750
Total $ 57,860.000 $ 44,376,447 $ 102,236.447
2003 Refunding COP
In May 2003, the Chula Vista Public Financing Authority (Authority) issued
$11,320,000 in 2003 Refunding Certificates of Participation to defease the 1993
Certificates, reimburse the City for amounts it has advanced to prepay the equipment
lease, fmance a reserve account, and pay for the cost of issuance of the Certificates.
The Certificates are to be repaid from lease payments made by the City to the Authority
for leasing certain property. Interest is payable semiannually on March 1 and
September 1 of each year commencing September 1, 2003. The certificates mature in
2013 and principal is payable on September 1 each year commencing September 1,
2003. As of June 30, 2007 the outstanding balance is $6,225,000.
63
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
The annual debt service requirements for the 2003 Refunding Certificates of
Participation outstanding at June 30,2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 1,140,000 $ 154,455 $ 1,294,455
2009 940,000 131,525 1,071 ,525
2010 940,000 109,905 1,049,905
2011 965,000 84,880 1,049,880
2012 990,000 56,273 1,046,273
2013-2014 1,250,000 28,288 1,278,288
Total $ 6,225,000 $ 565,326 $ 6,790,326
2004 COP Civic Center Phase I
In September 2004, the Chula Vista Public Financing Authority (Authority) issued
$37,240,000 in 2004 Certificates of Participation to provide funding the fist phase of the
reconstruction, renovation, and equipping of the City's Civic Center Complex.
Proceeds will also be used to finance the reserve account of the certificates, to capitalize
interest during construction, and to pay the cost of issuance of the certificates. The
source of repayment of the certificates is the lease payments to be made by the City to
the Authority. Interest is payable semiannually on March 1 and September 1 of each
year commencing March 1, 2006. The certificates mature in 2034 and principal is
payable on September 1 each year co=encing September 1, 2006. As of June 30,
2007, the outstanding balance is $36,465,000.
64
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
The annual debt service requirements for the 2004, Certificates of Participation Civic
Center Project Phase I outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 790,000 $ 1,602,155 $ 2,392,155
2009 810,000 1,583,393 2,393,393
2010 830,000 1,561,118 2,391,118
2011 855,000 1,536,218 2,391,218
2012 885,000 1,507,361 2,392,361
2013-2017 4,940,000 7,022,931 11,962,931
2018-2022 6,025,000 5,943,970 11,968,970
2023-2027 7,470,000 4,493,388 11,963,388
2028-2032 9,410,000 2,555,275 11,965,275
2033-2034 4,450,000 336,500 4,786,500
Total $ 36,465,000 $ 28,142,309 $ 64,607,309
2006 COP Civic Center Phase 2
In March 2006, the Chula Vista Public Financing Authority (Authority) issued
$20,325,000 in 2006 Certificates of Participation to provide funds for the construction
and equipping of certain improvements to the Civic Center Complex of the City of
Chula Vista and other existing City facilities, fund capitalized interest, fund a reserve
fund, and pay the costs incurred in connection with the execution and delivery of the
Certificates. The source of repayment of the certificates is the lease payments to be
made by the City to the Authority. Interest is payable semiannually on March I and
September I of each year commencing September 1, 2006. The certificates mature in
2036 and principal is payable on March 1 each year commencing March 1,2008. As of
June 30, 2007 the outstanding balance is $20,325,000.
65
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
The annual debt service requirements for the 2006 Certificates of Participation Civic
Center Project Phase 2 outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal mterest Total
2008 $ 435,000 $ 837,289 $ 1,272,289
2009 450,000 822,499 1,272,499
2010 465,000 807,199 1,272,199
2011 480,000 791,389 1,271,389
2012 495,000 775,069 1,270,069
2013-2017 2,750,000 3,600,479 6,350,479
2018-2022 3,315,000 3,034,506 6,349,506
2023-2027 3,895,000 2,289,984 6,184,984
2028-2032 4,075,000 1,447,813 5,522,813
2033-2036 3,965,000 456,074 4,421,074
Total $ 20,325,000 $ 14,862,301 $ 35,187,301
ERAF Loans
In May 2005, the Agency participated in a $765,000 Loan Agreement with the
California Statewide Communities Development Authority to fmance their 2005 share
ofERAF Payments to the County Auditor. The annual debt service payments are:
Year Ending
June 30, Principal mterest Total
2008 $ 70,000 $ 31,752 $ 101,752
2009 70,000 28,704 98,704
2010 75,000 25,570 100,570
2011 80,000 22,118 102,118
2012 80,000 18,354 98,354
2013-2015 270,000 30,762 300,762
Total $ 645,000 $ 157,260 $ 802,260
66
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
In May 2006, the Agency participated in a $930,000 Loan Agreement with the
California Statewide Communities Development Authority to fmance their 2006 share
ofERAF Payments to the County Auditor. The annual debt services payments are:
Year Ending
June 30, Principal Interest
2008 $ 80,000 $ 49,256
2009 80,000 44,972
2010 85,000 40,632
20Il 90,000 35,996
2012 95,000 31,052
2013-20 I 6 440,000 68,046
Total $ 870,000 $ 269,954
Notes Payable
Total
$ 129,256
124,972
125,632
125,996
126,052
508,046
$ 1,139,954
In January 1994, the City entered into a note payable with a private party in order to
purchase certain land and improvements for the ultimate purpose of constructing a
three-level parking structure. The note calls for 240 monthly payments of principal and
interest, commencing in April 1994 in the initial amount of $2,548 and increasing 3%
percent annually. The annual interest rate is 8.29%. As of June 30, 2007, the
outstanding balance is $249,896.
Caoital Leases
The City has agreed to participate in the San Diego County Regional Communication
System (RCS). The City will finance its share of the RCS network infrastructure over
14 years and its total contribution will be $2,809,405. The agreement with the County
will provide the City with full partnership in the RCS. As of June 30, 2007, the
outstanding balance is $1,671,632.
Comoensated Absences
The City's liability for vested and unpaid compensated absences (accrued vacation) has
been accrued and amounts to $6,586,385 at June 30, 2007. In business-type funds, the
liabilities are reported in the fund as the benefits vest and are earned. Compensated
absence at June 30, 2007 were obligations of the following funds:
GoverrunentalFunds
Fleet Management
Total
$ 6,503,633
82,752
$ 6,586,385
67
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Defeased Debt
On May 29, 1986, the Agency advance refunded the $7,150,000 1979 Tax Allocation
Bonds by placing in an irrevocable trust amount sufficient to meet all future debt
service payments of the refunded debt. As a result the 1979 bonds were considered
defeased and the liability was removed from the City's books. The outstanding balance
at June 30,2007, was $0.
F. Special Assessment Debt - Non-City Obligation
Bonds issued to finance public improvement projects in certain assessment districts are
liabilities of the property owners and are secured by liens against the assessed property.
The City acts as an agent for collection of principal and interest payments by the
property owners and remittance of such monies to the bondholders.
The City has no obligation or duty to pay any delinquency out of any available funds of
the City. Neither the faith, credit, nor the taxing power of the City is pledged to the
payment of the bonds. Thereafter, none ofthe following obligations are included in the
accompanying basic financial statements.
68
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
As of June 30, 2007, the total special assessment debt outstanding was as follows:
CFD 06-1 A Eastlake Woods, Vista, Land Swap $
CFD 06-1 B Eastlake Woods, Vista, Land Swap
CFD 01-2 McMillin Otay Valley Ranch Village 6
CFD 08-1 Otay Ranch Village
CFD 07-1 Otay Ranch Village II
CFD 12-1 McMillin Otay Ranch Village 7
CFD 200 I-I B San Miguel Ranch 2005 Improvement
CFD 13-1 McMillin Otay Ranch Village 7
CFD 07-1 McMillin Otay Ranch Village I
2005 Revenue Refunding Bonds
AD 94-1 Eastlake Greens Phase II
RAD200 I-I Refunding Revenue Bonds Residential
RAD2001-2 Refunding Revenue Bonds Commercial
Industrial Development Revenue Bonds, 1992 Series A-D
Industrial Development Revenue Bonds, 1996 Series A-B
Industrial Development Revenue Bonds, 1997 Series A
Industrial Development Revenue Bonds, 2004 Series A-F
Industrial Development Revenue Bonds, 2006 Series A
Total
Original
Amount
39,000,000
7,880,000
10,250,000
21,655,000
28,050,000
22,565,000
12,230,000
16,620,000
16,950,000
93,930,000
7,464,474
20,445,000
9,705,000
250,000,000
98,900,000
25,000,000
251,265,000
161,240,000
Outstanding
June 30, 2007
$ 37,210,000
7,635,000
9,795,000
20,915,000
27,580,000
22,565,000
12,230,000
16,620,000
16,950,000
91,680,000
3,835,000
18,285,000
3,005,000
150,000,000
98,900,000
25,000,000
251,265,000
161,240,000
$ 1,093,149,474 $ 974,710,000
G. Debt Compliance
At June 30, 2007, City management believes that the City has complied with all
requirements of its various debt agreements.
H. Self Insurance
The City is self-insured for the first $250,000 per occurrence for its general liability
losses including personal injury, property damage, errors and omission, automobile
liability and employment practices liability. For those losses between $250,000 and
$2,000,000 per occupied the City pools its liabilities tlrrough its membership in the San
Diego Pooled insurance Program Authority (SANDPlPA). Insurance for losses in
excess of the $2,000,000 up to $37,000,000 is purchased on a group basis by the
member cities.
69
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
SANDPLP A is a joint powers authority comprised of twelve San Diego County cities.
The Board of Directors consists of one staff representative (and an alternative) from
each of the member cities as designated by the city's governing body. Each member
City has equal representation on the Board of Directors. The Board of Directors is
liable for all actions ofSANDPLPA.
The SANDPIPA Board of Directors establishes an Executive Committee that is
responsible for the administration and operation of the risk management programs of
the Authority, subject to the control of the Board. The Executive Committee consists
of the Board President, Vice-President, Treasurer and a member at-large nominated by
the Board President and approved by a vote of the Board. The Executive Committee is
responsible for the oversight of all SANDPIPA operations, including preparation and
submittal of the Pool's annual budget to the Board for its review and approval.
Annual pool premiums and assessments are approved by the Board of Directors and are
adjusted annually based on the member city's incurred losses; the member's share of
such losses and other expenses as a proportion of all member's losses; historical
contributions to reserves (including reserves for lBNR losses); the cost to purchase
excess liability insurance and other coverage and a proportionate share of administrative
expenses.
The City is self-insured for the fIrst $500,000 per occurrence for worker's compensation
liabilities. Excess workers' compensation coverage is obtained through participation in
the CSAC Excess Insurance Authority's Excess Workers' Compensation Program. As
of June 30, 2007, there are 147 member entities participating in the program that offers
per occurrence coverage up to $5,000,000 through pooled resources and from
$5,000,000 to $150,000,000 via a group purchased excess insurance policy.
Only the probable amounts of loss as estimated by the City's Risk Manager and
Attorney, including an estimate of incurred-but-not reported losses, have been recorded
as liabilities in the accompanying basic fInancial statements. There were no reductions
in insurance from the prior year and there were no insurance settlements that exceeded
coverage in each of the past three years.
70
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
The following change in the balance of claims payable as recorded in the Governmental
Activities were as follows:
2007 2006
Unpaid claims, beginning of year $ 12,618,048 $ 8,948,014
Incurred claims and changes in estimates 4,617,779 7,204,186
Claim payments (3,356,238) (3,534,152)
Unpaid Claims, End of Year $ 13,879,589 $ 12,618,048
Due Within One Year $ 3,300,000 $ 3,500,000
The liabilities for claims and judgments typically will be liquidated from the General
Fund.
IV. Other Information
A. California Public Employees' Retirement Plan
Plan Description:
The City contributes to the California Public Employees' Retirement System (PERS),
an agent multiple-employer public employee defmed benefit pension plan. PERS
provides retirement and personal 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 the State
statute and the City ordinance. Copies of PERS' annual fmancial report may be
obtained from their Executive Office located at 400 P Street, Sacramento, California
95814.
Funding Policy:
Active plan members are required by State statute to contribute 8% for miscellaneous
and 9% for safety employees of their annual covered salary. The City employer makes
the contribution required of City employees on their behalf and for their account, which
amounted to $7,922,499 for the year ended June 30, 2007. The City is required to
contribute at an actuarially determined rate, which is 26.505% for miscellaneous
employees and 30.055% for safety employees.
71
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Annual Pension Cost:
For 2006-2007, the City's annual pension cost of $17,773,292 for PERS was equal to
the City's required and actual contributions. The required contribution was determined
as part of the June 30, 2005, actuarial valuation using the entry age normal actuarial
cost method. The actuarial assumptions included (a) 7.75% investment rate of return
(net of administrative expenses), (b) projected salary increases range from 3.25% to
14.45% for miscellaneous employees and 3.25% to 13.15% for safety employees
depending on age, service and type of employment and (c) 3.25% per year cost of living
adjustments. Both (a) and (b) included an inflation component of3%. The actual 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
actual accrued liability (or surplus) for both miscellaneous and safety employees are
being amortized as a level percentage payrolls over a closed 20-year period for prior
and current service unfunded liability.
Three-year trend information for the Miscellaneous and Safety Plans:
Fiscal Pension Percentage of Net Pension
Year Cost (APe) APC Contributed Obligation
6/30/2005 $ 13,614,272 100% $
6/30/2006 17,893,117 100%
6/30/2007 17,773,292 100%
B. Defmed Contribution Pension Plan
The City provides pension plan benefits for all of its part-time employees through a
defined contribution plan (Public Agency Retirement Plan). In a defined contribution
plan, benefits depend solely on amounts contributed to the plan plus investment
earnings. The plan is administered by Phase 11 Systems. All part-time employees are
eligible to participate from the date of employment. Federal legislation requires
contributions of at least 7.5% to a retirement plan, and City Council resolved to match
the employees' contributions of 3.75%. The City's contributions for each employee
(and interest earned by the accounts) are fully vested immediately.
For the year ended June 30, 2007, the City's total payroll and covered payroll was
$3,839,230. The City made employer contributions of $143,971 (3.75% of current
covered payroll), and employees contributed $143,971 (3.75% of current covered
payroll).
72
CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
C. Commitments and Contingent Liabilities
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 these cases, in the aggregate, are not expected
to result in a material adverse financial impact on the City. Additionally, management
believes that the City's insurance programs are sufficient to cover any potential losses
should an unfavorable outcome materialize.
The City participates in a number of federally assisted grant programs, including those
from the U.S. Department of Housing and Urban Development, the U.S. Department of
Justice, the U.s. Department of Treasury, and the U.S. Department of Education.
Receipts from these grant programs are subject to audit to determine if the monies were
expanded in accordance with appropriate statutes, grant terms and regulations. The
City believes no significant liabilities will result.
The General Fund has loaned approximately $578,149 to the Agency for unreimbursed
services rendered by City staff. It is anticipated that the Agency will repay this loan
from tax increment revenues. Currently, tax increment revenues are used to pay for
related debt service expenditures and possible future debt issuance. As a result, the
Agency is uncertain if the amount will be repaid to the City's General Fund.
Accordingly, this contingent payable has not been reported in accompanying basic
financial statements. The Agency will record the contingent payable when payment is
as sured.
V. Accounting for Termination Benefits
The City implemented GASB Statement No. 47, Accountingfor Termination Benefits
during the fiscal year ended June 30, 2006. The City entered into a separation
agreement with the former Assistant City Manager totaling $140,476 (which includes
salary, retirement and health benefits) to be paid out during fiscal year 2007-08. The
liability has been reflected in the financial statements as of June 30, 2007.
VI. Subsequent Event
On October 16, 2007 a resolution was approved by the City Council amending the
contract between the Board of Administration of the California Public Employees
Retirement System and the City of Chula Vista to provide two years additional service
credit to all local, miscellaneous and local safety members that retire during a
designated 90-day eligibility window, November 8, 2007 through February 5, 2008.
The City Council additionally adopted the same resolution approving the medical
incentive program for eligible employees. This was done to implement cost saving
measures to balance the city's current budget.
73
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74
REQUiRED SUPPLEMENTARY iNFORMATiON
75
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76
CITY OF CHULA VISTA
Required Supplementary Information
PERS Schedule of Funding Progress
June 30, 2007
Miscellaneous Emolovees
Unfunded
Actuarial Liability/ Annual ULAs a
Actuarial Accrued Asset (Excess Funded Covered %of
Valuation Liability Value Assests) Status Payroll Payroll
Date (a) (b) [(a)-(b)] [(b)/(a)] (c) [(a)-(b)]/(c)
6/30/2004 $ 206,730,274 $ 154,849,579 $ 51,880,695 74.9% $ 47,920,530 108.3%
6/30/2005 232,282,399 174,477,224 57,805,175 75.1% 52,893, 195 109.3%
6/30/2006 257,692,801 196,921,453 60,771,348 76.4% 57,654,921 105.4%
Safety Emolovees
Unfunded
Actuarial Liability/ Annual UL As a
Actuarial Accrued Asset (Excess Funded Covered %of
Valuation Liability Value Assests ) Status Payroll Payroll
Date (a) (b) [(a)-(b)] [(b)/(a)] (c) [(a)-(b)]/(c)
6/30/2004 $ 175,892,648 $ 160,902,527 $ 14,990,121 91.5% $ 22,412,640 66.9%
6/30/2005 196,045,435 174,416,640 21,628,795 89.0% 26,1 19,100 82.8%
6/30/2006 221,829,740 190,269,514 31,560,226 85.8% 31,000,407 101.8%
77
CITY OF CHULA VISTA
General Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues:
Taxes $ 84,689,144 $ 84,689,144 $ 77,282,443 $ (7,406,70] )
Intergovernmental revenue 23,578,957 24,7] 6,466 24,] 52,3] 6 (564,]50)
Licenses and permits 4,28],735 4,28],735 2,730,534 (1,55],20])
Charges for services 17,472,] 65 17,707,048 ]6,259,086 (1,447,962)
Fines, forfeitures, and penalties ],462,125 ] ,462,] 25 1,315,262 (146,863)
Use of money and property 2,430,686 2,550,687 2,355,304 (] 95,383)
Other revenues 20,462,608 2],094,228 2],970,468 876,240
Total Revenues ] 54,377 ,420 156,50] ,433 146,065,413 (10,436,020)
Expenditures:
General government
City council ],638,747 ],638,747 1,513,]13 125,634
Boards and commissions 14,252 ]4,252 ]],447 2,805
City clerk ],]03,870 ],] 95,231 1,166,484 28,747
City attorney 2,662,141 2,723,608 2,72] ,778 ],830
Administration 3,972,502 3,986,459 3,499,210 487,249
Management and information 4,405,560 4,46],887 4,202,550 259,337
Human resources 5,377 ,199 12,162,452 8,202,098 3,960,354
Finance 3,205,939 3,205,939 2,978,448 227,49 ]
Community development 3,799,375 3,954,618 3,668,786 285,832
Planning and building 10,474,6]8 10,616,759 10,075,239 54] ,520
Public safety:
Police 50,046,557 5],3]5,246 49,625,680 1,689,566
Fire 22,480,372 23,586,746 22,917,760 668,986
Public works:
Engineering 7,815,740 7,908,040 6,586,807 ],32],233
Services 32,09] ,000 32,389,56] 3],706,784 682,777
Parks and recreation 8,]99,963 8,237,944 7,268,640 969,304
Library 10,205,256 10,393,439 9,677,724 715,715
Non-departmental:
Furlough and pension
obligation bonds (3,952,369) (3,953,131) (2,]23,251) (1,829,880)
Capital outlay 877,715 400,584 477,131
Total Expenditures 163,540,722 174,7]5,512 164,099,881 ]0,615,631
(Continued)
78
CITY OF CHULA VISTA
General Fund
Budgetary Comparison Schedule (Continued)
For the Year Ended June 30, 2007
Variance
Budgeted Amounts Positive
Original Final Actual (Negative)
Excess (Deficiency)
of Revenues
Over (Under) Expenditures (9,163,302) (18,214,079) (18,034,468) 179,611
Other Financing Sources (Uses):
Transfers in 18,792,942 18,850,749 18,679,983 (170,766)
Transfers out (6,534,007) (6,537,007) (5,357,771) 1,179,236
Total Other Financing
Sources (Uses) 12,258,935 12,313,742 13,322,212 1,008,470
Net Change in Fund Balance 3,095,633 (5,900,337) (4,712,256) 1,188,081
Fund Balance, Beginning of Year 39,885,953 39,885,953 39,885,953
Fund Balance, End of Year
(budgetary basis) $ 42,981,586 $ 33,985,616 35,173,697 $ 1,188,081
Encumbrances outstanding
at year end 328,560
Fund Balance, End of Year
(GAAP basis) $ 35,502,257
See Accompanying Note to Required Supplementary Information
79
CITY OF CHULA VISTA
Sewer Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Budgeted Amounts Po si tive
Original Final Actual (Negative)
Revenues:
License and permits $ 400,000 $ 400,000 $ 115,161 $ (284,839)
Charges for services 29,719,987 29,719,987 27,334,561 (2,385,426)
Fine and forfeitures 9,300 9,300
Use of money and property 1,282,500 1,282,500 1,038,413 (244,087)
Other revenues 429,932 429,932 380,338 (49,594)
Total Revenues 31,832,419 31,832,419 28,877,773 (2,954,646)
Expenditures:
Public works 19,416,874 19,506,706 16,355,029 3,151,677
Capital outlay 610,550 4,458,604 1,074,273 3,384,331
Total Expenditures 20,027,424 23,965,310 17,429,302 6,536,008
Excess of Revenues Over
(Under) Expenditures 11,804,995 7,867,109 11,448,471 3,581,362
Other Financing Sources (Uses):
Transfers in 8,000,000 835,281 755,579 (79,702)
Transfers out (16,361,469) (9,888,317) (9,403,487) 484,830
Total Other Financing
Sources (Uses) (8,361,469) (9,053,036) (8,647,908) 405,128
Net Change in Fund Balance 3,443,526 (1,185,927) 2,800,563 3,986,490
Fund Balance, Beginning of Year 34,398,352 34,398,352 34,398,352
Fund Balance, End of Year
(budgetary basis) $ 37,841,878 $ 33,212,425 37,198,915 $ 3,986,490
Encumbl1lJ1ces outstanding
at year end 172,845
Fund Balance, End of Year
(GAAP basis) $ 37,371,760
See Accompanying Note to Required Supplementary Information.
80
CITY OF CHULA VISTA
Note to Required Supplementary Information
June 30, 2007
1. BUDGET AND BUDGETARY ACCOUNTING
An annual budget is adopted by the City Council prior to the fIrst day of the fIscal year.
The budget process includes submittal of each department's budget request for the next
fIscal year, a detailed review of each department's proposed budget by the City
Manager and a final City Manager recommended budget that is transmitted to the City
Council for its review before the required date of adoption. A pubic hearing is held to
give the public the opportunity to comment upon the proposed budget. Notice of such
public hearing is given in a newspaper of general circulation.
The adoption of the budget is accomplished by the approval of a Budget Resolution.
The legal level of budgetary control is at the department leveL Any budget
modifIcation, which would result in an appropriation increase, requires City Council
approval. The City Manager and Finance Director are jointly authorized to transfer
appropriations within a departmental budget. Any appropriation transfers between
departments require City Council approvaL
Reported budget fIgures are as originally adopted or subsequently amended plus prior
year continuing appropriations. All appropriations which are not obligated,
encumbered, or expended at the end of the fIscal year lapse and become part of the
unreserved fund balance which may be appropriated for the next fiscal year.
An annual budget for the year ended June 30, 2007 was adopted and approved by the
City Council for the general, special revenue, and debt service funds. These budgets
are prepared on the modifIed accrual basis of accounting except that encumbrances
outstanding at year-end are considered as expenditures. The budget of the capital
projects funds are priroarily long-term budgets, which emphasize major programs and
capital outlay plans extending over a number of years. Because of the long-term nature
of these projects, annual budget comparisons are not considered meaningful, and
accordingly, no budgetary information for capital projects funds is included in the
accompanying basic fInancial statements.
81
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82
SUPPLEMENTARY INFORMATION
83
CITY OF CHULA VISTA
Redevelopment Agency Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Taxes $ 3,739,984 $ 2,327,101 $ (1,412,883)
Intergove=ental 255,300 255,300
Use of money and property 394,589 386,439 (8,150)
Other 2,207 2,207
Total Revenues 4,389,873 2,971,047 (1,418,826)
Expenditures:
Current:
General government 18,250 261,354 (243,104)
Debt service:
Principal 25,510,002 24,905,001 605,001
Interest and fi seal charges 6,569,967 4,560,806 2,009,161
Total Expenditures 32,098,219 29,727,161 2,371,058
Excess (Deficiency) of
Revenues Over
(Under) Expenditures (27,708,346) (26,756,114) 952,232
Other Financing Sources (U ses):
Issuance of debt 24,982,645 24,982,645 0
Transfers in 21,171,520 17,373,176 (3,798,344)
Transfers out (21,171,519) (16,661,115) 4,510,404
Total Other Financing
Sources (Uses) 24,982,646 25,694,706 712,060
Net Change in
Fund Balance (2,725,700) (1,061,408) 1,664,292
Fund Balance, Beginning of Year (25,808,442) (28,665,143 ) (2,856,70 I)
Fund Balance, End of Year $ (28,534,142) $ (29,726,551) $ (1,192,409)
84
CITY OF CHULA VISTA
City Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Expenditures:
Debt service:
Principal 45,449 45,449
Interest and fiscal charges $ 58,069 $ 593,617 $ (535,548)
Excess (Deficiency) of
Revenues Over
(Under) Expenditures (103,518) (593,617) (490,099)
Other Financing Sources (Uses):
Transfers in 383,205 112,455 (270,750)
Transfers out (311,750) 311,750
Total Other Financing
Sources (Uses) 71,455 112,455 41,000
Net Change in
Fund Balance (32,063) (481,162) (449,099)
Fund Balance, Beginning of Year (14,445,589) (14,196,565) 249,024
Fund Balance, End of Year $ (14,477,652) $ (14,677,727) $ (200,075)
85
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86
NONMAJOR SPECIAL REVENUE FUNDS
Transportation Grants - This fund is used to account for revenues and expenditures received
from the State under Street and Highway Code Sections 2106, 2107 and 2107.5. The
allocations must be spent for street maintenance or construction and a limited amount for
engineering.
Parking Meter - This fund accounts for revenues from on/off street parking and issued parking
citations within the parking district. The funds derived must be expended for a purpose
substationally connected with the problem of traffic regulation and control in the parking
district
Traffic Safety - This fund is a depository for all monies derived from vehicle code fines
(excluding parking violations). The fines are collected through the County court system and
remitted to the City monthly. These monies may be expended only for traffic control devices
and equipment and maintenance thereof or for the maintenance, improvement or construction
of public streets.
Town Centre 1- This fund is used to account for revenues from an in lieu parking fee. The in
lieu parking fee applies to any developer of a new commercial building or addition to an
existing commercial building within the Downtown Parking district. Use of monies in this fund
is restricted for the purchase or development of parking sites.
Onen Space Districts - This fund is a depository for all monies received for all flat rate property
tax assessments levied against benefiting property owners for the maintenance of open space
areas.
Housing- Programs - This fund is for federal housing rehabilitation monies held in trust by Bank
of America for issuance of housing rehab loans to qualified low and moderate income
recipients.
Sundrv Grants - This fund consists of miscellaneous grants/revenues such as: supplemental law
enforcement services, California Library Services Act, Public Library Act, asset seizure, local
law enforcement block grants, federal library grants, waste management and recycling, energy
conservation, parks and recreation social service grants, G. McCandliss memorial cultural arts,
federal assistance, CDBG Section 108 loan, CDBG program income project, HOME project,
and Community Development Block grants.
Transportation Sales Tax - This fund was established for the receipt and disbursement of all
transportation sales tax revenues for the City.
NONMAJORDEBT SERVICE FUNDS
Public Financing Authoritv - This fund is used to account for fmancing the acquisition of
bonds, notes and other obligations of, or for the purpose of making loans to the City and / or
to refmance outstanding obligations of the City.
1994 POB - This fund receives payments from the City for payment of principal and interest
due on 1994 taxable pension obligation bonds.
Notes Pavable - This fund is used for the payment of principal and interest on various notes
payable.
SD Regional Comm Svstem - This fund is used to account for the City's portion of the
infrastructure and fmancing costs of the San Diego County regional communications systems
(RCS).
NONMAJORCAPITAL PROJECTS FUNDS
Residential Construction Tax - This fund is a depository for fees levied for the construction,
replacement or conversion of all dwelling units within the City including hotels and motels.
Bicvcle Facility - This fund was established as a depository for local Transportation
Development Act funds (Article 3.0) received from the County for the purpose of bicycle
related programs.
Industrial Develop Authoritv - This fund was established to account for staff costs in assisting
in the issuance of industrial development bonds. A fee of 1/8 of I % is charged to reimburse
costs incurred.
Redevelopment Capital Proiect - This fund was established to account for capital improvement
projects related to various redevelopment areas.
Assessment District Improvement - This fund was established as a depository for monies
received from issuance of bonds for various assessment districts. The monies are used to
finance the construction of public works improvements in the related districts.
Sewer Facilitv Replacement - This fund is a depository for a portion of the revenue derived
from the monthly sewer service charge. Monies in this fund shall be used solely for the purpose
of refurbishment and/or replacement of sewerage facilities including related evaluation,
engineering and utility modification costs.
88
Capital Improvement PrOgram - 1bis fund was established to set aside monies for capital
improvement projects. 1bis fund does not generate revenues from any source except by transfer
from other funds and interest earned on monies in the fund. Monies transferred to the fund are
expended for budgeted capital improvement projects and monies remaining after completion of
a project are transferred back to the fund from which the project was originally financed.
Transportation Partnership - 1bis fund is a depository for the revenues received from the State
and Local Transportation Partnership Program Funds must be spent for street purposes.
Other Transportation Program - 1bis fund is a depository for the revenues received from the
Federal Safety Program. Funds must be spent for street, public highway bridges and other
regional surface transportation programs.
Transportation Equity Act - This fund was established to account for reimbursable capital
improvement program such as highway safety, transit, and other surface transportation
programs from FY98 through FY 2003 as required by PL 105-178..
Traffic Congestion Relief - This fund is a depository for the revenues received from the Traffic
Congestion Relief Fund as required by AB2928. The monies must be spent for street or road
maintenance or reconstruction.
89
CITY OF CHULA VISTA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2007
Special Revenue
Transportation Parking Traffic Town
Grants Meter Safety Centre I
Assets
Cash and investments $ 10,688 $ 141,425 $ 247,772 $ 27,997
Receivables:
Accounts
Taxes 373,833
Interest 8,894 1,821 1,680 308
Loans
Due from other funds
Due from other governments 79,492
Advances to other funds
Restricted cash and investments:
Held by City
Held by fiscal agent
Land held for resale
Total Assets $ 393,415 $ 143,246 $ 328,944 $ 28,305
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities $ 22,153 $ 2,534
Due to other funds
Deferred revenue
Total Liabilities 22,153 2,534
Fund Balances:
Reserved for:
Encumbrances 7,369 1,579
Loans receivables and advances
Land held for resale
Debt service
Total Reserved 7,369 1,579
Unreserved:
Designated for:
Contingency 31,994 106,029
Capital projects
Undesignated:
Special revenue 331,899 33,104 $ 328,944 $ 28,305
Capital projects
Total Fund Balances 371,262 140,712 328,944 28,305
Total Liabilities and Fund Balances $ 393,415 $ 143,246 $ 328,944 $ 28,305
90
Special Revenue
Open
Space Housing Sundry Traffic Redevelopment Transportation
Districts Programs Grants Signals Agency Sales Tax
$ 11,355,213 $ 818,012 $ 3,816,391 $ 5,914,175 $ 15,068,150
504
58,244 77,454
106,519 8,044 46,009 52,159 154,135
$ 225,065 8,662,711 13,568,423
774,310
629,749 609
368,820 4,432,954
$ 11,519,976 $ 593,885 $ 10,893,330 $ 3,862,400 $ 24,045,774 $ 15,222,285
$ 597,028 $ 251,577 $ 24,759 $ 104,318 $ 41,949
1,012,218
$ 71 2,019,828 2,035,871
597,028 71 3,283,623 24,759 2,140,189 41,949
290 360,745 693 75,603 157,545
224,994 7,237,509 11,532,552
290 224,994 7,598,254 693 11,608,155 157,545
11,453
657,016
10,265,642 368,820 3,836,948 10,297,430 15,022,791
10,922,948 593,814 7,609,707 3,837,641 21,905,585 15,180,336
$ 1l,519,976 $ 593,885 $ 10,893,330 $ 3,862,400 $ 24,045,774 $ 15,222,285
(Continued)
91
CITY OF CHULA VISTA
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30, 2007
Debt Service
Public
Financing 1994 Notes SD Regional
Authority POB Payable Cornm. System
Assets
Cash and investments $ 1,394,046 $ 3,043 $ 2 $ 166
Receivables:
Accounts
Taxes
Interest 3,808
Loans
Due from other funds
Due from other governments
Advances to other funds
Restricted cash and investments:
Held by City
Held by fiscal agent 11,640,952 55
Land held forresale
Total Assets $ 13,038,806 $ 3,098 $ 2 $ 166
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
Due to other funds
Deferred revenue
Total Liabilities
Fund Balances:
Reserved for:
Encumbrances
Long-term receivables and advances
Land held for resale
Debt service $ 13,038,806 $ 3,098 $ 2 $ 166
Total Reserved 13,038,806 3,098 2 166
Unreserved:
Designated for:
Contingency
Capital projects
Undesignated:
Special revenue
Capital projects
Total Fund Balances 13,038,806 3,098 2 166
Total Liabilities and Fund Balances $ 13,038,806 $ 3,098 $ 2 $ 166
92
Capital Projects
Residential Industrial Redevelopment Assessment
Construction Bicycle Develop Capital District
Tax Facility Authority Projects Improvement
$ 2,960,377 $ 48,989 $ 9,389 $ 1,509,422 $ 2,250,717
309,817 266
39,220 2,224 95 28,694 21,408
1,274,659
773,435
5,024,641
4,000,272
2,260,925
$ 2,999,597 $ 51,213 $ 9,484 $ 15,181,865 $ 2,272,391
$ 17,215 $ 2,739,216
1,274,659
$ 51,213 1,402,819
17,215 51,213 5,416,694
53,571 280,666
4,349,509
2,260,925
53,571 6,891,100
2,928,811
$
9,484
2,874,071 $ 2,272,391
2,982,382
$ 2,999,597
$
51,213
$
9,484
9,484
9,765,171
$ 15,181,865
2,272,391
$ 2,272,391
(Continued)
93
CITY OF CHULA VISTA
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30,2007
Capital Projects
Capital Other
Sewer Facility Improvement Transportation Transportation
Replacement Program Partnership Program
Assets
Cash and investments $ 6,505,385 $ 54,517 $ 1,272,829
Receivables:
Accounts 221,407
Taxes 866
Interest 66,684 2,626 13,010
Loans
Due from other funds 25,747
Due from other governments
Advances to other funds 690,295
Restricted cash and investments:
Held by City
Held by fiscal agent $ 5,388,893
Land held for resale
Total Assets $ 7,484,637 $ 5,388,893 $ 57,143 $ 1,311,586
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities $ 2,473 $ 10,113
Due to other funds 1,075
Deferred revenue 178,295
Total Liabilities 180,768 11,188
Fund Balances:
Re served for:
Encumbrances 191,705 334,710
Long-term receivables and advances 512,000
Land held for resale
Debt service
Total Reserved 703,705 334,710
Unreserved:
Designated for:
Contingency
Capital projects 6,600,164 $ 5,388,893 $ 57,143
Undesignated:
Special revenue
Capital projects 965,688
Total Fund Balances 7,303,869 5,388,893 57,143 1,300,398
Total Liabilities and Fund Balances $ 7,484,637 $ 5,388,893 $ 57,143 $ 1,311,586
94
Capital Projects
Transportation Traffic Total Other
Equity Congestion Governmental
Act Relief Funds
$ 24,672 $ 494,730 $ 53,928,107
221,911
820,480
23,205 580,543
22,456,199
2,074,716
1,483,285
5,714,936
4,801,774
21,030,172
2,260,925
$ 24,672 $ 517,935 $ 115,373,048
$ 91 $ 3,813,426
$ 24,672 2,312,624
384,965 6,073,062
24,672 385,056 12,199,112
55,649 1,520,125
23,856,564
2,260,925
13,042,072
55,649 40,679,686
149,476
20,787,973
40,513,883
77,230 1,042,918
132,879 103,173,936
$ 24,672 $ 517,935 $ 115,373,048
95
CITY OF CHULA VISTA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2007
Special Revenue
Transportation Parking Traffic Town
Grants Meter Safety Centre I
Revenues:
Taxes
Intergovernmental $ 4,075,453
Licenses and permits $ 24,729
Charges for services
Fines and forfeitures 60,047 $ 842,213
Use of money and property 33,843 245,560 7,936 $ 1,349
Other 6,000
Total Revenues 4,115,296 330,336 850,149 1,349
Expenditures:
Current:
General government
Public safety 319,439
Public works
Parks and recreation
Library
Capital outlay 804,284
Debt service:
Principal
Interest and fiscal charges
Total Expenditures 804,284 319,439
Excess (Deficiency) Revenues
Over (Under) Expenditures 3,311,012 10,897 850,149 1,349
Other Financing Sources (Uses):
Transfers in
Transfer out (4,167,878) (2,264) (513,600)
Total Other Financing
Sources (Uses) (4,167,878) (2,264) (513,600)
Net Change in Fund Balances (856,866) 8,633 336,549 1,349
Fund Balances, Beginning of Year 1,228,128 132,079 (7,605) 26,956
Fund Balances, End of Year $ 371,262 $ 140,712 $ 328,944 $ 28,305
96
Special Revenue
Open
Space Housing Sundry Traffic Redevelopment Transportation
Districts Programs Grants Signals Agency Sales Talt
$ 2,294,709 $ 3,210,000
$ 5,643,489 $ 67,657
$ 7,022,583 683,742 58,897
483,662 $ 1,210 55,984 205,388 303,530 635,834
100,900 5,517 95,425
7,506,245 1,210 5,800,373 962,304 2,752,561 3,845,834
1,502,106 664,823
334,605
6,171,162 386,990 1,920 93,967
18,745
2,316,172 1,127,532 2,220,866
6,171,162 4,558,618 1,129,452 664,823 2,314,833
1,335,083 1,210 1,241,755 (167,148) 2,087,738 1,531,001
28,932 275,602 1,124
(1,124) (560,786) (8,562) (299,079)
27,808 (285,184) (8,562) (297,955)
1,335,083 29,018 956,571 (175,710) 1,789,783 1,531,001
9,587,865 564,796 6,653,136 4,013,351 20,115,802 13,649,335
$ 10,922,948 $ 593,814 $ 7,609,707 $ 3,837,641 $ 21,905,585 $ 15,180,336
(Continued)
97
CITY OF CHULA VISTA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2007
Debt Service
Public
Financing 1994 Notes SD Regional
Authority POB Payable Comm. System
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Use of money and property $ 613,858 $ 55 $ 5
Other
Total Revenues 613,858 55 5
Expenditures:
Current:
General government 15,260 2,475
Public safety 2,420
Public works
Parks and recreation
Library
Capital outlay
Debt service:
Principal 4,395,000 1,380,000 $ 22,279 190,522
Interest and fiscal charges 6,299,158 889,960 21,751 105,212
Total Expenditures 10,711,838 2,272,435 44,030 295,734
Excess (Deficiency) Revenues
Over (Under) Expenditures (10,097,980) (2,272,380) (44,030) (295,729)
Other Financing Sources (Uses):
Transfers in 9,500,218 2,272,460 44,030 295,734
Transfer out
Total Oilier Financing
Sources (Uses) 9,500,218 2,272,460 44,030 295,734
Net Change in Fund Balances (597,762) 80 5
Fund Balances, Beginning of Year 13,636,568 3,018 2 161
Fund Balances, End of Year $ 13,038,806 $ 3,098 $ 2 $ 166
98
Residential Industrial Redevelopment Assessment
Construction Bicycle Develop Capital District
Tax Facility Authority Projects Improvement
$ 393,650 $ 7,313,808
$ 59,662
168,542
37,596
599,788
8,908 $
437
654,797 $
58,392
8,026,997
95,694
54,165
149,859
68,570
437
7,897,287
220,929
100,000
1,001,795
68,570
172,420
1,101,795 289,499 8,069,707
(502,007) (220,929) 437 (42,710) 149,859
4,000,347
(721,392) (5,749,708) (8,937)
(721,392) (1,749,361) (8,937)
(1,223,399) (220,929) 437 (1,792,071) 140,922
4,205,781 220,929 9,047 11,557,242 2,131,469
$ 2,982,382 $ $ 9,484 $ 9,765,171 $ 2,272,391
(Continued)
99
CITY OF CHULA VISTA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Noumajor Governmental Funds (Continued)
For the Year Ended June 30, 2007
Capital Projects
Capital Other
Sewer Facility Improvement Transportation Transportation
Replacement Program Partnership Program
Revenues:
Taxes
Intergovernmental $ 23,837
Licenses and permits
Charges for services $ 1,335,443
Fines and forfeitures
Use of money and property 299,818 $ 860,936 $ 10,983 229,917
Other
Total Revenues 1,635,261 860,936 10,983 253,754
Expenditures:
Current:
General government
Public safety
Public works
Parks and recreation
Library
Capital outlay 404,240 12,303,540 307,297 120,825
Debt service:
Principal
Interest and fiscal charges
Total Expenditures 404,240 12,303,540 307,297 120,825
Excess (Deficiency) Revenues
Over (Under) Expenditures 1,231,021 (11,442,604) (296,314) 132,929
Other Financing Sources (Uses):
Transfers in
Transfer out (267,053) (1,731)
Total Other Financing
Sources (Uses) (267,053) (1,731)
Net Change in Fund Balance 963,968 (11,442,604) (298,045) 132,929
Fund Balances, Beginning of Year 6,339,901 16,831,497 355,188 1,167,469
Fund Balance, End of Year $ 7,303,869 $ 5,388,893 $ 57,143 $ 1,300,398
100
Capital Projects
Transportation Traffic
Equity Congestion
Act Relief
$ 2,108,082
$
52,739
113,096
8,290
2,229,468
52,739
Total Other
Governmental
Funds
$ 13,212,167
11,978,180
24,729
9,100,665
902,260
5,084,081
366,285
40,668,367
10,081,951
656,464
6,874,968
134,619 234,619
18,745
1,973,463 22,821,004
5,987,801
7,316,081
2,108,082 53,991,633
52,739 121,386 (13,323,266)
16,418,447
(12,302,114)
4,116,333
52,739 121,386 (9,206,933)
(52,739) 11,493 112,380,869
$ $ 132,879 $ 103,173,936
101
CITY OF CHULA VISTA
Transportation Grants Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative )
Revenues:
Intergove=ental $ 4,167,742 $ 4,075,453 $ (92,289)
Use of money and property 37,787 33,843 (3,944)
Other 6,000 6,000
Total Revenues 4,205,529 4,115,296 (90,233)
Expenditures:
Capital outlay 1,284,932 811,653 473,279
Excess (Deficiency) of Revenues
Over (Under) Expenditures 2,920,597 3,303,643 383,046
Other Financing Sources (Uses):
Transfers out (4,269,057) (4,167,878) 101,179
Total Other Financing Sources (Uses) (4,269,057) (4,167,878) 101,179
Net Change in Fund Balance (1,348,460) (864,235) 484,225
Fund Balance, Beginning of Year 1,228,128 1,228,128
Fund Balance, End of Year
(budgetary basis) $ (120,332) 363,893 $ 484,225
Encumbrances outstanding at year end 7,369
Fund Balance, End of Year
(GAAP basis) $ 371,262
102
CITY OF CHULA VISTA
Parking Meter Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Licenses and permits $ 24,500 $ 24,729 $ 229
Fines and forfeitures 82,387 60,047 (22,340)
Use of money and property 251,509 245,560 (5,949)
Total Revenues 358,396 330,336 (28,060)
Expenditures:
Current:
Public safety 332,971 321,018 11,953
Excess (Deficiency) of Revenues
Over (Under) Expenditures 25,425 9,318 (16,107)
Other Financing Sources (Uses):
Transfers out (2,364) (2,264 ) 100
Total Other Financing Sources (Uses) (2,364) (2,264) 100
Net Change in Fund Balance 23,061 7,054 (16,007)
Fund Balance, Beginning of Year 132,079 132,079
Fund Balance, End of Year $ 155,140 139,133 $ (16,007)
Encumbrances outstanding at year end 1,579
Fund Balance, End of Year
(GAAP basis) $ 140,712
103
CITY OF CHOLA VISTA
Traffic Safety Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Fines and forfeitures $ 513,600 $ 842,213 $ 328,613
Use of money and property 3,542 7,936 4,394
Total Revenues 517,142 850,149 333,007
Other Financing Sources (Uses):
Transfers out (513,600) (513,600)
Net Change in Fund Balance 3,542 336,549 333,007
Fund Balance, Beginning of Year (7,605) (7,605)
Fund Balance, End of Year $ (4,063) $ 328,944 $ 333,007
104
CITY OF CHULA VISTA
Town Centre I Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 806 $ 1,349 $ 543
Expenditures:
Capital outlay 10,288 10,288
Net Change in Fund Balance (9,482) 1,349 10,831
Fund Balance, Beginning of Year 26,956 26,956
Fund Balance, End of Year $ 17,474 $ 28,305 $ 10,831
105
CITY OF CHULA VISTA
Open Space Districts Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Charge for services $ 10,118,109 $ 7,022,583 $ (3,095,526)
Use of money and property 483,662 483,662
Total Revenues 10,118,109 7,506,245 (2,611,864)
Expenditures:
Current:
Public works 9,202,684 6,171,452 3,031,232
Excess (Deficiency) of Revenues
Over (Under) Expenditures 915,425 1,334,793 419,368
Other Financing Sources (Uses):
Transfers out (74,583) 74,583
Net Change in Fund Balance 840,842 1,334,793 344,785
Fund Balance, Beginning of Year 9,587,865 9,587,865
Fund Balance, End of Year
(budgetary basis) $ 10,428,707 10,922,658 $ 344,785
Encumbrances outstanding at year end 290
Fund Balance, End of Year
(GAAP basis) $ 10,922,948
106
CITY OF CHULA VISTA
Housing Programs Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 2,500 $ 1,210 $ (1,290)
Other Financing Sources (Uses):
Transfers in 28,932 28,932
Transfers out (2,500) (1,124) 1,376
Total Other Financing Sources (Uses) (2,500) 27,808 30,308
Net Change in Fund Balance 29,018 29,018
Fund Balance, Beginning of Year 564,796 564,796
Fund Balance, End of Year $ 564,796 $ 593,814 $ 29,018
107
CITY OF CHOLA VISTA
Sundry Grants Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental $ 7,852,089 $ 5,643,489 $ (2,208,600)
Use of money and property 42,478 55,984 13,506
Other 900 100,900 100,000
Total Revenues 7,895,467 5,800,373 (2,095,094)
Expenditures:
Current:
General government 4,244,729 1,862,851 2,381,878
Public safety 493,014 334,605 158,409
Public works 1,403,421 386,990 1,016,431
Library 19,101 18,745 356
Capital outlay 15,315,419 2,316,172 12,999,247
Total Expenditures 21,475,684 4,919,363 16,556,321
Excess (Deficiency) of Revenues
Over (Under) Expenditures (13,580,217) 881,010 14,461,227
Other Financing Sources (Uses):
Transfers in 275,602 275,602
Transfers out (544,044) (560,786) (16,742)
Total Other Financing Sources (Uses) (544,044) (285,184) 258,860
Net Change in Fund Balance (14,124,261) 595,826 14,720,087
Fund Balance, Beginning of Year 6,653,136 6,653,136
Fund Balance, End of Year
(budgetary basis) $ (7,471,125) 7,248,962 $ 14,720,087
Encumbrances outstanding at year end 360,745
Fund Balance, End of Year
(GAAP basis) $ 7,609,707
108
CITY OF CHULA VISTA
Traffic Signals Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental $ 67,657 $ 67,657
Charges for services $ 766,989 683,742 (83,247)
Use of money and property 72,425 205,388 132,963
Other 5,517 5,517
Total Revenues 839,414 %2,304 122,890
Expenditures:
Current:
Public works 14,571 1,920 12,651
Capital outlay 2,996,716 1,128,225 1,868,491
Total Expenditures 3,011,287 1,130,145 1,881,142
Excess (Deficiency) of Revenues
Over (Under) Expenditures (2,171,873) (167,841) 2,004,032
Other Financing Sources (Uses):
Transfers out (8,662) (8,562) 100
Net Change in Fund Balance (2,180,535) (176,403) 2,004,132
Fund Balance, Beginning of Year 4,013,351 4,013,351
Fund Balance, End of Year
(budgetary basis) $ 1,832,816 3,836,948 $ 2,004,132
Encumbrances outstanding at year end 693
Fund Balance, End of Year
(GAAP basis) $ 3,837,641
109
CITY OF CHULA VISTA
Redevelopment Agency Special Revenue Fund
Budgetary Comparison Sched.ule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Taxes $ 1,876,420 $ 2,294,709 $ 418,289
Use of money and property 114,033 303,530 189,497
Charges for Servi ces 59,442 58,897 (545)
Other 95,425 95,425
Total Revenues 2,049,895 2,752,561 702,666
Expenditures:
Current:
General government 1,913,523 740,426 1,173,097
Excess (Deficiency) of Revenues
Over (Under) Expenditures 136,372 2,012,135 1,875,763
Other Financing Sources (U ses):
Transfers in 2,500 1,124 (1,376)
Transfers out (3,022) (299,079) (296,057)
Total Other Financing Sources (Uses) (522) (297,955) (297,433)
Net Change in Fund Balance 135,850 1,714,180 1,578,330
Fund Balance, Beginning of Year 20,115,802 20,115,802
Fund Balance, End of Year
(budgetary basis) $ 20,251,652 21,829,982 $ 1,578,330
Encumbrances outstanding at year end 75,603
Fund Balance, End of Year
(GAAP basis) $ 21,905,585
110
CITY OF CHULA VISTA
Transportation Sales Tax Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Taxes $ 6,610,000 $ 3,210,000 $ (3,400,000)
Use of money and property 291,155 635,834 344,679
Total Revenues 6,901,155 3,845,834 (3,055,321)
Expenditures:
Current
Public Works 93,967 (93,967)
Capital outlay 17,130,812 2,378,4 II 14,752,401
Total Expenditures 17,130,812 2,472,378 14,658,434
Net Change in Fund Balance (l 0,229,657) 1,373,456 11,603,113
Fund Balance, Beginning of Year 13,649,335 13,649,335
Fund Balance, End of Year
(budgetary basis) $ 3,419,678 15,022,791 $ 11,603,113
Encumbrances outstanding at year end 157,545
Fund Balance, End of Year
(GAAP basis) $ 15,180,336
III
CITY OF CHULA VISTA
Public Financing Authority Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 613,858 $ 613,858
Expenditures:
Current:
General government $ 18,000 15,260 2,740
Public safety 5,300 2,420 2,880
Debt service:
Principal 4,395,000 4,395,000
Interest 6,299,158 6,299,158
Total Expenditures 10,717,458 10,711,838 5,620
Excess (Deficiency) of Revenues
Over (Under) Expenditures (10,717,458) (10,097,980) 619,478
Other Financing Sources (Uses):
Transfers in 9,912,733 9,500,218 (412,515)
Net Change in Fund Balance (804,725) (597,762) 206,%3
Fund Balance, Beginning of Year 13,636,568 13 ,636,568
Fund Balance, End of Year $ 12,831,843 $ 13,038,806 $ 206,963
112
CITY OF CHULA VISTA
1994 POB Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 55 $ 55
Expenditures:
Current:
General government $ 2,500 2,475 25
Debt service:
Principal 1,380,000 1,380,000
Interest 889,960 889,960
Total Expenditures 2,272,460 2,272,435 25
Excess (Deficiency) of Revenues
Over (Under) Expenditures (2,272,460) (2,272,380) 80
Other Financing Sources (Uses):
Transfers in 2,272,460 2,272,460
Net Change in Fund Balance 80 80
Fund Balance, Beginning of Year 3,018 3,018
Fund Balance, End of Year $ 3,018 $ 3,098 $ 80
113
CITY OF CHULA VISTA
Notes Payable Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Expenditures:
Debt service:
Principal $ 22,279 $ 22,279
Interest 21,751 21,751
Total Expenditures 44,030 44,030
Other Financing Sources (Uses):
Transfers in 44,030 44,030
Net Change in Fund Balance
Fund Balance, Beginning of Year 2 2
Fund Balance, End of Year $ 2 $ 2 $
114
CITY OF CHOLA VISTA
SD County Regional Comm. System Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 5 $ 5
Expenditures:
Debt service:
Principal $ ] 90,522 ] 90,522
Interest ]05,212 105,2]2
Total Expenditures 295,734 295,734
Excess (Deficiency) of Revenues
Over (Under) Expenditures (295,734) (295,729) 5
Other Financing Sources (Uses):
Transfers in 376,869 295,734 (8],135)
Net Change in Fund Balance 8],135 5 (8] ,130)
Fund Balance, Beginning of Year ]6] ]6]
Fund Balance, End of Year $ 8],296 $ ]66 $ (8],130)
115
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116
INTERNAL SERVICE FUNDS
Internal SeIVice Funds are used to finance and account for special activities and seIVices
performed by a designated City department for other departments on a cost reimbursement
basis.
Fleet Management - This fund was established to account for vehicle and equipment services
provided to City departments. Revenue accruing to this fund comes from charges to City
departments benefiting from services provided.
Technologv Reolacement - This fund was established to account for computer and other
technology seIVices provided to City departments. Revenue accruing to this fund comes
from charges to city departments benefiting from services provided.
Stores Inventory - This fund accounts for the City's Warehouse and Central Stores
operation. The source of revenue is a reimbursement for items purchased for other
departments.
117
CITY OF CHULA VISTA
Combining Statement of Net Assets
Internal Service Funds
June 30, 2007
Fleet Technology Stores
Management Replacement Inventory Total
Assets
Cash and investments $ 2,884,556 $ 194,740 $ 47,067 $ 3,126,363
Interest recei vab Ie 26,020 1,561 520 28,101
Other receivable 7,610 7,610
Due from other governments 34,145 34,145
Inventories 20,669 20,669
Capital Assets:
Property, plant and equipment 11,682,594 11 ,682,594
Accumulated depreciation (9,847,990) (9,847,990)
Total Assets 4,786,935 196,30 I 68,256 5,051,492
Liabili ties
Accounts payable and accrued liabilities 409,299 20,213 2,397 431,909
Compensated absences 82,752 82,752
Total Liabilities 492,051 20,213 2,397 514,661
Net Assets
Invested in capi tal assets 1,834,604 1,834,604
Unrestricted 2,460,280 176,088 65,859 2,702,227
Total Net Assets $ 4,294,884 $ 176,088 $ 65,859 $ 4,536,831
118
CITY OF CHULA VISTA
Combining Statement of Activities and Changes in Net Assets
Internal Service Funds
For the Year Ended June 30, 2007
Fleet Technology Stores
Management Replacement Inventory Total
Operating Revenues:
Charges for services $ 4,975,536 $ 269,850 $ 121,963 $ 5,367,349
Other 35,514 35,514
Total Operating Revenues 5,011,050 269,850 121,963 5,402,863
Operating Expenses:
Operations and administration 4,834,385 734,677 130,714 5,699,776
Depreciation 1,102,476 1,102,476
Total Operating Expenses 5,936,861 734,677 130,714 6,802,252
Operating Income (Loss) (925,811 ) (464,827) (8,751 ) (1,399,389)
Nonoperating Revenues:
Interest income 97,434 (2,025) 2,331 97,740
Gain on sale of capital assets 115,156 115,156
Total Nonoperating revenues 212,590 (2,025) 2,331 212,896
Income (Loss) Before Transfers (713,221) (466,852) (6,420) (1,186,493)
Transfer out (42,418) (42,418)
Change in Net Assets (755,639) (466,852) (6,420) (1,228,911)
Net Assets, Beginning of Year 5,050,523 642,940 72,279 5,765,742
Net Assets, End of Year $ 4,294,884 $ 176,088 $ 65,859 $ 4,536,831
119
CITY OF CHULA VISTA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2007
Cash Flows from Operating Activities:
Cash received from other funds
Cash payments to suppliers for goods and services
Cash payments to employee for services
Other
Net Cash Provided (Used) by Operating Activities
Cash Flows from Capital and Related Financing Activities:
Acquisition of capital assets
Proceeds from sale of capital assets
Net Cash Provided (Used) by Capital and
Related Financing Activities
Cash Flows from Noncapital Financing Activities:
Intergovernmental
Interfund transfers
Net Cash Provided (Used) by
Noncapital Financing Activities
Cash Flows from Investing Activities:
Interest revenue
Net Cash Provided (Used) by Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year
Reconciliation of Operating Income (Loss) to Net Cash
Provided (Used) by Operating Activities:
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) By Operating Activities:
Depreciation
(Increase) decrease in other receivables
(Increase) decrease in inventories
Increase (decrease) in accounts payable and,
accrued liabilities
Increase (decrease) in compensated absences
Total Acljustments
Net Cash Provided (Used) by Operating Activities
120
Fleet
Management
$ 4,977,995 $
(3,620,983)
(1,222,188)
35,514
170,338
Technology
Replacement
269,850
(797,608)
(527,758)
(76,256)
142,743
66,487
(16,963)
(42,418)
(59,381 )
102,581 6,188
102,581 6,188
280,025 (521,570)
2,604,531 716,310
$ 2,884,556 $ 194,740
$ (925,811) $
1,102,476
2,459
(21,420)
12,634
1,096,149
$ 170,338 $
(464,827)
(62,931)
(62,931)
(527,758)
Stores
Inventory Total
$ 121,963 $ 5,369,808
(129,620) (4,548,211)
(1,222,188)
35,514
(7,657) (365,077)
(76,256)
142,743
66,487
(16,963)
(42,418)
(59,381)
2,070 110,839
2,070 11 0,839
(5,587) (247,132)
52,654 3,373,495
$ 47,067 $ 3,126,363
$ (8,751) $ (1,399,389)
1,102,476
2,459
8,957 8,957
(7,863) (92,214)
12,634
1,094 1,034,312
$ (7,657) $ (365,077)
121
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122
AGENCY FUNDS
The Agency Funds are used to account for assets held by the City in a trustee capacity for
individuals, private organizations, other gove=ents, and/or other funds.
123
CITY OF CHULA VISTA
Statement of Changes in Fiduciary Net Assets
Agency Funds
For the Year Ended June 30, 2007
Balance Balance
July I, 2006 Additions Deletions June 30, 2007
Soecial Assessment District
Assets
Cash and investments $ 5,956,224 $ 24,376,687 $ (23,092,978) $ 7,239,933
Restricted cash and investments
held by fiscal agents 193,784,251 5,032,368 (27,445,672) 171,370,947
Total Assets $ 199,740,475 $ 29,409,055 $ (50,538,650) $ 178,610,880
Liabilities
Due to bondholders $ 199,740,475 $ 21,989,770 $ (43,119,365) $ 178,610,880
Total Liabilities $ 199,740,475 $ 21,989,770 $ (43,119,365) $ 178,610,880
124
STATISTICAL SECTION
125
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126
CITY OF CHULA VISTA
Comprehensive Annual Financial Report
Year Ended June 30, 2007
Statistical Section
This part of the City of Chula Vista comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information says about the government's
overall financial health.
TABLE OF CONTENTS
PAGE NO.
Financial Trends
These schedules contain trend information to help the reader understand
how the government 'sfinancial performance and well-being have changed
over time. 128-137
Revenue Capacity
These schedules contain trend information to help the reader assess the
government's most .\'ignificant current local revenue source, the property
tax. 138-144
Debt Capacity
These schedules contain present iriformation to help the reader assess the
q!Jordability of the government's current levels qf outstanding debt and the
government's ability to issue additional debt in the fUture. 145-151
Demographic and Economic Information
These schedules offir demographic and economic indicators to help the
reader understand the environment within which the government '.\'
financial activities take place. 152-154
Operating Information
These schedules contain sen.'ice and infrastructure data to help the reader
understand how the iriformation in the government's financial report
relates to the services the government provides and the activities it
peiforms. 155-159
127
CITY OF CHULA VISTA
Net Assets by Component
Last Five Fiscal Years
(accrual basis of accounting)
Fiscal Year
2003 2004 2005
$ 456,096,957 $ 537,716,998 $600,317,974
55,203,919 55,283,141 72,468,247
103,843,928 1l0,825,189 111,448,751
$615,144,804 $ 703,825,328 $ 784,234,972
Governmental Activities:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total Gove=ental Activities
Total Gove=ental Activities Net Assets
Business-type Activities:
Invested in capital assets,
net of related debt
Restri cted
Unrestricted
Total Business-type Activities Net Assets
$ 7,156,534
362,007
$ 7,518,541
Primary Government:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total Primary Government Net Assets
$ 463,253,491
55,203,919
104,205,935
$ 622,663,345
$ 6,217 ,348
381,697
$ 6,599,045
$ 543,934,346
55,283,141
III ,206,886
$ 710,424,373
The City ofChula Vista has elected to show on~v jive years of data for this schedule.
128
$ 7,423,479
580,735
$ 8,004,214
$607,741,453
72,468,247
112,029,486
$792,239,186
Fiscal Year
2006 2007
$ 662,230,041
75,916,972
95,782,921
$ 833,929,934
$ 6,540,514
500,299
$ 7,040,813
$ 668,770,555
75,916,972
96,283,220
$ 840,970,747
$ 715,090,838
69,516,915
126,026,156
$910,633,909
$ 5,658,433
335,824
$ 5,994,257
$ 720,749,271
69,516,915
126,361,980
$916,628,166
129
CITY OF CHULA VISTA
Changes in Net Assets
Last Five Fiscal Years
(accrual basis of accounting)
Fiscal Year
2003 2004 2005
Expenses:
Governmental activities:
General government $ 36,112,144 $ 37,542,162 $ 42,591,851
Public safety 46,795,935 54,974,182 63,368,815
Public works 60,981,126 71,482,668 79,723,824
Parks and recreation 7,213,329 5,854,495 7,757,251
Library 8,110,316 8,845,277 8,890,126
Depreciation expense
Interest on long-term debt 9,322,463 12,827,332 12,656,986
Total Governmental Activities Expenses 168,535,313 191,526,116 214,988,853
Business-type Activities:
Transit 7,797,769 7,257,722 7,475,184
Bayfront Trolley Station 79,593 85,567 98,900
Total Business-type Activities Expenses 7,877,362 7,343,289 7,574,084
Total Primary Government Expenses 176,412,675 198,869,405 222,562,937
Program Revenues:
Governmental activities:
Charges for services:
General government 18,522,715 25,937,307 23,523,277
Public safety 5,003,310 9,991,565 9,555,756
Public works 34,193,401 46,862,521 40,020,387
Parks and recreation 1,534,116 25,000,748 15,702,515
Library 603,136 2,751,059 2,220,368
Operating grants and contributions 23,272,659 17,426,744 22,226,690
Capital grants and contributions 2,190,909 1,783,068 79,419,189
Total Governmental Activities
Program Revenues 85,320,246 129,753,012 192,668,182
Business-type activities:
Charges for services:
Transit 2,319,322 2,525,349 2,425,531
Bayfront Trolley Station
Operating grants and contributions 3,610,307 3,805,056 4,231,445
Capital grants and contributions 1,971,311
Total Business-type Activities
Program Revenues 5,929,629 6,330,405 8,628,287
Total Primary Government
Program Revenues 91,249,875 136,083,417 201,296,469
Net Revenues (Expenses):
Governmental activities (83,215,067) (61,773,104) (22,320,671)
Business-type activities (1,947,733) (1,012,884) 1,054,203
Total Net Revenues (Expenses) (85,162,800) (62,785,988) (21,266,468)
130
Fiscal Year
2006 2007
33,955,790 27,579,681
11,598,587 7,311,407
52,749,415 45,520,978
26,935,981 19,106,017
2,693,087 818,285
19,464,389 16,646,713
57,074,381 85,608,765
204,471,630 202,591,846
2,526,487 2,433,008
2,526,487 2,433,008
206,998,117 205,024,854
(54,866,520) (54,619,124)
(5,007,501) (5,001,243)
(59,874,021) (59,620,367)
(Continued)
131
$ 53,566,425
72,887,220
102,122,564
8,085,160
10,412,973
12,263,808
259,338,150
7,447,393
86,595
7,533,988
266,872,138
$ 45,249,650
77,136,782
103,117,608
9,353,280
10,320,817
12,032,833
257,210,970
7,330,560
103,691
7,434,251
264,645,221
CITY OF CHULA VISTA
Changes in Net Assets (Continued)
Last Five Fiscal Years
(accrual basis of accounting)
General Revenues and Other Changes in Net Assets:
Govemmental activities:
Taxes:
Property taxes
Sales tax
Other taxes
Motor vehicle licenses
Investment income
Other general revenues
Transfers
Total Governmental Activities
Business-type activities:
Investment income
Miscellaneous
Transfers
Total Business-type Activities
Total Primary Government
Changes in Net Assets:
Governmental activities
Business-type activities
Total Primary Government
2003
22,472,649
19,612,779
14,844,449
1l,007,909
14,372,650
155,683,692
45,626
238,039,754
118,056
17,907
(45,626)
90,337
238,130,091
154,824,687
(1,857,396)
$ 152,967,291
Fiscal Year
2004
26,674,527
21,421,090
25,826,828
9,137,716
5,651,048
58,912,431
42,876
147,666,516
20,715
115,549
(42,876)
93,388
147,759,904
85,893,412
(919,496)
$ 84,973,916
The City of Chula Vista has elected to show only five years of data for this schedule.
132
2005
27,074,211
23,600,000
23,373,749
13,941,204
11 ,678,930
4,887,489
34,900
104,590,483
56,485
329,381
(34,900)
350,966
104,941,449
82,269,812
1,405,169
$ 83,674,981
Fiscal Year
2006 2007
32,597,672
30,915,515
22,218,942
18,354,839
10,195,710
5,261,428
122,588
119,666,694
78,605
4,088,083
(122,588)
4,044,100
123,710,794
64,800,174
(963,401)
$ 63,836,773
38,882,122
32,817,351
21,400,961
17,676,035
13,386,872
7,137,140
22,618
131,323,099
167,734
3,809,571
(22,618)
3,954,687
135,277,786
76,703,975
(1,046,556)
$ 75,657,419
133
General Fund;
Reserved
Unreserved
Total general fund
All Other Governmental Funds:
Reserved
Unreserved, reported in:
Special revenue funds
Capital projects funds
Debt service funds
Total all other governmental funds
CITY OF CHULA VISTA
Fund Balances of Gove=ental Funds
Last Five Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2003 2004 2005
$ 21,358,332 $ 20,096,238 $ 22,214,965
28,694,894 25,191,333 19,287,213
$ 50,053,226 $ 45,287,571 $ 41,502,178
$ 106,439,367 $ 98,145,262 $ 98,226,224
38,423,739 41,395,612 48,987,258
73,977,363 81,760,701 94,472,902
(28,318,787) (39,678,141) (40,817,038)
$ 190,521,682 $ 181,623,434 $ 200,869,346
The City ofChula Vista has elected to show only five years of data for this schedule.
134
Fiscal Year
2006 2007
$ 21,771,010 $ 22,249,346
18,114,943 13,252,911
$ 39,885,953 $ 35,502,257
$ 64,859,111
$ 65,710,718
57,893,321
113,659,937
(42,861,708)
$ 193,550,661
64,843,684
92,093,271
(44,404,278)
$ 178,243,395
135
CITY OF CHULA VISTA
Changes in Fund Balances of Governmental Funds
Last Five Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2003 2004 2005
Revenues:
Taxes $ 58,729,882 $ 72,842,579 $ 81,190,971
Licenses and permits 4,596,975 5,533,743 3,946,733
Fines and forfeitures 1,507,652 1,568,585 1,398,146
Investment income 13,874,221 5,113,371 10,199,902
Developer fees 25,613,027 44,032,302 22,625,331
Intergovernmental 31,868,289 24,600,541 43,647,460
Charges for services 38,994,778 44,940,117 41,850,292
Other 21,862,659 25,318,879 28,232,712
Total Revenues 197,047,483 223,950,117 233,091,547
Expenditures:
Current:
General government 35,884,084 38,239,086 46,054,981
Public safety 45,781,808 52,491,410 61,673,449
Public works 49,118,238 54,430,850 56,220,867
Parks and recreation 4,820,255 4,824,714 5,369,192
Library 7,803,208 7,583,333 8,957,574
Capital outlay 66,522,243 56,039,237 61,134,157
Debt service:
Principal retirement 7,046,207 13,362,073 4,936,247
Interest and fiscal charges 9,817,072 10,910,758 12,059,211
Bond issuance cost
Total Expenditures 226,793,115 237,881,461 256,405,678
Excess (deficiency) of
revenues over (under)
expenditures (29,745,632) (13,931,344) (23,314,131)
Other Financing Sources (Uses):
Transfers in 43,317,265 26,894,272 84,773,947
Transfers out (43,178,867) (26,789,382) (84,678,601 )
Proceeds from long-term debt 765,000
Proceeds from bond sale 11,320,000 37,240,000
Bond premium/(bond discount) 35,254
Proceeds from sale of capital assets 162,551 639,050
Total Other Financing
Sources (Uses) II ,458,398 267,441 38,774,650
Extraordinary item:
Forgiveness of debt (5,635,850)
Total extraordinary item (5,635,850)
Net Change in Fund Balances $ (23,923,084) $ (13,663,903) $15,460,519
Debt service as a percentage of
noncapital expenditures 10.5% 13.3% 8.7%
The City ofChula Vista has elected to show only five years of data for thL~ schedule.
136
Fiscal Year
2006 2007
$ 86,509,678
3,441,613
1,724,862
7,946,878
50,551,528
41,847,938
43,823,886
30,012,125
265,858,508
49,628,483
67,913,584
72,296,203
6,210,040
9,734,444
72,988,853
6,054,618
12,260,244
297,086,469
(31,227,961)
55,698,112
(52,132,246)
21,255,000
24,820,866
$ (6,407,095)
8.2%
$ 92,821,711
2,870,424
2,226,822
13,570,315
24,058,397
36,385,796
52,694,312
23,567,613
248,195,390
46,904,990
73,245,978
75,720,582
7,503,259
9,660,809
36,472,182
30,892,802
12,289,908
514,994
293,205,504
(45,010,114)
53,900,545
(53,835,509)
25,760,000
(505,884)
25,319,152
$(19,690,962)
17.0%
137
CITY OF CHULA VISTA
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
City
Fiscal Year Taxable
Ended Less: Assessed
June 30 Secured Unsecured Exemptions Value I
1998 $ 6,449,700,069 $ 413,899,982 $ (251,866,676) $ 6,611,733,375
1999 7,101,554,450 245,602,993 (234,813,113) 7,112,344,330
2000 7,854,468,090 502,416,173 (268,612,195) 8,088,272,068
2001 8,812,650,702 326,184,542 (296,831,109) 8,842,004,135
2002 9,948,410,787 442,676,336 (262,190,235) 10,128,896,888
2003 11,489,756,820 359,527,956 (303,902,966) 11,545,381,810
2004 13,186,377,450 387,657,132 (349,913,333) 13,224,121,249
2005 15,390,029,359 402,366,184 (426,140,493) 15,366,255,050
2006 18,481,902,606 442,863,514 (452,332,435) 18,472,433,685
2007 21,254,352,374 582,720,155 (496,479,594) 21,340,592,935
I Includes redevelopment incremental valuation
2 Redevelopment Agency exemptions are included in City e.xemption data
as they are not reported separately
NOTE:
In 1978 the voters of the State of California passed Proposition 13 which limited property
taxes to a total maximum rate of 1 % based upon the assessed value of the property being
taxed. Each year, the assessed value of property may be increased by an "inflation factor"
(limited to a maximum increase of2%). With few exceptions, property is only re-assessed at
the time that it is sold to a new owner. At that point, the new assessed value is reassessed at
the purchase price of the property sold. The assessed valuation data shown above represents
the only data currently available with respect to the actual market value of taxable property
and is subject to the limitations described above.
Source: County of San Diego Property Tax Services
138
Redevelopment Agency
Taxable Total
Less: Assessed Direct Tax
Secured Unsecured Exemptions' Value Rate
$ 186,753,485 $ 180,598,526 $ 367,352,011 0.144%
390,015,547 62,024,435 452,039,982 0.144%
443,796,518 62,434,166 506,230,684 0.144%
486,277,371 72,978,911 559,256,282 0.144%
420,217,884 165,288,557 585,506,441 0.144%
578,332,766 92,744,520 671,077,286 0.144%
548,945,714 84,234,008 633,179,722 0.144%
617,179,700 82,759,507 699,939,207 0.144%
735,529,147 82,456,175 817,985,322 0.144%
846,124,571 202,760,284 1,048,884,855 0.144%
139
CITYOFCHULA VISTA
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
1998
1999
Fiscal Year
2000 200 I
2002
2003
City Direct Rates:
City basic rate
0.144
0.144
0.144
0.144
0.144
0.144
Overlapping Rates:
Chula Vista Elementary School 0.025 0.025 0.024 0.026
District Bonds
Sweetwater Union High School 0.025 0.022
District Bonds
Southwestern Community 0.Dl5 0.013
College Bonds
MWD D/S Remainder of 0.009 0.009 0.009 0.009 0.008 0.007
SDCWA 15019999
CW A South Bay Irrigation 0.001 0.001 0.001 0.001 0.001 0.001
Debt Service
County of San Diego 1.000 1.000 1.000 1.000 1.000 1.000
Total Direct Rate 1.010 1.010 1.035 1.035 1.073 1.069
NOTE:
In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00%
fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides
within. In addition to the 1.00% fixed amount, property owners are charged taxes as a
percentage of assessed property values for the payment of school bonds and other debt service.
Overlapping rates may vary by tax rate area. The data listed in this table is representative of tax
rate area 00 I 00 I.
Source: County of San Diego Property Tax Services
140
2004
Fiscal Year
2005 2006
2007
QI44 QI44 Q144 QI44
0.027 0.028 0.027 0.027
0.020 0.018 0.023 0.020
0.007 0.013 O.oJ5 0.014
0.006 0.006 0.005 0.005
0.001
1.000 1.000 1.000 1.000
1.061 1.065 1.070 1.066
141
CITYOFCHULA VISTA
Principal Property TaxPayers
Current Year and Nine Years Ago
2007
Percent of
Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Rank Value
Rom Inc $ 98,905,821 1 0.46%
Essel Vistan L P 96,215,799 2 0.45%
Bre Properties Inc 78,696,784 3 0.37%
SSR Realty AdvisorslCalstrs 71,828,419 4 0.34%
Proctor Valley West Partners L L 68,558,822 5 0.32%
C V Centre Inc 67,677,615 6 0.32%
Duke Energy South Bay LLP 66,234,269 7 0.31%
Montecito Crossings LLC 60,545,680 8 0.28%
Camden USA Inc 58,777 ,852 9 0.28%
Eagle Lomas Verdes L P 54,019,421 10 0.25%
Ho Retail Properties I Lid Partn
Price Co The
Eucalyptus Grove Holdings L L C
R & B Executive Investments-Marbri
United States Olympic Committee
Scripps Memorial Hospitals
Eastlake Development Co
DMB/AEW Land Holdings Two LLC
$ 721,460,482 3.38%
The amounts shown above include assessed value data for both the City and the Redevelopment Agency.
Source; County of San Diego Property Tax Services
142
1998
Percent of
Total City
Taxable Taxable
Assessed Assessed
Value Rank Value
70,989,696 1 1.07%
26,557,417 7 0.40%
56,984,082 2 0.86%
42,725,111 3 0.65%
30,191,908 4 0.46%
28,800,090 5 0.44%
27,291,000 6 0.41%
25,775,794 8 0.39%
23,720,847 9 0.36%
21,612,465 10 0.33%
354,648,410 5.36%
143
CITY OF CHULA VISTA
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal Taxes Levied Fiscal Year of Levy Co llections in Total Collections to Date
Year Ended for the Percent Subsequent Percent
June 30 Fiscal Year Amount of Levy Years 1 Amount of Levy
1998 $ 8,675,402 $ 8,525,374 98.27% $ 161,558 $ 8,686,932 100.13%
1999 9,257,814 9,104,045 98.34% 129,600 9,233,645 99.74%
2000 10,133,358 9,936,521 98.06% 106,647 10,043,167 99.11 %
2001 11,254,079 11,069,156 98.36% 125,706 11,194,861 99.47%
2002 12,806,109 12,597,591 98.3 7% 96,550 12,694,141 99.13%
2003 14,293,880 14,061,319 98.37% 112,257 14,173,576 99.16%
2004 16,200,005 15,959,723 98.52% 116,784 16,076,507 99.24%
2005 18,652,193 18,324,623 98.24% 106,497 18,431,120 98.81%
2006 22,096,604 21,617,022 97.83% 162,806 21,779,829 98.57%
2007 25,159,692 24,409,063 97.02% 209,442 24,618,505 97.85%
1 The amounts presented represent delinquencies collected for prior years during the current tax year.
Source: County of San Diego Property Tax Services
144
CITY OF CHULA VISTA
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
Fiscal Year Pension Tax Total Percentage Debt
Ended Obligation Allocation Certificates of Governmental of Personal Per
June 30 Bonds Bonds Loans Participation Activities Income I Capita I
1998 $16,997,031 $27,975,000 $40,354,134 $ 15,510,000 $100,836,165 2.00% 653
1999 16,757,351 27,625,000 41,742,571 14,390,000 100,514,922 1.82% 630
2000 16,419,851 27,255,000 46,726,701 13,215,000 103,616,552 1.77% 631
2001 15,971,354 43,855,000 55,689,108 37,240,000 152,755,462 2.44% 880
2002 15,456,449 43,330,000 10,397,443 95,245,000 164,428,892 2.55% 906
2003 14,799,025 42,750,000 7,462,505 104,225,000 169,236,530 2.54% 886
2004 13,985,870 42,125,000 7,315,971 92,920,000 156,346,841 2.27% 780
2005 12,991,962 41,240,000 8,193,481 127,599,255 190,024,698 2.57% 910
2006 11,795,000 40,295,000 9,811,786 144,240,000 206,141,786 2.67% 950
2007 10,415,000 41,275,000 10,054,806 139,845,000 201,589,806 2.50% 902
I These ratios are calculated using personal income and population for the prior calendar year.
Notes: Details regarding the City's outstanding debt can be found in the notes to the
financial statements.
145
CITY OF CHULA VISTA
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Outstanding General Bonded Debt
Fiscal Year Pension Tax Percent of
Ended Obligation Allocation Assessed Per
June 30 Bonds Bonds Total Value I Capita
1998 16,997 27,975 44,972 0.68% 110
1999 16,757 27,625 44,382 0.62% 105
2000 16,420 27,255 43,675 0.54% 100
2001 15,971 43,855 59,826 0.68% 92
2002 15,456 43,330 58,786 0.58% 85
2003 14,799 42,750 57,549 0.50% 77
2004 13,986 42,125 56,111 0.42% 70
2005 12,992 41,240 54,232 0.35% 62
2006 11,795 40,295 52,090 0.28% 54
2007 10,415 41,275 51,690 0.24% 47
General bonded debt is debt payable with governmental fund resources and general
obligation bonds recorded in enterprise funds (of which, the City has none).
I Assessed value has been used because the actual value of taxable property is not
readily available in the State of California.
146
CITY OF CHULA VISTA
Direct and Overlapping Debt
June 30, 2007
2006-07 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted A~sessed Valuation:
OVERL\PPrNG TAX AND ASSESSMENT DEBT:
Metropolitan Water District
OtayMunicipal Water District, LD. No. 27
Southwestern Community College District
Sweetwater Union High School Di!o.lrict
Chula Vi:'.ta City School District
City ofChula Vista Community Facilities District~
Sweetwater Union High School Distrk't Community Facilities Districts
Chula Vista City School Di:'.'trict Community Facilities Distrkts
CityofChulaVista 1915 Act Bonds
TOTAL OVERLAPPrNG TAX AND ASSESSMENT DEBT
Total Debt
6/30107
S 359,115,000
9,210,000
88,567,442
178,139,415
85,960,000
249,815,000
193,304,633
7,425,000
39,346,023
DIRECT AND OVERL\PPrNG GENERAL FUND DEBT:
San Diego County General Fund Db ligations 351,215,000
San Diego County Pension Obligations 1,343,747,916
San Diego County Superintendent of Schools Obligations 18,042,500
Southwestern Community College District Certificates of Participation 1,840,000
Sween.'iater Union High School District Certificates of Participation 12,145,000
Chula Vi!oota City School District Certificates of Participation 133,905,000
City ofChula Vista Certificates of Participation 139,845,000
City ofChula Viltta Pension Obligations 10,415,000
Otay Municip-al Water District Certificates of Participation 66,135,000
TOTAL GROSS DIRECT AND OVERLAPPrNG GENERAL FUND DEBT
Less: Otay Municipal Water District Certificates of Participation
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT
GROSS COMBINED TOTAL DEBT
NET COMBINED TOTAL DEBT
521,340,592,935
1,048,884,855
S 20,291,708,080
% Applicable (I)
1.248%
99.998
56.570
66.007
86.729
100.
3.978-100.
100.
100.
6.424%
6.424
6.424
56.570
66.007
86.729
100.
100.
65.474
City's Share of
Debt 6/30107
S 4,481,755
9,209,816
50,102,602
117,584,484
74,552,248
249,815,000
180,870,534
7,425,000
39,346,023
733,387,462
22,562,052
86,322,366
1,159,050
1,040,888
8,016,550
116,134,467
139,845,000
10,415,000
43,301,230
428,796,603
43,301,230
S 385,495,373
S 1,162,184,065 (2)
S 1,118,882,835
(1) Percentage of overlapping agency's asses..'ied valuation located within 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.
Ratios to 2006-07 Assessed Valuation:
Total Overlapping Tax and Assessment Debt..
Ratios to Adiusted A.<;sessed Valuation:
Combined Direc~ Debt (S 150,260,000).,..,
Gros.... Combined Total Deb!........... ..............
Net Combined Total Deb!........ ..............
STATE SCHOOL BUILDING AID REPAYABLE AS OF 06/30107: SO
Source: California Municipal Statistics, Inc.
3.44%
0.74%
5.73%
5.51%
147
CITY OF CHULA VISTA
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Y car
1998
1999
2000
200\
Assessed valuation
$6,611,733,375 $7,112,344,330 $8,088,272,068 $8,842,004,135
Conversion percentage
25% 25% 25% 25%
Tota\ nct debt applicable to limit:
Pension obligation bonds
\,652,933,344 1,778,086,083 2,022,068,017 2,210,50\,034
15% 15% 15% 15%
247,940,002 266,712,912 303,310,203 33\,575,155
\6,997,031 16,757,351 16,4\9,851 ]5,971,354
$ 230,942,97] $ 249,955,56\ $ 286,890,352 $ 315,603,801
6.9% 6.3% 5.4% 4.8%
Adjul:t'tcd assessed valuation
Debt limit percentage
Dcbtlimit
Legal Debt Margin
Total Debt Applicable to the Limit
as a Percentage of Dcbt Limit
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed
valuation. However, this provision was enacted when assessed valuation was based upon 25% of market
value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of
the mOh't 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 fun valuation perspective to the 25% level
that was in effect at the time that the legal debt margin was enacted by the State of California for local
governments located within the ~1ate.
Source: City Finance Department
County of San Diego Property Tax Ser.ices
148
Fiscal Y car
2002 2003 2004 2005 2006 2007
$ 10,128,896,888 $ 11,545,381,810 $ ]3,224,121,249 $ 15,366,255,050 $ 18,472,433,685 $ 21,340,592,935
25% 25% 25% 25% 25% 25%
2,532,224,222 2,886,345,453 3,306,030,312 3,841,563,763 4,618,108,421 5,335,148,234
15% 15% 15% 15% 15% 15%
379,833,633 432,951,818 495,904,547 576,234,564 692,716,263 800,272,235
15,456,449 14,799,025 13,985,870 12,991,962 11,795,000 10,415,000
$ 364,377,184 $ 418,152,793 $ 481,918,677 $ 563,242,602 $ 680,921,263 $ 789,857,235
4.1% 3.4% 2.8% 2.3% 1.7% 1.3%
149
CITY OF CHULA VISTA
Pledged-Revenue Coverage
Last Ten Fiscal Years
(In Thousands)
Tax Allocation Bonds
Fiscal Year
Ended Tax Debt Service
June 30 Increment Principal Interest Coverage
1998 $ 5,422,421 $ 330,000 $ 2,226,058 2.12
1999 6,045,332 350,000 2,203,904 2.37
2000 6,388,669 370,000 2,179,841 2.51
2001 7,590,243 400,000 2,477,730 2.64
2002 7,032,187 525,000 2,980,373 2.01
2003 7,822,428 580,000 2,943,058 2.22
2004 10,317,573 625,000 2,902,851 2.92
2005 8,939,444 885,000 2,855,288 2.39
2006 10,404,880 945,000 2,797,726 2.78
2007 11,935,618 995,000 2,735,150 3.20
Note: Details regarding the city's outstanding debt can be found in the notes to
the financial statements.
150
This page has been left blank intentionally.
151
CITY OF CHULA VISTA
Demographic and Economic Statistics
Last Ten Calendar Years
Pct of S.D. Pct. Change Avg.
Fiscal Total County from Previous Median Household
Year Population Population Year Age Size
1998 159,500 5.9% 3.2% nla nla
1999 164,200 6.0% 2.9% nla nla
2000 173,556 6.2% 5.7% 33.0 2.99
2001 181,453 6.3% 4.6% 32.9 3.01
2002 191,033 6.5% 5.3% 32.9 3.05
2003 200,378 6.7% 4.9% 33.0 3.09
2004 208,768 6.9% 4.2% 33.4 3.03
2005 216,999 7.1% 3.9% 33.6 3.03
2006 223,533 7.3% 3.0% 33.8 3.05
2007 227,723 7.4% 1.9% 33.8 3.04
Sources;
SANDAG, Current Estimates (Oct. 2007)
California Department of Finance
California Employment Development Department
U.S. Census Bureau, Census 2000 and American Community Survey
U.S. Bureau of Economic Analysis
152
Educational Attainment Per
% Bachelor's Capita
% High School Degree or Pct Below Unemployment Personal Income Personal
Graduate Higher Poverty Rate (In Thousands) Income
n/a n/a n/a n/a $ 5,528,300 $ 34,660
n/a n/a n/a n/a 5,842,500 35,580
79% 22% 11% 4.6% 6,269,300 36,120
n/a n/a n/a 4.9% 6,447,000 35,530
n/a n/a n/a 6.1% 6,672,700 34,930
n/a n/a n/a 6.1% 6,891,100 34,390
n/a n/a n/a 5.6% 7,386,000 35,380
79% 25% 9% 5.1% 7,734,100 35,640
82% 24% 11% 4.7% 8,073,700 36,120
n/a n/a n/a n/a n/a n/a
153
CITY OF CHULA VISTA
Principal Employers
Current Year and Nine Years Ago
2007 1998 J
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
Sweetwater Union High School District 4,515 9.21% nla nla
Chula Vista Elementary School District 2,708 5.52% nla nla
Southwestern Community College 2,503 5.11% nla nla
Rohr InclGoodrich Aerospace 1,903 3.88% nla nla
City of Chula Vista 1,661 3.39% nla nla
Sharp Chula Vista Medical Center 1,410 2.88% nla nla
Wal-Mart 950 1.94% nla nla
Scripps Mercy Hospital Chula Vista 900 1.84% nla nla
United Parcel Service 636 1.30% nla nla
CostCo Wholesale Corp. 614 1.25% nla nla
1 1998 data is not available
"Total Employment" as used above represents the total employment of all employers located
within City limits.
Source: State Employment Development Department
City Finance Department
Sweetwater Union High School District Human Resources Department
Chula Vista Elementary School District Human Resources Department
Southwestern Community College Human Resources Department
154
CITY OF CHULA VISTA
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Full-Time and Part-time Employees as of June 30
Function 1998' 1999' 2000 ' 2001 ' 2002 ' 2003 2004 3 2005 2006 2007
General gove=ent 193 216 103 105 98 225 465 193 380 324
Public safety 360 353 309 327 362 413 480 528 518 548
Public works/engr 134 217 230 249 269 295 249 335 198 237
Parks and recreation 232 297 495 529 559 162 175 230 242
Library 127 216 182 217 252 227
Planning and building 70 74 84 92 92 99 91 97 83
Total 1,046 1,083 1,211 1,294 1,380 1,403 1,475 1,539 1,675 1,661
I Planning and Building employee count included in General Government count
, Library employee count included in Parks and Recreation count
3 Parks and Recreation employee count included in General Government count
Source, City Finance Department
155
CITY OF CHULA VISTA
Operating Indicators
by Function
Last Ten Fiscal Years
Fiscal Year
1998 1999 2000 2001 2002
Police:
Citizen-initiated calls for service I 69,196 74,405 76,738 73,977 71,859
Fire:
, 6,344
Number of emergency cal1s- 4,119 6,654 7,128 7,626
Inspections nJa nJa nJa nJa nJa
Public Works:
Street resurfacing/maintenance 3 nJa n/a 142,622.2 307,619.5 151,576.5
(square feet)
Parks and Recreation:
Number of recreation classes nJa nJa 1,076 1,136 1,126
Number of facility rentals nJa nJa nJa 762 1,096
Library:
Circulation 1,312,073 1,246,433 1,198,645 1,192,670 1,268,587
Attendance 971,829 811,470 965,406 1,209,986 1,009,061
Sewer:
New connections nJa nJa 1,633 2,314 2,464
Average daily sewage treatment nJa 13.0 14.3 15.0 15.2
(thousands of gallons)
I The 1999 figure is for the calendar year instead of fiscal year.
2 Figures for 1997, 1998, 1999, and 2005 are reported for the calendar year instead of fiscal year.
3 Excludes fllling of potholes.
Note: Data is not available for the fiscal years marked as n/a.
Source: City of Chula Vista
156
Fiscal Year
2003 2004 2005 2006 2007
71,268 71,000 74,106 73,075 74,277
8,088 8,420 9,907 nla 14,853
nla nla nla 1,780 2,119
218,632.1 252,788.5 142,863.8 230,598.4 157,903.0
2,261 1,819 1,709 1,821 2,231
897 402 680 610 855
1,308,148 1,308,709 1,414,295 1,467,799 1,344,115
1,044,755 1,070,560 1,121,119 1,170,168 1,148,024
2,652 2,480 1,934 488 529
16.3 15.8 17.0 16.9 17.0
157
CITY OF CHOLA VISTA
Capital Asset Statistics
by Function
Last Ten Fiscal Years
1998
1999
Fiscal Year
2000
2001
Police:
Stations 1 1 1 1
Fire:
Fire stations 6 6 6 6
Public Works:
Streets (miles) n/a n/a n/a n/a
Streetlights n/a n/a n/a n/a
Traffic signals 142 144 149 152
Parks and Recreation:
Community parks 6 6 6 6
Recreation facilities 8 8 8 8
Library:
Libraries 2 2 2 2
Sewer:
Sewer pipes (miles) n/a n/a n/a n/a
Storm drains (miles) n/a n/a n/a n/a
Maximum daily treatment capacity 19.8 19.8 19.8 19.8
(million of gallons)
Note: Data is not available for the fiscal years marked as n/a
Source: City of Chula Vista
158
2002
2003
2004
Fiscal Year
2005
2006
2007
1 1 1 1 1 1
7 7 7 8 9 9
356.2 358.8 370.9 373.8 387.3 403.3
7,107 7,547 8,047 8,368 8,501 8,953
161 170 188 199 220 238
6 6 6 6 9 9
8 9 9 9 12 12
2 2 2 2 2 2
338.6 428.2 448.1 455.8 471.3 484.2
173.0 182.3 191.9 219.9 228.6 234.0
19.8 19.8 19.8 20.9 20.9 20.9
159
.1TllrcfM7~r d-
,
CITY OF CHULA VISTA
Single Audit Report
For the Year Ended June 30, 2007
ClTY OF CHULA VISTA
Single Audit Report
June 30. 2007
TABLE OF c;ONTENTS
PAGE
Report on lntemal Control Over Financial R~porting and Oil
Compliance and Olb<::r Matters !:lased on Un Audit of Finan~ial
St<ltel1lents Pcrlilrmed in Accordance with D,overnrncnl
Auditing Standards
R~port on Compliancc with Requirements Applicabl<:: to Each
Major Program. lntemal COntrol Over Compliance and on the
Schedule of Ex.pcndihlres of Federal Awards in Accordance
with OMB Circular A-l33
3
Schcdule ofExp~nc1itllr<::s off'cdcral Awards
5
Nole to Schedule of ExpendinJl'cs of Federal Awards
9
Schedule of Findings and Questioned Costs
II
Schedule ofPlinr Year Audit Finc1ings
13
NI ~f.~~~~'~'I::L~;)~~~~~;'Lt:4!- '~~~'---
1201 CK."Nl:-$IHtt.l, SUITE6BO
NEWf'()H [ tltACH, CAliFORNIA 0~'t\hIJ
570 IlANCIICROf; DRIvt-, ~-;t 1111' :If;lO
SAN MARCO::;, C^ ~l;.I{ltlO
IIII ",HONE (048)2.2I-om'5
Dcccmber 18, 2007
Thc Honor;tble City Council of
the City ofChula Vista, California
ReDoli on Intcl:nal Control Ovcr Financial ReDorting and On
Conmlialwe and Other Matters Based on all Audit of Financial Statements
Perlllmled in Accordance With (jovernrnent Auditinl! Standards
Wc have auditcd the lillalleial statemcnts of' the govcl'llmental activities, the business-type
activities, "a<:h major fund, and the aggrcgate remaining fund information of thL' City of
('hula Vista, California as of and for the ycar cnded June 30, 2007, whidl collcctively
comprise the City's basic fUlancial statements, and have issucd our rcport thereon dated
De<:emhcr 18, 2007. Wc conducted our audit in accordancc with auditing standards
gencrally accepted in the United States of Amcriea and the standards applicablc to lInan<:i,d
audits contained in Govcrnment Auditinl! Standards issued by the Comptroller Gcncral of' the
Unitcd States.
Internal Control Over J:ijnal\cial R"norl:il1l!
Tn planning and perli,rming our audit, we considcrcd the City of Chula Vista's internal
control over tlnancial reporting as a basis J()r designing our auditing proccdures fl)r the
purpose of exprcssing Our opinions on thc linandal statemcnts, but not for thc purpose of
expressing an opinion on the effectivencss of the City's uncl'lHtl control. ovcr tlnancial
reporting. Accordingly, we do not express an opinion on thc cffectiveness of the City's
internal cOl1trol over tlnancial reporting.
^ conlrol deficiency exists when thc design Or operation of a control does not allow
management or cmployccs, in the norma! course of performing thcir assigned functions. to
prevent or detect misstatements on a timely basis. A significant deticiency is a control
ddiciency, or a combination of cootrQl deticicncies, that adversely affects the City's ability
to initiatc, authorize, record, process, or repoli tlnancial data reliably in accordance with
genel'ally acccpted accounting principles such that there is morc than a remote likclihood that
a misstatement l.lfthe City's tinancial statements that is !lIore than inconsequcntial will not bc
prevented or rletcctcd by the City's internal control.
1
A material weaknc~s is a significant detlcieney, or combination of significant deficiencies,
that results in morc than a remote likelihood that a material misstatemcnt of the financial
statements will not be prevented or detccted by the City's internal control.
Ollr consideration of internal control over financial reporting was for the limited rmrposc
described in the first paragraph of this section and would not ncccssarily identify all
dcficiencies in intcrnal eontrollhal might be significant deficiencies or material weak.nesses.
We did not identify any delieicncies in internal control Over financial reporting that we
eonsidcr to be material weaknesses, as deti ned abovc.
ComDlianc.e and Other Matter's
As part of obtaining rea~onab'e assurance about whcther the City of ehllla Vista's basic
financial statement~ are free of material misstatement', we performed tests of it~ eOlllpliam.:e
with cemtin provision~ of laws, regulations, contracts and grant agreements, noncompliance
with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions
was not an objr;r;tive of our audit and, accordingly, we do not express ~ueh an opinion. The
results nf' our tcsts disclosed no instances of nOlleompliance or other matters that are required
to be reported under Government AuditiIll! Standards.
We !.loted certain rmltters that we reported to management of thc City of Chula Vi~ta in a
~eparate leiteI' daled Decembcr 18,2007.
This report is imended solely flx the inli,rmal:1on and llse of the City COllllcil, management
and others within the City of Chula Vista, and the City's federal awarding agencies and pa~~-
through entities aud is not intended to be and should not be used by anyone other than thcse
speci lied p3lties.
/#~~ ~~..,;z-~hi~-4-c,
2
o
.
Moreland 6' ,.r/.1.1(~iO/f!~l_'?!._~~~___...
O.l1111"I[D PUBLIC ACCOl!NTANl S
1201 DOVE STnEIT, ;~l)11 L GOO
NEWr()nT nr..ACll. CALIFORNIA \-I:-lili(1
~7\J flANCllCROS DRIVE, ~::'UII!- ')I.>U
:JAN MARCOS, CA\-l;JlJlj\l
TELEPHON~ (\14U) 2:.!1 0025
D~c~mber 18, 2007
The Honorable City Council of
the City ofChula Vi.,m, California
ReDort on Comoliancc with Relluirelllcnts
Applicable to Fach Maillr Pro(!ram. Intemal Contr:ol Over
Compliance and on the Seheduk orExD~nditures of Federal
Awards in Accordance wjJl)OMB Circular A-DJ
Comnliance
We have audit~d the compliance of the City of Chula Vi~ta with the types of compliance
requirements dc~cribcd in thc U.s. Office of M.anl!gement and Bud!!et 10MB) Circular A-B3
Compliance SunnlclllclJ! that are applicable to each of its major federal programs fllr the ycar
endcd June 30. 2007. The City's major federal programs are identitled in the ~Ull1ll1alY or
auJilllr~' n:sults section of the accompanying sehcduk of findings and questioned costs.
Cornplianc~ with the requirements of laws, rcgulations, contmct~ and grants applicable to each of
Its major thleral prog.rams is the re~ponsibility of the City of Chlll,l Vista's manage1ll~nt. Our
responsibility is to express an opinion on the City of Chula Vista's complianee based on Ollr
audiL
We conducted nUl' audit of cOlllplianct: in accordance with auditing standards generally
accepted in the United Stutes of America; the stand;-lrds applicable to tinuncial audits
contained in Government Auditing Standards, issued hy thc Comptroller Gener,,1 of the
United States; and OMB Circular A-133, Audits of States. Local Gove.l:tlments, and Non-
Pratit Ori,!al1izations. Those slandard~ and OMB eireular A- 133 require that we plan and
p~rf<.mn the audit to obtain reason<lble assuranee about wh~ther noncompliance with the
typ~~ of complianc.e requirements referred to above that could bave a direct and material
effect on a major federal program oCl'urred. An audit includes examining. on a le~t basis,
cvidenc~ about the City ofChula Vista'~ compl.ial1ce with rhose requirements and perl<>ITning
slIch other procedures as we considered necessary in the circumstances. We bclicve that Our
,,"dit pn.>vide~ a reasonable basis for our opinion. Our audit doe~ llot provide a legal
determination of the City of Chula Vista's l'onlpliance with those requiremcnts.
In our opinion, the City complied, in all material respects, with the rcquirements rckrrccl to
above that arc applicable to cach of its major federal program:; for the year ended .Iulle 3D,
2007.
.1
'fhe management of the City of Chula Visla i~ responsible for establishing and maintaining
effe<:tive intemal control over eompliarw<.: with the requirements of laws, ,'cgulalions,
contracts and grants applicable to tCderal programs. In planning and perfomling our audit,
we considcrcd the- Cily of Chula Vista's internal control over compliance with requirements
that could have a direct and material etfect on a major federal program in order to determinc
our auditing procedures for thc purpos<.: of e,,-pressing our opinion on compliance, but not for
thc purpose of expressing an opinion on the eITectivcncss of the City's intcrnal control over
compliance, Accordingly, we do not expre~s an opinion on thc effectivencss of the City's
internal control over <.:,.>mpliance,
A conl.ml deficiency in an entity's internal control over compliance exists when thc design or
operation of a clOntrol do<.:s not allow management or employce-s, in the normal course of
pCrl<)rming their assigned fun<.:tions, tlO prcvcnt or detect noncolnpliance with a type of
compliance of a federal program on a timely ba~is. A signitlcant deficiency is a eonlrol
- .
deficiency, or a combination of control deficiencies, that adversely affects thc City's ability
to administer a federal program such that there is more than a remMe likelihood thaI
noncompliance with a lype of compliance requirement of a federal program that is 1110re than
inconsequential will not he prevented or detccred by the City's intemal control.
A matcrial w~akness is a significant deficiency, Or combination of signilicant deficiencies.
that results in more than a remote likelihood tbat materialnlOneompli\lnce with a type of
compliance requirement or a federal program will not be prevented or detected by the City's
inkmal control.
Our eonsiderati on of i ntcmal conlro! over compliance was tor the Ii l11ited purposc described
in thc first paragraph of this ~ection and would not necessarily identify all ddiciencies in
intcrnal control that might be signiticant deficiencies or material weaknesses. We did not
identity any deficiencies in inte111al control over complian<.:e that we consider to be material
weaknesses, as defined above.
Schedule of Expenditures of h;:.deral ^ wards
We have audited thc financia.1 statements of rhe governmental activities, the business-type
aclivities, each major fund, and the aggrcgate rcmaining fund information of the City of
Chula Vista as of and for the yea.r ended Junc 30, 2007, alld havc issLLed our report thereon
dated Dccember ] R, 2007. Our audit was perto1111ed tC)T the purplOse oC Comling our opinions
on the financial statcrm;nts that collectively comprise the City's basic financial statements.
'The accompanying schedule of expenditurcs of l,xkral aW;irds is prcsented t()r purposes lOf
additiunal analysis as required by OMH Circular A-133 and is not a required part of the basic
tlnancial staternents. Such information has been subjected to the auditing pro<.:eclures applied
in the audit of the hasic tlnancial statcmcnls and, in our opiniol1, is fairly stated, in all
matcrial respects, in relation to the basic financial statements taken as a whole,
This rcporl is inlended solely for thc information and use of rhe City Council, management
and others within the City of Chula Vista, and the City's federal awarding agencies and pass-
through entities and is not intended to be and should not hc used hy anyone other than these
speeificd partics.
4
--z1~~<~~~~~c,
A material weakness is a significant detlcicney, or combination of significant dctieiencics,
thar results in more tban a remote Iikelibood !bat a material misstatemcnt of" the financial
statemcnts will not be prevcntcd or detected by the City's internal control.
Ollr consideration of intc11lal control over fUlaneial r~porting was for the limited purpose
deseribe,l in the first paragraph of this section and would not necessarily identitY all
deficiencies in interIJal control thaI might be significant deficiencies or material weaKnesses.
We did not identitY any delicicncics in internal control over tlnancial reporting that we
considcr to be material weaknesses, as detined above.
ComDlianc.e and Other Matter's
As part of obtaining reasonable assurance about whether the City of Chula Vista's basic
linaneiat statements are free of material misstal.cm~1ll", we performed tests of it<; compliance
with celtnin provisions of laws, regulations, contracts and gran! agre..,ments, noncompliance
with whieh could have a tlirccl ancl material etfeet on the determination of tinancial
st,ltement amounts. However, providing an opinion on compliance \lIith those provisions
was not an oDje<:tive of our audit and, accordingly, we do not ..,xpress such an opinion. The
results of' nur tcsts disclosed no instances of noncompliance or other matters rhat are required
to be reported llnd..,r Govemment AllditiIll! Stand,lrds.
We noted ecrtain malters that we reported to management of (hc City of Chula Vi~ta in a
separate IeILcr dated December 18, 2007,
This report is intended solely tl)!' the in lilrmal:ion and use of the City Council, management
and others within the City ofChula Vista, and the City's federal awarding agencies and pass-
through entities a.nd is not intended to be and should not be used by anyone other tban these
spcci fied parties.
/~~~ r:'~#C';"k0AC,
2
CITY OF CHULA VISTA
Schedule of L!xpcnditllres of Federal Aw[mJs
Fl)r the Year Ended Jlme .10, 2007
Federal Urantor!
Pass-thrnugh Graulor!
Program Title
-
Program
Idcntiticfllion
Number
crDA
Number
US DFPA RTMENT OF HOUSING
ANO URBAN DEVELOPMENT:
Dircct Programs -
Commllnity Development
Block Granl
Community Developmcnt
lllock Cranl
14.21~
B-04-MC-060540
14.211\
11-05-MC-O(,lJ540
Total Commllnity lJevelopmcm Block Grant
Direcr ProJ;.'Tams -
lIomc Investment
Partncrship Program 14.239 M-%-MC-lJ60505
Home Investment
Partnership Program 14,239 M-98-MC-060505
Home Inve~tmcnt
Partnership Prngram 14.239 M-02-M(>lJ()05lJ5
Homc Illvestlnenl
Partnership Program 14.2.1') M-03-MC-060505
Homc Investment
Partnership Program 14.239 M-04-MC-060S0S
Horne lnvestmcnt
Partncrship Program 14.2.19 M-05-MC-lJ(,lJ50S
Ilome Investment
Partnership Pr'ogram 1 '1.239 M-06-MC-060S05
['otal /loll1c Investment Paltnership PrograIIl
Oircct Programs -
F.mergeney Shelter (irant
Program
ICmcrgency Shelter Grant
Program
14.2.11
S-05-MC-060540
14.231
S-lJ6-MC-060540
Tolal P:mergency Sheltcr Granll'rogram
TotaL U,S. lJepartmcnt of.Housing and
Urban Dcvelopmcnt
5
Federal
Expenditurcs
$ 4~5, 1~6
1,4 7S, 796
1,960,9g2 *
3KI,093
47,889
1(,0,728
834,296
157,637
11,198
gl,80.1
1,674,644 *
123
!-:(', /95
86,318
3,721,944
.
Disblll'SCl11cnts
to
Sllbrceipients
$ 19,029
19,029
(Contin ucd)
ClTY OF CHULA VISTA
Schedule ofExpenditurcs or Fcderal Awards (Continued)
For the Year Ended June 3D, 2007
.'
Federal Grantor/
Pa~s-Ihrough Grant()r/
Program Title
CFDA
N Ull1 her
Progntrn
hientiJiealiun
Nllmber
r ederal
Expenditures
l)i~bursemcnls
to
Sllhreci~iicllts
U.S. DEPARTMENT OF TRANSPORTATION:
Passed-through the State of Cali fomi a:
Business, Transportation and llou$ing Agency
om"c of Traffic Safety
D U I Enlorccmen I Grant
Of!jce or Trame Safely STEP
Califoflli" Onice ufTra!11e Safcty
20.600
20.(,00
20.600
AL0513
1'1'0723
('1'073705
74,756
199,51(;
(is,OOO
Total State and C()nHllunity Highway Safety
339,272
Direct Programs:
ABC - Alcuholi<; l3everage Control
16.727
06C-I.A05
,)4,~g5
Total U.s. Dep1ll1ment ofTransportalion
434,157
OFFICE OF CRIMINAL:n ISTICE PLANNING:
Passed-through the Slatc ofCalitomia oen' (OES):
Onice of Emergency Services
Domcstic Violence Response and
Advocacy (DVR'l)
IluUetproor Vest Partner
Law Entixccrm;nl Terrorism
Prevention P'(>gnHn (LfTI'I')
16..'iRR LE-050363(;4
16.607 2006BOBXOG131750
82,168
3,407
97.074
073-00000
-19,322
Total U.S. DcpartrnGnt of Justice Planning
134,897
us DFPARTMENT OF JUSTICE:
Passed-through the County of San Diego:
JUDGE Grant
16.738
DC-05180370
16';,461
Direct Prngt'ams:
Fi m1Ilcial Crlllles Task
Force (200(j/2007) .IHDTA
Operation Alliance Task
ForeG (2006/2007) IflOTA
Mt1rinc Task Porce
Force (2006/2007) H I!)TA
Mexican Drug Traffickers
Foree (2006/2007) 11IDTA
16.726 16-I7PSCP575 70,898
1(,.72(, 16/17PSCP575 118,661
16.726 16I17PSCP575 114,660
16.726 16/171'SCP575 239,569
(Conlinued)
6
CITY OF CHULA VISTA
Schedule of Expenditure:s o[ Federal Awards
For the Year Fnded June 30, 200? (Continued)
F ~d~ra I (irantorl
Pass-through Grantorl
Program Title
('FDA
NlLTnher
Progrurll
'd~nlilicali()n
Number
U.S. DEPARTMENT or JUSTICE (Continllen),
Direct Programs:
California Border Alliance (2006/2007) 16.726
HlDTA Inlell Ciroup
(2004/2005) Cri Ille Analyst
(VCTF '051'(6) 16.726
16/17PSCP575
16If7PS('P575
BZPP
"AVOID The 14"
97. 078
20.600
2U05-06g
ALO(,21
Total 1 [IDTA
Passed.through th~ U.S. Attorney's Omce,
Direct Program -
Universal Hiring <Trant.
2001 16.710 2001-ULWX-001.l
Universal Hiring (irant-
2002 16.710 2002-UL WX-OO(,4
Total Univcrsal T-Tiring Grant
Total U.S. Dcpm1ment of Justice
U.S. DEPARTMENT OF TRFASURY:
Passed-through the U.S. Customs Service:
Various small agreements
tOpcntlion BEST 14228) 21.000
CVPD.l1-07 -03
7
federal
Expenditures
1,670,21 g
70,4gg
5.1,111(,
17,50(,
2,355,036
toO,OOO
402,824
502,824
3,023,321
.10,541
Disbursements
10
Suhreeipicnts
.
(Continued)
)
CITY OF CHULA VISTA
Schedule of Expcnditllrcs u[Fcdcral Awards
For thc Year Fnded luno 30, 2007 (Continucd)
Feucrul Granl.or/
Pass-through Grantor/
Program Title
CFDA
Numher
Program
Idel11 i.licatiun
Numher
U.S. DEPARTMENT (W TREASURY (CONTINU.l:iD):
Pil.%cd-through the State of Cali.lomia:
Homeland Security Fcderal Grant SAFER 97.{)X3 hMW-2005-FF-002R9
Total U.S. Departmcnt of Treasury
Total federal Expenditures
* Major PrognlJll
See Accompanying Notes to Schedule. of Expenditl.lres of Federal Awards.
x
l' cderal
.l:ixpcnditures
322,833
353,374
$ 7,667,693 $
Disburscments
to
Subrocipicnts
19,029
CITY OF CllULA VISTA
Note to S<.:h~dllk of Expenditures of Federal Awards
Ju'", 30, 2007
I. Summary of Significant Accounting Policies Applie.,lble to the Schcdule or
Exp~nditures of Federal Awards:
a. Scope ()fPr~scntation
The a<.:<.:ompanying schedule pr~~~l1ls only the expenditures incurred by the City
of Chula Vista (City) that are reimbursable und"r f~d~ra[ programs of federal
linancial <Lssistance. I'or the PUllxlses of this schedule, federal fin<Lneial assistance
inelllde~ botb federal JinaTlcial assistan<.:e received directly ti-om a fcdcral ag~n<.:y,
as well as fedcral fund, rce<.:iv~d indirectly by the City from a non-tecleral ag~ncy
or othcr organization_ Only the portion "I' program expenditures reimbursable
with such federal fund~ is repOlted in the accompanying schedule_ Program
expenditures in axcess of th<.: maximlUll federal rcimnursement authorized or the
portion of the program cxpcnditur<.:s Ihat were funded with state, local or other
non-federal funds arc cxcluded from the accompanying ,<.:hedul~.
b. l3asi~ of' A<.:counting
The expel1ditLtre~ included ill the accompanying ~chcdulc were reported on the
modified <l<.:<.:rual basis of accounting. Under the modilied <l<.:<.:rual basis of
accounting, expenditures arc incurred when the City become, obligated for
payment as a result of the reecipt oflhe rdated good~ and services. Expenditures
reported included any property or equipmcnt acyuisitions incurred under the
federal prograTll_
9
This page Jell blank intentionally.
10
City afChula Vista
Schedule of hndings and Quesl;onl::d Costs
1;ortl1e Year l:inded June 30, 2007
..
L SUMMARY OF AUDITORS' RESULTS
A. Finaneial st,(teml::nts
t. Type 01' auditors' report is~ued:
"'"(?lllli/ied
2. I nll:mal control over financial repOlting:
a. Material weakncss(es) identified'!
b. Signifieanr dciicieney(ies) identiticd (1ot
considered to be material weakncsses?
x
ycs
no
yes ~nnnc reported
3. NlJncompliance material to financial
statements noled?
ycs ~no
R. Federal Awards
1.
Tntemal control over major programs:
a. Material weakncss(es) identitied'!
b. Significant dctkieney(ies) identitied not
considered to be material weaknesses?
yes ~none repolted
yes ~no
2.
Type ofauditol's' I'eport issul::u on
compliance tl1r major pmgrams:
?lnl/l.lalified
3,
Any audit findings disclosed that are
reg ui red to be repoJted in accordance
with OMH Circular A-LB, Scction 5l0(a)?
yes _.0. no
4. Idcntification of major programs:
CTDA Number(s)
Nallle ol'Federal Program or Cluster
14.2H:
14.239
16.710
CommuniI)' Development B lock Grant
Tlome Investment Partnership Progmm
Universal Hiring OHmt
5.
Vollar thrcRhnld uscd 10 di;;linguish
betwcen Type A and Type B programs:
$ 300,000
6.
Audilee <{uali/;ed a.s low-risk ~uditec')
_yes
,~no
II
City "Cehula Vista
Schedule of Findings and Questioned Costs (Cominued)
lior the Year Ended .TUlle 30, 2007
11. FINDfNGS - FINANCIAL STATEMENT ALJDIT
None.
lll. f1INDINGS AND ()LJESTIONF.D COSTS - .MAJOR J.'EDERAI. AWARD
PROGRAMS AUDIT
None.
12
City ofChula Vista
Sche,lulc llfPrior Year Audit Iiindings
For the Year End"d June 30, 2007
CFDA No. 16.71.0 lJniversal Hiring Grant
On-I. l'inding: Program Identitlcation Numbers 200 I-UL WX-0064 and 2002-1 JT.WX-0064
During our teslwork, we noted that the tinancial Status Reports submitted to the
Department of Ju~tiee were inaecurate_ The expenditures were overstated hy $38,961
due to the fact that the repOlts includ"d "xpenditurcs for salary and benelits whi"h were
nol. eligible for tederal reimbursement.
Finding resolved in lis"al yellr 06-07.
J:1
REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA
Financial Statements
Independent Auditors' Report
For the Year Ended June 30, 2007
1l/74cff/JlEIJ7 3
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Financial Statements
For the Year Ended June 30, 2007
TABLE OF CONTENTS
Letter of Transmittal
Independent Auditors' Report
Basic Financial Statements
Management's Discussion and Analysis (Unaudited)
Statement of Net Assets
Statement of Activities
Balance Sheet - Governmental Funds
Reconciliation of the Governmental Funds
Balance Sheet to the Statement of Net Assets
Statement of Revenues, Expenditures and
Changes in Fund Balances - Governmental Funds
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
Notes to Financial Statements
Required Supplementary Information (Unaudited):
Low and Moderate Income Housing Special Revenue Fund _
Budgetary Comparison Schedule
Redevelopment Agency Housing Program Special Revenue Fund _
Budgetary Comparison Schedule
Chula Vista Housing Authority Special Revenue Fund - Budgetary
Comparison Schedule
Note to Required Supplementary Information
Pa\?e
1
1
3
8
9
10
13
14
17
19
34
35
36
37
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Financial Statements
For the Year Ended June 30, 2007
TABLE OF CONTENTS (Continued)
Pal?-e
SupplementaJy Information:
Bayfront/Town Centre 1 Debt Service Fund - BudgetaJy Comparison
Schedule
Town Centre II Otay Valley Southwest Merged Projects Debt Service
Fund - BudgetaJy Comparison Schedule
40
41
Independent Auditors' Report on Internal Control Over Financial
Reporting and on Compliance (Including the Provisions Contained in
the Guidelines for Compliance Audits of Redevelopment Agencies)
and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditinl?- Standards
43
\
ow Of
~'H'J~ A 'llCTt\
C, ,( ;,J"\ 'li "'!",
REDEWi,1.0PMENT AGENCY
December 18, 2007
Honorable Member& of the Agency,
The Basic FinancialStatemen~ and Independent Auditor's Report on all projects6f the City of Chl.lla
Vista Redevelopment Agency for the yeer ended June 30, 2007 .Is . presented. in aCCordan~ with the
Community RedevelOPment Law, ~ 330000fthe He.althand Safety Code 6fthe State of California.
The accuracy of the data presentadandthe completeness and fairness ollha presentation, including all
disclosures, are the responsibUity of the Age.ncy. . The Report has. been prepared in accordance. with
Generally Accepted Accounting Principles (GAAP) as promulgated by the Governmental Accounting
Stendards Board (GASB). It is belillV€dthat the data. reported is .accurate in all material respects, that it
i. presented in a manner designed to fairly represent the financial position .and resuns of operatiqns of the
Agency as measured by the financialac;tivii'lin .Its various Funds, and that .ail disclosures neceSsary to
enable the rsader to gain maximum underSl!lndlng or the Agency'sflnancial.affairs have been included.
Rl!developm,mtAgency Background
Redeveloornent Law
Redevelopment in California stm!(."<l In 1945 with the enactmentofthe Califomial'ledevelopmentAct,
Which gave cities and counties the authority luestablish redevelopment 'lgencies. 1n1951, .the
Community Redevelopment Act wascodlfied and renamed the Community Redevelopment Law under
He€il.th "lid Safely Code Secj;dh 33000, el seq. Most importanU'I,.\he a~lhority for tax Increment
financingwaS.added. . .
In 1976. the Slate Legislature imposed a requirement tnat 20% of the lax incrlOme.nt generated from
project areas must .be W.ed to improve the community's suppty of affordable housing. In addilion, school
districts and C;\Jmmunltycollege districts.and. olhertaXing entities receive a par/ion of the rlOdevetopmeni
tax Increment. Forrede\ielopment projects that were adopted before AB 1290, or Janu8ry1. 1994, fhe
Agency negoUatedagreementa w~hthese taxing "ntities. HOI';ever after the enactment of A8129.0ithe
negotiated separate agreements with each taxing entity weie eliminated and implamentatlon 01 statutory
reimbursement to alltaxing entitle.. was implemented.
Tax JncremenlPrirner
Tax Increment Is thelncrEiaSe' in property taxes within the redevelopment project area that result from
incr.eases in the project area assessed Value. that exceeds the blise year assessed value, This funding
source provides a way 10 improve an area.byenabHligredevelopmentagE>.J1cies to issue tax .increment
bonds without Using generai fund moni.es or ,aising taxes. .
I
~1BFOL.rHiH AVENue tr CHUU VtS'fA 'I CAUFOFHilA .91910 f> {6i- $l} 691-5041 !O FAX {B19}47~,..53"HJ
?l.>it--~<1't>........"""~f'.\p!<
fax inCff..::ment' is a poworfu! fumHnq sourc.efor JeQ~v8Iopr:nent acHvitips dUB to the Increased perGentage
of property tax the .Ag,t3f1cyis ab!o to retain. I n'California,'property lax IS calcuJBted at one-Mpercent of a
property's assessed val~e. Of this one-percent the City receives approximately $0 15 per dollat
collected The reSt is P?ssed through to other t"'xing "ntities (i.e. schooi districts, County and ERAf).
However with properly taxes col!ected in a r~development project are;; established in 1994 or lal"r. the
City and other taxing 8nlilie!> will stili roc",ive their :;har" ofpase W(or taxes but the Agency will receive
approximately 60 percent of the tax increm",m (taxes above base 1\"al values) generated in the project
area (i.e. gross tax increment less 20% for low and moderate housing and 20% for AB1290 pass
throughs)
lJ1e City'S Redeyelooment Mency
Rede-velopnient -Pr.gject:Ar~a.s
'ty ofChula Vista
REDEVI!LOpMENi I'IiOJECT AREAS
!t1ffl/@1trl.BAVF,ONT
_91A'fVAitEY IiQAG
. . JlIllllllhoUTHWESi . "
· .. TOWN CE.N:iREl
'_TOWN C~NI~EP
I .'
_ AMID REDI!VnoI'MH~1
. . . AREAS
Agency History
The City of Chula Vista's RedevetopmentAgency(Agencyj wasfcm'led in 1974. The goals of the Agency
are to redur", blight and to ehcourage new development, 'econstru~iion. and rehabilitation of residential,
commerclal, industrial arid retail uses. The map above depicts the Agency's five project areas as well as
areas recently added. The table I:1elow StlinmarizesimPOItantda'lesfdr the project areas.
Jl
Project Areas and Tirnelines
Cumulative Final
Tax Increment Date to
Revenue Limit-'~~r..J:lebt
$ 210,000,000 No Limit
...______JI17 12018
84,000,000 No Umit
115,000,000 No Umit
150;000,000 No Limit
No Unlit
$100,000,000 No .Limit
No Limit
_.__..~'1.Umit
~.-_._.._-_....._.... - ... ~.._-_.~_.._~"-,.~."
~~~.t.~~.~!..
Bayfront
!Sqyfront Amended,
Town Centre _L_____~_.__, $
9.!.E\yValley $
Southwest $
Southwest Amended
Town Centre 2
Town Cen!re 2 Amended
.?QQ4 AmendmentArea
NoUmil
Date of
Plan
Termination
7116/2011
7f712029
7/6/2019
~-_.__.._-_.
12/2912026
11/27/2031
71912032
811512021
711912029
51112034
Termination
Date
0.1 Revenul>
..----------
7/'1612027
7,712044
. 71612029
1212912036
11/27f2041
__ 7131~?042
811512031
711912039
51112049
During the 1970'sand19$O's the Agency focused on the Town Centre I, T01Nn Cen!rell and Bayfront
Red"v"lopm"nt Project Areas, The Agency issued $7..15 million in tall allOcation bonds in .1979, $25.0
million in 19$4, $38.a million In 198.6 and $11:0 million Cert1ficate of Partitip<'ition Was issued in 1987.
Most of the bond proceeds were used for planninQjstlldies or pUblltinfrastructure p~ojeGtsthatprovideda
public; benefit This strategic focus provided infrastructure in the doWntbwn and bay front areas, bUI
primarily due to a sluggisl:> r"al estate market, th.e pUblic investment did not have the intended effect of
spurring major new development .neither location. Projects during this period inClUded: (1 )streetscape
improvements along third AVenue: (2i development of a public parking structure in the Park Plaza.
development: and' (3) removalofjvnkyardS from the bay front.
In the 1990s, the Agency again/ocused on foundational planr11ng effQr\s~ .inclUding .adoption of the
Southwest Redevelopment Project Areal!> address the annexatfon of the Mont!;}omeryarea.Addi>d
investment in public improvemenlproj"cts includ"dtheSouth Bay Court House ($1,3 mIlIiOh), the.
Palomar Trolley Center ($775,000) and the Chula Vista Center parkingstruclure ($3.$milH()-n).
The Agenoy's M"rged Project Area was created In Augusl2000 pursuant .to an amendment 10 the
redevelopmenl plans of three of the Agency's Project Areas (Le, Town Centre II, Otay Va.lley and
. SouthWest): Subsequently in .october2000, the AgeT1l::yissued ils most recent tax Allocation Bond in the
amountof$17.0 million.
Also in 2000, a develppm"nt agro"mentforthe ~atewayChula Vista
. Project,a 347,000 squarofoot upscalepffice dllVelopmentat .the
noithwest corner of Third Av"nue an(I"H" $treet was enlered into by
the Agency,'commilting $7.2 million of Agl'lOCY fund$;.represenlirrga
. shift of focus toward urban core. infilloPPor!unilies afforded by
changes in the realestale markel and renewed intere.st .from
: developers. The first of 2 phases is complete and the result Is an
iocreaseoftaxincremenl olapproximately $400,000 annually.
over its 30 year life span, the Agency ushered in a' feW s.ignlficant
developments inCluding the 1992 redevelopment 01 properties for the Scripps Hosp~alexpansion on H
Street, tpe construction of the Rohr Headquarters Building. upgrades to the Chula Vista Center, relocation
of the auto: park to OtayValtey Road and land swap lor the' development of the state Veterans Home In
2001. The Agen<;y also funded the new Chula Vista Police Station in the amount of $5.8 million in the
form 01 relOCation assistance and land .acqUisition.
iii
cnv .QF"CHUU\ ,v~s'rp.,
The chart below displays the growth of tax increment for the past ten years. It should be noted that in
fiscal year 2002, tax increment decreased due to the devaluation of the South Bay Power Plant by the
State Board of Equalization.
Gross Tax Increment Revenue
Ten-Year Chart
For the years ended June 30
Millions
$12
$10
$8
$6
$4
$2
$0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
ACCOUNTING SYSTEMS AND BUDGETARY CONTROL
The basic financial statements are presented on an "economic resources" measurement focus and the
accrual basis of accounting. Accordingly, all of the Agency'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 accruai
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.
All governmental funds are accounted for on a spending or "current financiai resources" measurement
focus and the modified accrual basis of accounting. Accordingiy, only current assets and current liabilities
are included on the balance sheet The statement of Revenues, Expenditures and Changes in Fund
Balances present increases (revenue 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.
In administering the Agency's accounting systems, primary consideration is given to the adequacy of
internal accounting controls, which include an array of administrative procedures. These controls are
designed to provide reasonabie, but not absolute, assurance regarding the safeguarding of assets
against loss from unauthorized use or disposition, as well as the reliability of financial records for accurate
and fair presentation of financial reports. The concept of reasonable assurance recognizes that the cost
of specific controls should not exceed the benefits likely to be derived from exercising the controls, and
that this evaluation necessarily involves estimates and judgments by management It is believed that the
Agency's internai accounting controls adequately safeguard Agency assets and provide reasonable
assurance of proper recording of financial transactions.
The City Charter charges the Director of Finance with the responsibility to supervise and be responsible
for the disbursement of all monies and have control over all expenditures to ensure that budget
appropriations are not exceeded. The level of budgetary control, that is, the level at which expenditures
IV
are not to exceed Council approved appropriations, is established by department at the category level
An encumbrance (commitment) accounting system is utilized as a technique to enhance budgetary
control during the year. Appropriations encumbered (committed) at year end automatically carry forward
and are available to be used for those commitments during the subsequent year while unspent,
unencumbered appropriations lapse at year end and become generally available for re-appropriation the
following year.
INDEPENDENT AUDIT
An independent audit of the Agency's records is required by Community Redevelopment Law, !l 33000 of
the Health and Safety Code of the State of California and was performed for the year ended June 30,
2007 by the certified public accounting firm of Moreland and Associates, Inc. The auditors report on the
basic financial statements and schedules is included in the Financiai Section of the Report. In general,
the auditors concluded that the financial statements and schedules referred to above present fairly, in all
material respects, the financial position of the Agency as of June 30, 2007, and the results of its
operations and cash flows of its proprietary fund types for the year then ended in conformity with
generally accepted accounting principles. The professionalism and knowledge exhibited by Moreland
and Associates, Inc. during their audit work is greatly appreciated.
ACKNOWLEDGMENTS
Preparation of the Report and more importantly, maintaining the Agency's accounting records in a
manner sufficient to earn the aforementioned auditors opinion is only accomplished with the continuous
concerted effort of each and every staff member in the Finance Department. As such, I express my
sincere appreciation for their dedicated service.
Respectfully,
c4J~K.~
Maria Kachadoorian, CPA, MPA
Director of FinancelTreasurer
v
CITY OF CHULA vrSTA
l,/roreland & ..#JiJOct"aledJ ,!Inc.
ill CERTIFIED PUBlIl~ ACCOlltHAf\JTS
1201 DOVE STREET SUITE 680
NEWPORT BEACH, CALIFORNIA 92660
570 R&.NCHEROS DANE, SUITE 260
SAN "'lARGOS. GA 92069
mEPHONE (949) 221-0025
December 18, 2007
The Board of Directors of the
Redevelopment Agency
of the City of Chula Vista
Independent Auditors' Reoort
We have audited the financial statements of the governmental activities and each major fund of the
Redevelopment Agency of the City of Chula Vista (Agency), a component unit of the City of ChuIa Vista,
California as of and for the year ended June 30, 2007, which collectively comprise the Agency's basic
financial statements as listed in the table of contents. TIlese [mancial statements are the responsibility of the
Agency's management. Our responsibility is to express opinions on these financial statements based on our
audit.
We conducted onr audit in accordance with anditing standards generally accepted in the United States of
America and the standards applicable to [mancial audits contained in Govemment Anditing Standards issued
by the Comptroller General of the United States. Those standards require that we plan and perform the andit to
obtain reasonable assurance about whether the [mancial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amo:unts 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 fmancial 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
[mancial position of the governmental activities and each major fund of the Agency as of June 30, 2007, and
the respective changes in financial position thereof for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2007
on our consideration of the Agency's internal control over :fmancial reporting and our tests of it'i compliance
with certain provisioIL' oflaws, regulations, contracts, 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 result Ii of our audit.
The management's discussion and analysis and other required supplementary information identified in the
accompanying table of content. are not a required part of the basic financial statements but are supplementary
information required by the Governmental Accounting Standards Board. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the required supplementary information. However, we did not audit the 'information and
express no opinion on it.
Our audit was conducted for the purpose for fonning opinions on the financial statement'i that collectively
comprise the Agency's basic financial statements. The accompanying major fund budgetary comparison
schedules listed as supplementary infonnation in the table of contents are presented for purposes of ~dditional
analysis and are not a required part of the basic [mancia] statements. The major fund budgetary comparison
schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated, in all material respects in relation to the basic financial statements taken
as a whole.
1 ~~~~~,,;,~~-4rC.
This page has been left blank intentionally.
2
CITY OF CHULA VISTA - REDEVELOPMENT AGENCY
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
The discussion and analysis of the Redevelopment Agency's (Agency's) fmancial
performance provides an overall review of the Agency's fmancial activities for the fiscal year
ended June 30, 2007. The intent of this discussion and analysis is to look at the Agency's
financial performance as a whole. Readers should also review the basic financial statements,
as well as the prior year's report ending June 30, 2006, to enhance their understanding of the
Agency's fmancial performance.
The fmancial section of this report has been prepared to show the results of the financial
administration, financial condition, and operation of the Agency. The flfm of Moreland and
Associates, Inc., whose opinion is included in this report, has audited the combined fmancial
statements in this report.
BASIS OF ACCOUNTING AND FUND GROUPINGS
The basic financial statements are presented on an "economic resources" measurement focus
and the accrual basis of accounting. Accordingly, all of the Agency's assets and liabilities,
including capital 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.
All governmental funds are accounted for on a spending or "current fmancial 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 present increases (revenue 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. The Agency maintains funds in accordance with generally accepted accounting
principles set forth by the GASB and other rule-making entities.
FINANCIAL DISCUSSION
Under the Governmental Fund statements, the Redevelopment Agency reported an excess of
revenues over expenditures of $1.0 million, including transfers in and out. The total fund
balance at June 30, 2007 was $32.3 million, of which $5.5 million is designated or
committed. Designations represent management's intended use of resources and reflect
actual plans approved by the City CounciL
3
Total tax increment revenue increased by 14.7% in fiscal year 2007, to $11.9 million from
$10.4 million in the previous fiscal year. The large increase in revenues occurred due to the
rapid appreciation of properties due primarily to sales of existing homes. The largest
increases occurred in the Otay Valley Road project area ($482,786), the Town Centre 1
project area ($472,258) followed by the Southwest project area ($359,649) and combined
accounted for 86% of the increase.
Gross Tax Increment Revenue
For the years ended June 30
Incrcase/(Dccreasc)
Fiscal Year Tax Increment Amount Percentage
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
$7,540,242
$7,032,266
$7,822,850
$8,317,575
$8,939,342
$10,404,881
$11,935,619
($507,976)
$790,584
$494,725
$621,767
$1,465,539
$1,530,738
(6.7%
11.2%
6.3%
7.5%
16.4%
14.7%
Fiscal Year 2006-07 Tax Increment Revenue
Added Area
2.8%
Bayfront
20.8%
Southwest
26.6%
Town Centre I
20.7%
Town Centre II
11.4%
I In fiscal year 2002, tax increment decreased due to the devaluation of the South Bay Power Plant by the
State Board of Equalization.
'The fiscal year 2003-04 tax Increment is adjusted downwards by $2.0 million for comparison to other
fiscal years. A correction to the Unitary Tax Roll was made by the County of San Diego to reallocate the
1 % State Unitary tax revenues that had affected prior years.
4
Total revenue realized by the Agency for fiscal year 2007 was $13.8 million, of which 86.8%
was tax increment revenue, 10.4% were charges for use of money and property and 2.8%
was other income. Total expenditures for fiscal year 2007 were $38.7 million. The
expenditures include $9.0 million for general government and capital outlay that include all
redevelopment activities. Debt service expenditures totaled $29.7 million which included
$24.8 million for the refunding of the 1994 Tax Allocation Bonds Series A, C and D. The
remaining $5.0 million of debt service expenditures were for payment of long-term debt,
interest, and fiscal charges.
REDEVELOPMENT AGENCY ACTIVITIES & HIGHLIGHTS
A critical activity of the Redevelopment Agency during the past several years, including
Fiscal Year 2006/07, has been to fund and facilitate the preparation of high priority land use
planning documents within redevelopment project areas. The Bayfront Master Plan will be a
crucial foundational document for the long-term development of the City's waterfront. The
Urban Core Specific Plan, adopted in 2007, provides the City an essential framework for a
new paradigm of urban development in the City's historic northwest. The City and Agency
also spent significant time during the past year reexamining and adjusting the Agency's
structural and operational systems.
Bayfront
The City has identified redevelopment of the Bayfront for many years as a top priority. In
addition to removing blight and capitalizing on underutilized property, a reinvigorated
Bayfront can provide stronger waterfront access and recreational amenities, improved
visibility and recognition for the City, enhanced market potential and property values for the
City's urban core and an improved contribution to the City's fiscal resources and public
service levels. The City had these results in mind when the Bayfront was identified as a
redevelopment project area.
In June of 2005, the City and the Port of San
Diego received an unsolicited letter of
interest from Gaylord Entertainment
regarding development of a Iill\ior resort
hotel and conference center on the City's
Bayfront. Gaylord has proposed a project
that would consist of a 1,500 to 2,000 room
resort hotel, approximately 400,000 square
feet of meeting rooms and exhibit
hallslbalIrooms and a retail/entertainment!
restaurant component.
5
The Gaylord proposal is unique in its ability to advance these City objectives in a relatively
short period of time. Whereas a market analysis conducted for the Bayfront master plan
indicated that realization of the Bayfront master plan would likely occur over several decades
in the absence of a "catalyst" project, the Gaylord proposal would redevelop a substantial
portion of the B ayfront area over the next several years and is likely to attract further
investment during the same time or shortly thereafter. This acceleration of development will
have the effect of increasing the numerous revenues generated, which can be used to
augment the City's infrastructure and public services. A letter of Intent (LOI) was entered
into by and between the City, Agency, Port District, and Gaylord Entertainment in July 2006
and extended in December 2007. Negotiations are on-going with Gaylord, the City and the
Port of San Diego.
Urban Core
Another top priority for the City is the redevelopment and revitalization of the City's Urban
Core. A critical tool in facilitating redevelopment in Northwest Chula Vista is the Urban
Core Specific Plan (UCSP), a comprehensive planning document that creates new zoning
standards and design guidelines for the creation of a revitalized, economically attractive
Urban Core. By creating greater predictability for new development in the Urban Core, the
UCSP seeks to attract greater investment of private capital into some of the oldest sections of
the City. The UCSP was adopted by the City Council in April 2007 and took effect in June
2007.
REOUEST FORlNFORMATlON
This financial report is designed to provide our citizens, taxpayers, creditors and investors
with a general overview of the Agency's fmances and to show the City's accountability for
the money it receives. Questions concerning any of the information provided in this report or
requests for additional information should be addressed to the City of Chula Vista, Finance
Department, 276 Fourth Avenue, Chula Vista, CA 91910.
6
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Statement of Net Assets
June 30, 2007
Assets
Governmental
Activities
Cash and investments
Receivables:
Taxes
Interest
Loans
Other
Other assets
Land held for resale
Restricted cash and investments
Held by Ci ty of Chula Vista
Held by fiscal agent
Capital assets:
Nondepreciable assets
Depreciated capital assets,
net of accumulated depreciation
Total Assets
Liabilities
Current Liabilities:
Accounts payable and accrued liabilities
Interest payable
Noncurrent Liabilities:
Due within one year
Due in more than one year
Total Liabilities
$ 9,717,781
387,271
102,095
13,568,423
730,918
490,470
2,260,925
4,432,954
7,304,180
7,560,108
1,718,150
48,273,275
2,800,409
756,628
1,215,910
71,413,541
76,186,488
Net Assets
Investments in capital assets, net of related debt
Restricted for:
Capital projects
Community development
Unrestricted
9,278,258
Total Net Assets (Deficit)
5,467,452
21,820,595
(64,479,518)
$ (27,913,213)
See Accompanying Notes to Financial Statements.
7
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Statement of Activities
For the Year Ended June 30, 2007
Functions/Programs
Governmental Activities:
General government
Interest on long-term debt
Total Governmental Activities
General revenues:
Property taxes
Interest earnings
Miscellaneous
Transfer to City of Chula Vista
Expenses
$ 9,072,571
4,260,838
$ 13,333,409
Total General Revenues and Transfers
Change in net assets
Net Assets (Deficit), Beginning of Year
Net Assets (Deficit), End of Year
See Accompanying Notes to Financial statements.
8
Net (Expense)
Revenue and
Change in
Net Assets
Governmental
Activities
$ (9,072,571)
(4,260,838)
(13,333,409)
11,935,619
2,122,115
324,358
(1,335,256)
13,046,836
(286,573)
(27,626,640)
$ (27,913,213)
This page has been left blank intentionally.
9
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Balance Sheet
Governmental Funds
June 30, 2007
Special Revenue
Low and Moderate Chula Vista
Income RDA Housing Housing
Housing Program Authority
Assets
Cash and investments $ 5,795,843 $ 34,359 $ 83,972
Taxes receivable 77 ,454
Interest receivable 50,503 639 1,017
Loans receivable 11,681,960 1,886,463
Other receivables 609
Due from other funds
Advances to other funds
Land held for resale
Restricted cash and investments:
Held by City of Chula Vista 524,453 3,908,501
Held by fiscal agent
Total Assets $ 18,130,822 $ 5,829,962 $ 84,989
Liabilities and Fund Balance
Liabilities:
Accounts payable and accrued liabilities $ 90,994 $ 13,324
Due to other funds
Advances from other funds
Deferred revenue 1,835,434 200,437
Total Liabilities 1,926,428 213,761
Fund Balance:
Reserved for:
Encumbrances 40,165 35,439
Loans receivables 9,846,526 1,686,026
Low and moderate income housing 6,317,703
Advances
Housing program 3,894,736
Land held for resale
Debt service
Total Reserved 16,204,394 5,616,201
Unreserved:
Designated $ 84,989
Undesignated
Total Unreserved 84,989
Total Fund Balances (Deficit) 16,204,394 5,616,201 84,989
Total Liabilities and Fund Balances $ 18,130,822 $ 5,829,962 $ 84,989
See Accompanying Notes to Financial Statements.
10
Debt Service Capital Projects
Town Centre II Town Centre II
Otay Valley Otay Valley
Bayfront! Southwest Bayfront/ Southwest
Town Centre I Merged Projects Town Centre I Merged Proj eets Total
$ 1,420,105 $ 874,080 $ 4,097 $ 1,505,325 $ 9,717,781
172,553 137,264 387,271
14,773 6,469 47 28,647 102,095
13,568,423
1,200 729,109 730,918
1,274,659 1,274,659
5,024,642 5,024,642
2,260,925 2,260,925
4,432,954
2,083,371 1,220,537 4,000,272 7,304,180
$ 3,518,249 $ 2,101,086 $ 7,463,464 $ 7,675,276 $ 44,803,848
$ 1,215,954 $ 1,480,137 $ 2,800,409
1,274,659 1,274,659
$ 5,024,642 5,024,642
675,132 727,687 3,438,690
5,024,642 3,165,745 2,207,824 12,538,400
236,662 44,004 356,270
11,532,552
6,317,703
4,349,509 4,349,509
3,894,736
2,260,925 2,260,925
$ 3,518,249 2,101,086 5,619,335
3,518,249 2,101,086 6,847,096 44,004 34,331,030
5,423,448 5,508,437
(5,024,642) (2,549,377) (7,574,019)
(5,024,642) (2,549,377) 5,423,448 (2,065,582)
3,518,249 (2,923,556) 4,297,719 5,467,452 32,265,448
$ 3,518,249 $ 2,101,086 $ 7,463,464 $ 7,675,276 $ 44,803,848
II
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12
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Reconciliation of Governmental Funds Balance Sheet
to the Statement of Net Assets
June 30, 2007
Fund balance for governmental funds
$ 32,265,448
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Capital assets used in governmental activities are not current resources.
Therefore, they were not reported in the Governmental Funds Balance
Nondepreciable capital assets
Depreciable capital assets
Total capital assets
$ 7,560,108
1,718,150
9,278,258
Deferred revenues which are deferred because they are not available
currently are taleen into revenue in the Statement of Activities and,
accordingly, increases the net assets on the Statement of Net Assets.
3,438,690
Interest payable on long-term debt does not require current [mancial
resources. Therefore, interest payable is not reported as a liability in
Governmental Funds Balance Sheet.
(756,628)
Other long-term assets which are not considered available to pay for
current expenditures are not reported in the governmental funds.
490,470
Long-term liabilities are not due and payable in the current period.
Therefore, they were not reported in the Governmental Funds Balance
Sheet. The long-term liabilities were adjusted as follows:
Long-term liabilities - due within one year $ (1,215,910)
Long-term liabilities - due in more than one year (71,413,541)
(72,629,451)
Net Assets (Deficit) of Governmental Activities
$ (27,913,213)
See Accompanying Notes to Financial Statements.
13
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Statement of Revenues, Expenditures and Changes in Flmd Balances
Governmental Funds
For the Year Ended Jlli1e 30, 2007
Special Revenue
Low and Moderate Chula Vista
Income RDA Housing Housing
Housing Program Authority
Revenues:
Taxes $ 2,294,709
Use of money and property 363,981 $ 23,425 $ 4,211
Other 7,262 75 58,897
Total Revenues 2,665,952 23,500 63,108
Expenditures:
Current:
General government 492,877 134,902 37,044
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Bond issuance cost
Total Expenditures 492,877 134,902 37,044
Excess (Deficiency) of Revenues
Over (Under) Expenditures 2,173,075 (1ll,402) 26,064
Other Financing Sources (Uses):
Issuance of debt
Bond discount
Advances from the City of
Chula Vista
Transfers from the City of Chula Vista 1,124
Transfers to the City of Chula Vista (2,922) (296,157)
Transfers in
Transfers out
Total Other Financing Sources (Uses) (2,922) (295,033)
Net Change in Fund Balances 2,170,153 (406,435) 26,064
Fund Balances (Deficit), Beginning of Year 14,034,241 6,022,636 58,925
Fund Balances (Deficit), End of Year $ 16,204,394 $ 5,616,201 $ 84,989
See Accompanying Notes to Financial Statements.
14
Bayfront!
Town Centre I
Debt Service
Town Centre II
Gtay Valley
Southwest
Merged Projects
Capital Projects
Town Centre II
Gtay Valley
Bayfront! Southwest
Town Centre I Merged Projects
Total
$ 1,009,524 $ 1,317,578 $ 3,047,277 $ 4,266,531 $ 11,935,619
360,640 25,797 242,984 411,813 1,432,851
256,417 1,091 15,267 43,125 382,134
1,626,581 1,344,466 3,305,528 4,721,469 13,750,604
258,754 2,600 3,588,976 4,308,311 8,823,464
63,844 108,576 172,420
24,460,750 444,250 24,905,000
2,265,377 2,051,908 4,317,285
514,994 514,994
27,499,875 2,498,758 3,652,820 4,416,887 38,733,163
(25,873,294) (1,154,292) (347,292) 304,582 (24,982,559)
25,760,000 25,760,000
(505,884) (505,884)
196,979 1,896,954 2,093,933
1,124
(1,025,903) (2,632) (8,766) (1,336,380)
15,635,139 1,738,037 75 4,000,271 21,373,522
(15,635,213) (5,738,309) (21,373,522)
25,451,021 2,609,088 (2,557) (1,746,804) 26,012,793
(422,273) 1,454,796 (349,849) (1,442,222) 1,030,234
3,940,522 (4,378,352) 4,647,568 6,909,674 31,235,214
$ 3,518,249 $ (2,923,556) $ 4,297,719 $ 5,467,452 $ 32,265,448
15
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16
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2007
Net change in fund balances - total governmental funds:
$ 1,030,234
Amounts reported for governmental activities in the Statement of Activities are
different because:
Deferred revenue does not provide for current financial resources and
therefore are not reported as revenues in the governmental funds.
689,264
Governmental Funds report capital outlay as expenditures. However, in the
Statement of Activities the costs of these assets is allocated over their
estimated useful lives and reported as depreciation expense. This is the
amount of depreciation.
(52,163)
Sale of capital asset
(57,776)
Long-term debt proceeds provide current financial resources to
Governmental Funds, but issuing debt increases long-term liabilities in the
Government-Wide Statement of Net Assets. Repayment of bond principal is
an expenditure in Governmental Funds, but the repayment reduces long-term
liabilities in the Government-Wide Statement of Net Assets.
Proceeds from long-term debt
Long-term debt repayments
(27,348,049)
24,880,910
(2,467,139)
Other long-term assets which are not considered available to pay for current
expendi tures are not reported in the governmental funds.
490,470
Interest expense on long-term debt is reported in the Government-Wide
Statement of Activities and Changes in Net Assets, but does not require the
use of current financial resources. Therefore, interest expense is not reported
as expenditures in governmental funds. The following amount representing
the change in accrued interest from prior year.
80,537
Change in Net Assets of Governmental Activities
$ (286,573)
See Accompanying Notes to Financial Statements.
17
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18
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements
June 30, 2007
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the
Redevelopment Agency of the City of Chula Vista (Agency):
A. Reporting Entity
The Agency is a blended component unit of the City of Chula Vista. The City of Chula
Vista (City) City Council created the Agency in October 1972. The primary purpose of
the Agency is to eliminate blighted areas by encouraging the development of
residential, commercial, industrial, recreational and public facilities. The
Bayfrontlfowne Centre I Project encompasses approximately 775 acres and its general
objective is to redevelop the Bayfront area and central business district. The Merged
Redevelopment Project encompasses approximately 2,456 acres. Its general goal is to
revitalize the area into a principal regional shopping center and to upgrade the
commercial, industrial, residential properties and rights-of-way at a more rapid pace
than would occur without the redevelopment plan.
The Agency is an integral part of the reporting entity of the City of Chula Vista. The
basic fmancial statements of the Agency have been included within the basic fmancial
statements of the City because the City Council of the City of Chula Vista is the
governing board over the operations of the Agency.
B. Government-Wide Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the
statement of activities) report information on all of the activities of the Agency. For the
most part, the effect of the interfund activity has been removed from these statements.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include charges for services and grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as
general revenues.
Separate fmancial statements are provided for govemmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
19
REDEVELOPMENT AGENCY OF THE CLTY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
I. Basis of Accounting
The government-wide fmancial statements are reported using the economic
resources measurement focus and the accrual basis of accounting wherein
revenues are recorded when they are both earned and realized, regardless of the
timing of the related cash flows.
Governmental fund statements are reported using the modified accrual basis of
accounting wherein revenues are recognized as soon as they are both measurable
and available as a resource to finance operations of the current year. Expenditures
are recorded when incurred except that interest on long-term debt is recorded as
an expendi lure on its due date.
The financial statements have been prepared in accordance with generally
accepted accounting principles and necessarily include amounts based on
estimates and assumptions by management Actual results could differ from those
amounts.
2. Tax increment revenue
The law provides a means for fmancing redevelopment projects based upon an
allocation of taxes collected within a redevelopment project. The assessed
valuation of a redevelopment project last equalized prior to adoption of a
redevelopment plan or amendment to such redevelopment plan, or "base roll", is
established and, except for any period during which the assessed valuation drops
below the base year level, the taxing bodies thereafter receive the taxes produced
by the levy of the current tax rate upon the base roll. Taxes collected upon any
increase in assessed valuation over the base roll ("tax increment") are paid and
may be pledged by a redevelopment agency to the repayment of any indebtedness
incurred in fmancing or refmancing a redevelopment project. Redevelopment
agencies themselves have no authority to levy property taxes.
3. Description of funds
The Agency reports the following major governmental funds:
Low and Moderate Income Housin~ Soecial Revenue Fund is used to account for
the 20% portion of the Agency's tax increment revenue that is required to be set
aside for low and moderate income housing and related expenditures.
20
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
RDA Housinl): Program Soecial Revenue Fund is used to account for specific
revenue that is required to be used for low and moderate income housing and
related expenditures.
Chula Vista Housing Authority Soecial Revenue Fund is used to account for
specific revenue that is required to be used for low and moderate income housing
and related expenditures.
BavfrontfIown Centre I Debt Service Fund is used to account for the payment of
interest and principal on long-term debt, and the accumulation of resources thereof
associated with the Bayfront and Town Centre I Project Areas.
Town Centre 1lI0tav Vallev/Southwest Merged Proiects Debt Service Fund is
used to account for the payment of interest and principal on long-term debt, and
the accumulation of resources thereof associated with the Town Centre II, Otay
Valley Road, and Southwest Merged Project Areas.
Bayfront/Town Centre I Caoital Proiects Fund is used to account for the financial
resources used in developing the Bayfront and Town Centre I Project Areas.
Town Centre 1lI0tay Vallev/Southwest Merged Proiects Caoital Proiects Fund is
used to account for the fmancial resources used in developing the Town Centre II,
Otay Valley Road, and Southwest Merged project areas.
II. STEW ARDSHLP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Accounting
An annual budget is adopted by the Board of Directors prior to the first day of the fiscal
year. The budget process includes submittal of each department's budget request for
the next fiscal year, a detailed review of each department's proposed budget by the
Executive Director, and a fmal Executive Director recommended budget that is
transmitted to the Board of Directors for its review before the required date of adoption.
Once transmitted to the Board of Directors, the proposed budget is made available for
public inspection. A public hearing is held to give the public the opportunity to
comment upon the proposed budget. Notice of such public hearing is given in a
newspaper of general circulation.
The adoption of the budget is accomplished by the approval of a Budget Resolution.
The level of budgetary control, that is, the level at which expenditures are not to exceed
Council approved appropriations, is established by department at the category level.
Any budget modification, which would result in an appropriation increase, requires
Board of Directors' approval. The Executive Director and Finance Director are jointly
21
REDEVELOPMENT AGENCY OF THE ClTY OF CHULA VISTA
Notes to Financial Statements (Continued) .
June 30, 2007
authorized to transfer appropriations within a departmental budget. Any appropriation
transfers between departments require Board of Directors' approval. All appropriations
which are not obligated, encumbered or expended at the end of the fiscal year lapse
become a part of the unreserved fund balance which may be appropriated for the next
fiscal year.
An annual budget for the year ended June 30, 2007 was adopted and approved by the
Board of Directors for the special revenue and debt service funds. These budgets are
prepared on the modified accrual basis of accounting except that encumbrances
outstanding at year-end are considered as expenditures. The budgets of the capital
projects funds are primarily long-term budgets, which emphasize major programs and
capital outlay plans extending over a number of years. Due to the long-term nature of
these projects, annual budget comparisons are not considered meaningful, and,
accordingly, no budgetary information for capital projects funds is presented
B. Deficit Fund Balance
The Town Centre lVOtay Valley/Southwest Merged Projects Debt Service Fund has a
deficit fund balance of$2,923,556. This deficit is expected to be eliminated with future
tax revenues.
Ill. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
Cash and investments at June 30, 2007 consisted of the following:
Cash and investments pooled with the City
Restricted:
Cash and investments
Cash and investments with fiscal agent
Total Cash and Investments
$ 9,717,781
4,432,954
7,304,180
$ 21,454,915
The Agency has pooled its cash and investments with the City in order to achieve a
higher return on investment. Certain restricted funds, which are held and invested by
independent outside custodians through contractual agreements, are not pooled These
restricted funds include cash with fiscal agent.
The investments made by the Agency are limited to those allowable under State statutes
and include the following types of investments:
. U.S. Government Securities
. Bankers' Acceptances
22
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
. Commercial Paper
. Medium- Teml Notes
· Repurchase Agreements
. Deposits with Banks
· State of California Local Agency Investment Fund
See the City's Comprehensive AmlUal Financial Report for disclosures related to cash
and investments and the related custodial risk categorization.
B. Land Held for Resale
Land held for resale is recorded in the BayfrontITown Centre I Capital Projects Fund at
the lower of cost or estimated net realizable value. The available fund balance is
reserved in an amount equal to the carrying value of land and buildings held for resale
because such assets are not available to fmance the Agency's current operations. The
amount recorded as land held for resale and the corresponding fund balance reserved as
of June 30,2007 was $2,260,925.
C. Loans Receivable
At June 30, 2007, the Agency had the following loans receivable, including principal
and accrued interest:
South Bay Co=unity Services
South Bay Community Villas, L.P.
Chula Vista Rehabilitation CHIP Loans
Civic Center Barrio Housing Corporation Loan
Rancho Vista Housing
Mobile Home Assistance Programs
Chelsea mvestment CorporationlSunbow Services Co.,LLC
Alpha 1lI Development mc. (Main Plaza, L.P.)
Wakeland Housing and Redevelopment Corportation
Total
South Bav Community Services
$ 1,086,525
5,133,710
1,886,463
234,597
1,072,658
55,952
2,380,208
1,612,479
105,831
$ 13,568,423
The Agency entered into a loan agreement with South Bay Community Services, a
California non-profit public benefit corporation. The loan amount of $478,200 was
made to enable South Bay Community Services to develop a 40-unit affordable multi-
family housing rental project to provide housing to low income families. The note is
secured by a deed of trust on certain property and assignments of rents. Interest accrues
annually at 3% of the unpaid principal balance of the note. Interest of $102,297 has
been deferred at June 30, 2007. The outstanding balance is $580,497.
23
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
The Agency entered into a loan agreement with South Bay Community Services for the
acquisition of property located at 1536 Concord Way for a domestic violence shelter
site, other transitional living programs or housing for very low income families. The
loan is secured by a deed of trust and a promissory note for the properties on behalf of
the Agency. Repayment of the loan is limited to annual payment based on residual
receipts. Interest of $18,931 has been deferred at June 30, 2007. The outstanding
balance is $55,726.
The Agency entered into a $300,000 loan agreement with South Bay Community
Services for the acquisition of a real property at 746 Ada Street, and improving it with a
multi-family residential project consisting of II units. These units, called the Trolley
Trestle, will provide affordable housing for low income young adults who have
completed the County of San Diego Foster Care program The loan is secured by a
Deed of Trust and Security Agreement and will accrue 3% interest. Payment of
principal and interest will be made from 50% of residual receipts for 55 years. Interest
of $77,302 has been deferred at June 30, 2007. The outstanding balance is $450,302.
South Bav Community Villas. L.P.
The City entered into a loan agreement with South Bay Community Villas, L.P. for the
development of the Heritage Town Center multi-family rental housing project. Agency
assistance is in the form of residual receipt loan secured by a promissory note and deed
of trust. The outstanding principal and interest on the loan will be repaid over fifty five
years and shall accrue interest at 3 % per annum. Payment of principal and interest on
the Agency loan shall be made on an annual basis, out of a fund equal to fifty percent of
the net cash flow of the project (residual receipts) after debt service on bonds, payment
of deferred developers fee, and reasonable operating expense have been paid. Interest
of $733,710 has been deferred at June 30, 2007. The outstanding balance is
$5,133,710.
Chula Vista Rehabilitation CHIP Loans
The Chula Vista Rehabilitation Community Housing Improvement Program (CHIP) is
under the direct control of the Agency. CHIP offers deferred and low interest rate home
improvement loans to qualified borrowers residing within a target area. Loan
repayments are re-deposited into the program cash accounts and are redistributed as
future loans. The program was originally funded entirely with Community
Development Block Grant Federal funds. In recent years, the Agency began
supplementing the program due to decreased availability of Federal grants. Interest of
$200,437 was deferred as of June 30, 2007. The outstanding balances of the CHIP
loans are $1,886,463.
24
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Civic Center Barrio Housing Corporation Loan
In 1991, the Agency entered into a loan agreement with the Civic Center Barrio
Housing Corporation, a California non-profit public benefit corporation. The loan was
made for the purchase of land and the development of a 28-unit low income housing
project. During 1992, the loan was assigned to Park Village Apartments Ltd., a
California limited partnership in which Civic Center Barrio Housing Corporation is the
managing general partner. The loan is secured by a deed of trust on the property and
assignment of rents. Principal and interest are payable monthly. Interest accrues
annually at 5% of the unpaid principal balance of the note. The outstanding balance is
$234,597.
Rancho Vista Housing
The Agency has loaned $1,000,000 to CIC Eastlake, L.P. for the development and
operation of Rancho Vista Housing project, a multifamily affordable housing project.
The loan is secured by promissory notes and deeds of trust. The outstanding principal
and interest amount of the loan shall be repaid over fifty-five (55) years and shall
accrue at the simple interest rate of three (3%) percent per annum. Payment of
principal and interest, or portions thereof, on the loan shall be made on an annual basis,
out of a fund equal to fifty (50%) percent of the net cash flow of the project. Interest of
$72,658 has been deferred at June 30, 2007. The outstanding balance is $1,072,658.
Mobile Home Assistance Programs
The Agency entered into agreements with eligible residents of the Orange Tree Mobile
Home Park, whereby the Agency loaned $250,030 as permanent financing assistance to
residents for the purpose of purchasing certain mobile home property. The loans are
secured by deeds of trust on the property and mature in 20 17 or when the property is
sold. Contingent interest will be charged based on calculations specified in the
agreement. The outstanding balance is $55,952.
Chelsea Investment Coruoration/Sunbow Services Co.. LLC
The Agency entered into a residual receipts loan agreement with Chelsea Investment
Corporation/Sunbow Services Company, LLC for the development of the proposed 132
unit Villa Serena senior affordable housing project. The loan amount of $275,000 was
funded by the Agency's Low and Moderate Income Housing Fund. Terms of the loan
will be for 52 years at 6% per annum. Principal and interest payments will be made on
an annual basis out of a fund equal to 90% of the "Residual Receipts." Interest of
$133,558 has been deferred at June 30,2007. The outstanding balance is $408,558.
The Agency entered into a loan agreement with Chelsea Investment Corporation for the
acquisition and rehabilitation of the 119-unit Pear Tree Apartments at 1025 Broadway.
25
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
All units will be affordable to low income households. The loan is secured by a deed of
trust and will accrue 6% interest for 52 years. Payment of principal and interest shall
be made on an annual basis out of a fund equal to 90% of the residual receipts. Interest
of $584,498 has been deferred at June 30, 2007. The outstanding balance is
$1,971,650.
Alpha III Development Inc (Main Plaza, L.P.)
The Agency entered into a loan agreement with Main Plaza, LP (Borrower) to assist the
borrower in acquiring and improving certain real property for occupation by very low,
lower and low and moderate income households. The total loan amount is $1,500,000.
The loan bears an interest rate of 3 % per annum. The loan shall be due and payable on
the date that is 55 years from the date of the Agency's issuance of the Certificate of
Completion. Interest of $112,479 was deferred as of June 30, 2007. The outstanding
balance is $1,612,479.
Wakeland Housing and Development COl1lOration
The Agency entered into a predevelopment loan agreement with Wakeland Housing
and Development Corporation to assist the borrower in constructing affordable multi
family apartment units for occupancy by extremely low, very low and lower income
households. The loan is interest free. Repayment of the predevelopment loan is subject
to the approval and execution of a Development and Loan Agreement within the
negotiating period as set forth in the Exclusive Negotiating Agreement (ENA). If the
Development and Loan Agreement is not approved or executed within the negotiating
period, the loan shall be immediately due and payable. The outstanding balance as of
June 30, 2007 is $105,831.
26
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
D. Capital Assets
Changes in capital assets during the year ended June 30, 2007 were as follows:
Balance Balance
July I, 2006 Additions Deletions June 30, 2007
Capital Assets Not Being Depreciated:
Land $ 7,617,884 $ (57,776) $ 7,560, 108
Capital Assets Being Depreciated:
Buildings 2,608,126 2,608,126
Machinery and equipment 308,873 (296,873) 12,000
Total Capital Assets
Being Depreciated 2,916,999 (296,873) 2,620,126
Less: Accwnulated
Depreciation (1,146,686) $ (52,163) 296,873 (901,976)
Total Capital Assets
Being Depreciated, Net 1,770,313 (52,163) 1,718,150
Total Capital Assets $ 9,388,197 $ (52,163) $ (57,776) $ 9,278,258
Depreciation expense of $52,163 was charged to general government.
E. Long-Term Debt
The following is a summary of changes in long-term liabilities for the year ended
June 30, 2007:
Balance Balance Due Within
luly 1,2006 Additions Deletions lunc30, 2007 One Year
ERAF Loan - 2005 $ 71 0,000 $ 65,000 $ 645,000 $ 70,000
ERAF Loan - 2006 930,000 60,000 870,000 80,000
Bond discount $ (505,884) (24,090) (481,794) (24,090)
Advances from the City
ofChula Vista 28,227,312 2,093,933 30,321,245
Tax Allocation Bonds 40,295,000 25,760,000 24,780,000 41,275,000 1,090,000
Total $ 70,162,312 $ 27,348,049 $ 24,880,910 $ 72,629,451 $ 1,215,910
27
REDEVELOPMENT AGENCY OF THE CiTY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
ERAF Loan - 2005
In May 2005, the Agency participated in a $765,000 Loan Agreement with the
California Statewide Communities Development Authority to finance their 2005 share
of ERAF Payments to the County Auditor. Interest is payable semi-annually on
February I and August I at interest rates ranging from 3.87% to 5.01 %. The annual
debt service is:
Year Ending
June 30, Principal Interest Total
2008 $ 70,000 $ 31,752 $ 101,752
2009 70,000 28,704 98,704
2010 75,000 25,570 100,570
2011 80,000 22,118 102,118
2012 80,000 18,354 98,354
2013-2015 270,000 30,762 300,762
Total $ 645,000 $ 157,260 $ 802,260
ERAF Loan - 2006
In May 2006, the Agency participated in a $930,000 Loan Agreement with the
California Statewide Communities Development Authority to finance their 2006 share
of ERAF Payments to the County Auditor. Interest is payable semi-annually on
February I and August I at interest rates ranging from 5.28% to 5.67%. The annual
debt service is:
Year Ending
June 30, Principal Interest Total
2008 $ 80,000 $ 49,256 $ 129,256
2009 80,000 44,972 124,972
2010 85,000 40,632 125,632
2011 90,000 35,996 125,996
2012 95,000 31,052 126,052
2013-2016 440,000 68,046 508,046
Total $ 870,000 $ 269,954 $ 1,139,954
28
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
Advances from the City ofChula Vista
As of June 30, 2007, the City has advanced the Agency $30,321,245 to help fund
capital projects and debt service payments. There are no set repayment terms in
relation to these advances. Interest is calculated based on the LAlF average annual
yield at the time the advance is made.
2000 Tax Allocation Bonds
In October 2000, the Agency issued $17,000,000 2000 Tax Allocation Bonds, to
provide funds to fund a reserve account, to pay expenses of the Agency in connection
with the issuance of the bonds and to finance or refInance certain redevelopment
activities. The proceeds of the bonds were used to fund the acquisition and
construction of certain capital improvements which are located in the Agency's Town
Centre I Project Area. The bonds consist of $9,535,000 serial bonds which mature
from 2001 to 2030 in amounts ranging from $100,000 to $715,000 and term bonds of
$1,440,000 and $6,025,000 which mature in 2022 and 2029, respectively. Interest is
payable semi-annually on March I and September I at interest rates ranging from
4.30% to 5.375%. The bonds are subject to optional redemption on any interest
payment date on or after September I, 2004, at various redemption prices. The balance
outstanding at June 30, 2007 was $15,515,000.
The annual debt service requirements for the 2000 Tax Allocation Bonds outstanding at
June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 405,000 $ 787,605 $ 1,192,605
2009 425,000 769,760 1,194,760
2010 440,000 750,943 1,190,943
2011 460,000 730,913 1,190,913
2012 480,000 709,523 1,189,523
2013-2017 2,655,000 3,175,681 5,830,681
2018-2022 3,170,000 2,443,198 5,613,198
2023-2027 4,115,000 1,4 79 ,864 5,594,864
2028-2031 3,365,000 333,116 3,698,116
Total $ 15,515,000 $ 11 ,180,603 $ 26,695,603
29
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
2006 Senior Tax Allocation Refunding Bonds. Series A
In July 2006, the Agency issued $13,435,000 2006 Senior Tax Allocation Refunding
Bonds, Series A to refInance the Agency's outstanding BayfrontIT own Centre
Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series A, and to
satisfy the reserve requirement for the Bonds and provide for the costs of issuing the
Bonds. The original bond proceeds were used in the acquisition of property,
demolition, relocation, public improvements and funding the Low and Moderate
Income Housing Project. The bond consist of serial bonds which mature in 2028.
Interest is payable semiannually on March I and September I at interest rates ranging
from 4.00% to 4.60%. The bonds are subject to optional redemption on any interest
payment date on or after September I, 2012, at various redemption prices. The bonds
are payable solely from certain tax increment revenues of the Agency and other funds
held under the indenture. The 1994 Sewer Tax Allocation Refunding Bonds, Series A
were paid in full by 2006 debt issuance. The economic gain of issuance of new debt
was approximately $2.3 million. The balance outstanding at June 30, 2007 was
$13,435,000.
The annual debt service requirements for the 2006 Tax Allocation Bonds outstanding at
June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 395,000 $ 574,433 $ 969,433
2009 460,000 556,345 1,016,345
2010 480,000 537,545 1,017 ,545
2011 500,000 517,945 1,017 ,945
2012 520,000 497,545 1,017 ,545
2013-2017 2,950,000 2,120,993 5,070,993
2018-2022 3,620,000 1,430,011 5,050,011
2023-2027 3,995,000 547,265 4,542,265
2028 515,000 11,845 526,845
Total $ 13,435,000 $ 6,793,927 $ 20,228,927
2006 Subordinate Tax Allocation Refunding Bonds. Series B
In July 2006, the Agency issued $12,500,000 2006 Subordinate Tax Allocation
Refunding Bonds, Series B to refInance the Agency's outstanding Bayfront/Town
Centre Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series C
and D, and to satisfy the reserve requirement for the Bonds and provide for the costs of
issuing the Bonds. The original bond proceeds were used in the acquisition of property,
30
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Notes to Financial Statements (Continued)
June 30, 2007
demolition, relocation, public improvements and funding the Low and Moderate
Income Housing Project. The bonds consist of $7,995,000 serial bonds which mature
from 2007 to 2021 in amounts ranging from $290,000 to $735,000 and term bonds of
$4,330,000 which mature in 2028. Interest is payable semiannually on April 1 and
October 1 at interest rates ranging from 4.00% to 6.00%. The bonds are subject to
optional redemption on any interest payment date on or after October 1, 2012, at
various redemption prices. The bonds are payable solely from certain tax increment
revenues of the Agency and other funds held under the indenture. The 1994
Subordinate Tax Allocation Refunding Bonds, Series C and the Senior Tax Allocation
Refunding Bonds, Series D were paid in full by 2006 debt issuance. The economic
gain of issuance of new debt was approximately $2.4 million. The balance outstanding
at June 30,2007 was $12,325,000.
The annual debt service requirements for the 2006 Subordinate Tax Allocation
Refunding Bonds, Series B outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 290,000 $ 603,065 $ 893,065
2009 4]0,000 586,]65 996,] 65
20]0 425,000 569,]99 994,]99
20]] 440,000 55],084 99],084
20]2 460,000 53],384 99] ,384
2013-20] 7 2,630,000 2,311,806 4,94],806
2018-2022 3,340,000 1,578,622 4,918,622
2023-2027 3,830,000 607,163 4,437,163
2028 500,000 13,125 513,125
Total $ 12,325,000 $ 7,351,613 $ 19,676,613
F. Commitments and Contingencies
The General Fund of the City has loaned approximately $578,149 to the Agency for
unreirnbursed services rendered by City staff. It is anticipated that the Agency will
repay this loan from tax increment revenues. Currently, tax increment revenues are
used to pay for related debt service expenditures and possible future debt issuance. As
a result, the Agency is uncertain if the amount will be repaid to the City's General
Fund. Accordingly, this contingent payable has not been reported in accompanying
basic [mancial statements. The Agency will record the contingent payable when
payment is assured.
3]
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32
REQUIRED SUPPLEMENTARY INFORMATION
33
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Low and Moderate Income Housing Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Original Final Positive
Budget Budget Actual (Negative)
Revenues:
Taxes $ 1,876,420 $ 1,876,420 $ 2,294,709 $ 418,289
Use of money and property 94,642 94,642 363,981 269,339
Other 7,262 7,262
Total Revenues 1,971,062 1,971,062 2,665,952 694,890
Expenditures:
Current:
General government 1,212,305 1,450,760 568,480 882,280
Excess (Deficiency) of Revenues
Over (Under) Expenditures 758,757 520,302 2,097,472 1,577,170
Other Financing Sources (Uses):
Transfers to the City of Chula Vista (3,022) (3,022) (2,922) 100
Net Change in Fund Balance 755,735 517,280 2,094,550 1,577,270
Fund Balance, Beginning of Year 14,034,241 14,034,241 14,034,241
Fund Balance, End of Year
(budgetary basis) $ 14,789,976 $ 14,551,521 16,128,791 $ 1,577,270
Encumbrances outstanding at year end 75,603
Fund Balance, End of Year
(GAAP basis) $ 16,204,394
See Accompanying Note to Required Supplementary Information.
34
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
RDA Housing Program Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Original/ Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 16,789 $ 23,425 6,636
Other 75 75
Total Revenues 16,789 23,500 6,711
Expenditures:
Current:
General government 425,719 134,902 290,817
Excess (Deficiency) of Revenues
Over (Under) Expenditures (408,930) (1l1,402) 297,528
Other Financing Sources (Uses):
Transfers from the City ofChula Vista 2,500 1,124 (1,376)
Transfers to the City of Chula Vista (296,157) (296,157)
Total other Financing Sources (uses) 2,500 (295,033) (297,533)
Net Change in Fund Balance (406,430) (406,435) (5)
Fund Balance, Beginning of Year 6,022,636 6,022,636
Fund Balance, End of Year $ 5,616,206 $ 5,616,201 $ (5)
See Accompanying Note to Required Supplementary Information.
35
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Chula Vista Housing Authority Special Revenue Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Original! Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 2,602 $ 4,211 $ 1,609
Other 59,442 58,897 (545)
Total Revenues 62,044 63,108 1,064
Expenditures:
General government 37,044 37,044
Net Change in Fund Balance 25,000 26,064 1,064
Fund Balance, Beginning of Year 58,925 58,925
Fund Balance, End of Year $ 83,925 $ 84,989 $ 1,064
See Accompanying Note to Required Supplementary Information.
36
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Note to Required Supplementary Information
For the Year Ended June 30, 2007
1. BUDGETS AND BUDGETARY ACCOUNTING
An annual budget is adopted by the Board of Directors prior to the frrst day of the fiscal
year. The budget process includes submittal of each department's budget request for
the next fiscal year, a detailed review of each department's proposed budget by the
Executive Director, and a fmal Executive Director recommended budget that is
transmitted to the Board of Directors for its review before the required date of adoption.
Once transmitted to the Board of Directors, the proposed budget is made available for
public inspection. A public hearing is held to give the public the opportunity to
comment upon the proposed budget. Notice of such public hearing is given in a
newspaper of general circulation.
The adoption of the budget is accomplished by the approval of a Budget Resolution.
The level of budgetary control, that is, the level at which expenditures are not to exceed
Council approved appropriations, is established by department at the category level.
Any budget modification, which would result in an appropriation increase, requires
Board of Directors approval. The Executive Director and Finance Director are jointly
authorized to transfer appropriations within a departmental budget. Any appropriation
transfers between departments require Board of Directors approval.
Reported budget figures are as originally adopted or subsequently amended plus prior
year continuing appropriations. AIl appropriations which are not obligated,
encumbered or expended at the end of the fiscal year lapse become a part of the
unreserved fund balance which may be appropriated for the next fiscal year.
An annual budget for the year ended June 30, 2007 was adopted and approved by the
Board of Directors for the special revenue and debt service funds. These budgets are
prepared on the modified accrual basis of accounting except that encumbrances
outstanding at year-end are considered as expenditures. The budgets of the capital
projects funds are primarily long-term budgets, which emphasize major programs and
capital outlay plans extending over a number of years. Because of the long-term nature
of these projects, annual budget comparisons are not considered meaningful, and,
accordingly, no budgetary information for capital projects funds is presented.
37
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38
SUPPLEMENTARY INFORMATION
39
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
BayfrontlTown Centre I Debt Service Flmd
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Taxes $ 2,518,643 $ 1,009,524 $ (1,509,119)
Use of money and property 320,589 360,640 40,051
Other 255,300 256,417 1,117
Total Revenues 3,094,532 1,626,581 (1,467,951)
Expenditures:
Current
General government 14,250 258,754 (244,504)
Debt service:
Principal 25,065,751 24,460,750 605,00 I
Interest and fiscal charges 4,147,708 2,265,377 1,882,331
Bond issuance cost 243,523 514,994 (271,471 )
Total Expenditures 29,471,232 27,499,875 1,971,357
Excess (Deficiency) of Revenues
Over (Under) Expenditures (26,376,700) (25,873,294) 503,406
Other Financing Sources (Uses):
Issuance of debt 24,982,645 25,760,000 777,355
Bond discount (505,884) (505,884)
Advances from the
City of Chula Vista 196,979 196,979
Transfers in 15,589,579 15,635,139 45,560
Transfers out (15,589,578) (15,635,213) (45,635)
Total Other Financing Sources (Uses) 24,982,646 25,451,021 468,375
Net Change in Fund Balance (1,394,054) (422,273) 971,781
Fund Balance, Beginning of Year 3,940,522 3,940,522
Fund Balance, End of Year $ 2,546,468 $ 3,518,249 $ 971,781
40
REDEVELOPMENT AGENCY OF THE CIT'{ OF CHULA VISTA
Town Centre II Otay Valley Southwest Merged Projects Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Taxes $ 1,221,371 $ 1,317,578 $ 96,207
Use of money and property 74,000 25,797 (48,203)
Other 1,091 1,091
Total Revenues 1,295,371 1,344,466 49,095
Expenditures:
Current:
General government 4,000 2,600 1,400
Debt service:
Principal 444,251 444,250 1
Interest and fiscal charges 2,178,737 2,051,908 126,829
Total Expenditures 2,626,988 2,498,758 128,230
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,331,617) (1,154,292) 177,325
Other Financing Sources (Uses):
Advances from the
City of Chula Vista 1,896,954 1,896,954
Transfers to the City of Chula Vista (1,058,958) (1,025,903) 33,055
Transfers in 4,522,983 1,738,037 (2,784,946)
T olal Other Financing Sources (Uses) 3,464,025 2,609,088 (854,937)
Net Change in Fund Balance 2,132,408 1,454,796 (677,612)
Fund Balance (Deficit), Beginning of Year (4,378,352) (4,378,352)
Fund Balance (Deficit), End of Year $ (2,245,944) $ (2,923,556) $ (677,612)
41
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42
1 fl' Ol'eland & J':'tJ(j()cia4J} /Jnl"
1'; CERTIFIED PUBLIC: I\CCOllf'.lT,I>.I-,ITS
1201 DCVE STRE8 SUITE 680
NEV\IPORT BEACH, CALIFORNIA 92660
570 RANC'HEROS DRIVE SUITE 260
SAN MARCOS, CA 92069
ffiEPHONE (949) 221-0025
December 18, 2007
The Board of Directors of the
Redevelopment Agency of the City ofChula Vista
Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance (Including the Provisions Contained in the Guidelines for Compliance
Audits of Redevelopment Al?:encies) and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing Standards
We have audited the financial statements of the governmental activities and each major fund,
of the Redevelopment Agency of the City ofChula Vista (Agency), a component unit of the
City of Chula Vista (City), California as of and for the year ended June 30, 2007, which
collectively comprise the Agency's basic financial statements, as listed in the table of
contents, and have issued our report thereon dated December 18, 2007. 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 Auditinl?:
Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Agency's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Agency's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the Agency's internal
control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency, or a combination of control deficiencies, that adversely affects the Agency's
ability to initiate, authorize, record, process, or report financial data reliably in accordance
with generally accepted accounting principles such that there is more than a remote
likelihood that a misstatement of the Agency's financial statements that is more than
inconsequential will not be prevented or detected by the Agency's internal control.
43
A materia] weakness is a significant deficiency, or combination of significant deficiencies,
that results in more than a remote likelihood that a materia] misstatement of the [mancia]
statements will not be prevented or detected by the Agency's internal control.
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify aI]
deficiencies in internal control that might be significant deficiencies or materia] weaknesses.
We did not identify any deficiencies in internal control over [mancia] reporting that we
consider to be materia] weaknesses, as defined above. However, we noted other control
deficiencies that we have reported to management of the City of Chu]a Vista in a separate
letter dated December ]8, 2007 relating to both the City and the Agency.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the basic [mancia] statements of the
Agency are free of materia] misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
Such provisions include those provisions of laws and regulations identified in the Guide]ines
for Compliance Audits of California Redeve]opment Agencies issued by the State
Controller's Office, Division of Accounting and Reporting. However, providing an opinion
on compliance with those provisions was not an objective of our audit and, accordingly, we
do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
This report is intended for the information of the Board of Directors, management and others
within the Redeve]opment Agency of the City of Chu]a Vista and the State Controller's
Office, Division of Accounting and Reporting and is not intended to be and should not be
used by anyone other than these specified Parties... ... ... ~~. ........ "..
. ~A_~h_/. F;J ~.<:'-7d&:~c.
~~{~ .... -, ./
44
CITY OF CHULA VISTA
PUBLIC FINANCING AUTHORITY
Financial Statements and
Independent Auditors' Report
For the Year Ended June 30, 2007
I'fT7/1CI//Y!fNT L/
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORlTY
Financial Statements
For the Year Ended June 30, 2007
TABLE OF CONTENTS
Page
Independent Auditors' Report
1
Management's Discussion and Analysis (Unaudited)
3
Basic Financial Statements:
Statement of Net Assets
6
Statement of Activities
7
Balance Sheet - Governmental FUnds
8
Reconciliation of the Balance Sheet of
Governmental Funds to the Statement of Net Assets
10
Statement of Revenues, Expenditures and
Changes in Fund Balances - Governmental Funds
12
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
14
Notes to Financial Statements
15
Supplementary Information:
2000 Certificate of Participation Debt Service Fund - Budgetary
Comparison Schedule
2002 Certificate of Participation Debt Service Fund - Budgetary
Comparison Schedule
2003 Refunding Certificate of Participation Debt Service Fund -
Budgetary Comparison Schedule
2004 Certificate of Participation Debt Service Fund - Budgetary
Comparison Schedule
2006 Certificate of Participation Debt Service Fund - Budgetary
Comparison Schedule
26
27
28
29
30
Moreland & ~J #1W.
CERTIFIED PUBLIC ACCOUNTANTS
1201 DOVE SffiEET, SUITE 680
NEWPORT BEACH, CALIFORNIA 92660
570 RANCHEROS DRIVE, SUITE 260
SAN MARCOS, CA 92069
December 18, 2007
TELEPHONE (949) 221-0025
The Board of Directors of the
City of Chula Vista Public Financing Authority
Independent Auditors' Report
We have audited the accompanying financial statements of the governmental activities and each major fund
of the City ofChula Vista Public Financing Authority (Authority), a component unit of the City ofChula
Vista, California as of and for the year ended June 30, 2007, which collectively comprise the Authority's
basic fmancial statements as listed in the table of contents. These financial statements are the responsibility
of the Authority's management. Our responsibility is to express opinions on these fmancial 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 fmancial 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 examining, on a test basis, evidence supporting the amounts and
disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall fmancial 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 fmancial position of the governmental activities and each major fund of the Authority as of June
30, 2007, and the respective changes in fmancial position thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Governmental Auditing Standards. we have also issued our report dated December 18,
2007 on our consideration of Authority's internal control over fmancial reporting and our test of its
compliance with certain provisions of laws, regulations, contracts, 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 Governmental Auditing Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis is not a required part of the basic fmancial statements, but is
supplementary information required by the Governmental Accounting Standards Board. We have applied
certain limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Our audit was performed for the purpose of forming opinions on the financial statements that collectively
comprise the Authority's basic fmancial statements. The accompanying major fund budgetary comparison
schedules are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The major fund budgetary comparison schedules have been subjected to the auditing
procedures applied in the audit of the basic fmancial statements and, in our opinion, are fairly stated, in all
material respects in relation to the basic financial state~~ ~~ ~C.
t:::::"
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2
CITY OF CHULA VISTA - PUBLIC FINANCING AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
The discussion and analysis of the Public Financing Authority's (Authority) fmancial
performance provides an overall review of the Authority's financial activities for the fiscal
year ended June 30, 2007. The intent of this discussion and analysis is to look at the
Authority's fmancial performance as a whole. Readers should also review the basic financial
statements, as well as the prior year's report ending June 30, 2006, to enhance their
understanding of the Authority's fmancial performance.
The Authority was established by ordinance, pursuant to the City Charter and Constitution of
the State of California, as a public body, acting to facilitate serving the public purposes of the
City. The ordinance was adopted on April 4, 1995. The governing body of the Authority is
comprised of the consenting members of the City Council. The Authority is authorized to
borrow money for the purpose of fmancing the acquisition of bonds, notes and other
obligations of, or for the purpose of making loans to the City and/or to refmance outstanding
obligations of the City.
The fmancial section of this report has been prepared to show the results of the financial
administration, fmancial condition, and operation of the Authority. The combined fmancial
statements in this report have been audited by the firm of Moreland and Associates, Inc.
whose opinion is included in this report.
BASIS OF ACCOUNTING AND FUND GROUPINGS
The basic fmancial statements are presented on an "economic resources" measurement focus
and the accrual basis of accounting. Accordingly, all of the Authority's assets and liabilities,
including capital 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.
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 present increases (revenue and other fmancing
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 fmance expenditures of the current
period and expenditures are recorded in the period in which the liability was incurred. The
Authority maintains funds in accordance with generally accepted accounting principles set
forth by the GASB and other rule-making entities.
3
FINANCIAL DISCUSSION
Under the Governmental Fund statements, the Authority reported an excess of expenditures
- and other uses over revenues and other sources of $(-0.6) million, including transfers in and
out. The total fund balance at June 30, 2007 was $13.0 million, of which $13.0 million is
designated or reserved. Designations represent management's intended use of resources and
reflect actual plans approved by the City Council.
Total revenue for fiscal year 2007 was $10.1 million, of which 94% was capital lease
revenue with remaining revenue composed of interest earnings. Total expenditures for fiscal
year 2007 were $10.7 million. The expenditures were made up of $4.4 million for principal
payments and $6.3 million for interest and fiscal charges for long-term debt and $17,680 for
staff and administrative charges. For additional details refer to note III. C. in the notes to the
financial statements section of this report.
REQUEST FOR INFORMATION
This [mancial report is designed to provide our citizens, taxpayers, creditors and investors
with a general overview of the Authority's [mances and to show the City's accountability for
the money it receives. Questions concerning any of the information provided in this report or
requests for additional information should be addressed to the City of Chula Vista, Finance
Department, 276 Fourth Avenue, Chula Vista, CA 91910.
4
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5
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Statement of Net Assets
June 30, 2007
Governmental
Activities
Assets
Cash and investments
Receivables:
Interest
Leases
Restricted cash and investments
held by fiscal agents
$ 1,394,046
3,808
139,845,000
11 ,640,951
Total Assets
152,883,805
Liabilities
Interest payable
Unearned revenue
Noncurrent Liabilities:
Due within one year
Due in more than one year
2,344,176
139,845,000
4,800,000
135,045,000
Total Liabilities
282,034,176
Net Assets
Restricted for:
Debt service
(129,150,371)
Total Net Assets (Deficit)
$ (129,150,371)
See Accompanying Notes to Financial Statements.
6
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Statement of Activities
For the Year Ended June 30, 2007
Program
Revenues
Functions/Programs
Expenses
Charges for
Services
Governmental Activities:
General government
Public safety
Interest and fiscal charges
$ 11,058 $ 9,500,218 $
6,619
6,245,491
Total Governmental Activities
$ 6,263,168 $ 9,500,218
General revenues:
Investment earnings
Change in Net Assets
Net Assets (Deficit), Beginning of Year
Net Assets (Deficit), End of Year
See Accompanying Notes to Financial Statements.
7
Net (Expense)
Revenue and
Change in
Net Assets
Governmental
Activities
9,489,160
(6,619)
(6,245,491)
3,237,050
613,855
3,850,905
(133,001,276)
$ (129,150,371)
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Balance Sheet
Governmental Funds
June 30, 2007
Debt Service Funds
2003 Refunding
2000 Certificate 2002 Certificate Certificate of
of Participation of Participation Participation
Assets
Cash and investments $ 538,921 $ 552,837 $ 301,722
Receivables:
Interest 3,217
Capital lease 18,970,000 57,860,000 6,225,000
Restricted cash and investments
held by fiscal agents 2,206,342 4,066,452 1,132,005
Total Assets $ 21,715,263 $ 62,479,289 $ 7,661,944
Liabilities and Fund Balances
Liabilities:
Unearned revenues $ 18,970,000 $ 57,860,000 $ 6,225,000
Fund Balances:
Reserved for:
Debt service 2,745,263 4,619,289 1,436,944
Total Liabilities and Fund Balances $ 21,715,263 $ 62,479,289 $ 7,661,944
See Accompanying Notes to Financial Statements.
8
Debt Service Funds
2004 Certificate 2006 Certificate
of Participation of Participation Total
$ 566 $ 1,394,046
591 3,808
36,465,000 $ 20,325,000 139,845,000
2,522,423 1,713,729 11 ,640,951
$ 38,988,580 $ 22,038,729 $ 152,883,805
$ 36,465,000 $ 20,325,000 $ 139,845,000
2,523,580 1,713,729 13,038,805
$ 38,988,580 $ 22,038,729 $ 152,883,805
9
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2007
Fund balance for governmental funds:
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Interest payable on long-term debt does not require current fmancial
resources. Therefore, interest payable is not reported as a liability in
Governmental Funds Balance Sheet.
Long-term liabilities are not due and payable in the current period.
Therefore, they were not reported in the Governmental Funds Balance
Sheet. The long-term liabilities were adjusted as follows:
Long-term liabilities - due within one year
Long-term liabilities - due in more than one year
$ (4,800,000)
(135,045,000)
Net Assets of Governmental Activities
See Accompanying Notes to Financial Statements.
10
$ 13,038,805
(2,344,176)
(139,845,000)
$ (129,150,371)
This page has been left blank intentionally.
11
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2007
Debt Service Funds
2003 Refunding
2000 Certificate 2002 Certificate Certificate
of Participation of Participation of Participation
Revenues:
Capital lease revenues $ 2,051,668 $ 3,796,386 $ 1,430,588
Use of money and property 139,236 238,440 49,849
Total Revenues 2,190,904 4,034,826 1,480,437
Expenditures:
Current:
General government 3,750
Public safety 4,200 2,419
Debt service:
Principal 1,180,000 1,160,000 1,280,000
Interest and fiscal charges 940,750 2,749,546 186,480
Total Expenditures 2,124,500 3,913,746 1,468,899
Net Change in Fund Balances 66,404 121,080 11,538
Fund Balances, Beginning of Year 2,678,859 4,498,209 1,425,406
Fund Balances, End of Year $ 2,745,263 $ 4,619,289 $ 1,436,944
See accompanying notes to financial statements.
12
Debt Service Funds
2004 Certificate 2006 Certificate
of Participation of Participation Total
$ 2,221,576
144,838 $
$ 9,500,218
41,492 613,855
2,366,414
41,492
10,114,073
7,308 11,058
6,619
775,000 4,395,000
1,617,655 804,728 6,299,159
2,399,963 804,728 10,711,836
(33,549) (763,236) (597,763)
2,557,129 2,476,965 13,636,568
$ 2,523,580 $ 1,713,729 $ 13,038,805
13
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2007
Net change in fund balances - total governmental funds:
$
(597,763)
Amounts reported for governmental activities in the Statement of Activities
are different because:
Repayment of principal is an expenditure in Governmental Funds, but the
repayment reduces long-term liabilities in the Government-wide Statement
of Net Assets.
4,395,000
Interest expense and bond amortization costs on long-term debt are
reported in the Government-wide Statement of Activities, but they do not
require the use of current fInancial resources. Therefore, interest expense
and bond amortization costs are not reported as expenditures in
governmental funds. The following amount represents the change in
accrued interest and bond amortization costs from prior year.
53,668
Change in Net Assets of Governmental Activities
$ 3,850,905
See accompanying notes to fmancial statements.
14
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORlTY
Notes to Financial Statements
June 30, 2007
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the City of Chula
Vista Public Financing Authority (Authority):
A. Reporting Entity
The Authority was established by ordinance, pursuant to the City Charter and
Constitution of the State of California, as a public body, acting to facilitate serving the
public purposes of the City of Chula Vista (City). The ordinance was adopted on April
4, 1995. The governing body of the Authority is comprised of the members of City
Council. The Authority is authorized to borrow money for the purpose of financing the
acquisition of bonds, notes and other obligations of, or for the purpose of making loans
to the City and/or to refmance outstanding obligations of the City.
The Authority is an integral part of the reporting entity of the City ofChula Vista. The
basic fmancial statements of the Authority have been included within the basic fmancial
statements of the City because the City Council of the City of Chula Vista is the
governing board over the operations of the Authority.
B. Government-wide Financial Statements
The government-wide fmancial statements (i.e., the statement of net assets and the
statement of activities) report information on all of the activities of the Authority. For
the most part, the effect of the interfund activity has been removed from these
statements.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include charges for services and grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as
general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate colunms in the fund fmancial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
1. Basis of Accounting
The government-wide fmancial statements are reported using the economic
resources measurement focus and the accrual basis of accounting wherein
revenues are recorded when they are both earned and realized, regardless of
the timing of the related cash flows.
15
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
Governmental fund statements are reported using the modified accrual basis of
accounting wherein revenues are recognized as soon as they are both
measurable and available as a resource to fmance operations of the current
year. Expenditures are recorded when incurred except that interest on long-
term debt is recorded as an expenditure on its due date.
The financial statements have been prepared in accordance with generally
accepted accounting principles and necessarily include amounts based on
estimates and assumptions by management. Actual results could differ from
those amounts.
2. Description of funds
The Authority reports the following major governmental funds:
2000 Certificate of Participation Debt Service Fund is used to account for the
payment of interest on principal on long-term debt, and the accumulation of
resources thereof associated with the 2000 Certificates of Participation.
2002 Certificate of Participation Debt Service Fund is used to account for the
payment of interest on principal and long-term debt, and the accumulation of
resources thereof associated with the 2002 Certificates of Participation.
2003 Refunding Certificate of Participation Debt Service Fund is used to
account for the payment of interest on principal and long-term debt, and the
accumulation of resources thereof associated with the 2003 Refunding
Certificates of Participation.
2004 Certificate of Participation Debt Service Fund is used to account for the
payment of interest and principal on long-term debt, and the accumulation of
resources thereof associated with the 2004 Certificates of Participation.
2006 Certificate of Participation Debt Service Fund is used to account for the
payment of interest and principal on long-term debt, and the accumulation of
resources thereof associated with the 2006 Certificates of Participation.
II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Accounting
An armual budget is adopted by the Board of Directors prior to the first day of the fiscal
year. The budget process includes submittal of each department's budget request for
the next fiscal year, a detailed review of each department's proposed budget by the
16
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
Executive Director, and a fmal Executive Director recommended budget that is
transmitted to the Board of Directors for its review before the required date of adoption.
Once transmitted to the Board of Directors, the proposed budget is made available for
public inspection. A public hearing is held to give the public the opportunity to
comment upon the proposed budget. Notice of such public hearing is given in a
newspaper of general circulation.
The adoption of the budget is accomplished by the approval of a Budget Resolution.
The legal level of budgetary control is at the department level. Any budget
modification, which would result in an appropriation increase, requires Board of
Directors' approval. Reported budget figures are as originally adopted or subsequently
amended plus prior year continuing appropriations. Such budget amendments during
the year, including those related to supplemental appropriations, did not cause these
reported budgets amounts to be significantly different than the originally adopted
budget amounts. All appropriations which are not obligated, encumbered or expended
at the end of the fiscal year become a part of the unreserved fund balance which may be
appropriated for the next fiscal year.
An annual budget for the year ended June 30, 2007 was adopted and approved by the
Board of Directors for the debt service funds. These budgets are prepared on the
modified accrual basis of accounting except that encumbrances outstanding at year-end
are considered as expenditures.
Expenditures in Excess of Appropriations
The 2004 Certificate of Participation expenditures exceeded appropriations because
expenditures related to trustee charges were only estimated based on other Certificate of
Participation trustee fees.
III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
Cash and investments at June 30, 2007 consisted of the following:
Cash and investments pooled with the City
Cash and investments with fiscal agents
$ 1,394,046
11 ,640,951
Total Cash and Investments
$ 13,034,997
The Authority has pooled its cash and investments with the City in order to achieve a
higher return on investment. Certain restricted funds, which are held and invested by
independent outside custodians through contractual agreements, are not pooled. These
restricted funds include cash with fiscal agents.
17
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
The investments made by the Authority are limited to those allowable under State
statutes and include the following types of investments:
. U.S. Government Securities
. Bankers' Acceptances
. Commercial Paper
. Medium-Term Notes
. Repurchase Agreements
. Deposits with Banks
. State of California Local Agency Investment Fund
See the City's Comprehensive Annual Financial Report for disclosures related to cash
and investments and the related custodial risk categorization.
B. Leases Receivable and Unearned Revenue
The Authority has recorded leases receivable in the amount of $139,845,000 pursuant
to the lease agreement between the Authority and the City in relation to the bonded
indebtedness. The lease receivable along with investments held by fiscal agents secures
the repayment of the different debt issues. The lease revenue is equal to the Authority's
debt service requirements and is used for that purpose.
C. LONG-TERM OBLIGATIONS
A summary of the Authority's long-term debt transactions for the. year ended
June 30, 2007, is presented below.
Amounts
Balance Balance Due Within
Description July 1, 2006 Additions Retirements June 30, 2007 One Year
2000 COP, Series A $ 20,150,000 $ (1,180,000) $ 18,970,000 $ 1,235,000
2002 COP 59,020,000 (1,160,000) 57,860,000 1,200,000
2003 Refunding COP 7,505,000 (1,280,000) 6,225,000 1,140,000
2004 Civic Center COP 37,240,000 (775,000) 36,465,000 790,000
2006 Civic Center 2 COP 20,325,000 20,325,000 435,000
Total $ 144,240,000 $ $ (4,395,000) $ 139,845,000 $ 4,800,000
18
CITY OF ClIULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
2000 Certificates of Participation, Series A
In October 2000, the Authority issued $25,255,000 2000 Certificates of Participation,
Series A to improve the City's 800 Megahertz emergency communications system,
improve the City's Corporation Yard, fmance a reserve account for the certificates, and
pay the costs of issuance incurred in connection with the execution and delivery of the
certificates. The certificates mature in amounts ranging from 4.25% to 5.25%. The
certificates maturing after September 1, 2010, are subject to redemption at premiums
ranging from zero to 2%. The outstanding balance at June 30, 2007 is $18,970,000.
The armual debt service requirements for the 2000 Certificates of Participation
outstanding at June 30, 2007 were as follows:
June 30, Principal Interest Total
2008 $ 1,235,000 $ 887,922 $ 2,122,922
2009 1,025,000 838,484 1,863,484
2010 1,070,000 792,523 1,862,523
2011 1,120,000 744,343 1,864,343
2012 1,165,000 693,490 1,858,490
2013-2017 6,700,000 2,574,262 9,274,262
2018-2021 6,655,000 716,502 7,371,502
Total $ 18,970,000 $ 7,247,526 $ 26,217,526
19
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
2002 Certificates of Participation
In June 2002, the Authority issued its 2002 Certificates of Participation to provide
funds to construct the City's Police Headquarters, finance the reserve account of the
certificates, to capitalize interest during construction, and to pay the cost of issuance of
the certificates. The source of repayment of the Certificates is the lease payments to be
made by the City to the Authority. Interest is payable semiannually on February 1 and
August 1 at interest rates ranging from 3.0% to 5.0% commencing February I, 2003.
The Certificates mature in 2032 and principal is payable on August I each year
commencing August 1, 2005. As of June 30, 2007 the outstanding balance is
$57,860,000.
The annual debt service requirements for the 2002 Certificates of Participation
outstanding at June 30, 2007 w~re as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 1,200,000 $ 2,714,146 $ 3,914,146
2009 1,240,000 2,671,346 3,911,346
2010 1,290,000 2,620,746 3,910,746
2011 1,340,000 2,568,146 3,908,146
2012 1,400,000 2,513,346 3,913,346
2013-2017 7,960,000 11,634,127 19,594,127
2018-2022 10,020,000 9,616,840 19,636,840
2023-2027 12,890,000 6,807,250 19,697,250
2028-2032 16,650,000 3,133,750 19,783,750
2033 3,870,000 96,750 3,966,750
Total $ 57,860,000 $ 44,376,447 $ 102,236,447
20
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
2003 Refunding Certificates of Participation
In May 2003, the Authority issued its 2003 Refunding Certificates of Participation to
decrease the 1993 Certificates, reimburse the City for amounts it has advanced to
prepay the equipment lease, fmance a reserve account and pay for the cost of issuance
of the Certificates. The Certificates are to be repaid from lease payments made by the
City to the Authority for leasing certain property. Interest is payable semiannually on
March 1 and September 1 at interest rates ranging from 3.0% to 3.5% commencing
September 1, 2003. The Certificates mature in 2013 and principal is payable on
September 1 each year commencing September 1, 2003. As of June 30, 2007 the
outstanding balance is $6,225,000.
The annual debt service requirements for the 2003 Refunding Certificates of
Participation outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 1,140,000 $ 154,455 $ 1,294,455
2009 940,000 131,525 1,071,525
2010 940,000 109,905 1,049,905
2011 965,000 84,880 1,049,880
2012 990,000 56,273 1,046,273
2013-2014 1,250,000 28,288 1,278,288
Total $ 6,225,000 $ 565,326 $ 6,790,326
21
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
2004 Civic Center Project Phase I COP
In September 2004, the Authority issued its 2004 Certificates of Participation to
provide funding for the first phase of the reconstruction, renovation, and equipping of
the City's Civic Center Complex, to finance the reserve account of the certificates, to
capitalize interest during construction, and to pay the cost of issuance of the certificates.
The source of repayment of the Certificates is the lease payments to be made by the
City to the Authority. Interest is payable semiannually on March 1 and September 1 at
interest rates ranging from 2.0% to 4.5% commencing March 1, 2006. The Certificates
mature in 2034 and principal is payable on September 1 each year commencing
September 1,2006. As of June 30, 2007 the outstanding balance is $36,465,000.
The annual debt service requirements for the 2004 Certificates of Participation Civic
Center Project Phase I outstanding at June 30, 2007 were as follows:
Year Ending
June 30,
Principal
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
2033-2035
Total
$
790,000 $
810,000
830,000
855,000
885,000
4,940,000
6,025,000
7,470,000
9,410,000
4,450,000
36,465,000 $
$
22
Interest
1,602,155 $
1,583,393
1,561,118
1,536,218
1,507,361
7,022,931
5,943,970
4,493,388
2,555,275
336,500
28,142,309 $
Total
2,392,155
2,393,393
2,391,118
2,391,218
2,392,361
11 ,962,931
11,968,970
11,963,388
11,965,275
4,786,500
64,607,309
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
Notes to Financial Statements (Continued)
June 30, 2007
2006 Civic Center Project Phase 2 COP
In March 2006, the Authority issued its 2006 Certificates of Participation to provide
funds for the construction and equipping of certain improvements to the Civic Center
Complex of the City of Chu1a Vista and other existing City facilities, fund capitalized
interest, fund a reserve fund, and pay the costs incurred in connection with the
execution and delivery of the certificates. The source of repayment ofthe Certificates is
the lease payments to be made by the City to the Authority. Interest is payable
semiannually on March 1 and September 1 at interest rates ranging from 3.40% to
4.375% commencing September 1,2006. The Certificates mature in 2036 and principal
is payable on March 1 each year commencing March 1, 2008. As of June 30, 2007 the
outstanding balance is $20,325,000.
The annual debt service requirements for the 2006 Certificates of Participation Civic
Center Project Phase 2 outstanding at June 30, 2007 were as follows:
Year Ending
June 30, Principal Interest Total
2008 $ 435,000 $ 837,289 $ 1,272,289
2009 450,000 822,499 1,272,499
2010 465,000 807,199 1,272,199
2011 480,000 791,389 1,271,389
2012 495,000 775,069 1,270,069
2013-2017 2,750,000 3,600,479 6,350,479
2018-2022 3,315,000 3,034,506 6,349,506
2023-2027 3,895,000 2,289,984 6,184,984
2028-2032 4,075,000 1,447,813 5,522,813
2033-2036 3,965,000 456,075 4,421,075
Total $ 20,325,000 $ 14,862,302 $ 35,187,302
23
TIlls page has been left blank intentionally.
24
SUPPLEMENTARY INFORMA nON
25
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORlTY
2000 Certificate of Participation Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Capital lease revenues $ 2,120,750 $ 2,051,668 $ (69,082)
Use of money and property 139,236 139,236
Total Revenues 2,120,750 2,190,904 70,154
Expenditures:
Current:
General government 5,500 3,750 1,750
Debt service:
Principal 1,180,000 1,180,000
Interest and fiscal charges 940,750 940,750
Total Expenditures 2,126,250 2,124,500 1,750
Net Change in Fund Balance (5,500) 66,404 71,904
Fund Balance, Beginning of Year 2,678,859 2,678,859
Fund Balance, End of Year $ 2,673,359 $ 2,745,263 $ 71,904
26
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
2002 Certificate of Participation Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Capital lease revenues $ 3,909,546 $ 3,796,386 $ (113,160)
Use of money and property 238,440 238,440
Total Revenues 3,909,546 4,034,826 125,280
Expenditures:
Current:
Public safety 5,500 4,200 1,300
Debt service:
Principal 1,160,000 1,160,000
Interest and fiscal charges 2,749,546 2,749,546
Total Expenditures 3,915,046 3,913,746 1,300
Net Change in Fund Balance (5,500) 121,080 126,580
Fund Balance, Beginning of Year 4,498,209 4,498,209
Fund Balance, End of Year $ 4,492,709 $ 4,619,289 $ 126,580
27
CITY OF CIlliLA VISTA PUBLIC FINANCING AUTHORlTY
2003 Refunding Certificate of Participation Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Capital lease revenues $ 1,466,480 $ 1,430,588 $ (35,892)
Use of money and property 49,849 49,849
Total Revenues 1,466,480 1,480,437 13,957
Expenditures:
Current:
Public safety 5,300 2,419 2,881
Debt service:
Principal 1,280,000 1,280,000
Interest and fiscal charges 186,480 186,480
Total Expenditures 1,471,780 1,468,899 2,881
Net Change in Fund Balance (5,300) 11,538 16,838
Fund Balance, Beginning of Year 1,425,406 1,425,406
Fund Balance, End of Year $ 1,420,106 $ 1,436,944 $ 16,838
28
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
2004 Certificate of Participation Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (N egati ve )
Revenues:
Capital lease revenues $ 2,392,655 $ 2,221,576 $ (171,079)
Use of money and property 144,838 144,838
Total Revenues 2,392,655 2,366,414 (26,241 )
Expenditures:
Current:
General government 7,000 7,308 (308)
Debt service:
Principal 775,000 775,000
Interest and fiscal charges 1,617,655 1,617,655
Total Expenditures 2,399,655 2,399,963 (308)
Net Change in Fund Balance (7,000) (33,549) (26,549)
Fund Balance, Beginning of Year 2,557,129 2,557,129
Fund Balance, End of Year $ 2,550,129 $ 2,523,580 $ (26,549)
29
CITY OF CHULA VISTA PUBLIC FINANCING AUTHORITY
2006 Certificate of Participation Debt Service Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2007
Variance
Final Positive
Budget Actual (Negative)
Revenues:
Use of money and property $ 41,492 $ 41,492
Expenditures:
Debt service:
Interest and fiscal charges $ 804,728 804,728
Net Change in Fund Balance (804,728) (763,236) 41,492
Fund Balance, Beginning of Year 2,476,965 2,476,965
Fund Balance, End of Year $ 1,672,237 $ 1,713,729 $ 41,492
30