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HomeMy WebLinkAbout2009-01-13 - AGENDA REPORTS - ANNUAL FIN RPT (2)Agenda Item: 1 CITY OF SANTA CLARITA JOINT CITY COUNCIL / REDEVELOPMENT AGENCY AGENDA REPORT City Manager Approval: CONSENT CALENDAR Item to be presented by: Darren Hernandez J DATE: January 13, 2009 SUBJECT: JUNE 30, 2008 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND AUDIT COMMITTEE LETTER DEPARTMENT: Administrative Services RECOMMENDED ACTION City Council and Redevelopment Agency approve: 1. The Component Unit Financial Statements and the Redevelopment Agency State Controller Report for fiscal year ending June 30, 2008. 2. The Comprehensive Annual Financial Report (CAFR) and Audit Committee Letter for fiscal year ending June 30, 2008. BACKGROUND The City's independent audit firm, Diehl, Evans and Company, has completed the City's and Agency's annual audit for fiscal year ending June 30, 2008. Diehl, Evans and Company conducted the audit in accordance with generally accepted auditing standards, whereby an audit plan was prepared and followed to obtain reasonable assurance the City's and Agency's financial statements were free from material misstatements. The audit included a review, on a test basis, of documents supporting the amounts and disclosures in the financial statements. The audit also included assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. No significant findings were noted as a result of the audit. QnooQD 2.: L� Based on the audit performed, Diehl, Evans and Company issued an unqualified audit opinion letter. The opinion reflects the best level an organization can receive on its financial statements. The letter is identified as the "Independent Auditor's Report" in the City's CAFR for fiscal year ending June 30, 2008. In accordance with professional standards, an Audit Committee Letter has been prepared by Diehl, Evans and Company to provide specific information related to the audit scope and performance. No items of concern were noted by the auditors. ALTERNATIVE ACTIONS No feasible alternative action has been identified by staff. FISCAL IMPACT None. ATTACHMENTS Comprehensive Annual Financial Reports available in the City Clerk's Reading File Audit Committee Letter available in the City Clerk's Reading File Component Unit Financial Statements - RDA available in the City Clerk's Reading File Redevelopment Agency State Controller Report available in the City Clerk's Reading File City of SANTA C LARITA California Comprehensive Annual Financial Report Fiscal Year Ended - June 30, 2008 f -V8 Y - santa-claritaxam CITY OF SANTA CLARITA (CALIFORNIA) COMPREHENSIVE ANNUAL FINANCIAL REPORT WITH REPORT ON AUDIT BYINDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 2008 PREPARED BY THE ADMINISTRATIVE SERVICES DEPARTMENT CITY OF SANTA CLARITA, CALIFORNIA 2 ti A O O c n ti O N m O 2 INTRODUCTORY SECTION CITY OF SANTA CLARITA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS June 30, 2008 FINANCIAL SECTION: Independent Auditors' Report l - 2 Management's Discussion and Analysis 3 -15 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 17 Statement of Activities 18-19 Fund Financial Statements: Governmental Funds: Balance Sheet 20-21 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 23 Statement of Revenues, Expenditures and Changes in Fund Balances 24-25 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 26 Proprietary Funds: Statement of Net Assets 27 Statement of Revenues, Expenses and Changes in Fund Net Assets 28 Statement of Cash Flows 29-30 Fiduciary Funds: Statement of Fiduciary Assets and Liabilities 31 Notes to Basic Financial Statements 33-71 Page Number INTRODUCTORY SECTION: Table of Contents i - iv Letter of Transmittal v - xi GFOA Certificate of Achievement for Excellence in Financial Reporting xii Officials of the City of Santa Clarita xiii Organizational Chart xiv Map of the City xv FINANCIAL SECTION: Independent Auditors' Report l - 2 Management's Discussion and Analysis 3 -15 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 17 Statement of Activities 18-19 Fund Financial Statements: Governmental Funds: Balance Sheet 20-21 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 23 Statement of Revenues, Expenditures and Changes in Fund Balances 24-25 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 26 Proprietary Funds: Statement of Net Assets 27 Statement of Revenues, Expenses and Changes in Fund Net Assets 28 Statement of Cash Flows 29-30 Fiduciary Funds: Statement of Fiduciary Assets and Liabilities 31 Notes to Basic Financial Statements 33-71 CITY OF SANTA CLARITA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS (CONTINUED) June 30, 2008 Page Number REQUIRED SUPPLEMENTARY INFORMATION: 73 Budgetary Comparison Schedules: General Fund 74 Bridge and Thoroughfare Special Revenue Fund 75 Developer Fees Special Revenue Fund 76 Open Space Preservation District Special Revenue Fund 77 Note to Required Supplementary Information 78 SUPPLEMENTARY INFORMATION: Other Governmental Funds: 79-81 Combining Balance Sheet 82-87 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 88-93 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Bikeway Special Revenue Fund 94 Gas Tax Special Revenue Fund 95 Park Improvement Special Revenue Fund 96 Proposition A Special Revenue Fund 97 Special Assessment Special Revenue Fund 98 State Park Special Revenue Fund 99 TDA Special Revenue Fund 100 Traffic Safety Special Revenue Fund 101 CDGB Special Revenue Fund 102 AQMD Special Revenue Fund 103 Aid to Cities Special Revenue Fund 104 Landscape Maintenance District #1 Special Revenue Fund 105 Stormwater Utility Special Revenue Fund 106 Miscellaneous Grants Special Revenue Fund 107 BJA Law Enforcement Special Revenue Fund 108 Supplemental Law Grant Special Revenue Fund 109 HOME Special Revenue Fund 110 Library Facility Fees Special Revenue Fund 111 Proposition C Special Revenue Fund 112 Federal Grants Special Revenue Fund 113 General Capital Projects Fund 114 Redevelopment Agency Low/Mod Capital Projects Fund 115 Public Financing Authority Capital Projects Fund 116 Redevelopment Agency Capital Projects Fund - Major Fund 117 CITY OF SANTA CLARITA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS (CONTINUED) June 30, 2008 Fiduciary Funds: 127 Combining Statement of Fiduciary Assets and Liabilities 128 Schedule of Changes in Fiduciary Assets and Liabilities - All Agency Funds 129-130 Capital Assets Used in the Operation of Governmental Funds: 131 Comparative Schedules by Source 132 Schedule by Function 133 Schedule of Changes by Function 134 STATISTICAL SECTION (UNAUDITED): Description of Statistical Section Contents 135 Financial Trends: Net Assets by Component - Last Six Fiscal Years 137 Changes in Net Assets - Expenses and Program Revenues - Last Six Fiscal Years 138 Changes in Net Assets - General Revenues - Last Six Fiscal Years 139 Fund Balances of Governmental Funds - Last Ten Fiscal Years 140-141 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 142-143 Revenue Capacity: Assessed Valuation and Actual Value of Taxable Property - City Last Ten Fiscal Years 144-145 Assessed Valuation and Actual Value of Taxable Property - Redevelopment Agency - Last Ten Fiscal Years 146-147 Assessed Value - Taxable Property by Category - Last Ten Fiscal Years 148-149 Assessed Value - Use Category Summary - Current Fiscal Year 150 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 151 Direct and Overlapping Property Tax Rates - Current Fiscal Year 152 Principal Property Taxpayers - Current Fiscal Year and Two Fiscal Years Ago 153 Property Tax Levies, Collections and Delinquency - Last Ten Fiscal Years 155 Page Number SUPPLEMENTARY INFORMATION (CONTINUED): Internal Service Funds: 119 Combining Statement of Net Assets 120-121 Combining Statement of Revenue, Expenses and Changes in Net Assets 122-123 Combining Statement of Cash Flows 124-125 Fiduciary Funds: 127 Combining Statement of Fiduciary Assets and Liabilities 128 Schedule of Changes in Fiduciary Assets and Liabilities - All Agency Funds 129-130 Capital Assets Used in the Operation of Governmental Funds: 131 Comparative Schedules by Source 132 Schedule by Function 133 Schedule of Changes by Function 134 STATISTICAL SECTION (UNAUDITED): Description of Statistical Section Contents 135 Financial Trends: Net Assets by Component - Last Six Fiscal Years 137 Changes in Net Assets - Expenses and Program Revenues - Last Six Fiscal Years 138 Changes in Net Assets - General Revenues - Last Six Fiscal Years 139 Fund Balances of Governmental Funds - Last Ten Fiscal Years 140-141 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 142-143 Revenue Capacity: Assessed Valuation and Actual Value of Taxable Property - City Last Ten Fiscal Years 144-145 Assessed Valuation and Actual Value of Taxable Property - Redevelopment Agency - Last Ten Fiscal Years 146-147 Assessed Value - Taxable Property by Category - Last Ten Fiscal Years 148-149 Assessed Value - Use Category Summary - Current Fiscal Year 150 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 151 Direct and Overlapping Property Tax Rates - Current Fiscal Year 152 Principal Property Taxpayers - Current Fiscal Year and Two Fiscal Years Ago 153 Property Tax Levies, Collections and Delinquency - Last Ten Fiscal Years 155 CITY OF SANTA CLARITA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS (CONTINUED) June 30, 2008 Page Number STATISTICAL SECTION (UNAUDITED) (CONTINUED): Debt Capacity: Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 156- 157 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years 158 Direct and Overlapping Debt 159 Legal Debt Margin Information - Last Ten Fiscal Years 160-161 Pledged Revenue Coverage: Transit - Last Ten Fiscal Years 162 Demographic and Economic Information: Demographic and Economic Statistics - Last Ten Calendar Years 163 Principal Employers - Current Fiscal Year and Three Fiscal Years Ago 164 Operating Information: Full -Time and Part -Time City Employees by Function - Last Ten Fiscal Years 165 Operating Indicators by Function - Last Ten Fiscal Years 166-167 Capital Asset Statistics by Function - Last Ten Fiscal Years 168 -iv- City of SANTA CLARITA 23920 Valencia Boulevard a Suite 300 • Santa Clarita, California 91335-21% Phone: (661) 259-2489 • FAX: (661) 259-8125 tutow. mnta-clarira.com December 15, 2008 Honorable Mayor, Mayor Pro -Tem, and City Councilmembers: w The Comprehensive Annual Financial Report (CAFR) of the City of Santa Clarita for • fiscal year ended June 30, 2008, is hereby submitted, in accordance with Chapter 2.12 of the City of Santa Clarita Municipal Code. The intent of the report is to provide the City Council and the public with an understanding of the financial condition of the City of Santa Clarita as of June 30, 2008. The report consists of management's representations concerning the finances of the City of Santa Clarita. As such, management assumes full responsibility for the completeness and reliability of the information contained in the report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive framework of internal controls that is designed to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City of Santa Clarita_ State Law requires the City to prepare an annual financial report. The report fulfills that obligation. Diehl, Evans, & Company, LLP, an independent firm of certified public accountants, has issued an unqualified ("clean") opinion on the City of Santa Clarita's financial statements for the year ended June 30, 2008. The independent auditor's report is located at the front of the financial section of the report. The CAFR has been prepared in conformity with generally accepted accounting principles (GAAP) and with the financial reporting requirements prescribed by the Governmental Accounting Standards Board (GASB). The reporting requirements specify that management provide a narrative introduction, overview, and analysis to accompany the financial statements in the form of a Management's Discussion and Analysis (MD&A). The MD&A, which immediately follows the independent auditor's report, complements the letter of transmittal and should be read in conjunction with it. -v- Also, as a recipient of federal and state financial assistance, the City is required to have a "Single Audit" performed by our independent audit firm. The Single Audit was designed to meet the special needs of the federal grantor agencies. The standards governing the Single Audit engagements require that the independent auditor report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. The reports are available in the City's separately issued Single Audit Report. City Profile The City of Santa Clarita is celebrating over 20 years of success. Officially incorporated on December 15, 1987, as a General Law City, the City operates under a City Council/City Manager form of government. Located 35 miles northwest of downtown Los Angeles and 40 miles east of the Pacific Ocean, between Interstate 5 and State Highway 14, Santa Clarita forms an inverted triangle with the Santa Susana and San Gabriel mountain ranges. Encompassing the communities of Canyon Country, Newhall, Saugus, and Valencia, Santa Clarita covers approximately 52 square miles. With a population of over 177,000, the City is the 24ffi largest city in the State of California. Santa Clarita has consistently ranked in the top five safest cities in the United States. Santa Clarita residents enjoy an expansive year-round parks and recreation network, featuring 20 beautiful parks totaling 250 acres and more than 60 miles of picturesque trails and paseos designed for commuting and recreational use, including walking, riding, jogging, and skating. With its unique blend of rural, old west heritage, and urban sophistication, this fast-growing City has established an enviable balance between quality living and growth. Santa Clarita was selected as a host city for the Amgen Tour of California, a world-class cycling event. The Amgen Tour of California is known as the "West Coast version of the Tour de France." In 2009, Santa Clarita will serve as a Tour of California host city for the third year in a row. The City of Santa Clarita's five City Councilmembers are elected at large to four-year overlapping terms, with elections held bi-annually. The position of Mayor is selected from among the Councilmembers. The governing Council is responsible for passing ordinances, adopting the budget, setting policy, and appointing committees. The City Council appoints the City Manager, who is responsible for carrying out the policies and ordinances of the Council, overseeing the day-to-day operations of the government, and appointing the various Department Heads. The City Council also appoints the City Attorney. The City provides, either directly or under contract, a full range of municipal services including public safety, construction, maintenance of streets and other infrastructure, public works, parks and recreation, community development, and cultural events. The City also provides services through the Santa Clarita Redevelopment Agency (RDA) and the Santa Clarita Public Financing Authority (PFA), which are blended component units liAM • • • • • of the City of Santa Clarita. The financial activities of these entities are included on this • report as their activities are under the control of the City. Separate component unit reports for each entity are also available. • • The City operates on a fiscal year basis, which begins July 1 and ends June 30. The • City's Municipal Code requires the City Manager to prepare a budget and present it to the City Council each year. The budget process begins by January of each year and is carried • out under the direction of the City Manager in cooperation with the various City • departments. The proposed operating and capital budget is submitted by the City • Manager to City Council for adoption by June 30, to take effect at the beginning of the • fiscal year on July 1. Budgetary control for the City is maintained through its accounting systems. Once adopted, the budget may be amended throughout the year as necessary. • Budgetary control is established at the function or program level within each fund. • Local Economy • Located north Los Angeles County, the City of Santa Clarita enjoys a prime position as • one of Southern California's most sought-after places to live and to do business. City - officials pride themselves on the organization's ability to balance the needs of locally - based companies with those of the community, resulting in an unmatched quality of life • that is quintessentially California. • • The instability of national and world financial markets in the last fiscal year heightened • awareness of City programs and budgets throughout the state. Santa Clarita is proud to share Fiscal Year 07-08 was successful and stable for the City. • • Santa Clarita boasts one of the lowest unemployment rates in Los Angeles County at 4.9 • percent, compared to 7.9 for Los Angeles County and 7.6 percent for the state of California, as of June 30, 2008. Targeted employment sectors in Santa Clarita include • aerospace, biotechnology, entertainment, and technology. Several noted and • internationally recognized brands opened new operation centers or expanded existing • facilities in the last year, including Boston Scientific, Bioness, Princess Cruises, and Pharmavite. • • The City's entertainment industry enjoyed many successes in the year, with FY 07-08 • resulting in an economic impact of nearly $20 million to local businesses from location filming alone. Santa Clarita is home to more than 20 sounds stages and 10 movie ranches • and hundreds of film -related businesses. Five network television shows, including • HBO's "Big Love," CBS's "The Unit" and "NCIS," and NBC's "Knight Rider," base in • Santa Clarita and regularly film on location in the City. • Tourism continues to be one of the City of Santa Clarita's largest economic generators, • contributing more than $1.6 million to the general fund from Transient Occupancy Tax • (TOT). Two new hotels opened within the City in 2007, including the 157 -room Embassy Suites and the 140 -room Courtyard by Marriott, both conveniently located off • Interstate 5 and Highway 126. Attraction of regional and national sports tourism events, • like the AT&T Champions Classic, Amgen Tour of California, and the 2009 Western • • - vii - • States Police & Fire Game, generates additional visitors in Santa Clarita and increased revenue for the City and its businesses. The California Association for Local Economic Developers (CALED) recognized the City's Tourism program, specifically the more than $10 million in economic benefit in 2007 as a result of tourism and the unique public- private partnership of the Santa Clarita Valley Tourism Bureau, as the "best economic development program in the state" in 2008. This was the second consecutive year the City of Santa Clarita was recognized with this honor, with the City's Film Office taking home the same award in 2007 in recognition of the City's efforts to attract and retain the entertainment industry and filming. Also this year, the League of California Cities recognized the City of Santa Clarita's Film and Tourism Programs as effective economic development efforts as part of the organization's prestigious 2008 Helen Putnam Awards. Both programs were showcased at the organization's annual conference in September and touted as successful effort to not only retain but grow targeted industries in an effort to enhance economic stability. The City of Santa Clarita has developed and is implementing programs to help existing businesses succeed while also initiating programming designed to grow targeted business sectors in the coming years. Los Angeles Economic Development Corporation (LAEDC) recently named the City of Santa Clarita the most business -friendly City in the county. Santa Clarita was named one of the Top 25 City Retail Markets in California by the California Retail Survey for the second consecutive year, and new retail centers such as Bridgeport Marketplace and Plaza at Golden Valley are anchored with strong retailers such as Bristol Farms, Lowe's, Kohl's, and Target. The City's continued control of expenditure growth is a key factor in maintaining the City's strong financial position. In 2007, the City of Santa Clarita became one of California's 42 State Enterprise Zones, which provides tax incentives to businesses located within the zone. The Santa Clarita Enterprise Zone encompasses 97 percent of all commercial and industrial -zoned property in the City, includes existing and proposed development areas, and has proven to be a powerful business attraction and retention tool. To date, Santa Clarita Enterprise Zone staff have issued over 250 employee vouchers to businesses in Santa Clarita as part of the Enterprise Zone program, potentially saving local employers over $9 million as a result of tax credits. Santa Clarita recognizes the important role education plays in the success of the community. The City is home to three premier colleges, including California Institute of the Arts (CalArts), College of the Canyons, and the Masters College, all of which offer world-class instruction and programming that prepares students to become the next generation of business professionals and leaders. Santa Clarita was recently named one of the best communities for young people by America's Promise, the nation's largest private -public partnership. Long -Term Financial Planning Santa Clarita's well-planned community is home to more than 177,000 residents and is consistently ranked one of California's model cities, boasting the essential elements needed for well-balanced living and total well-being. Santa Clarita ranks as one of the top five safest cities in Los Angeles County and one of the top 15 safest cities in the United States, among cities with populations exceeding 150,000. Santa Clarita is home to a well-educated population, with more than 61 percent of adults over age 25 and older having attained some college or higher, as compared to Los Angeles County, which averages 43 percent. The City of Santa Clarita has experienced continuous growth since its inception in 1987 and City officials work directly with the private and public sectors to attract new businesses to the Santa Clarita Valley. The City of Santa Clarita is focused on retaining existing companies and encouraging their growth within the City, while working to attract new business, thereby creating new jobs for residents. Santa Clarita has set an aggressive goal of creating two jobs for every household, providing increased opportunities for residents to work close to home. The continued increase in business development, land area, and demographic growth have directly affected the City's revenue growth, producing overall increases in property tax revenues, property tax in -lieu of Vehicle License Fee (VLF), sales tax, and TOT for the five-year period ending June 30, 2008. Millions 35 30 25 20 0 MaJor Tax Revenues 2003-04 2004-05 2005-00 2006-07 2007-08 Fiscal Year F1 ■ Property Taxes ❑ VLF Transient Occupancy Taxes ■ Real Property Transft Tax The City provides necessary funding for essential services for City Council and community identified priorities, while taking steps to ensure the City remains in good financial health. Annually, the City prepares extended forecasts for the General Fund to determine the future impact of current actions. These forecasts indicate a flat or stable General Fund over the next few years, primarily due to projected decreases in sales, property taxes, and property taxes in lieu of VLF. However, because the City of Santa Clarita has practiced smart growth in successful times, the City is well prepared for these times when revenue projections do not include growth. The City maintains a General Fund balance sufficient to provide for various identified contingencies, as well as an established operating reserve. In addition, the General Fund contributes annually to the City's facilities replacement fund, which provides for major maintenance and replacement of infrastructure and capital improvements. The City's Capital Improvement Program (CIP) is a component of the annual budget process that addresses the City's short- and long-term capital needs. Just as important, the CIP emphasizes a plan of action that effectively maintains the existing infrastructure to a sound physical standard, as well as providing new facilities to support current growth and complement new development. Maior Milestones in Fiscal Year 2007-2008 ❖ Santa Clarita was awarded the prestigious Grand Prize for "Best Economic Development Program" in the State of California, in 2007 and 2008. The award recognizes outstanding and innovative programs which have made a significant contribution to the field of economic development. The 2007 award was given for the City's Film program, while 2008 was bestowed with the award for Tourism. •3 Governor Schwarzenegger announced that Santa Clarita would receive an Enterprise Zone designation in 2007. This designation is significant in that it enhances our efforts to attract business to the City, particularly the Downtown Newhall area, and will continue Santa Clarita's reputation as one of the premier cities in California for doing business. ❖ For the success the City of Santa Clarita has seen in its final phase of the Sign Compliance Program, the American Planning Association, Los Angeles (LA -APA) has recognized the City with an Award of Merit in the category of Planning Excellence in Implementation. ❖ The $4.5 million Todd Longshore Park opened in conjunction with the City's 20th anniversary celebration in 2007. The 32 -acre park offers breathtaking views, modem amenities, and open space preservation to honor the legacy of one of Santa Clarita's most ardent supporters and dedicated commissioners of Parks and Recreation. ❖ City named one of the 100 Best communities for Young People by America's Promise Alliance. Awards and Acknowledgments The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Santa Clarita for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2007. This was the 19th consecutive year the City achieved the -x- • prestigious award. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy GAAP and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the requirements of the GFOA Certificate of Achievement Program, and we are submitting it to GFOA to determine its eligibility for another certificate. The report is a joint effort by many people from many different areas of responsibility. The preparation of the report could not have been accomplished without the hard work and team effort of the Finance Division. I would like to express my appreciation to all members of the Division who assisted and contributed to its preparation. I would also like to thank the Mayor, Mayor Pro -Tem, Councilmembers, City Manager Ken Pulskamp, Assistant City Manager Ken Striplin, Director of Public Works Robert Newman, Director of Parks, Recreation and Community Services Rick Gould, and Director of Community Services Paul Brotzman, for their continuing efforts in administering the financial operations of the City in a conservative and responsible manner. Sincerely, Darren Hernandez Deputy City Manager & Director of Administrative Services DH:CM:hds p \816 PBC Ta atal later 08 12 12 09 dac Certificate of Achievement for Excellence in Financial Reporting Presented to City of Santa Clarita California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2007 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. 4 Ohf Z President Executive Director OFFICIALS OF THE CITY OF SANTA CLARITA As of June 30, 2008 City Council Bob Kellar MAYOR Frank Ferry MAYOR PRO TEM Laurie Ender COUNCILMEMBER Marsha McLean COUNCILMEMBER Laurene Weste COUNCILMEMBER City Officials Ken Pulskamp CITY MANAGER Ken Striplin ASSISTANT CITY MANAGER Carl Newton CITY ATTORNEY Paul Brotzman DIRECTOR OF COMMUNITY DEVELOPMENT Richard Gould DIRECTOR OF PARKS, RECREATION & COMMUNITY SERVICES Darren Hernandez DEPUTY CITY MANAGER AND DIRECTOR OF ADMINISTRATIVE SERVICES Robert Newman DIRECTOR OF PUBLIC WORKS/CITY ENGINEER E N U U xiv - F o ° � v E c o N G Op C U U U U v U U, u oo m o0 E N 0 9 U xG o oU � w N U U xiv - `c U U N G Op C U U U U v U U, u oo m o0 E _y 0 9 U _ O > L oU � r `c U G G Lx. N v U U N r x U � Y U VJ ^> o0 0 _y F _ O > L oU � O U s a cn d E^ LL) O T 7 v U E v � o U U G G Lx. N v U N U Y U VJ _ N W _y A _ O > L , —f O U s a cn d E^ xv - Y , FINANCIAL SECTION • DIEHL, EVANS & COMPANY, LLP © CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS • • A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS MICHAEL R LUDIN. CPA CRAIG W. SPEAKER. CPP NRM P. PATEL CPA . ROBERT. HOLT ANAN.CPA 'PHILIP H. MP. CPA 5 CORPORATE PARK, SUITE 100 'THOMAS M. R CPA M. PEXL • IRVINE, CALIFORNIA 92606-5165 C OEDER. 'HARVEY J. SCHROEDER CPA (949) 399-0600 • FAX (949) 399-0610 KENNETH R AMES. CPA • w .diehlevans.com -WILLIAM C. PENT? CPA p December 11, 2008 'APROTESSIONALCORPORATION • • • INDEPENDENT AUDITORS' REPORT • • • The Honorable Mayor and Members of City Council • City of Santa Clarita • Santa Clarita, California • We have audited the accompanying financial statements of the governmental activities, the business -type activity, each major fund, and the aggregate remaining fund information of the City of Santa Clarita, California, as of and for the year ended June 30, 2008, 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 Santa Clarita'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 Auditine 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 r respective financial position of the governmental activities, the business -type activity, each major fund, • and the aggregate remaining fund information of the City of Santa Clarita, California, as of • June 30, 2008, 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. • L OTHER OFFICES AT: -I- 2%5 ROOSEVELT STREET 613 W. VALLEY PARKWAY. SUITE 330 CARLSBAD, CALIFORNIA 92008-2389 ESCONDIDO. CALIFORNIA 92025-2598 (760)729-2343 • FAX (760)729-2234 (760)741-3141 - FAX(760)741-9890 In accordance with Government Auditine Standards, we have also issued our report dated December 11, 2008 on our consideration of the City of Santa Clarita, California'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 Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and the budgetary comparison schedules, identified in the accompanying table of contents, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures to the management's discussion and analysis, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this required supplementary information. However, we did not audit the management's discussion and analysis and express no opinion on it. The budgetary comparison schedules and related note 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. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Santa Clarita, California's basic financial statements. The introductory section, supplementary information section and statistical section as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplementary information section has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory 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. -2- City of SANTA CLARITA 23920 Valencia Boulevard • Suite 300 • Santa Claita, California 91355-21% Phone: (661) 259-2489 • FAX: (661) 259-8125 tuanu.santa-clarita. com MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Year Ended June 30, 2008 This discussion and analysis of the City of Santa Clarita's financial performance provides an overview of the financial activities of the City of Santa Clarita (City) for the fiscal year ended June 30, 2008. Our analysis includes information regarding the City's overall financial position and results of operations to assist users in evaluating the City's financial position, a discussion of significant changes that occurred in funds, and information regarding significant budget variances. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of currently known facts, decisions, and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the accompanying transmittal letter, the basic financial statements and the accompanying notes to those financial statements. FINANCIAL HIGHLIGHTS • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $912.7 million. Of this amount, $51.8 million represents unrestricted net assets that may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total net assets increased by 5.4%, primarily as a result of the increase in capital assets. Net assets of the business -type activities increased by $2.7 million, or 4.2%, and net assets of the governmental activities increased by $44.1 million, or 5.5%. • The capital assets of the City's governmental activities increased by $29.3 million or 4.2% over last fiscal year. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $168.6 million. This represents an increase of $58.6 million as compared to the prior year. See independent auditors report. -3- The financial statements presented herein include all of the activities of the City of Santa Clarita and its component units using the integrated approach as prescribed by GASB Statement No. 34. The three components of the basic financial statements are as follows: 1) Government -Wide Financial Statements The Government -Wide Financial Statements present the financial picture of the City from the economic resources. measurement focus using the accrual basis of accounting in a manner similar to a private -sector business. These statements include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). 2) Fund Financial Statements The Fund Financial Statements include statements for each of the three categories of activities: governmental, proprietary and fiduciary. For governmental activities, these fund statements tell how these services were financed in the short term, as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government -wide statements by providing information about the City's most significant funds and other funds. 3) Notes to the Basic Financial Statements The notes provide additional information necessary to enable the user to fully understand the various financial statements. In addition to the basic financial statements and notes, this report contains other supplementary information. REPORTING THE CITY AS A WHOLE — GOVERNMENT -WIDE FINANCIAL STATEMENTS The Statement of Net Assets and the Statement of Activities One of the most important questions asked about the City's finances is, "Is the City as a whole better or worse off as a result of the year's activities?" The Statement of Net Assets and the Statement of Activities report information about the City as a whole, and its activities, in a way to answer this question. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid. The statement of net assets reports all of the City's assets and liabilities, with the difference between the two reported as net assets. Net assets are one way to measure the City's financial health or financial position. Over time, increases or decreases in the City's net assets are an indication of whether its financial health is improving or deteriorating. Other things to consider are non-financial factors, such as changes in the economy due to external factors that would cause an increase or decrease in consumer spending. The statement of activities presents information relating to how the City's net assets changed during the fiscal year. All activities resulting in changes in net assets are reported when earned or incurred, regardless of the receipt or disbursement of the related transaction's cash flows. Some of the revenues and expenses reported in this statement will result in future fiscal period cash flows, such as the receipt of uncollected taxes and the payment of interest expense or compensated absences. See independent auditors report. • The Statement of Net Assets and the Statement of Activities (Continued) In the Statement of Net Assets and the Statement of Activities, we separate the City Activities as follows: * Governmental Activities — Most of the City's basic services are reported in this category, including general administration (City Manager, City Clerk, Finance, etc.), public safety, public works, parks and recreation, community services, economic development, planning, and engineering. These activities are distinguished due to the use of property taxes, sales tax, transient occupancy tax, user fees, interest • income, franchise fees, state and federal grants, contributions from other agencies, and other revenues « to finance these activities. Business -Type Activities — City functions that are intended to be primarily self-supporting through the imposition of user fees and charges are reported in the business -type activity category. Business -type activities for the City consist of transit activities related to the operation of the City's local public transportation system. Component Unit Activities — The City of Santa Clarita is the primary government unit to two legally separate entities. The financial activity and data of the Santa Clarita Public Financing Authority and the Redevelopment Agency of the City of Santa Clarita have been accounted for within the funds of the City, and therefore separate component unit financial information is not presented within the financial statements. • REPORTING THE CITY'S MOST SIGNIFICANT FUNDS — FUND FINANCIAL STATEMENTS A fund is a grouping of related accounts used to account for and accumulate financial information related to a specific activity or objective. Some funds are required to be established by State law and bond covenants; however, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The fund financial statements provide detailed information about the most significant funds and other. funds — not the City as a whole. The City's three types of funds are • governmental, proprietary, and fiduciary. 49 Governmental Funds — Most of the City's basic services are reported in governmental funds. 6 Governmental funds financial statements focus on how money flows in and out of those funds and the 0 balances left at year-end that are available for spending. These funds are reported using an accounting 46 method called "modified accrual" accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. Because the focus of the governmental funds is narrower than that of the government -:wide financial statements, it is useful to compare the information S presented for the governmental funds with similar information presented for the governmental r activities in the government -wide financial statements. Reconciliation of the Fund Financial Statements to the Government -Wide Financial Statements are provided to explain the differences - created by this integrated approach. w See independent auditors report. -5- Governmental Funds (Continued) The City reports governmental fund financial information within 33 governmental funds. The general fund, bridge and thoroughfare special revenue fund, developer fees special revenue fund, open space preservation district special revenue fund, debt service -redevelopment agency fund, and capital projects -redevelopment agency fund, and are presented separately as major funds in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances. Financial data for the remaining 27 governmental funds are combined into a single, aggregated presentation. Supporting financial information on each of the other governmental funds are also provided within the report. Proprietary Funds —The City maintains two different types of proprietary funds. When the City charges customers for the services it provides, these services are generally reported in a type of proprietary fund known as an enterprise fund. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statement, but the proprietary fund statements provide more detail and additional information, such as a statement of cash flows. The City uses the transit enterprise fund to account for the activities related to transit operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses four internal service funds to account for costs related to self-insurance, computer replacement, vehicle replacement, and public facilities replacement. Proprietary funds are reported in the same way all activities are reported in the Statement of Net Assets and the Statement of Activities. The proprietary fund financial statements provide separate information for the transit enterprise fund, which is considered to be a major fund of the City. All of the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report. THE CITY AS TRUSTEE — FIDUCIARY FUND STATEMENTS Reporting the City's Fiduciary Responsibilities The City is the trustee, or fiduciary, for certain funds held for the benefit of other parties outside of the City. The City's fiduciary activities are reported in separate Statements of Fiduciary Assets and Liabilities. These activities were excluded from the City's other financial statements, because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. NOTES TO THE BASIC FINANCIAL STATEMENTS The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. OTHER INFORMATION In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the comparison of budget and actual results for the major governmental funds. Required supplementary information can be located on pages 73-78 of this report. See independent auditors report. KIM OTHER INFORMATION (CONTINUED) The combining statements referred to earlier in connection with the other governmental funds, internal service funds, and fiduciary funds are presented immediately following the required supplementary information described in the previous paragraph. Combining and individual fund statements and schedules, as well as schedules related to the capital assets used in the operation of governmental funds, can be found on pages 79-134 of this report. THE CITY AS A WHOLE The analysis below focuses on the net assets (Table 1) and changes in net assets (Table 2) of the City's governmental and business -type activities. The City's net assets may be analyzed and used as an indicator of the City's overall financial condition. The City's combined net assets increased by $46.8 million, increasing from $865.9 million to $912.7 million. ASSETS - Current and Other Assets Capital assets TOTAL ASSETS LIABILITIES Long Term Liabilities TABLE 1 CITY OF SANTA CLARITA'S NET ASSETS Governmental Activities 2007 2008 As Restated Activities Total 2007 2008 2007 2008 As Restated $ 268,634,435 $ 194,925,569 $ 6,416,378 $ 6,102,811 $ 275,050,813 $ 201,028,380 723,115,624 693,803,347 64,396,391 63,483,490 787,512,015 757,286,837 149,877,371 92,404,051 991,750,059 888,728,916 70,812,769 69,586,301 1,062,562,828 958,315,217 86,255,293 34,600,563 485,304 870,149 86,740,597 35,470,712 Other Liabilities 59,293,162 52,016,896 3,843,612 4,916,443 63,136,774 56,933,339 TOTAL LIABILITIES 145,548,455 86,617,459 4,328,916 5,786,592 149,877,371 92,404,051 NET ASSETS Invested in capital assets, net of related debt Restricted Unrestricted TOTAL NET ASSETS 672,306,820 661,210,117 107,644,883 52,576,463 63,526,242 62,246,621 735,833,062 723,456,738 - 107,644,883 52,576,463 66,249,901 88,324,877 2,957,611 1,553,088 69,207,512 89,877,965 $ 846,201,604 $ 802,111,457 $ 66,483,853 $ 63,799,709 $ 912,685,457 $ 865,911,166 See independent auditors report. -7- THE CITY AS A WHOLE (CONTINUED) The City's Net Assets is made up of three components: Investment in Capital Assets (Net of Related Debt), Restricted Net Assets, and Unrestricted Net Assets. As of June 30, 2008, assets exceeded liabilities by $912.7 million. The largest component of the City's net assets, 80.6%, is represented by its $735.8 million investment in capital assets (e.g., infrastructure, land, buildings and improvements, equipment, and construction in progress) less any related outstanding debt used to acquire the assets. These capital assets are used to provide services to the citizens, and therefore, are not available to finance future operations. In addition, resources necessary to repay the related debt must be provided by sources other than the capital assets, as the assets themselves cannot be used to satisfy these liabilities. An additional portion of the City's net assets, 11.8%, represents resources subject to external restrictions on how they may be used. The remaining 7.6% of unrestricted net assets, $69.2 million may be used to meet the City's ongoing obligations to citizens and creditors. Consistent with the prior year, at the end of the current fiscal year, the City is able to report positive balances in both categories of governmental and business -type net assets. Net assets for governmental activities increased by $44.1 million over the prior year, $11.1 million of which is represented by increased capital assets and reductions in their related debt. Increases in capital assets also accounted for the majority of the overall increase in net assets for business -type activities of $2.7 million. The unrestricted portion of the business -type activities increased by $1.4 million. Governmental Activities Revenues from governmental activities were up by $16.5 million or 10.4%. The cost of all governmental activities this year was $121.8 million, an increase of 16.9% over the past year. However, as shown in the Statement of Activities, the governmental activities expenditures were ultimately financed in part by the taxpayers, as $35.6 million in revenues were generated by service revenues received from the performance of these activities; another $22.6 million was received from government agencies and other organizations that subsidized certain programs with operating grants and contributions; and another $39.0 million in revenues was generated from capital grants and contributions. Community Development and Public Works programs were the only activities that generated net revenues of $41.8 and $4.2 million, respectively. Overall, the City's total governmental revenues amounted to $174.4 million, which funded the expenditures and contributed an additional $53 million to the increase in net assets. Part of the $174.4 million total governmental revenue is other general revenue amounting to $77.2 million that the City realized this past year. See independent auditors report. -8- THE CITY AS A WHOLE (CONTINUED) TABLE 2 CITY OF SANTA CLARITA'S CHANGES IN NET ASSETS See independent auditors report. M Government Activities Business -type Activities Total 2007 2007 2008 As Restated 2008 2007 2008 As Restated Program Revenues - Charges for services $ 35,601,495 $ 30,086,825 $ 3,216,239 $ 5,827,778 $ 38,817,734 $ 35,914,603 Operating grants and contributions 22,600,793 26,656,678 11,876,720 12,616,641 34,477,513 39,273,319 Capital grants and contributions 39,003,536 24,770,306 617,421 - 39,620,957 24,770,306 General Revenues Taxes - Property taxes, levied for general purposes 24,482,930 27,891,202 - 24,482,930 27,891,202 Other Taxes 46,866,631 41,074,451 46,866,631 41,074,451 Grants and contributions not restricted to specific programs 1,252,281 1,862,901 - 750,200 1,252,281 2,613,101 Other 4,566,884 5,541,720 48,961 26,367 4,615,845 5,568,087 Total Revenues 174,374,550 157,884,083 15,759,341 19,220,986 190,133,891 177,105,069 General government 27,488,731 26,029,070 - - 27,488,731 26,029,070 Public safety 16,482,917 14,398,408 - 16,482,917 14,398,408 Public works 30,549,888 19,273,980 - - 30,549,888 19,273,980 Parks and recreation 21,817,251 20,573,077 - 21,817,251 20,573,077 Community development 9,257,881 8,985,449 - 9,257,881 8,985,449 Unallocated infrastructure depreciation 13,128,617 12,920,310 13,128,617 12,920,310 Interest on long term debt 3,127,998 2,087,949 - - 3,127,998 2,087,949 Transit - - 21,506,317 18,315,106 21,506,317 18,315,106 Total Expenses 121,853,283 104,268,243 21,506,317 18,315,106 143,359,600 122,583,349 Increase in Net Assets before transfers 52,521,267 53,615,840 (5,746,976) 905,880 46,774,291 54,521,720 Transfers (8,431,120) 441,376 8,431,120 (441,376) - - Increase In Net Assets 44,090,147 54,057,216 2,684,144 464,504 46,774,291 54,521,720 Net Assets — Beginning of Year, As Restated (Note 16) 802,111,457 748,054,241 63,799,709 63,335,205 865,911,166 811,389,446 Net Assets — End of Year $ 846,201,604 $ 802,111,457 $ 66,483,853 $ 63,799,709 $ 912,685,457 $ 865,911,166 See independent auditors report. M THE CITY AS A WHOLE (CONTINUED) Business -Type Activities Business -type activities increased the City's net assets by $2.7 million for the current year. Business -type activities revenues decreased by $3.4 million during the year for a total of $15.7 million in revenues, not including the $8.4 million of transfers in from other governmental activities. This was largely due to $739,921 decrease in operating grants and contributions and $2.6 million decrease in charges for services during the year. Related transit activity expenses increased by $3.2 million or 17.4% of the $21.5 million total. THE CITY'S FUNDS, AS RESTATED (Note 16) The governmental funds reported a combined fund balance at the end of the current fiscal year of $168.6 million, an increase of $58.6 million over the prior year. Approximately $86.9 million is reserved and already committed for specific restricted purposes, and approximately $81.7 million of the unreserved portion may be used to meet the City's ongoing obligations to citizens and creditors. The total governmental fund balance includes the general fund balance of $66 million, an increase of $2.3 million over the prior year. The general fund is the chief operating fund of the City of Santa Clarita. At the end of the current fiscal year, the $34.9 million in reserved general fund balance accounted for 40% of the total reserved governmental fund balance. The unreserved general fund balance of $31.1 million, which is available for spending at the City's discretion, is up by $2.6 million from prior year. The City's general fund balance has reserved $34.9 million for advances, encumbrances, deposits and prepaid items. More detailed information about the combined fund balance reserves and designations and restatement are presented in Note 11 and Note 16, respectively, to the financial statements. Other major fund balance changes are noted below: • The bridge and thoroughfare fund balance has realized an increase of $3.5 million or 29.7% from -the prior year. • The developer fees fund balance decreased in the current year by $565,433 or 32.8%. This is due primarily to an increase in deferred revenues from developers. • The Open Space Preservation District special revenue fund is new for the current year. The purpose of this fund is to accelerate vacant land acquisition in and around the City. The total fund balance for the current year is $16.4 million. • Presented separately this fiscal year in the major funds category is the debt service fund — redevelopment agency and the capital projects fund — redevelopment agency. The total fund balance for the current year for the debt service fund — redevelopment agency is a negative $15.9 million and $37.7 million for the capital projects fund — redevelopment agency. • In addition to the major funds, the fund balances for the other governmental funds experienced an aggregate increase of $11.7 million, resulting in an overall 32.5% increase in other governmental funds' balances. See independent auditors report. -10- THE CITY'S FUNDS, AS RESTATED (Note 16) (CONTINUED) Other major fund balance changes are noted below (continued): The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The total net assets for the transit enterprise fund increased over the prior year by $2.7 million or 4%. This $2.7 million increase was primarily due to the increase in cash and investments and decrease in total liabilities. The unrestricted portion of the business -type activities net assets increased by $1.4 million from prior year. The Internal Service funds net assets increased by $4.5 million or 22.5%, ending the fiscal year with a fund balance of $24.6 million, of which $23.7 million is unrestricted. General Fund Budgetary Highlights Comparison of the fiscal year 2007-08 original (adopted) general fund budgeted expenditures and transfers of $80.3 million to the final budgeted expenditures of $85.7 million results in a net increase of $5.4 million. Included in this net increase is $2.6 million in committed purchase orders and contracts from the prior June 30 balance, as well as $1.5 million of prior fiscal year operating and capital improvement projects approved for carryover into fiscal year 2007-08. The resulting beginning budget balance was equal to $84.3 million. Original Budget + Cont. Appropriations + Encumbrances = Beg. Balance+ Supplemental Changes = Final Budget $80,280,867+ $1,470,293+ $2,614,370 = $84,365,530+ $1,356,112= $85,721,642 Comparing the beginning budget of $84.3 million with the final budget of $85.7 million indicates the general fund had supplemental budgetary appropriations of $1.4 million during the fiscal year. Included in the supplemental appropriations are the results of this year's budget review. At the mid -year budget review, the City Council approved additional appropriations for non -represented employee cost -of -living salary increases of 3.0%, as well as increased costs related to the City's contribution towards employees' health benefits. During the mid -year budget review, budgeted general fund revenue had a net increase of $1.6 million. Included in the net increase is $1.5 million increase in property tax revenue due to increasing property valuation in the area. The projected fiscal year 07-08 property valuation is an increase of 11.65% over fiscal year 06-07 actual values. At year end, the City's actual revenues are $2.4 million more than the final budgetary estimates. Actual expenditures were less than the final budgetary estimates by over $15.8 million. This was partly due to large infrastructure commitments that were not liquidated at year end and projects that are multi-year. See independent auditors report. -11- CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City had $787.5 million (net of accumulated depreciation) invested in a broad range of capital assets. This investment in capital assets includes land, buildings and related improvements, vehicles and equipment, and infrastructure (including infrastructure placed in service prior to July 1, 2002), such as streets, bridges, traffic signals, medians, sidewalks, trails, sewers, curbs and gutters, and drainage systems. (See Table 3) TABLE 3 CITY OF SANTA CLARITA'S'CAPITAL ASSETS, (net of depreciation) Land Construction in progress Infrastructure, net Depreciable site improvements, Net Depreciable buildings and improvements, net Depreciable equipment, net TOTALS Governmental Activities 2008 2007 $ 82,955,324 $ 79,279,650 106,605,795 82,155,075 480,771,124 482,800,768 12,693,526 9,695,070 37,381,460 37,369,921 2,708,395 2,502,863 Business Type Activities 2008 2007 $ 10,787,880 $ 10,787,880 762,096 144,675 38,095,978 38,610,490 14,750,437 13,940,445 Total 2008 2007 $ 93,743,204 $ 90,067,530 107,367,891 82,299,750 480,771,124 482,800,768 12,693,526 9,695,070 75,477,438 75,980,411 17,458,832 16,443,308 $ 723,115,624 $ 693,803,347 $ 64,396,391 $ 63,483,490 $ 787,512,015 $ 757,286,837 Major capital asset events during the year included: • Completion of the Todd Longshore Park. The Todd Longshore Park is a neighborhood park on approximately 5 acres of the 32 -acre site in Canyon Country. Amenities for this park include a parking lot, restroom facility, play area, picnic shelters, and walking paths. • Completion of the Magic Mountain Median Demonstration project. Located between Valencia Boulevard and Bouquet Canyon, this project entails the replacement of the existing natural turf on the median with synthetic artificial turf for the purpose of evaluating the potential merits of artificial grass specific to deferred maintenance and reduction of water use. • Significant progress in the design and road construction along Magic Mountain Parkway and the I-5 freeway. • Design for the Newhall Library project. This effort will provide for the design and eventual construction of a new library in the Downtown Newhall area. Additional information on the City of Santa Clarita's capital assets can be located in Note 3 to the financial statements on pages 48 through 50. See independent auditors report. -12- CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED) Debt Administration At year-end, the City's total debt amounted to $89.7 million in bonds, notes, capital leases, contracts, claims payable, and compensated absences as shown in Table 4. A summary of debt activity for the year follows. TABLE 4 CITY OF SANTA CLARITA'S OUTSTANDING DEBT Governmental Activities Business -type Activities 2008 -2007 2008 2007 Refunding Certificates of Participation, net $ 15,388,369 $ 16,389,028 $ Tax Allocation Bonds, net 38,544,094 - Certificates of Participation 15,525,000 Lease Revenue Bonds, net 13,679,570 13,893,228 Contract and Leases Payable 3,617,410 4,364,608 Compensated Absences 1,993,279 1,780,826 Claims Payable 70,000 100,000 TOTALS $ 88,817,722 $ 36,527,690 Total 2008 2007 $ $ 15,388,369 $ 16,389,028 38,544,094 - 15,525,000 - - - 13,679,570 13,893,228 870,149 1,236,869 4,487,559 5,601,477 - - 1,993,279 1,780,826 - - 70,000 100,000 $ 870,149 $ 1,236,869 $ 89,687,871 $ 37,764,559 The City's governmental activities had $88.8 million in debt at year-end. Governmental activities long-term debt increased overall by $52.3 million during the year. A summary of the activity giving rise to new increases in debt is as follows: • Compensated absences liability for that portion of unused, earned vacation compensation that is not expected to be paid within the coming fiscal year, increased by $212,453. • Claims payable liability for that portion of incurred and reported claims, as well as incurred but unreported claims, which are not expected to be paid within the coming fiscal year decreased by $30,000. Additional information on the City of Santa Clarita's self-insurance can be located in the financial statements on page 69. The Tax Allocation Bonds, Series 2008, for $29.9 million were issued in connection with the City of Santa Clarita Redevelopment Agency to fund certain redevelopment projects within the Newhall Redevelopment Project Area. The RDA Housing Tax Allocation Bonds, Series 2008, for $8.8 million were issued in connection with the City of Santa Clarita Redevelopment Agency to fund certain low/mod housing projects within the Newhall Redevelopment Area. On December 1, 2007, the Santa Clarita Public Financing Authority issued $15,525,000 in Certificates of Participation for the acquisition of open space and parkland. See independent auditors report. -13- CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED) Debt Administration (Continued) The City's business -type activities debt decreased by $366,720, from $1,236,869 to $870,149. No new debt related to business -type activities was issued or refinanced during the current fiscal year. Debt in the business -type activities is for capital leasing of buses and other transit -related equipment. During the fiscal year ended June 30, 2008, the City was able to meet its current year debt obligation in a timely matter. State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its total assessed valuation. The debt limitation for the City as of June 30, 2008, was $3,224,039,571. Additional information on the City of Santa Clarita's debt can be located in Note 4 to the financial statements, on pages 51 through 61. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS In preparing the budget for fiscal year 2008-09, management looked at the following economic factors: • Sales tax continues to be the City's largest General Fund revenue source accounting for 37.3% of the total General Fund revenue, or $32.6 million in 2008-09. Three major sales tax generators will soon open, however, the City is conservative by projecting no growth in sales tax revenue in light of the economic downturn related to the housing, financial services and consumer spending sectors. • Total property tax revenues for Fiscal Year 2008-09 are projected to increase by 15.7% or $3.6 million. This projected increase is based on the assessed valuations for fiscal year 2007-08 per the County Assessor. • The City has consistently maintained a conservative approach to budgeting revenues. Budgeted general fund revenues for fiscal year 2008-09 is .19% less than the original budgeted revenues of the prior year. The increase in total property tax revenues mentioned earlier made up for the decrease in other revenue areas. Slow down in the housing market attributed to the decrease in Licenses and Permits revenue by 18.2%, Revenues from Other Agencies also took a 51 % slip, this was due to the one time FEMA grant budgeted in fiscal year 2007-08. General fund revenues for fiscal year June 30, 2009 are budgeted at $82.6 million net of overhead reimbursements and operating transfers in, which represents a decrease of 0.19% over the prior year, the City's general fund operating and capital expenditures for the coming year are budgeted at $79.1 million net of reserves and debt service, which represents a decrease of 0.94% over previous year. Operational expenditures, net of reserves and debt service, for fiscal year 2009 have increased by 8%, and capital expenditures decreased by $6.3 million or 59.5%. The City's 2008-09 operating budget for all funds increased by $9.6 million or 8.4% to a total of $123.6 million. See independent auditors report. -14- ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS (CONTINUED) The City continues to grow with new commercial and residential development, street improvements, park construction, and various other projects. The 2008-09 budget is a reflection of the City's commitment to the residents of Santa Clarita. This is consistent with the City's long tradition of ensuring that programming for Santa Clarita's youth and children is a priority to help curb teen crimes. The 2008-09 budget also continues the provision of consistent high levels of service to the community through the allocation of resources for public safety, cultural and social programs, and continued infrastructure improvements and maintenance. A copy of the City's 2008-09 budget can be obtained by contacting the City Finance Division or visit the web at santa-clarita.com/cityhall/cmo/budget. CONTACTING THE CITY'S FINANCE DIVISION This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report, or need additional financial information, contact the City's Finance Division, at the City of Santa Clarita, 23920 Valencia Boulevard, Suite 295, Santa Clarita, California 91355, or (661) 255-4920. See independent auditors report. -15- This page intentionally left blank. -16- CITY OF SANTA CLARITA STATEMENT OF NET ASSETS ASSETS: Cash and investments (Note 2) Cash and investments with fiscal agent (Note 2) Receivables: Accounts Interest Intergovernmental Loans Prepaid costs Deposits Due from fiduciary funds Internal balances Land held for resale Deferred charges Capital assets (Note 3): Land Construction in progress Depreciable site improvements, net Depreciable buildings and improvements, net Depreciable equipment, net Depreciable infrastructure, net TOTAL ASSETS LIABILITIES: Accounts payable and accrued liabilities Accrued interest payable Due to other governments Unearned revenue Deposits Noncurrent liabilities (Notes 4 and 12): Due within one year Due in more than one year TOTAL LIABILITIES NET ASSETS - Invested in capital assets, net of related debt Restricted for capital improvements Restricted for debt service Restricted for redevelopment Restricted for low and moderate income housing Restricted for special assessment services Restricted for other special purposes Unrestricted TOTAL NET ASSETS June 30, 2008 Governmental Business -type Activities Activity Total $ 220,267,200 $ 2,631,723 $ 222,898,923 1,206,283 1 - 1,206,283 15,091,805 25,150 15,116,955 5,824,049 26,914 5,850,963 7,227,845 3,680,328 10,908,173 1,373,437 - 1,373,437 27,200 - 27,200 13,331,807 - 13,331,807 44,350 - 44,350 (52,263) 52,263 - 1,607,196 - 1,607,196 2,685,526 - 2,685,526 82,955,324 10,787,880 93,743,204 106,605,795 762,096 107,367,891 12,693,526 - 12,693,526 37,381,460 38,095,978 75,477,438 2,708,395 14,750,437 17,458,832 480,771,124 - 480,771,124 991,750,059 70,812,769 1,062,562,828 25,406,931 2,217,223 27,624,154 725,320 22,829 748,149 813,738 1,218,715 2,032,453 20,867,954 - 20,867,954 8,916,790 - 8,916,790 2,027,429 384,845 2,412,274 86,790,293 485,304 87,275,597 145,548,455 4,328,916 149,877,371 672,306,820 63,526,242 735,833,062 45,993,804 - 45,993,804 632,680 - 632,680 27,846,000 - 27,846,000 11,295,816 - 11,295,816 19,288,764 - 19,288,764 2,587,819 - 2,587,819 66,249,901 2,95 7,611 69,207, 512 $ 846,201,604 $ 66,483,853 $ 912,685,457 See independent auditors' report and notes to basic financial statements. -17- CITY OF SANTA CLARITA STATEMENT OF ACTIVITIES For the year ended June 30, 2008 Functions/programs Expenses Governmental activities: General government $ 27,488,731 Public safety 16,482,917 Public works 30,549,888 Parks and recreation 21,817,251 Community development 9,257,881 Unallocated infrastructure depreciation 13,128,617 Interest on long term debt 3,127,998 Total governmental activities 121,853,283 Business -type activity: Transit 21,506,317 Total $ 143,359,600 Program Revenues Charges Operating Capital for Grants and Grants and Services Contributions Contributions $ 2,737,355 2,291,100 355,817 3,875,539 26,341,684 $ 113,923 142,015 3,235,578 590,729 18,518,548 31,144,181 1,656,540 6,202,815 35,601,495 22,600,793 39,003,536 3,216,239 11,876,720 617,421 $ 38,817,734 $ 34,477,513 $ 39,620,957 General revenues: Taxes: Sales taxes Property taxes, levied for general purposes Franchise taxes Real property transfer taxes Transient occupancy taxes Unrestricted revenue in lieu of sales taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Transfers Total general revenues and transfers Change in net assets Net assets - Beginning of year, as restated (Note 16) Net assets - End of year See independent auditors' report and notes to basic financial statements. -18- Net (Expense) Revenue and Changes in Net Assets Governmental Business -type Activities Activity Total $ (24,637,453) $ - $ (24,637,453) (14,049,802) - (14,049,802) 4,185,688 - 4,185,688 (15,694,443) - (15,694,443) 41,805,166 - 41,805,166' 2,433,651 8,490,865 (13,128,617) - (13,128,617) (3,127,998) - (3,127,998) (24,647,459) - (24,647,459) (5,795,937) (5,795,937) (24,647,459) (5,795,937) (30,443,396) 29,076,388 - 29,076,388 24,482,930 - 24,482,930 6,028,903 - 6,028,903 836,824 - 836,824 2,433,651 - 2,433,651 8,490,865 - 8,490,865 1,252,281 - 1,252,281 4,566,884 48,961 4,615,845 (8,431,120) 8,431,120 - 68,737,606 8,480,081 77,217,687 44,090,147 2,684,144 46,774,291 802,111,457 63,799,709 865,911,166 $ 846,201,604 $ 66,483,853 $ 912,685,457 -19- CITY OF SANTA CLARITA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2008 ASSETS Cash and investments Cash and investments with fiscal agent Accounts receivable Interest receivable Prepaid costs Due from other funds Due from other governments Land held for resale Deposits Loans receivable Advances to other funds TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable and accrued liabilities Deferred revenue Due to other governments Deposits Due to other funds Advances from other funds TOTAL LIABILITIES FUND BALANCES (DEFICIT): Reserved Unreserved: General fund Special revenue fund Debt service fund Capital projects fund TOTAL FUND BALANCES (DEFICIT) TOTAL LIABILITIES AND FUND BALANCES See independent auditors' report and notes to basic financial statements. -20- $ 19,090,579 $ 1,161,013 $ 24,287 8,253,269 3,786,579 14,636,434 860 - - 8,916,790 - - 36,261,498 21,147,662 14,660,721 34,920,547 14,097,3 31 5,527,888 31,153,879 - - - 1,211,846 (4,370,973) 66,074,426 15,309,177 1,156,915 $ 102,335,924 $ 36,456,839 $ 15,817,636 Special Revenue Funds Bridge and Developer General Thoroughfare Fees $ 52,619,909 $ 33,490,401 $ 9,525,220 9,500,377 2,500,000 2,879 519,087 299,118 93,247 27,200 - - 2,149,208 - - 474,017 167,320 - 13,330,807 - - 23,715,319 - 6,196,290 $ 102,335,924 $ 36,456,839 $ 15,817,636 See independent auditors' report and notes to basic financial statements. -20- $ 19,090,579 $ 1,161,013 $ 24,287 8,253,269 3,786,579 14,636,434 860 - - 8,916,790 - - 36,261,498 21,147,662 14,660,721 34,920,547 14,097,3 31 5,527,888 31,153,879 - - - 1,211,846 (4,370,973) 66,074,426 15,309,177 1,156,915 $ 102,335,924 $ 36,456,839 $ 15,817,636 Special Debt Capital Revenue Service Projects Funds (Continued) Fund Fund Other Total Open Space Redevelopment Redevelopment Governmental Governmental Preservation District Agency Agency Funds Funds $ 16,371,810 $ - $ 36,777,581 $ 50,450,808 $ 199,235,729 - 913,904 - 292,379 1,206,283 66,364 - 81,956 2,932,371 15,083,947 12,554 - 72,145 4,664,151 5,660,302 - - - - 27,200 - - - - 2,149,208 - - - 6,586,508 7,227,845 - - 1,607,196 - 1,607,196 1,000 - - - 13,331,807 - - - 1,373,437 1,373,437 29,911,609 $ 16,451,728 $ 913,904 $ 38,538,878 $ 66,299,654 $ 276,814,563 $ 11,200 $ - $ 146,308 $ 4,447,209 $ 24,880,596 5,058 - 29,071 11,798,749 38,509,160 - - 676,105 136,773 813,738 - - - 8,916,790 - 2,104,858 2,104,858 - 16,787,739 - - 32,987,809 16,258 16,787,739 851,484 18,487,589 108,212,951 1,000 - 2,579,835 29,766,916 86,893,517 - - - - 31,153,879 16,434,470 - - 15,102,453 28,377,796 - (15,873,835) - - (15,873,835) - - 35,107,559 2,942,696 38,050,255 16,435,470 (15,873,835) 37,687,394 47,812,065 168,601,612 $ 16,451,728 $ 913,904 $ 38,538,878 $ 66,299,654 $ 276,814,563 -21- This page intentionally left blank. -22- CITY OF SANTA CLARI TA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS June 30, 2008 Fund balances - total 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 financial resources and therefore are not reported in the funds. Those assets consist of: Land Construction in progress Site improvements, net of $5,040,898 accumulated depreciation Building and improvements, net of $9,155,571 accumulated depreciation Equipment, net of $4,873,222 accumulated depreciation Infrastructure, net of $ 187,033,259 accumulated depreciation Total capital assets used in governmental activities 0 Debt issuance costs are reported as an expenditure in the governmental funds • in the year that the costs are incurred. On the government -wide statements, such costs are reported as deferred charges and amortized over the life of the debt. Unamortized deferred charges at June 30, 2008 are: - Certain receivables will be collected after year-end, but are not available soon enough to pay for current -period expenditures, and therefore are offset by deferred revenue in the funds. On the government -wide statements, this . deferred revenue has been recognized as income. The deferred revenue amount at June 30, 2008 is: Internal Service funds are used by management to charge the costs of . self-insurance and capital replacements to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Assets. • Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. Interest on long-term debt is not • accrued in governmental funds. Balances at June 30, 2008 are: • Accrued interest on long-term debt Certificates of participation, net of $401,631 unamortized discount and deferred amount • Lease revenue bonds, plus unamortized premium of $104,570 Tax allocation bonds payable, net of $165,906 unamortized net discount Capital leases payable Loans payable . Compensated absences Total long-term liabilities . Net assets of governmental activities • See independent auditors' report and notes to basic financial statements. . -23- $ 82,955,324 106,605,795 12,693,526 37,381,460 1,806,503 480,771,124 $ (30,913,369) (13,679,570) (38,544,094) (23,676) (3,593,734) (1,993,279) $ 168,601,612 722,213,732 2,685,526 17,641,206 24,532,570 (725,320) (88.747.722) $ 846,201,604 CITY OF SANTA CLARITA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the year ended June 30, 2008 REVENUES: Taxes Licenses and permits Developer fees Investment income Revenue from other agencies Fines and forfeitures Service charges Other revenue Overhead reimbursement TOTAL REVENUES EXPENDITURES: Current: General government Public safety Public works Parks and recreation Community development Capital outlay Debt service: Bond issuance costs Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out Bonds and certificates issued Issuance premiums (discounts) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES (DEFICIT) - BEGINNING OF YEAR, Special Revenue Funds Bridge and Developer General Thoroughfare Fees $ 68,032,980 5,256,748 3,654,884 2,074,594 464,954 6,368,343 1,167,594 1,659,376 88,679,473 13,891,238 15,764,767 15,423,009 19,731,872 5,080,812 12,725 inc V7,7VV,JVV 21,215,477 621,005 1,482,014 512,279 - 7,362 LL,V7 /,-T71 1,1-fV,-V 4,862,433 14,305,741 20,648 52,434 1,394,178 119'TV,V 1 L 18,772,905 3,508,669 (305,966) 3,081,801 - - (19,551,665) - (259,467) (16,469,864) - (259,467) 2,303,041 3,508,669 (565,433) AS RESTATED 63,771,385 11,800,508 1,722,348 FUND BALANCES (DEFICIT) - END OF YEAR $ 66,074,426 $ 15,309,177 $ 1,156,915 See independent auditors' report and notes to basic financial statements. -24- Special Debt Capital 12,062,058 25,965,196 Revenue Service Projects 578,212 16,342,979 Funds (Continued) Fund Fund Other Total Open Space Redevelopment Redevelopment Governmental Governmental Preservation District Agency Agency Funds Funds $ 1,474,353 $ - $ 2,954,920 $ 15,626,533 $ 88,088,786 - - - - 5,256,748 - - - 454,326 22,290,808 189,095 1 362,639 2,086,529 8,287,441 - - - 22,173,017 24,247,611 - - - 1,656,616 2,121,570 - - - 3,562,698 9,931,041 - - 40,704 493,843 1,709,503 - - - - 1,659,376 1,663,448 1 3,358,263 46,053,562 163,592,884 11,900 - - 12,062,058 25,965,196 - - - 578,212 16,342,979 - - - 5,692,321 25,977,763 - - - 424,471 20,156,343 - - 1,553,853 896,137 7,583,236 - - 4,222,639 24,984,244 44,906,802 - - 939,432 878,911 1,818,343 - - - 1,914,473 1,927,198 - 1,191,357 - 1,600,486 2,814,636 11,900 1,191,357 6,715,924 49,031,313 147,492,496 1,651,548 (1,191,356) (3,357,661) (2,977,751) 16,100,388 15,000,000 1,052,000 5,273,097 18,705,643 43,112,541 (216,078) (5,273,097) (1,052,000) (28,316,354) (54,668,661) - - 29,860,000 24,375,000 54,235,000 - - (160,665) (66,017) (226,682) 14,783,922 (4,221,097) 33,920,432 14,698,272 42,452,198 16,435,470 (5,412,453) 30,562,771 11,720,521 58,552,586 - (10,461,382) 7,124,623 36,091,544 110,049,026 $ 16,435,470 $ (15,873,835) $ 37,687,394 $ 47,812,065 $ 168,601,612 -25- CITY OF SANTA CLARITA 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, 2008 Net change in fund balances - total governmental funds $ 58,552,586 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capitalizable capital outlays ($35,792,694) exceeded depreciation ($15,325,687) in the current period: 20,467,007 The contribution of governmental capital assets to the Transit Enterprise fund is not reported in the governmental funds because there has been no flow of current financial resources. In the Statement of Activities, both sides of this transaction are reported as transfers: Donations of capital assets increase net assets in the Statement of Activities, but do not appear in the governmental funds because they are not financial resources: 8,551,225 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. Also, governmental funds report the effect of issuance costs, premiums, and similar items when the debt is first issued, whereas these amounts are deferred and amortized in the Statement of Net Activities. These amounts are the net effect of these differences in the treatment of long-term debt and related items: Issuance of certificates of participation and tax allocation bonds $ (54,235,000) Bond issuance costs 1,818,343 Principal payments 1,927,198 Net bond discounts/(premiums) 226,682 Amortization of bond premium 3,658 Amortization of discount and deferred amount on refunding (30,117) Amortization of debt issuance costs (68,765) (50,358,001) Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences $ (212,453) Accrued interest (218,138) (430,591) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds Conversely, collection of these revenues are reported in the governmental funds, but not in the Statement of Activities since they have been recognized in previous years. 2,795,619 Internal service funds are used by management to charge the costs of self-insurance and capital replacements to individual funds. The net revenue of internal service funds is reported with governmental activities. 4,512,302 Change in net assets of governmental activities $ 44,090,147 See independent auditors' report and notes to basic financial statements. -26- CITY OF SANTA CLARI TA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2008 ASSETS CURRENT ASSETS: Cash and investments Accounts receivable Interest receivable Due from other governments Advances to other fund TOTAL CURRENT ASSETS NONCURRENT ASSETS: Capital assets: Land Construction in progress Buildings, net of accumulated depreciation Equipment, net of accumulated depreciation TOTAL NONCURRENT ASSETS TOTAL ASSETS LIABILITIES LIABILITIES: CURRENT LIABILITIES: Accounts payable and accrued liabilities Due to other governments Accrued interest payable Capital leases payable - current TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES: Claims payable Capital leases payable TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS: Invested in capital assets, net of related debt Unrestricted TOTAL NET ASSETS Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net Assets of business -type activities See independent auditors' report and notes to basic financial statements. -27- Business -type Activity - Transit Enterprise Government Activities - Internal Service Funds $ 2,613,274 $ 21,031,471 25,150 7,858 26,914 163,747 3,680,328 - - 3,076,200 6,345,666 24,279,276 10,787,880 - 762,096 - 38,095,978 - 14,750,437 901,892 64,396,391 901,892 70,742,057 25,181,168 2,198,774 526,335 1,218,715 - 22,829 384,845 - 3,825,163 526,335 - 70,000 485,304 - 485,304 70,000 4,310,467 596,335 63,526,242 901,892 2,905,348 23,682,941 66,431,590 $ 24,584,833 52,263 $ 66,483,853 CITY OF SANTA CLARTTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For the year ended June 30, 2008 OPERATING EXPENSES: Administrative Business -type Government Transportation services Activity - Activities - Services and supplies Transit Internal Depreciation Enterprise Service Funds OPERATING REVENUES: 21,424,482 2,412,359 Charges for services $ 3,216,239 $ 2,681,965 Other revenue 199,457 23,498 TOTAL OPERATING REVENUES 3,415,696 2,705,463 OPERATING EXPENSES: Administrative 2,026,381 - Transportation services 14,301,516 - Services and supplies 1,755,690 2,179,577 Depreciation 3,340,895 232,782 TOTAL OPERATING EXPENSES 21,424,482 2,412,359 OPERATING INCOME (LOSS) (18,008,786) 293,104 NONOPERATING REVENUES (EXPENSES): Intergovernmental grants 10,735,433 - Investment income 48,961 1,094,198 Miscellaneous revenues 913,955 - Interest expense (53,960) - TOTAL NONOPERATING REVENUES (EXPENSES) 11,644,389 1,094,198 INCOME (LOSS) BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS (6,364,397) 1,387,302 TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers in 9,157,455 3,125,000 Transfers out (726,335) - Capital contributions from other funds 617,421 - TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS 9,048,541 3,125,000 CHANGE IN NET ASSETS 2,684,144 4,512,302 TOTAL NET ASSETS - BEGINNING OF YEAR 20,072,531 TOTAL NET ASSETS - END OF YEAR $ 24,584,833 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds - Change in net assets of business -type activities $ 2,684,144 See independent auditors' report and notes to basic financial statements -28- CITY OF SANTA CLARITA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the year ended June 30, 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users Receipts from interfund services provided Other operating receipts Payments to suppliers Payments to employees NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Cash contributed by other governments Cash received from other funds Cash paid to other funds NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Principal payments on financed debt Interest expense NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Investment income NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR See independent auditors' report and notes to basic financial statements. -29- Business -type Government Activity - Activities - Transit Internal Enterprise Service Funds $ 3,216,239 $ - - 2,678,965 225,726 23,498 (18,091,914) (1,789,770) (939,804) - (15,589,753) 912,693 11,545,057 - 9,157,455 3,125,000 (726,335) (3,076,200) 19,976,177 48,800 (3,636,375) (471,068) (366,720) - (60,299) - (4,063,394) (471,068) 48,589 1,116,273 371,619 1,606,698 2,241,655 19,424,773 $ 2,613,274 $ 21,031,471 (Continued) CITY OF SANTA CLARITA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (CONTINUED) For the year ended June 30, 2008 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) Depreciation Change in assets and liabilities: (Increase) decrease in accounts receivable Increase (decrease) in accounts payable and accrued liabilities Increase (decrease) in claims payable NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Contributions of capital assets from government See independent auditors' report and notes to basic financial statements. -30- Business -type Activity - Transit Enterprise Government Activities - Internal Service Funds $ (18,008,786) $ 293,104 3,340,895 232,782 26,269 (3,000) (948,131) 419,807 (30,000) $ (15,589,753) $ 912,693 $ 617,421 $ - CITY OF SANTA CLARITA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES FIDUCIARY FUNDS June 30, 2008 ASSETS: Cash and investments Cash and investments with fiscal agent Accounts receivable Interest receivable TOTAL ASSETS LIABILITIES: Accounts payable and accrued liabilities Due to other funds Due to bondholders TOTAL LIABILITIES Agency Funds $ 185,040 1,811,040 3,138 1,692 $ 2,000,910 $ 2,375 44,350 1,954,185 $ 2,000,910 See independent auditors' report and notes to basic financial statements. -31- This page intentionally left blank. -32- NOTES TO BASIC FINANCIAL STATEMENTS -.33- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. Reporting Entity: The City of Santa Clarita (the City), California, was incorporated on December 15, 1987, as a general law city. The City operates under a council-manager form of government and provides its citizens with a full range of municipal services, either directly or under contract with the County of Los Angeles. Such services include public safety (police and fire protection), building permit/plan approval, planning, community development, recreation, animal control and street maintenance. The Redevelopment Agency of the City of Santa Clarita (the Agency) was established in July 1991 pursuant to the State of California Health and Safety Code, Section 33000. The primary purpose of the Agency is to encourage private redevelopment of property and to rehabilitate areas suffering from economic disuse arising from inadequate street layout and street access, lack of open space, landscaping and other improvements and facilities necessary to establish and maintain the economic growth of the City. The Santa Clarita Public Financing Authority (the Authority) was established in July 1991 as a joint power of authority between the City and the Agency for the purpose of providing financing and funding of public capital improvements and the acquisition of property. The criteria used in determining the scope of the reporting entity are based on the provisions of Government Accounting Standards Board (GASB) Statement No. 14. The City of Santa Clarita is the primary government unit. Component units are those entities which are financially accountable to the primary government, either because the City appoints a voting majority of the component unit's board, or because the component unit will provide a financial benefit or impose a financial burden on the City. The Agency and the Authority have been accounted for as "blended" component units of the City. Despite being legally separate, these entities are, in substance, part of the City's operations. Accordingly, the balances and transactions of these component units are reported within the funds of the City. The Agency's financial data and activity are reported within the debt service and capital projects fund types, and the Authority's financial data and activity are reported within the debt service and capital projects fund types. See independent auditors' report. -34- . CITY OF SANTA CLARITA NOTE TO BASIC FINANCIAL STATEMENTS (CONTINUED) • June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): A. Reporting Entity (Continued): The following specific criteria were used in determining that the Agency and the Authority were blended component units: • The members of the City Council also act as the governing bodies of the Agency and the Authority. • The Agency and the Authority are managed by employees of the City. Financial statements for each of the individual component units may be obtained at the City's a administrative offices. • B. Government -Wide and Fund Financial Statements: The government -wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) 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. Interfund services provided and used are not eliminated in the process of consolidation. 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. 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. Certain indirect costs are included as part of • the program expenses reported for individual functions and activities. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or 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 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 the major individual enterprise fund are reported as separate columns in the fund financial statements. See independent auditors' report. -35- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation: The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the fiscal year in which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all the eligibility requirements imposed by the provider have been met. 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 transit enterprise fund and of the government's internal service funds are charges to customers for services. Operating expenses for the proprietary funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, except for principal and interest on general long-term liabilities, claims and judgments, and compensated absences, which are recognized as expenditures only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. See independent auditors' report. -36- • • CITY OF SANTA CLARITA • • NOTES TO BASIC FINANCIAL STATEMENTS • (CONTINUED) • • June 30, 2008 • • 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): • C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued): • The accounts of the City are organized and operated on the basis of funds, each of which is • considered a separate accounting entity with a self -balancing set of accounts, established for the purpose of carrying on specific activities or attaining certain objectives in accordance with, • special regulations, restrictions or limitations. • • The City reports the following major governmental funds: • The General Fund is the primary operating fund of the City. It is used to account for all • financial resources of the City that are not required to be accounted for in another fund. • The Bridge and Thoroughfare Special Revenue Fund is used to account for monies received from developers for street and highway construction through bridge and thoroughfare districts. • • The Developer Fees Special Revenue Fund is used to account for monies received from • developers for street improvements. • The Open Space Preservation District Special Revenue Fund is used to account for monies • received from assessments for the costs of acquiring open space lands, parks, and parkland in • accordance with the City's programs. The Redevelopment Agency Debt Service Fund is used to account for debt service on loans • from the City to the Redevelopment Agency. • • The Redevelopment Agency Capital Projects Fund is used to account for the Agency's • construction of all capital projects located within the project area that are not financed with • housing set-aside funds. • The City reports the following major enterprise fund: • • The Transit Enterprise Fund is used to account for the operation of the City's local public transit bus system. • • Additionally, the City reports the following fund types: • The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for special purposes. • • See independent auditors' report. • -37- • 1 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued): The City reports the following Fund Types (Continued): The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest and principal on long-term debt. The Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). The Internal Service Funds are used to account for the financing of special activities that provide services within the City. Such activities include self-insurance, computer replacement, vehicle replacement and public facilities replacement. The Agency Funds are used to account for assets held by the City as an agent and related to the debt service activity on no -commitment special assessment debt. The City has conformed to the pronouncements of the Governmental Accounting Standards Board (GASB), which are acknowledged as the primary authoritative statements of accounting principles generally accepted in the United States of America applicable to state and local governments. In accordance with GASB Statement No. 20, the City applies all applicable GASB pronouncements, as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements contradict GASB pronouncements: Financial Accounting Standards Board Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins of the Committee on Accounting Procedures. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. D. Cash and Cash Equivalents: A substantial portion of the City's investments, not held by bond trustees, are in short-term, highly liquid instruments with original maturities of three months or less, including investments in the California Local Agency Investment Fund and Los Angeles County Pooled Investment Fund. For purposes of the statements of cash flows, all pooled cash and investments held by the enterprise and internal service funds are considered to be short-term and, accordingly, are classified as cash and cash equivalents. See independent auditors' report. -38- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): E. Investments: Investments are stated at fair value (quoted market price or best available estimate thereof). F. Capital Assets: Capital assets, which include land, site improvements, buildings and improvements, equipment and infrastructure assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. General infrastructure assets consist of roads, curbs and gutters, sidewalks, medians, street trees, street signs, bus shelters, bridges, trails, traffic signals, storm drains/catch basins, sewer manholes, and sewer lines. Capital assets are defined by the City as assets with an initial cost of more than $5,000 ($25,000 for site improvements and building improvements and $100,000 for infrastructure) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Equipment 5 - 25 years Site Improvements 5 - 25 years Buildings and Improvements 5 - 50 years Infrastructure 20 - 60 years , G: Inventories: Inventories are accounted for on the purchase (expenditure) method, whereby expenditures for inventory are written off as incurred. There were no significant inventories on hand at June 30, 2008. See independent auditors' report. -39- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): H. Employee Compensated Absences: It is the City's policy to permit employees to accumulate earned but unused vacation (compensated absences). All vacation pay is accrued when incurred in the government -wide and proprietary fund financial statements. Vacation pay which is expected to be liquidated in the current period with expendable available resources is reported in the governmental funds that will pay it (primarily the General Fund). Compensated absences are reported in governmental funds only if they have matured. I. Property Taxes: Property taxes are an enforceable lien on property as of January 1 of each year. Taxes are levied on each July 1 and are payable in two installments on November 1 and February 1, which become delinquent on December 10 and April 10, respectively. The County of Los Angeles bills and collects property taxes for the City. Remittance of property taxes to the City is accounted for in the City's General Fund. J. Claims and Judgments: When it is probable that a claim liability has been incurred at year end and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage, under its self-insurance program claims payable, which includes an estimate for incurred but not reported claims (IBNR) and is recorded in an Internal Service Fund. K. Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Specifically, the City has made certain estimates and assumptions related to the collectibility of its receivables (e.g. accounts receivable, intergovernmental receivables and loans receivable), the depreciation of its capital assets and the ultimate outcome of claims and judgments. Actual results could differ from those estimates and assumptions. See independent auditors' report. 9 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS: Cash and Investments Cash and investments at June 30, 2008, are classified in the accompanying financial statements as follows: Government - Wide Statement of Net Assets Fiduciary Fund Statement of Net Assets Total Unrestricted assets: Cash and investments $ 222,898,923 $ 185,040 $ 223,083,963 Cash and investments with fiscal agent 1,206,283 1,811,040 3,017,323 Total Cash and Investments 224,105,206 1,996,080 226,101,286 Cash and investments at June 30, 2008, consisted of the following: Cash on hand $ 3,609 Deposits with financial institutions 14,948,226 Investments 211,149,451 Total Cash and Investments 226,101,286 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 trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. See independent auditors' report. -41- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): Investments Authorized by the California Government Code and the City's Investment Policy (Continued) -42- Maximum Percentage Maximum Maximum or Amount Investment Authorized Investment Type Maturity of Portfolio* in One Issuer Local Agency Bonds 5 years None None U.S. Treasury Obligations 5 years None None State of California Obligations 5 years None None CA Local Agency Obligations 5 years None None U.S. Government Sponsored Enterprise Securities 5 years None None Banker's Acceptances 180 days 40% 30% Commercial Paper 270 days 25% 10% Negotiable Certificates of Deposit 5 years 30% None Repurchase Agreements I year None None Medium -Term Notes 5 years 30% None Money Market Mutual Funds 5 years 15% 10% Mortgage Pass -Through Securities 5 years 20% None County Pooled Investment Funds N/A None None Local Agency Investment Fund (LAIF) N/A $ 40 M None * - Excluding amounts held by bond trustees that are not subject to California Government Code restrictions. N/A - Not Applicable See independent auditors' report. -42- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustees 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 table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment Type U.S. Treasury Obligations Money Market Mutual Funds Local Agency Investment Fund (LAIF) N/A - Not Applicable Disclosures Relating to Interest Rate Risk Maximum Percentage Maximum Maximum or Amount Investment Maturity Allowed in One Issuer 5 years None None 5 years 15% 10% N/A $ 40 M None 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 trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: See independent auditors' report. -43- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): Disclosures Relating to Interest Rate Risk (Continued) Remaining Maturity in Months) 12 Months 13-24 25-60 Investment Type or Less Months Months Total Local Agency Investment Fund (LAIF) $ 91,151,121 $ - $ - $ 91,151,121 Los Angeles County Pooled Investment Fund (LACPIF) Federal National Mortgage Association (FNMA) Federal Home Loan Bank (FHLB) Federal Farm Credit Bank (FFCB) Federal Home Loan Mortgage Corporation (FHLMC) Tennessee Valley Authority Medium -Term Notes United States Treasury Notes Money Market Mutual Funds Held by Bond Trustee: Local Agency Investment Fund (LAIF) Money Market Mutual Funds See independent auditors' report. 1,386,732 - - 1,386,732 1,062,004 974,439 9,875,367 11,911,810 7,489,137 6,696,417 7,348,817 21,534,371 429,119 488,656 10,926,265 11,844,040 2,439,405 4,061,440 19,451,929 25,952,774 2,523,420 - - 2,523,420 452,947 13,715,910 21,920,176 36,089,033 274,625 5,464,202 5,464,202 - 274,625 1,685,692 - - 1,685,692 1,331,631 - 1,331,631 110,225.833 25,936,862 $ 74,986,756 211,149.451 -44-- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): 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. Presented below 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 reported by Standard and Poor's, as of year end for each investment type: The actual ratings for the Medium -Term Notes: Other: AA Total Minimum 10,055,620 A+ Not A 3,136,442 as of Legal Total Other S 21.559.167 Required to Investment Type June 30, 2008 Rating_ AAA Other be Rated Not Rated LAIF $ 91,151,121 N/A $ - $ - $ - $ 91,151,121 LACPIF 1,386,732 N/A - - - 1,386,732 FNMA 11,911,810 N/A 11,911,810 - - - FHLB 21,534,371 N/A 21,534,371 - - - FFCB 11,844,040 N/A 11,844,040 - - - FHLMC 25,952,774 N/A 25,952,774 - - - Tennessee Valley Authority 2,523,420 N/A 2,523,420 - - Medium -Term Notes 36,089,033 A-1 14,529,866 21,559,167 - - US Treasury Notes 5,464,202 N/A - - 5,464,202 - Money Market Mutual Funds 274,625 A - 274,625 - - Held by Bond Trustee: LAIF 1,685,692 N/A - - - 1,685,692 Money Market Mutual Funds 1,331,631 A 1,331,631 - Total 211.149.451 88.296.281 23.165.423 5,464,202$_24—Z23.545 The actual ratings for the Medium -Term Notes: Other: AA $ 2,154,374 AA- 10,055,620 A+ 3,702,406 A 3,136,442 A -l+ 2,510,325 Total Other S 21.559.167 N/A - Not Applicable See independent auditors' report. -45- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer that represent 5% or more of the City's total investments are as follows: Issuer Federal National Mortgage Association Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal Farm Credit Bank Custodial Credit Risk Reported Investment Type Amount U.S. Government Sponsored Enterprise Securities $ 11,911,810 U.S. Government Sponsored Enterprise Securities 21,534,371 U.S. Government Sponsored Enterprise Securities 25,952,774 U.S. Government Sponsored Enterprise Securities 11,844,040 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 110% 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. At June 30, 2008, the City deposits (bank balances) were insured by the Federal Depository Insurance Corporation or collateralized as required under California Law. See independent auditors' report. -46-- • • • CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS • (CONTINUED) • • June 30, 2008 • • 2. CASH AND INVESTMENTS (CONTINUED): Investment in State Investment Pool • The City is a voluntary participant in the California 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. Each City may invest up to $40,000,000 and may also invest without limitation in special bond proceeds accounts. Investments in LAIF are highly liquid, as deposits r can be converted to cash within twenty-four hours without loss of interest. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts . based upon the City's prorata 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. • Investment in County Investment Pool The LACPIF is a pooled investment fund program governed by the Los Angeles County Board of Supervisors and administered by the Los Angeles County Treasurer and Tax Collector. Investments in the LACPIF are highly liquid, as deposits and withdrawals can be made at anytime without • penalty. LACPIF does not impose any maximum investment limit. The fair value of the City's . investment in this pool is reported in the accompanying financial statements at amounts based upon the City's prorata share of the fair value provided by LACPIF for the entire LACPIF portfolio (in w relation to the amortized cost of that portfolio). The balance available for withdrawal is based on - the accounting records maintained by LACPIF, which are recorded on an amortized cost basis. • • • • • • • • • • • See independent auditors' report. -47- • CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 3. CAPITALASSETS: Capital asset activity for the year ended June 30, 2008, was as follows: Governmental Activities: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Site improvements Building and improvements Equipment Infrastructure Total capital assets, being depreciated Less accumulated depreciation for: Balance at Balance at July 1, 2007 Additions Deletions June 30, 2008 $ 79,279,650 $ 3,675,674 $ - $ 82,955,324 82,155,075 28,566,872 (4,116,152) 106,605,795 161,434,725 32,242,546 (4,116,152) 189,561,119 14,074,142 3,660,282 - 17,734,424 45,530,704 1,006,327 - 46,537,031 8,455,763 978,770 - 9,434,533 656,695,949 11,098,973 - 667,794,922 724,756,558 16,744,352 Site improvements (4,379,072) (661,826) Building and improvements (8,160,783) (994,788) Equipment (5,952,900) (773,238) Infrastructure (173,895,181) (13,128,617) Total accumulated depreciation Total capital assets, being depreciated, net Total governmental activities capital assets, net See independent auditors' report. (192,387,936) (15,558,469) 532,368,622 1,185,883 - 741.500.910 (5,040,898) (9,155,571) (6,726,138) (187,023,798) _ (207,946,405) - 533,554,505 693.803.347 33.428.429 (4.116.152) 723.115.624 .• CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) 3. CAPITALASSETS (CONTINUED): Capital Asset Activity (Continued): Business -type Activity: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Building and improvements Equipment Total capital assets, being depreciated Less accumulated depreciation for: Building and improvements Equipment Total accumulated depreciation Total capital assets, being depreciated, net Total business -type activity, capital assets, net See independent auditors' report. June 30, 2008 Balance at Balance at July 1, 2007 Additions Deletions June 30, 2008 $ 10,787,880 $ - $ - $ 10,787,880 144,675 617,421 - 762,096 10,932,555 617,421 - 11,549,976 41,891,446 417,558 - 42,309,004 27,033,838 3,218,817 - 30,252,655 68,925,284 3,636,375 - 72,561,659 (3,280,956) (932,070) - (4,213,026) (13,093,393) (2,408,825) - (15,502,218) (16,374,349) _(3,340,895) - (19,715,244) 52,550,935 295,480 - 52,846,415 $ 63.483.490$ 912.901 $ - 64.396.391 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 3. CAPITAL ASSETS (CONTINUED): Depreciation Expense: Depreciation expense was charged to City functions/programs as follows: Governmental Activities: General government $ 401,922 Public safety 50,575 Public works 283,675 Parks and recreation 1,446,189 Community development 14,709 Internal service funds depreciation charged to programs 232,782 Allocated depreciation 2,429,852 Unallocated infrastructure depreciation 13,128,617 Total depreciation expense - governmental activities 15,558,469 Business -type Activity: Transit 3,340,895 Construction Commitments: The City has active construction projects as of June 30, 2008. At year-end, the City's commitments with contractors for the projects are as follows: Project Streets Medians Bridges Traffic signals Trails Drainage Total See independent auditors' report. -50- Remaining Commitment $ 15,700,061 112,739 1,462,491 119,102 582,240 3,424,030 21,400,663 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES: Long-term liabilities activity for the year ended June 30, 2008, was as follows: Balance at Balance at Due July 1, June 30, Within 2007 Additions Deletions 2008 One Year Governmental Activities: Lease Revenue Bonds: Series 2007 $ 13,785,000 $ - $ (210,000) $ 13,575,000 $ 245,000 Plus deferred amount for issuance premium 108,228 - (3,658) 104,570 - Total Lease Revenue Bonds 13,893,228 - _213,658) 13,679,570 245,000 Certificates of Participation: Refunding, Series 2005 16,760,000 - (970,000) 15,790,000 1,000,000 Series 2007 - 15,525,000 - 15,525,000 - Less deferred amounts: For issuance discounts (19,985) (60,776) 2,589 (78,172) On refunding (350,987) - 27,528 (323,459) - Total Certificates of Participation 16,389,028 15,464,224 (939,883) 30,913,369 1,000,000 Tax Allocation Bonds: Series 2008 - 29,860,000 - 29,860,000 - Housing Set -Aside - 8,850,000 - 8,850,000 - Less deferred amounts: For issuance discounts - (165,906) - (165,906) - Total Tax Allocation Bonds - 38,544,094 38,544,094 Subtotal 30,282,256 54,008,318 (1,153,541) 83,137,033 1,245,000 Capital leases payable 36,401 - (12,725) 23,676 12,788 Loans payable 4,328,207 - (734,473) 3,593,734 769,641 Compensated absences 1,780,826 1,445,128 (1,232,675) 1,993,279 500,000 Claims payable (see Note 12) 100,000 - (30,000) 70,000 35,000 Total governmental activities long-term liabilities 36.527.690 $ 55.453.446 S (3.163.414) S 88,817,722S__2_562.429 Business -type Activity: Capital leases payable S 1.236.869 $ -S (366.720) $ 870 149 &___B4 .845 See independent auditors' report. -51- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities: A. Lease Revenue Bonds - Series 2007: On January 16, 2007, the Santa Clarita Public Financing Authority issued $13,785,000 Lease Revenue Bonds, Series 2007. Concurrent with this bond issuance, the Authority entered into a lease and lease -back arrangement with the City whereby the Authority used the proceeds of the bond issuance to make a lump -sum lease payment to the City. In return, the City will make lease -back payments to the Authority sufficient to cover the principal and interest due on the Series 2007 Bonds. The property subject to the lease and lease -back arrangement is City Hall. The City used the proceeds from the lump -sum lease payment to make a valuation deposit with the Los Angeles County Superior Court in connection with the acquisition of right-of-way. Principal amounts on serial bonds mature annually each February 1 in the years 2008 through 2018 and bear interest at rates ranging from 4.0% to 5.0%. $2,495,000 term bonds mature February 1, 2033 and bear interest at 4.3%. $2,965,000 term bonds mature February 1, 2037 and bear interest at 4.375%. Interest is payable semi-annually on February 1 and August 1, commencing August 1, 2007. The term bonds maturing February 1, 2033 are subject to mandatory redemption commencing February 1, 2030. The term bonds maturing February 1, 2037 are subject to mandatory redemption commencing February 1, 2034. Bonds maturing on or after February 1, 2018 are subject to optional redemption on or after February 1, 2017. Future debt service requirements on the lease revenue bonds are as follows: Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2037 Total Principal $ 245,000 255,000 270,000 280,000 295,000 1,685,000 2,040,000 2,485,000 3,055,000 2,965,000 13,575.000 See independent auditors' report. -52- Interest $ 577,485 566,460 555,304 541,804 527,804 2,435,869 2,071,669 1,625,163 1,053,589 331,188 10,286,335 Total $ 822,485 821,460 825,304 821,804 822,804 4,120,869 4,111,669 4,110,163 4,108,589 3,296,188 $ 23,861,335 . CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) • June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): • Governmental Activities (Continued): B. Refunding Certificates of Participation - Series 2005: • On July 1, 2005, the Santa Clarita Public Financing Authority issued $17,700,000 in Certificates of Participation with an average interest rate of 3.4% to advance refund $17,640,000 of outstanding 1997 Series certificates with an average interest rate of 4.9%. These securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1997 series certificates. As a result, the 1997 Series • certificates are considered to be defeased, and the liability for those certificates has been removed from the long-term liabilities. The defeased 1997 Series certificates have been retired. The Authority amended and restated the lease agreement with the City that was entered into w simultaneously with the refunded certificates issue. Principal amounts mature annually each October 1 in the years 2006 through 2020 and bear interest at rates ranging from 3.0% to 4.0%. Interest is payable semi-annually on April 1 and October 1. The certificates maturing on or after October 1, 2016, are subject to optional prepayment on any date on or after October 1, 2015, at a price equal to the principal amount plus accrued interest to the prepayment date, without premium. Future debt service requirements on the certificates are as follows: Year Ending June 30- 2009 2010 2011 2012 2013 2014-2018 2019-2021 Total See independent auditors' report. Principal $ 1,000,000 1,030,000 1,060,000 1,090,000 1,125,000 6,195,000 4,290,000 15,790,000 -53-- $ 19,820,185 53-- Interest $ 532,201 501,752 470,401 438,151 404,223 1,422,516 260,941 4.030,185 Total $ 1,532,201 1,531,752 1,530,401 1,528,151 1,529,223 7,617,516 4,550,941 19,820,185 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities (Continued): C. Certificates of Participation - Series 2007: On December 12, 2007, the Santa Clarita Public Financing Authority issued $15,525,000 in Certificates of Participation to provide financing for the costs of acquiring open space lands, parks, and parkland in accordance with the City's open space, park and parkland programs, purchase a reserve fund surety and fund the costs of delivery of the Certificates. The Certificates evidence proportionate interest in lease payments to be made by the City to the Authority for the use and occupancy of the Aquatic Center and Sports Complex. The Certificates were issued at a discount of $60,776, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis for government -wide financial statement purposes. This issuance is comprised of $6,000,000 serial certificates maturing annually on October 1 from 2011 to 2028 and two term certificates (totaling $9,525,000) maturing on October 1, 2033 and October 1, 2037 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the certificates is payable semi-annually on October 1 and April 1 at rates ranging from 4.00% to 4.60% for the serial certificates and 4.75% for the term certificates. Future debt service requirements on the certificates are as follows: Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2038 Total See independent auditors' report. Principal 35,000 60,000 765,000 1,655,000 2,770,000 4,205,000 6,035,000 15,525,000 -54- Interest $ 713,651 713,651 713,651 712,951 711,051 3,485,756 3,243,600 2,765,543 1,962,995 755,606 15.778,455 Total $ 713,651 713,651 713,651 747,951 771,051 4,250,756 4,898,600 5,535,543 6,167,995 6,790,606 31,303.455 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities (Continued): D. Tax Allocation Bonds - Series 2008: On June 12, 2008, the Agency issued the Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series 2008 (2008 Bonds) in the amount of $29,860,000. Proceeds of the 2008 Bonds will used to finance certain redevelopment projects of the Agency, fund a debt service reserve account, and pay for costs of the bond issuance. The bonds were issued at a net discount of $160,665, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis for government -wide financial statement purposes. This bond issue is comprised of $12,065,000 serial bonds maturing annually on October 1 through 2028 and three term bonds (totaling $17,795,000) maturing on October 1, 2032, October 1, 2037, and October 1, 2042 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the 2008 Bonds is payable semi-annually on October 1 and April 1 at rates ranging from 4.00% to 4.75% for the serial bonds and 4.75% to 5.00% for the term bonds. The annual debt service requirements on the 2008 Bonds are as follows: Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2042 Totals See independent auditors' report. Principal 400,000 420,000 435,000 450,000 2,550,000 3,105,000 3,830,000 4,820,000 6,095,000 7,755,000 29,860,000 -55- Interest $ 1,114,374 1,380,148 1,363,748 1,346,648 1,328,948 6,352,738 5,783,476 5,030,178 4,018,156 2,710,097 1,006,875 31,435,386 Total $ 1,114,374 1,780,148 1,783,748 1,781,648 1,778,948 8,902,738 8,888,476 8,860,178 8,838,156 8,805,097 8,761,875 61,295,386 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities (Continued): E. Tax Allocation Bonds - Housing Set -Aside: On June 12, 2008, the Agency issued the Santa Clarita Redevelopment Agency Housing Set -Aside Tax Allocation Bonds, Series 2008 (Housing Set -Aside Bonds) in the amount of $8,850,000. Proceeds of the Housing Set -Aside Bonds will be used to finance low and moderate income housing projects and programs, fund a reserve fund, and pay for costs of the bond issuance. The bonds were issued at a net discount of $5,241, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis for government -wide financial statement purposes. The bond issue is comprised of $3,550,000 serial bonds maturing annually on October 1 through 2028 and three term bonds (totaling $5,300,000) maturing on October 1, 2032, October 1, 2037, and October 1, 2042 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the Housing Set -Aside Bonds is payable semi-annually on October 1 and April 1 at rates ranging from 4.00% to 4.875% for the serial bonds and 5.00% for the term bonds. The annual debt service requirements on the Housing Set -Aside Bonds are as follows: Year Ending June 30, Principal Interest 2009 $ - $ 335,205 2010 120,000 415,156 2011 125,000 410,256 2012 125,000 405,256 2013 135,000 400,056 2014-2018 750,000 1,913,781 2019-2023 910,000 1,746,741 2024-2028 1,125,000 1,524,825 2029-2033 1,430,000 1,218,088 2034-2038 1,815,000 814,375 2039-2042 2,315,000 300,625 Totals 8,850,000 9,484,364 See independent auditors' report. -56- Total $ 335,205 535,156 535,256 530,256 535,056 2,663,781 2,656,741 2,649,825 2,648,088 2,629,375 2,615,625 18,334,364 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities (Continued): F. Capital Leases Payable: (1) In August 2005, the City entered into a lease with an option to purchase agreement in the amount of $40,608 for the lease of a copier. Payments of $812 are due monthly through August 2010. Future lease payment requirements are as follows: Year Ending June 30, 2009 2010 2011 Total Principal $ 8,652 9,278 1,610 19.540 Interest $ 1,094 468 14 $ 1,576 Total $ 9,746 9,746 1.624 (2) In April 2006, the City entered into a lease with an option to purchase agreement in the amount of $14,518 for the lease of a copier. Payments of $427 are due monthly through April 2009. Future lease payment requirements are as follows: Year Ending June 30, 2009 Principal $ 4,136 Interest $ 134 Total $ 4,270 The remaining assets acquired through existing capital leases are as follows: Assets: Equipment $ 55,126 Less: accumulated depreciation (29,302) Total assets, net $ 25,824 See independent auditors' report. -57- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities (Continued): G. Loans Payable: (1) In December 1999, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $2,000,000. The purpose of this loan was to provide financing for the installation of curbs, gutters and sidewalks in the West Newhall area. Payments are due semi-annually, commencing on August 1, 2001, and continuing through August 1, 2014. Future CDBG grant funding will be used to repay the loan. In August 2002, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $1,150,000. The purpose of this loan was to provide financing for the construction of improvements to Scherzinger Lane. Payments are due semi-annually, commencing on February 1, 2003, and continuing through August 1, 2017. Future CDBG grant funding will be used to repay the loan. In August 2002, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $350,000. The purpose of this loan was to assist the Boys and Girls Club in financing the construction of a new gymnasium. Payments are due semi-annually, commencing on February 1, 2003, and continuing through August 1, 2017. Future CDBG grant funding will be used to repay the loan. Future loan payment requirements are as follows: Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 Total Principal $ 230,000 230,000 230,000 230,000 230,000 810,000 $ 1.960,000 See independent auditors' report. -58- Interest $ 116,159 102,494 88,424 73,949 59,184 96,463 $ 536,673 Total $ 346,159 332,494 318,424 303,949 289,184 906,463 $ 2,496,673 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities (Continued): G. Loans Payable (Continued): (2) On April 8, 2002, the City entered into a lease purchase agreement with the Santa Clarita Public Financing Authority to finance the purchase of real property that was developed as an employee parking lot for the City. The Authority assigned all of its rights under the lease purchase agreement to Zions First National Bank. In consideration of this assignment, Zions First National Bank advanced the City $1,200,000. The lease purchase agreement calls for interest at a rate of 4.79% per annum on the unpaid balance. Principal and interest are payable to Zions First National Bank semi-annually, commencing on October 8, 2002, and continuing through April 8, 2012. The asset acquired with the loan proceeds is reported in the governmental activities' capital assets as land (not being depreciated). Future payment requirements are as follows: Year Ending June 30, 2009 2010 2011 2012 Total Principal $ 127,647 133,835 140,322 147,053 $ 548,857 Interest $ 24,783 18,595 12,108 5,307 $ 60.793 Total $ 152,430 152,430 152,430 152,360 $ 609,650 • (3) On October 3, 2003, the City entered into a seven year fixed rate lease/leaseback • transaction for certain capital transfer facilities with the Santa Clarita Public Financing Authority. The Authority assigned all of its rights under the leaseback transaction to Zions First National Bank. In consideration of this assignment, Zions First National Bank loaned • the Authority $2,590,955, which the Authority used to pay the up -front rental payment due . to the City. This amount was used to prepay, in full, the note payable to Price Enterprise, • Inc. The balance of the proceeds were used to pay for delivery costs. The lease/leaseback transaction calls for the City to make semi-annual payments of principal and interest to • Zions First National Bank, commencing on May 1, 2004. Interest is fixed at a rate of 3.64%. • • See independent auditors' report. -59- • CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Governmental Activities (Continued): G. Loans Payable (Continued): (3) (Continued): Future payment requirements are as follows: Year Ending June 30, 2009 2010 2011 Total H. Compensated Absences: Principal $ 411,994 442,137 230,746 1.084,877 Interest $ 35,844 20,570 4,200 60,614 Total $ 447,838 462,707 234,946 1,145,491 There is no fixed payment schedule for earned but unpaid compensated absences. Business -type Activity: A. Capital Leases Payable: (1) In January 1998, the City entered into a lease with an option to purchase agreement in the amount of $1,539,232 for the lease of four buses. Such agreement carries interest at 5.2%, payable annually on January 22 through 2009. Future lease payment requirements are as follows: Year Ending June 30, 2009 Principal $ 158,636 See independent auditors' report. -60- Interest $ 8,234 Total $ 166,870 CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. LONG-TERM LIABILITIES (CONTINUED): Business -type Activity (Continued): A. Capital Leases Payable (Continued): (2) In December 1998, the City entered into a lease with an option to purchase agreement in the amount of $2,335,964 for the lease of six buses. Such agreement carries interest at 4.77%, payable annually on December 31 through 2010. Future lease payment requirements are as follows: Year Ending June 30, 2009 2010 2011 Total Principal $ 226,209 237,000 248,304 $ 711,513 Interest $ 33,939 23,148 11,844 $ 68.931 Total $ 260,148 260,148 260,148 $ 780.444 The remaining assets acquired through existing capital leases are as follows: Assets: Equipment $ 3,875,196 Less: accumulated depreciation (3,185,444) Total assets, net $ 689,752 5. LOANS RECEIVABLE: The City has provided deferred -payment rehabilitation loans to qualified homeowners in connection with CDBG and HOME rehabilitation programs. The loans receivable balance totaling $1,373,437 at June 30, 2008, has been offset by deferred revenue in the other governmental funds, since these loans are not available to finance current expenditures. See independent auditors' report. -61 - CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 6. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS: The composition of interfund balances as of June 30, 2008, is as follows: Due To/From Other Funds: Receivable Fund Payable Fund Amount General Fund Other Governmental Funds $ 2,104,858 Agency Funds 44,350 $ 2,149,208 The interfund payables balance represents routine and temporary cash flow assistance from the General Fund until the amounts receivable from other governments are collected to reimburse eligible expenditures. Advances From/To Other Funds: Receivable Fund Payable Fund Amount General Fund Bridge and Thoroughfare Special Revenue Fund $ 7,489,773 Redevelopment Agency Debt Service Fund 16,225,546 Developer Fees Special Bridge and Thoroughfare Revenue Fund Special Revenue Fund 5,634,097 Redevelopment Agency Debt Service Fund 562,193 Self -Insurance Internal Bridge and Thoroughfare Service Fund Special Revenue Fund 3,076,200 32,987,809 Advances between the funds are to fund capital projects. Amounts will be reimbursed to the receivable fund through future developer fees and tax increment revenues. See independent auditors' report. -62- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 6. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS (CONTINUED): Interfund Transfers: Transfer In to Fund Transfers Out of Fund General Fund Developer Fees Special Revenue Fund Other Governmental Funds Transit Enterprise Fund Open Space Preservation District Special Revenue Fund Redevelopment Agency Debt Service Fund Redevelopment Agency Capital Projects Fund Other Governmental Funds Transit Enterprise Internal Service Funds Other Governmental Funds Redevelopment Agency Capital Projects Fund Redevelopment Agency Debt Service Fund General Fund Open Space Preservation District Special Revenue Fund Other Governmental Funds Transit Enterprise Fund Other Governmental Funds General Fund Amount $ 259,467 2,111,579 710,755 15,000,000 1,052,000 5,273,097 16,426,665 216,078 2,047,320 15,580 9,157,455 3,125,000 55,394.996 Transfers provide funding for capital projects, capital acquisitions and debt service. See independent auditors' report. -63- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 7. INDIVIDUAL FUND DISCLOSURES: A. Deficit Fund Balances: Funds which have a deficit fund balance at June 30, 2008, are as follows: Major Funds: Redevelopment Agency Debt Service Fund Other Governmental Funds: State Park Special Revenue Fund CDBG Special Revenue Fund Miscellaneous Grants Special Revenue Fund Sewer Maintenance Special Revenue Fund BJA Law Enforcement Special Revenue Fund HOME Special Revenue Fund Federal Grants Special Revenue Fund $ 15,873,835 302,224 39,772 1,348,959 18,930 2,984 1,867 607,757 The City plans to remove these deficits through transfers from the General Fund, receipt of developer fees, receipt of tax increment revenues and receipt of deferred grant revenues from other governmental agencies. B. Expenditures Exceeding Appropriations: For the year ended June 30, 2008, expenditures exceeded appropriations in the following programs/functions (the legal level of budgetary control) of the respective funds: Major Funds: General Fund Bridge and Thoroughfare Special Revenue Redevelopment Agency Capital Projects Other Governmental Funds: Special Assessment Special Revenue State Park Special Revenue Public Financing Authority Capital Projects See independent auditors' report. -64- Excess Program/Function Expenditures Debt service $ 14,870 Public works 716,348 Debt service 20,648 Capital outlay 2,511,552 Debt service 939,432 Public works 774,028 Capital outlay 707,248 Parks and recreation 13,020 Debt service 168,537 - CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) - June 30, 2008 8. DEFINED BENEFIT PENSION PLAN: Plan Description: The City of Santa Clarita contributes to the California Public Employees' Retirement System (Ca1PERS), an agent multiple -employer public employee defined benefit pension plan. CalPERS • provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of CalPERS' annual • financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. Funding Policy: Participants are required to contribute 8% of their annual covered salary. The City makes the . contributions required of City employees on their behalf and for their account. The City is required to contribute at an actuarially determined rate; the rate for the year ended June 30, 2008, was 11.387% for non -safety employees. The contribution requirements of plan members and the City are established and may be amended by CalPERS. Annual Pension Cost: For 2008, the City's annual pension cost of $4,622,420 for CaIPERS was equal to the City's • required and actual contribution. The required contribution was determined as part of the • June 30, 2005, actuarial valuation using the entry age normal actuarial cost method The contributions were determined as a level percent of payroll over an average remaining period of fifteen years from the valuation date. The actuarial assumptions included (a) a 7.75% investment rate of return (net of administrative expenses), (b) projected annual salary increases of 3.25% to - 14.45%, depending on age, service and type of employment, (c) an inflation rate of 3.00%, (d) a payroll growth rate of 3.25%, and (e) individual salary growth based on a merit scale that varies by duration of employment, coupled with an assumed annual inflation component of 3.00% and an annual production growth of 0.25%. The actuarial value of CalPERS' assets was determined using techniques that smooth the effect of short-term volatility in the market value of investments over a - three-year period (smoothed market value). Initial unfunded liabilities are amortized over a closed period that depends on the plan's date of entry into CalPERS. Subsequent plan amendments are amortized as a level percentage of pay over a closed 20 -year period. Gains and losses that occur in the operation of the plan are amortized over a rolling period, which results in an amortization of • 6% of unamortized gains and losses each year. If the plan's accrued liability exceeds the actuarial . value of plan assets, then the amortization payment on the total unfunded liability may not be lower than the payment calculated over a 30 -year amortization period. See independent auditors' report. -65- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 8. DEFINED BENEFIT PENSION PLAN (CONTINUED): Annual Pension Cost (Continued): Three -Year Trend Information for Ca1PERS ($ Amounts in Thousands) Fiscal Annual Pension Percentage of Year Cost (APC) APC Contributed 2006 $ 3,578 100% 2007 4,280 100% 2008 4,622 100% Funded Status and Funding Progress: Net Pension Obligation As of June 30, 2007, the most recent actuarial valuation date, the plan was ,83.9% funded. The actuarial accrued liability for benefits was $60.4 million, and the actuarial value of assets was $50.70 million, resulting in an unfunded actuarial accrued liability (UAAL) of $9.7 million. The covered payroll (annual payroll of active employees covered by the plan) was $23.0 million, and the ratio of the UAAL to the covered payroll was 42.2%. The schedule of funding progress presented below, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Schedule of Funding Progress ($ Amounts in Thousands) See independent auditors' report. -66- Entry Age Unfunded Normal AAL UAAL as a Actuarial Accrued Actuarial (UAAL)/ % of Valuation Liability Value of (Excess Funded Covered Covered Date (AAL) Assets Assets) Ratio Payroll Payroll (A) (B) (A -B) (B/A) (C) [(A-B)/C] 6/30/05 $ 44,138 $ 36,024 $ 8,114 81.6 % $ 19,842 40.9 % 6/30/06 50,463 42,487 7,976 84.2 % 21,669 36.8 % 6/30/07 60,401 50,699 9,702 83.9 % 22,981 42.2 % See independent auditors' report. -66- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 9. POST EMPLOYMENT BENEFITS: In addition to the retirement benefits described in Note 8, the City provides post-retirement health care benefits, in accordance with a City resolution, to all employees who retire from the City on or after attaining age 50 with 5 years Ca1PERS credited service. The City pays the cost of the retirees' enrollment, including the enrollment of family members, in a health benefits plan to a maximum of $913 per month. The City funds these amounts on a pay-as-you-go basis. For the year ended June 30, 2008, there were 33 eligible participants for which the City paid $241,006 for medical insurance premiums. 10. DEFERRED COMPENSATION PLAN/DEFINED CONTRIBUTION PLAN: The City has established Deferred Compensation/Defined Contribution plans for certain classifications of management under Internal Revenue Service Code Section 401(a). City participation in contributions to the plans is mandatory. The City is obligated to contribute amounts ranging from $2,000 to $15,500 per participant per year. Employee contributions to certain plans are voluntary. During the year ended June 30, 2008, there were 24 participants in the plans. The City contributions totaled $72,144, and employees' contributions totaled $60,171. 11. RESERVES AND DESIGNATIONS OF FUND BALANCES: A city may set up "reserves" of fund equity to segregate fund balances or net assets which are not appropriable for expenditure in future periods, or which are legally set aside for a specific future use. Fund "designations" of unreserved fund balances also may be established to indicate tentative plans for financial resource utilization in a future period. The City's reserves and designations at June 30, 2008, are tabulated below, followed by explanations as to the nature and purpose of each reserve and designation. Reserves: Encumbrances Prepaid costs Deposits Debt service Land held for resale Low/moderate income housing Advance to other funds Total Reserves 11,285,873 19,968,118 - 5,460,000 - - - 34.920.54714.097.331 5.527,888 $ 1,000 2.579.835 29.766.916 See independent auditors' report. -67- Special Revenue Funds Redevelopment Bridge Open Space Agency Other General and Developer Preservation Capital Governmental Fund Thoroughfare Fees District Projects Funds $ 1,594,422 $ 14,097,331 $ 67,888 $ - $ 972,639 $ 17,734,461 27,200 - - - - - 13,330,807 - - 1,000 - - - - - - - 746,582 - - - - 1,607,196 - 11,285,873 19,968,118 - 5,460,000 - - - 34.920.54714.097.331 5.527,888 $ 1,000 2.579.835 29.766.916 See independent auditors' report. -67- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 11. RESERVES AND DESIGNATIONS OF FUND BALANCES (CONTINUED): Designations: Self-insurance Special revenue purposes Capital improvements Total Designations Special Revenue Funds Redevelopment Bridge Open Space Agency Other General and Developer Preservation Capital Governmental Fund Thoroup-hfareFees District Proiects Funds $ 220,616 $ - $ - $ - $ - - 31,916,032 6,186,071 $ 220.616 $ - $ - $ - $ - $ 38.102.103 A. Reserved for Encumbrances - Amounts reserved for encumbrances are commitments for materials and services on purchase orders and contracts which are unperformed. B. Reserved for Prepaid Costs - This reserve is for prepaid costs since they are not available as a resource to meet expenditures of the current year. C. Reserved for Deposits - This reserve is for deposits since they are not available as a resource to meet expenditures of the current year. D. Reserved for Debt Service - These reserves represent amounts accumulated in accordance with a bond indenture or similar covenant. E. Reserved for Land Held for Resale - This reserve is for land held for resale by the Agency since it is not available as a resource to meet expenditures of the current year. F. Reserved for Low/Moderate Income Housing - This reserve is for amounts set-aside from tax increment money received by the Agency for the purpose of spending on projects that benefit low/moderate income households. G. Reserved for Advances to Other Funds - This reserve is established to reflect the advances to the Redevelopment Agency, so they will not be considered as current funds available. H. Designated for Self-insurance - This designation is held to cover any shortfalls in the Self-insurance Internal Service Fund. See independent auditors' report. -68- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 I L RESERVES AND DESIGNATIONS OF FUND BALANCES (CONTINUED): I. Designated for Special Revenue Purposes - These funds are designated for specific special revenue purposes, as restricted by law or administrative action. J. Designated for Capital Improvements - These funds are designated to provide for new capital additions, as determined by the City Council. 12. SELF INSURANCE: The City joined Special Districts Risk Management Authority (SDRMA) in the fall of 2005. SDRMA is a self insurance risk pool that serves as a not-for-profit public agency to its members. Through SDRMA the City currently holds a $500 general liability deductible. All general liability claims above $500 and up to a limit of $10,000,000 are handled by SDRMA. On June 30, 2008, $100,000 was accrued by the City for general liability claims that were received prior to the partnership with SDRMA. While the ultimate amounts of losses that occurred prior to SDRMA are dependent of future developments, based upon information provided from the City Attorney, outside counsel and others involved with the administration of the programs, the City's management believes that the aggregate accrual is adequate to cover such losses. Settled claims have not exceeded any of these coverage amounts in any of the last three fiscal years, and there were no reductions in the City's insurance coverage during the year ended June 30, 2008. Changes in the reported liability since June 30, 2006, resulted in the following: Liability as of June 30, 2006 $ 566,632 Claims and changes in estimates during the year ended June 30, 2007 1,427,195 Claims payments during the year ended June 30, 2007 (1,893,827) Liability as of June 30, 2007 100,000 Claims and changes in estimates during the year ended June 30, 2008 1,251,935 Claims payments during the year ended June 30, 2008 (1,281,935) Liability as of June 30, 2008 $ 70,000 See independent auditors' report. CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 13. SEGMENT INFORMATION: Net working capital (deficit) of the Transit Enterprise System at June 30, 2008, was as follows: Current assets $ 6,364,115 Current liabilities payable from current assets (3,843,612) Net working capital (deficit) 2,520,503 14. NO COMMITMENT DEBT: 1915 Act Limited Obligation Improvements Bonds A. On September 2, 1992, $879,432 of 1915 Act Limited Obligation Improvement Bonds for the Golden Valley Road Improvement Assessment District were issued. The 1915 Golden Valley Road Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of debt service is from the property assessments within the district. The principal amount of debt outstanding at June 30, 2008, was $75,000. B. On January 13, 2001, $790,000 of 1915 Act Limited Obligation Improvement Bonds for the Vermont Drive/Everett Drive Improvement Assessment District were issued. The 1915 Vermont Drive/Everett Drive Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of debt service is from the property assessments within the district. The principal amount of the debt outstanding at June 30, 2008, was $590,000. Community Facilities District No. 2002-1 Special Tax Bonds On October 29, 2002, $17,370,000 of Special Tax bonds were issued for Community Facilities District No. 2002-1. The Special Tax bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of these bonds. The source of debt service is from property assessments within the district. The principal amount of debt outstanding at June 30, 2008, was $17,205,000. See independent auditors' report. -70- CITY OF SANTA CLARITA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 15. SANTA CLARITA WATERSHED RECREATION AND CONSERVANCY AUTHORITY: In June 1992, the City entered into a joint powers agreement with the Santa Monica Mountains Conservancy to create the Santa Clarita Watershed Recreation and Conservancy Authority (the Authority). The purpose of the Authority is to acquire, develop and conserve additional park and open space lands, including water -oriented recreation and conservation projects. The governing board consists of two representatives from the Conservancy and two from the City. Upon termination of the agreement, personal property and funds will be returned to the originating party. Any real property owned by the Authority shall be conveyed to the City unless the Authority deems otherwise. The City has an ongoing financial responsibility and an ongoing financial interest in the Authority; however, it does not have an equity interest. Financial statements of the Authority may be obtained at the City's administrative offices. 16. RESTATEMENT OF NET ASSETS/FUND BALANCES: Beginning fund balances of the General Fund and Developer Fees Special Revenue Fund have been increased by $571,527 and $15,533, respectively, as a result of reclassifying previously deferred interest income that met the availability criteria as of July 1, 2007. On the government -wide statements, these amounts had been improperly classified as unearned revenue, therefore, beginning net assets of the governmental activities has also been increased. See independent auditors' report. -71- This page intentionally left blank. -72- REQUIRED SUPPLEMENTARY INFORMATION -73- CITY OF SANTA CLARTTA BUDGETARY COMPARISON SCHEDULE GENERAL FUND For the year ended June 30, 2008 REVENUES: Taxes Licenses and permits Investment income Revenue from other agencies Fines and forfeitures Service charges Other revenue Overhead reimbursement TOTAL REVENUES EXPENDITURES: Current: General government Public safety Public works Parks and recreation Community development Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR, AS RESTATED FUND BALANCE - END OF YEAR Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 65,638,227 $ 67,227,547 $ 68,032,980 $ 805,433 5,334,130 5,334,130 5,256,748 (77,382) 2,172,950 2,172,950 3,654,884 1,481,934 3,058,369 3,073,889 2,074,594 (999,295) 350,950 350,950 464,954 114,004 6,162,795 6,214,633 6,368,343 153,710 48,000 136,459 1,167,594 1,031,135 1,708,846 1,708,846 1,659,376 (49,470) 84,474,267 86,219,404 88,679,473 2,460,069 25,243,063 25,725,372 13,891,238 11,834,134 15,794,891 16,327,656 15,764,767 562,889 15,501,243 16,952,297 15,423,009 1,529,288 19,630,911 20,797,944 19,731,872 1,066,072 4,110,759 5,918,373 5,080,812 837,561 - - 12,725 (12,725) - - 2,145 (2,145) 80,280,867 85,721,642 69,906,568 15,815,074 4,193,400 497,762 18,772,905 18,275,143 3,281,598 3,168,813 3,081,801 (87,012) (6,446,004) (23,100,119) (19,551,665) 3,548,454 (3,164,406) (19,931,306) (16,469,864) 3,461,442 1,028,994 (19,433,544) 2,303,041 21,736,585 63,771,385 63,771,385 63,771,385 - $ 64,800,379 $ 44,337,841 $ 66,074,426 $ 21,736,585 See independent auditors' report and note to required supplementary information. -74- CITY OF SANTA CLARITA BUDGETARY COMPARISON SCHEDULE BRIDGE AND THOROUGHFARE SPECIAL REVENUE FUND REVENUES: Developer fees Investment income TOTAL REVENUES EXPENDITURES: Current: Public works Capital outlay Debt service: Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES: Transfers in NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR For the year ended June 30, 2008 143,216 4,146,085 4,862,433 Variance with 4,371,984 33,792,338 14,305,741 Final Budget Budgeted Amounts - Positive Original Final Actual (Negative) $ 1,750,000 $ 32,008,000 $ 21,215,477 (10,792,523) 229,500 229,500 1,482,014 1,252,514 1,979,500 32,237,500 22,697,491 (9,540,009) 143,216 4,146,085 4,862,433 (716,348) 4,371,984 33,792,338 14,305,741 19,486,597 - - 20,648 (20,648) 4,515,200 37,938,423 19,188,822 18,749,601 (2,535,700) (5,700,923) 3,508,669 9,209,592 - 500,000 - (500,000) (2,535,700) (5,200,923) 3,508,669 8,709,592 11, 800,508 11,800,508 11,800,508 - $ 9,264,808 $ 6,599,585 $ 15,309,177 $ 8,709,592 See independent auditors' report and note to required supplementary information. -75- CITY OF SANTA CLARITA BUDGETARY COMPARISON SCHEDULE DEVELOPER FEES SPECIAL REVENUE FUND REVENUES: Developer fees Investment income Other revenue TOTAL REVENUES EXPENDITURES: Current: Community development Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING USES: Transfers out NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR, AS RESTATED FUND BALANCE - END OF YEAR For the year ended June 30, 2008 Budgeted Amounts Original Final $ - $ - $ 621,005 225,000 225,000 512,279 - - 7,362 225,000 225,000 1,140,646 Actual Variance with Final Budget Positive (Negative) $ 621,005 287,279 - 92,279 52,434 39,845 722,000 1,722,354 1,394,178 328,176 722,000 1,814,633 1,446,612 368,021 (497,000) (1,589,633) (305,966) 1,283,667 - (701,211) (259,467) 441,744 (497,000) (2,290,844) (565,433) 1,725,411 1,722,348 1,722,348 1,722,348 - $ 1,225,348 $ (568,496) $ 1,156,915 $ 1,725,411 See independent auditors' report and note to required supplementary information. -76- CITY OF SANTA CLARITA BUDGETARY COMPARISON SCHEDULE OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Taxes Investment income TOTAL REVENUES EXPENDITURES: Current: General government EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Variance Final Budget Budgeted Amounts Positive Original Final Actual (Negative) — $ - $ - $ 1,474,353 $ 1,474,353 189,095 189,095 1,663,448 1,663,448 221,578 11,900 (221,578) 1,651,548 209,678 1,873,126 15,000,000 15,000,000 - (216,078) (216,078) - - 14,783,922 14,783,922 - - 14,562,344 16,435,470 1,873,126 $ - $ 14,562,344 $ 16,435,470 $ 1,873,126 See independent auditors' report and note to required supplementary information. -77- CITY OF SANTA CLARITA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION June 30, 2008 1. BUDGETS AND BUDGETARY ACCOUNTING: The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1) The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and the means of financing them. 2) The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year. Actual expenditures may not exceed budgeted appropriations at the functional or program level. The City Manager is authorized to transfer budgeted amounts at the program level. The City has the following programs accounted for through its governmental funds: general government, public safety, public works, parks and recreation, community development, capital outlay and debt service expenditures. 3) Annual budgets for the governmental funds are adopted on a basis substantially consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items. No budgetary comparison is presented for the Sewer Maintenance Special Revenue Fund, the Public Education and Government Special Revenue Fund, the Redevelopment Agency Debt Service Fund, the Redevelopment Agency Low/Mod Debt Service Fund and the Public Financing Authority Debt Service Fund. 4) Formal budgetary integration is employed as a management control device. Commitments for materials and services, such as purchase orders and contracts, are recorded during the year as encumbrances to assist in controlling expenditures. Appropriations at year-end lapse, and then re -appropriated amounts are added to the following year's budgeted appropriations. At June 30, 2008, governmental fund balances have been reserved for encumbrances carried forward. See independent auditors' report. -78- . OTHER GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS • The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are • legally restricted to expenditures for specific purposes. Bikeway - To account for monies received from the State of California restricted for bicycle and pedestrian facilities available under Article 3 of Transportation Development Act (SB821). Gas Tax - To account for monies received and expended from the state and county gas tax allocation restricted to fund various street highway improvements including maintenance. Park Improvement - To account for monies received from developers restricted to fund the acquisition and development of new park land space. Proposition A - As "Proposition A" increased sales tax in Los Angeles County by one-half percent (.5%), this fund accounts for financial activity relative to the City's share of these monies. "Proposition A" revenue is to be used for transportation -related purposes. Special Assessment - To account for monies received for small assessment districts. State Park - To account for grant monies received from the State of California Department of Parks and - Recreation for construction or improvements of park lands within the City. TDA (Transportation Development Act) - To account for monies received from the State of California under Article 8 of the TDA. These funds may be used for local streets and road expenditures when the City's unmet transportation needs have been satisfied. • Traffic Safety - To account for monies received from vehicle code fines. This fund is used to finance law enforcement expenditures. CDBG (Community Development Block Grant) - To account for Federal entitlements under the Housing and Community Development Act of 1974, as amended. The City Council annually allocates CDBG Funds to various programs. AOMD (Air Quality Management District) - To account for revenues and expenditures for Air Quality Management. Aid to Cities - To account for receipts and disbursements associated with County Aid to cities grant. . Landscape Maintenance District #1 - To account for receipts and disbursements related to a landscape district. -79- • OTHER GOVERNMENTAL FUNDS (CONTINUED) SPECIAL REVENUE FUNDS (CONTINUED) Stormwater Utility - To account for receipts and disbursements related to stormwater and run-off programs. Miscellaneous Grants - To account for receipts and disbursements for non-federal miscellaneous grants. Sewer Maintenance - To account for monies received from developers as sewer frontage fees to be used to fund sewer maintenance projects. BJA Law Enforcement - To account for receipts and disbursements for the BJA law enforcement grant Supplemental Law Grant - To account for receipts and disbursements for the supplemental law grant. HOME - To account for receipts and disbursements for the activity for the HOME grant program. Library Facilities Fees - To account for receipts and disbursements for the library facilities. Public Education and Government - To account for the 1% PEG Capital Grant funds received from video service providers pursuant to Digital Infrastructure and Video Competition Act of 2006. Proposition C - To account for the City's share of the one-half percent (.5%) increased sales tax in Los Angeles County as a result of "Proposition C". This revenue is to be used for transportation related purposes. - Federal Grants - To account for receipts and disbursements of miscellaneous federal grant monies not accounted for in other funds. DEBT SERVICE FUNDS The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest and principal on general long-term debt. Redevelopment Agency Low/Mod - To account for principal and interest payments on the Housing Set -Aside Tax Allocation Bonds, Series 2008. Public Financing Authority - To account for principal and interest payments on the 1991 Revenue Bonds issued by the Santa Clarita Public Financing Authority. OTHER GOVERNMENTAL FUNDS (CONTINUED) CAPITAL PROJECTS FUNDS The Capital Projects Funds are used to account for the acquisition or construction of the City's major capital facilities, other than those financed by proprietary funds. OTHER FUNDS: General Capital Projects - To account for major capital improvement projects not accounted for in other funds. Redevelopment Agency Low/Mod - To account for the 20% set-aside of tax increment revenues, bond proceeds and other revenues to be used for development of low and moderate income housing. Public Financing Authority - To account for the construction of all capital projects that utilize public financing authority funds. MAJOR FUND: Redevelopment Agency - To account for the Agency's construction of all capital projects located within the project area that are not financed with housing set-aside funds. CITY OF SANTA CLARITA COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS ASSETS Cash and investments Cash and investments with fiscal agent Accounts receivable Interest receivable Due from other governments Loans receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable and accrued liabilities Deferred revenue Due to other governments Due to other funds TOTAL LIABILITIES FUND BALANCES (DEFICITS): Reserved: Encumbrances Debt service Low/moderate income housing Unreserved: Designated for special revenue purposes Designated for capital improvements Undesignated TOTAL FUND BALANCES (DEFICITS) TOTAL LIABILITIES AND FUND BALANCES See independent auditors' report. June 30, 2008 Special Revenue Funds Park Bikeway Gas Tax Improvement Proposition A $ 422,760 $ 3,092,663 $ 1,970,548 $ 1,029,544 - 777,938 15,802 - 3,796 28,779 17,900 10,125 60,000 - 103,170 - $ 486,556 $ 3,899,380 $ 2,107,420 $ 1,039,669 $ 54,177 $ 195,644 $ 19,152 $ 152,878 279,808 2,861,061 110,382 4,080 333,985 3,056,705 129,534 156,958 84,032 3,534,780 342,868 745,753 68,539 - 1,635,018 136,958 - (2,692,105) - - 152,571 842,675 1,977,886 882,711 $ 486,556 $ 3,899,380 $ 2,107,420 $ 1,039,669 -82- Special Revenue Funds (Continued) Special State Traffic $ - $ 166,742 Assessment Park TDA Safety CDBG AQMD $ 6,582,169 $ 19,773 $ - $ 45,805 $ 205,908 $ 702,797 244,597 - - 112,070 - - 70,486 - - 16,097 - 6,432 - 302,337 3,913,718 - 159,676 54,600 - - - - 141,004 - $ 6,897,252 $ 322,110 $ 3,913,718 $ 173,972 $ 506,588 $ 763,829 $ 422,078 $ 26,015 $ 175,193 $ - $ 166,742 $ - 28,402 302,337 3,309,770 6,487 379,618 2,592 - 26,215 - - - - 64,121 269,767 423,860 - - - 514,601 624,334 3,908,823 6,487 546,360 2,592 343,786 116,465 3,342,543 - 293,940 - 6,038,865 - - 167,485 - 761,237 - (418,689) (3,337,648) - (333,712) - 6,382,651 (302,224) 4,895 167,485 (39,772) 761,237 $ 6,897,252 $ 322,110 $ 3,913,718 $ 173,972 $ 506,588 $ 763,829 (Continued) -83- CITY OF SANTA CLARITA COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS (CONTINUED) ASSETS Cash and investments Cash and investments with fiscal agent Accounts receivable Interest receivable Due from other governments Loans receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable and accrued liabilities Deferred revenue Due to other governments Due to other funds TOTAL LIABILITIES FUND BALANCES (DEFICITS): Reserved: Encumbrances Debt service Low/moderate income housing Unreserved: Designated for special revenue purposes Designated for capital improvements Undesignated TOTAL FUND BALANCES (DEFICITS) TOTAL LIABILITIES AND FUND BALANCES See independent auditors' report. June 30, 2008 Special Revenue Funds (Continued) Landscape Aid to Maintenance Stormwater Miscellaneous Cities District #1 Utility Grants $ - $ 13,406,632 $ 3,433,643 $ 26,915 - 467,919 1,238,280 - - 150,427 30,028 - _ _ - 1,990,977 $ - $ 14,024,978 $ 4,701,951 $ 2,017,892 $ - $ 1,070,234 $ 198,259 $ 661,726 48,631 12,099 1,575,311 - - 1,129,814 1,118,865 210,358 3,366,851 13,212 316,619 1,313,104 12,892,901 4,174,974 - - - (2,662,063) - 12,906,113 4,491,593 (1,348,959) $ - $ 14,024,978 $ 4,701,951 $ 2,017,892 -84- Special Revenue Funds (Continued) $ - $ 7,878 $ 56,442 - 54,978 18,930 - - 18,930 7,878 111,420 47,582 46,247 (18,930) (50,566) (45,423) (18,930) (2,984) 824 $ - $ 1,919 $ - 1,232,433 114,303 331 1,867 - - 1,234,300 116,222 331 27,571 146,919 (1,867) (6,939) - (1,867) 20,632 146,919 $ - $ 4,894 $ 112,244 $ 1,232,433 $ 136,854 $ 147,250 (Continued) WDIE Library Public Sewer BJA Law Supplemental Facility Education and Maintenance Enforcement Law Grant HOME Fees Government $ - $ 2,864 $ 111,482 $ - $ 134,417 $ 89,669 - - - - 1,224 56,760 - - 762 - 1,213 821 - 2,030 - - - - - - - 1,232,433 - - $ - $ 4,894 $ 112,244 $ 1,232,433 $ 136,854 $ 147,250 $ - $ 7,878 $ 56,442 - 54,978 18,930 - - 18,930 7,878 111,420 47,582 46,247 (18,930) (50,566) (45,423) (18,930) (2,984) 824 $ - $ 1,919 $ - 1,232,433 114,303 331 1,867 - - 1,234,300 116,222 331 27,571 146,919 (1,867) (6,939) - (1,867) 20,632 146,919 $ - $ 4,894 $ 112,244 $ 1,232,433 $ 136,854 $ 147,250 (Continued) WDIE CITY OF SANTA CLARITA COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS (CONTINUED) ASSETS Cash and investments Cash and investments with fiscal agent Accounts receivable Interest receivable Due from other governments Loans receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable and accrued liabilities Deferred revenue Due to other governments Due to other funds TOTAL LIABILITIES FUND BALANCES (DEFICITS): Reserved: Encumbrances Debt service Low/moderate income housing Unreserved: Designated for special revenue purpose Designated for capital improvements Undesignafed TOTAL FUND BALANCES (DEFICITS) TOTAL LIABILITIES AND FUND BALANCES See independent auditors' report. June 30, 2008 Debt Service Special Revenue Funds (Continued) Funds Redevelopment Federal Agency Proposition C Grants Total Low/Mod $ 573,328 $ 20,303 $ 31,871,220 $ - - - - 288,552 - - 2,914,590 - 3,365,932 936,679 4,639,477 - - - 6,586,508 - $ 3,939,260 $ 956,982 $ 47,385,232 $ 288,552 $ 197,716 $ 355,203 $ 3,761,256 $ - 563,704 902,479 11,788,806 - - 110,558 136,773 - - 196,499 2,104,858 - 761,420 1,564,739 17,791,693 - 3,471,988 450,596 14,491,086 - - - - 288,552 26,022,896 - (294,148) (1,058,353) (10,920,443) - 3,177,840 (607,757) 29,593,539 288,552 $ 3,939,260 $ 956,982 $ 47,385,232 $ 288,552 -86- Debt Service Funds (Continued) Capital Projects Funds Total Public General Redevelopment Public Other Financing Capital Agency Financing Governmental Authority Total Projects Low/Mod Authority Total Funds $ 457,291 $ 457,291 $ 6,868,936 $ 11,253,361 $ - $ 18,122,297 $ 50,450,808 739 289,291 - - 3,088 3,088 292,379 - - - 17,781 - 17,781 2,932,371 - - - 24,674 - 24,674 4,664,151 - - - - - - 6,586,508 - - - - - - 1,373,437 $ 458,030 $ 746,582 $ 6,868,936 $ 11,295,816 $ 3,088 $ 18,167,840 $ 66,299,654 685,953 $ - $ - $ 685,953 $ 4,447,209 - 9,943 - 9,943 11,798,749 - - - 136,773 - - - - - - 2,104,858 685,953 9,943 - 695,896 18,487,589 - 3,243,375 - - 3,243,375 17,734,461 458,030 746,582 - - - - 746,582 - - - 11,285,873 - 11,285,873 11,285,873 - - - - - 26,022,896 2,939,608 - 3,088 2,942,696 2,942,696 - - - - (10,920,443) 458,030 746,582 6,182,983 11,285,873 3,088 17,471,944 47,812,065 $ 458,030 $ 746,582 $ 6,868,936 $ 11,295,816 $ 3,088 $ 18,167,840 $ 66,299,654 -87- CITY OF SANTA CLARTTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2008 REVENUES: Taxes Developer fees Investment income Revenue from other agencies Fines and forfeitures Service charges Otherrevenue TOTAL REVENUES EXPENDITURES: Current: General government Public safety Public works Parks and recreation Community development Capital outlay Debt service: Bond issuance costs Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out Bonds and certificates issued Issuance premiums (discounts) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES (DEFICITS) - BEGINNING OF YEAR FUND BALANCES (DEFICITS) - END OF YEAR See independent auditors' report. Special Revenue Funds Park Bikeway Gas Tax Improvement Proposition A - - 454,326 - 21,745 80,409 149,805 372,616 222,227 3,088,489 - 2,674,083 - 183 - - 243,972 3,169,081 604,131 3,046,699 2,670,934 - 31,389 222,227 1,699,009 2,555,018 584,161 222,227 4,369,943 2,555,018 615,550 21,745 (1,200,862) (1,950,887) 2,431,149 250,000 - - (322,671) - (8,757,455) - (72,671) - (8,757,455) 21,745 (1,273,533) (1,950,887) (6,326,306) 130,826 2,116,208 3,928,773 7,209,017 $ 152,571 $ 842,675 $ 1,977,886 $ 882,711 -88- Special Revenue Funds (Continued) Special State Traffic Assessment Park TDA Safety CDBG AQMD $ 3,511,580 $ - $ - $ - $ _ $ _ 355,255 - 4,895 56,626 20,754 33,680 - 433,882 713,747 - 979,539 211,864 - - - 1,656,616 - - 128,954 - - _ 129,524 - 32,428 - - _ _ _ 4,028,217 433,882 718,642 1,713,242 1,000,293 245,544 2,617,857 774,028 - - - - 43,242 - 221,868 - - _ _ - - - - 871,102 - 707,248 194,262 713,948 - 8,282 - - - - - 230,000 - - - - - 129,524 - 4,099,133 416,130 713,948 - 1,238,908 43,242 (70,916) 17,752 4,694 1,713,242 (238,615) 202,302 1,192,030 - - - _ - (1,199,584) (9) - (1,713,242) - - (7,554) (9) - (1,713,242) - - (78,470) 17,743 4,694 - (238,615) 202,302 6,461,121 (319,967) 201 167,485 198,843 558,935 $ 6,382,651 $ (302,224) $ 4,895 $ 167,485 $ (39,772) $ 761,237 (Continued) -89- CITY OF SANTA CLARITA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMEENTAL FUNDS (CONTINUED) For the year ended June 30, 2008 OTHER FINANCING SOURCES (USES): Transfers in 30 - 169,407 - Transfers out - - (15,840) - Bonds and certificates issued - - - Issuance premiums (discounts) - - - - TOTAL OTHER FINANCING SOURCES (USES) 30 - 153,567 - NET CHANGE IN FUND BALANCES 30 2,178,696 1,609,055 423,219 FUND BALANCES (DEFICITS) - BEGINNING OF YEAR (30) 10,727,417 2,882,538 (1,772,178) FUND BALANCES (DEFICITS) - END OF YEAR $ - $ 12,906,113 $ 4,491,593 $ (1,348,959) See independent auditors' report -90- Special Revenue Funds (Continued) Landscape Aid to Maintenance Stormwater Miscellaneous Cities District #1 Utility Grants REVENUES: Taxes $ - $ 11,160,125 $ 70,617 $ - Developer fees - - - ' Investment income - 618,976 153,928 - Revenue from other agencies - - - 3,679,926 Fines and forfeitures - - - - Service charges - - 3,433,744 - Other revenue - 30,667 86,225 60,047 TOTAL REVENUES - 11,809,768 3,744,514 3,739,973 EXPENDITURES: Current: General government - 9,358,504 41,298 33,970 Public safety - - - 217,789 Public works - - 2,172,728 - Parks and recreation - - - 202,603 Community development - - - - Capital outlay - 272,568 75,000 2,862,392 Debt service: Bond issuance costs - - - - Principal retirement - - - - Interest and fiscal charges - - - - TOTAL EXPENDITURES - 9,631,072 2,289,026 3,316,754 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - 2,178,696 1,455,488 423,219 OTHER FINANCING SOURCES (USES): Transfers in 30 - 169,407 - Transfers out - - (15,840) - Bonds and certificates issued - - - Issuance premiums (discounts) - - - - TOTAL OTHER FINANCING SOURCES (USES) 30 - 153,567 - NET CHANGE IN FUND BALANCES 30 2,178,696 1,609,055 423,219 FUND BALANCES (DEFICITS) - BEGINNING OF YEAR (30) 10,727,417 2,882,538 (1,772,178) FUND BALANCES (DEFICITS) - END OF YEAR $ - $ 12,906,113 $ 4,491,593 $ (1,348,959) See independent auditors' report -90- Special Revenue Funds (Continued) Library Public Sewer BJA Law Supplemental Facility Education and Maintenance Enforcement Law Grant HOME Fees Government $ - $ - $ - $ - $ - $ 145,481 - 8,821 20 5,125 1,438 37,344 330,080 - - - - 37,344 20 5,125 146,919 - - - 10,429 - 21,768 338,655 - - - - - - 9,445 - - 21,768 338,655 9,445 10,429 - 15,576 246 (9,425) (5,304) 146,919 iJ,Jiv c•+v �7,�r��) tj,.3v,+) iwv,y1Y (18,930) (18,560) 578 7,558 25,936 - $ (18,930) $ (2,984) $ 824 $ (1,867) $ 20,632 $ 146,919 (Continued) -91- CITY OF SANTA CLARITA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS (CONTINUED) For the year ended June 30, 2008 REVENUES: Taxes Developer fees Investment income Revenue from other agencies Fines and forfeitures Service charges Otherrevenue TOTAL REVENUES EXPENDITURES: Current: General government Public safety Public works Parks and recreation Community development Capital outlay Debt service: Bond issuance costs Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out Bonds and certificates issued Issuance premiums (discounts) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES (DEFICITS) - BEGINNING OF YEAR FUND BALANCES (DEFICITS) - END OF YEAR See independent auditors' report. Debt Service Special Revenue Funds (Continued) Funds Redevelopment Federal Agency Proposition C Grants Total Low/Mod $ - $ - $ 14,887,803 $ - - - 454,326 - 44,975 - 1,929,068 1 9,388,530 413,306 22,173,017 - - - 1,656,616 - - - 3,562,698 - - 284,293 493,843 - 9,433,505 697,599 45,157,371 1 - 12,062,058 - - - 578,212 - - - 5,692,321 - - - 424,471 - - - 880,547 - 7,386,539 929,746 18,210,400 - 230,000 - - - 129,524 - 7,386,539 929,746 38,207,533 - 2,046,966 (232,147) 6,949,838 1 - - 1,611,467 454,623 (400,000) - (12,408,801) (166,072) (400,000) - (10,797,334) 288,551 1,646,966 (232,147) (3,847,496) 288,552 1,530,874 (375,610) 33,441,035 - $ 3,177,840 $ (607,757) $ 29,593,539 $ 288,552 -92- Debt Service Funds (Continued) Capital Projects Funds Total Public General Redevelopment Public Other Financing Capital Agency Financing Governmental Authority Total Projects Low/Mod Authority Total Funds $ - $ - $ - $ 738,730 $ - $ 738,730 $ 15,626,533 - - - - - - 454,326 3,244 3,245 - 150,491 3,725 154,216 2,086,529 - - - - - - 22,173,017 - - - - - - 1,656,616 - - - - - - 3,562,698 3,244 3,245 - 889,221 - 493,843 3,725 892,946 46,053,562 - - - - - - 12,062,058 - - - - - - 578,212 - - - - - - 5,692,321 - - - - - - 424,471 - - - 15,590 - 15,590 896,137 - - 6,773,844 - - 6,773,844 24,984,244 4,203 4,203 - 413,208 461,500 874,708 878,911 1,684,473 1,684,473 - - - - 1,914,473 1,470,962 1,470,962 - - - - 1,600,486 3,159,638 3,159,638 6,773,844 428,798 461,500 7,664,142 49,031,313 (3,156,394) (3,156,393) (6,773,844) 460,423 (457,775) (6,771,196) (2,977,751) 3,300,576 3,755,199 12,956,827 166,072 216,078 13,338,977 18,705,643 - (166,072) - (454,623) (15,286,858) (15,741,481) (28,316,354) - - - 8,850,000 15,525,000 24,375,000 24,375,000 - - - (5,241) (60,776) (66,017) (66,017) 3,300,576 3,589,127 12,956,827 8,556,208 393,444 21,906,479 14,698,272 144,182 432,734 6,182,983 9,016,631 (64,331) 15,135,283 11,720,521 313,848 313,848 - 2,269,242 67,419 2,336,661 36,091,544 $ 458,030 $ 746,582 $ 6,182,983 $ 11,285,873 $ 3,088 $ 17,471,944 $ 47,812,065 -93- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL BIKEWAY SPECIAL REVENUE FUND REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Capital outlay EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. For the year ended June 30, 2008 Budgeted Amounts Original Final $ 18,000 $ 18,000 - 252,203 18,000 270,203 562,757 649,800 (544,757) (379,597) 222,227 427,573 21,745 401,342 130,826 130,826 130,826 - $ (413,931) $ (248,771) $ 152,571 $ 401,342 -94- Variance Final Budget Positive Actual (Negative) $ 21,745 $ 3,745 222,227 (29,976) 243,972 (26,231) 222,227 427,573 21,745 401,342 130,826 130,826 130,826 - $ (413,931) $ (248,771) $ 152,571 $ 401,342 -94- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GAS TAX SPECIAL REVENUE FUND REVENUES: Investment income Revenue from other agencies Other revenue TOTAL REVENUES EXPENDITURES: Current: Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report For the year ended June 30, 2008 Budgeted Amounts Original Final Actual Variance Final Budget Positive (Negative) $ 67,500 $ 67,500 $ 80,409 $ 12,909 3,101,591 5,951,057 3,088,489 (2,862,568) - - 183 183 3,169,091 6,018,557 3,169,081 (2,849,476) 2,639,948 2,810,915 2,670,934 139,981 2,690,210 5,305,863 1,699,009 3,606,854 5,330,158 8,116,778 4,369,943 3,746,835 (2,161,067) (2,098,221) (1,200,862) 897,359 250,000 250,000 250,000 - (291,545) (319,662) (322,671) (3,009) (41,545) (69,662) (72,671) (3,009) (2,202,612) (2,167,883) (1,273,533) 894,350 2,116,208 2,116,208 2,116,208 - $ (86,404) $ (51,675) $ 842,675 $ 894,350 -95- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL PARK IMPROVEMENT SPECIAL REVENUE FUND REVENUES: Developer fees Investment income TOTAL REVENUES EXPENDITURES: Capital outlay EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. For the year ended June 30, 2008 Budgeted Amounts Original Final 243,000 243,000 243,000 243,000 773,180 3,881,148 2,555,018 1,326,130 (530,180) (3,638,148) (1,950,887) 1,687,261 3,928,773 3,928,773 3,928,773 - $ 3,398,593 $ 290,625 $ 1,977,886 $ 1,687,261 -96- Variance Final Budget Positive Actual (Negative) $ 454,326 $ 454,326 149,805 (93,195) 604,131 361,131 2,555,018 1,326,130 (530,180) (3,638,148) (1,950,887) 1,687,261 3,928,773 3,928,773 3,928,773 - $ 3,398,593 $ 290,625 $ 1,977,886 $ 1,687,261 -96- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL PROPOSITION A SPECIAL REVENUE FUND REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Current: Community development Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING USES: Transfers out NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report For the year ended June 30, 2008 65,000 65,000 - Variance 31,850 31,850 31,389 Final Budget Budgeted Amounts 584,161 Positive Original Final Actual (Negative) $ 157,000 $ 157,500 $ 372,616 $ 215,116 7,373,715 2,693,981 2,674,083 (19,898) 7,530,715 2,851,481 3,046,699 195,218 65,000 65,000 - 65,000 31,850 31,850 31,389 461 1,385,000 1,453,725 584,161 869,564 1,481,850 1,550,575 615,550 935,025 6,048,865 1,300,906 2,431,149 1,130,243 (7,178,708) (8,762,863) (8,757,455) 5,408 (1,129,843) (7,461,957) (6,326,306) 1,135,651 7,209,017 7,209,017 7,209,017 - $ 6,079,174 $ (252,940) $ 882,711 $ 1,135,651 -97- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL SPECIAL ASSESSMENT SPECIAL REVENUE FUND REVENUES: Taxes Investment income Service charges Other revenue TOTAL REVENUES EXPENDITURES: Current: General government Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR For the year ended June 30, 2008 3,273,744 3,514,727 2,617,857 Variance - - 774,028 Final Budget Budgeted Amounts 707,248 Positive Original Final Actual (Negative) $ 3,035,155 $ 3,035,155 $ 3,511,580 $ 476,425 275,535 275,535 355,255 79,720 140,279 140,279 128,954 (11,325) - - 32,428 32,428 3,450,969 3,450,969 4,028,217 577,248 3,273,744 3,514,727 2,617,857 896,870 - - 774,028 (774,028) - - 707,248 (707,248) 3,273,744 3,514,727 4,099,133 (584,406) 177,225 (63,758) (70,916) (7,158) 1,653 968,727 1,192,030 223,303 (6,711) (976,160) (1,199,584) (223,424) (5,058) (7,433) (7,554) (121) 172,167 (71,191) (78,470) (7,279) 6,461,121 6,461,121 6,461,121 - $ 6,633,288 $ 6,389,930 $ 6,382,651 $ (7,279) See independent auditors' report. -98- CITY OF SANTA CLARITA • SCHEDULE OF REVENUES, EXPENDITURES AND . CHANGES IN FUND BALANCE - BUDGET AND ACTUAL STATE PARK SPECIAL REVENUE FUND For the year ended June 30, 2008 - Variance with • Final Budget Budgeted Amounts Positive i Original Final Actual (Negative) REVENUES: • Revenue from other agencies $ 451,170 $ 548,170 $ 433,882 $ (114,288) EXPENDITURES: • Current: Parks and recreation 188,654 208,848 221,868 (13,020) Capital outlay 254,170 433,823 194,262 239,561 TOTAL EXPENDITURES 442,824 642,671 416,130 226,541 EXCESS OF REVENUES OVER • (UNDER) EXPENDITURES 8,346 (94,501) 17,752 112,253 r OTHER FINANCING USES: S Transfers out - (9) (9) - NET CHANGE IN FUND BALANCE 8,346 (94,510) 17,743 112,253 • FUND BALANCE (DEFICIT) - BEGINNING OF YEAR (319,967) (319,967) (319,967) - • FUND BALANCE (DEFICIT) - END OF YEAR $ (311,621) $ (414,477) $ (302,224) $ 112,253 r r See independent auditors' report. • -99- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL TDA SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Capital outlay EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING USES: Transfers out NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. Variance Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ - $ - $ 4,895 $ 4,895 6,033,443 6,049,433 713,747 (5,335,686) 6,033,443 6,049,433 718,642 (5,330,791) - 4,981,208 713,948 4,267,260 6,033,443 1,068,225 4,694 (1,063,531) (6,049,433) - - - (15,990) 1,068,225 4,694 (1,063,531) 201 201 201 - $ (15,789) $ 1,068,426 $ 4,895 $ (1,063,531) CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL TRAFFIC SAFETY SPECIAL REVENUE FUND For the year ended June 30, 2008 See independent auditors' report. -101- Variance Final Budget Budgeted Amounts Positive Onginal Final Actual (Negative) REVENUES: Investment income $ 45,000 $ 45,000 $ 56,626 $ 11,626 Fines and forfeitures 1,811,400 1,811,400 1,656,616 (154,784) TOTAL REVENUES 1,856,400 1,856,400 1,713,242 (143,158) OTHER FINANCING USES: Transfers out (2,050,000) (1,863,394) (1,713,242) 150,152 NET CHANGE IN FUND BALANCE (193,600) (6,994) - 6,994 FUND BALANCE - BEGINNING OF YEAR 167,485 167,485 167,485 - FUND BALANCE - END OF YEAR $ (26,115) $ 160,491 $ 167,485 $ 6,994 See independent auditors' report. -101- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL CDBG SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Current: Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE (DEFICIT) - END OF YEAR See independent auditors' report. Budgeted Amounts Original Final 1,172,363 933,695 Variance 871,102 Final Budget Positive Actual (Negative) $ 20,754 $ 20,754 979,539 (192,824) 1,000,293 (172,070) 933,695 1,238,941 871,102 367,839 50,000 8,282 41,718 230,000 230,000 230,000 - 129,524 129,524 129,524 - 1,293,219 1,648,465 1,238,908 409,557 (120,856) (476,102) (238,615) 237,487 198,843 198,843 198,843 - $ 77,987 $ (277,259) $ (39,772) $ 237,487 M[1I►.1e CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL AQMD SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Current: Public works EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. Budgeted Amounts Original Final $ 29,250 $ 29,250 $ 282,810 282,810 312,060 312,060 43,242 41,123 219,060 227,695 202,302 (25,393) 558,935 558,935 558,935 - $ 777,995 $ 786,630 $ 761,237 $ (25,393) -103- Variance Final Budget Positive Actual (Negative) 33,680 $ 4,430 211,864 (70,946) 245,544 (66,516) 43,242 41,123 219,060 227,695 202,302 (25,393) 558,935 558,935 558,935 - $ 777,995 $ 786,630 $ 761,237 $ (25,393) -103- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL AID TO CITIES SPECIAL REVENUE FUND For the year ended June 30, 2008 Variance Final Budget Budgeted Amounts Positive Original Final Actual (Negative) OTHER FINANCING USES: Transfers in $ - $ 30 $ 30 $ - NET CHANGE IN FUND BALANCE - 30 30 - FUND BALANCE (DEFICIT) - BEGINNING OF YEAR (30) (30) (30) - FUND BALANCE - END OF YEAR $ (30) $ - $ - $ - See independent auditors' report -104- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL LANDSCAPE MAINTENANCE DISTRICT #1 SPECIAL REVENUE FUND REVENUES: Taxes Investment income Other revenue TOTAL REVENUES EXPENDITURES: Current: General government Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES For the year ended June 30, 2008 Budgeted Amounts Original Final $ 10,030,273 $ 10,830,273 445,500 445,500 10,475,773 11,275,773 8,699,386 9,916,709 9,358,504 558,205 - 280,887 272,568 8,319 8,699,386 10,197,596 9,631,072 566,524 1,776,387 1,078,177 2,178,696 1,100,519 FUND BALANCE - BEGINNING OF YEAR Variance 10,727,417 Final Budget FUND BALANCE - END OF YEAR Positive Actual (Negative) $ 11,160,125 $ 329,852 618,976 173,476 30,667 30,667 11,809,768 533,995 8,699,386 9,916,709 9,358,504 558,205 - 280,887 272,568 8,319 8,699,386 10,197,596 9,631,072 566,524 1,776,387 1,078,177 2,178,696 1,100,519 FUND BALANCE - BEGINNING OF YEAR 10,727,417 10,727,417 10,727,417 - FUND BALANCE - END OF YEAR $ 12,503,804 $ 11,805,594 $ 12,906,113 $ 1,100,519 See independent auditors' report. -105- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL STORMWATER UTILITY SPECIAL REVENUE FUND REVENUES: Taxes Investment income Service charges Other revenue TOTAL REVENUES EXPENDITURES: Current: General government Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. For the year ended June 30, 2008 - 65,571 41,298 Variance 2,368,952 2,444,860 2,172,728 Final Budget Budgeted Amounts 75,000 Positive Original Final Actual (Negative) $ - $ - $ 70,617 $ 70,617 103,500 103,500 153,928 50,428 2,504,675 2,504,675 3,433,744 929,069 - - 86,225 86,225 2,608,175 2,608,175 3,744,514 1,136,339 - 65,571 41,298 24,273 2,368,952 2,444,860 2,172,728 272,132 75,000 349,644 75,000 274,644 2,443,952 2,860,075 2,289,026 571,049 164,223 (251,900) 1,455,488 1,707,388 169,351 169,350 169,407 57 (205,809) (14,080) (15,840) (1,760) (36,458) 155,270 153,567 (1,703) 127,765 (96,630) 1,609,055 1,705,685 2,882,538 2,882,538 2,882,538 - $ 3,010,303 $ 2,785,908 $ 4,491,593 $ 1,705,685 -106- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL MISCELLANEOUS GRANTS SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Revenue from other agencies Otherrevenue TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks and recreation Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE (DEFICIT) - BEGINNING OF YEAR FUND BALANCE (DEFICIT) - END OF YEAR See independent auditors' report. Budgeted Amounts Original Final $ 450,982 $ 1,007,517 - Variance 33,970 Final Budget 162,656 Positive Actual (Negative) $ 3,679,926 $ 2,672,409 60,047 (88,553) 3,739,973 2,583,856 - 108,500 33,970 74,530 162,656 236,042 217,789 18,253 249,074 236,954 202,603 34,351 142,500 4,022,257 2,862,392 1,159,865 554,230 4,603,753 3,316,754 1,286,999 39,252 (3,447,636) 423,219 3,870,855 (1,772,178) (1,772,178) (1,772,178) - $ (1,732,926) $ (5,219,814) $ (1,348,959) $ 3,870,855 -107- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL BJA LAW ENFORCEMENT SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Revenue from other agencies EXPENDITURES: Current: Public safety EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE (DEFICIT) - BEGINNING OF YEAR FUND BALANCE (DEFICIT) - END OF YEAR See independent auditors' report. Budgeted Amounts Original Final $ - $ 85,052 Variance Final Budget Positive Actual (Negative) $ 37,344 $ (47,708) - 70,039 21,768 15,013 15,576 563 (18,560) (18,560) (18,560) - $ (18,560) $ (3,547) $ (2,984) $ 563 -108- CITY OF SANTA CLARI TA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL SUPPLEMENTAL LAW GRANT SPECIAL REVENUE FUND REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Current: Public safety EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE -END OF YEAR See independent auditors' report. For the year ended June 30, 2008 Variance Final Budget Budgeted Amounts Positive Original Final Actual (Negative) — $ - $ - $ 8,821 $ 8,821 384,751 330,080 (54,671) 384,751 338,901 (45,850) 384,903 338,655 46,248 - (152) 246 398 578 578 578 - $ 578 $ 426 $ 824 $ 398 - 109- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL HOME SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Current: Community development EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE (DEFICIT) - END OF YEAR See independent auditors' report. Budgeted Amounts Original Final 800,000 800,000 800,000 800,000 800,743 801,002 Actual Variance Final Budget Positive (Negative) 20 $ 20 - (800,000) 20 (799,980) 9,445 791,557 (743) (1,002) (9,425) (8,423) 7,558 7,558 7,558 - $ 6,815 $ 6,556 $ (1,867) $ (8,423) -110- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL LIBRARY FACILITIES FEES SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Investment income EXPENDITURES: Current: General government EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. Budgeted Amounts Original Final $ 2,700 $ 2,700 $ Variance Final Budget Positive Actual (Negative) 5,125 $ 2,425 38,000 10,429 27,571 2,700 (35,300) (5,304) 29,996 25,936 25,936 25,936 - $ 28,636 $ (9,364) $ 20,632 $ 29,996 CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL PROPOSITION C SPECIAL REVENUE FUND REVENUES: Investment income Revenue from other agencies TOTAL REVENUES EXPENDITURES: Capital outlay EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING USES: Transfers out NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. For the year ended June 30, 2008 Budgeted Amounts Original Final $ 135,000 $ 135,000 4,641,714 18,168,946 4,776,714 18,303,946 Variance Final Budget Positive Actual (Negative) $ 44,975 $ (90,025) 9,388,530 (8,780,416) 9,433,505 (8,870,441) 3,235,000 13,976,272 7,386,539 6,589,733 1,541,714 4,327,674 2,046,966 (2,280,708) (422,752) (661,865) (400,000) 261,865 1,118,962 3,665,809 1,646,966 (2,018,843) 1,530,874 1,530,874 1,530,874 - $ 2,649,836 $ 5,196,683 $ 3,177,840 $ (2,018,843) wills CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FEDERAL GRANTS SPECIAL REVENUE FUND For the year ended June 30, 2008 REVENUES: Revenue from other agencies Otherrevenue TOTAL REVENUES EXPENDITURES: Current: Public safety Public works Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE (DEFICIT) - BEGINNING OF YEAR FUND BALANCE (DEFICIT) - END OF YEAR See independent auditors' report. 20,397 - - - - 295,000 - 295,000 2,089,280 3,084,008 929,746 2,154,262 2,109,677 3,379,008 929,746 2,449,262 (1,007,597) (1,337,200) (232,147) 1,105,053 (375,610) (375,610) (375,610) - $ (1,383,207) $ (1,712,810) $ (607,757) $ 1,105,053 - 113 - Variance Final Budget Budgeted Amounts Positive Original Final Actual (Negative) — $ - $ - $ 413,306 $ 413,306 1,102,080 2,041,808 284,293 (1,757,515) 1,102,080 2,041,808 697,599 (1,344,209) 20,397 - - - - 295,000 - 295,000 2,089,280 3,084,008 929,746 2,154,262 2,109,677 3,379,008 929,746 2,449,262 (1,007,597) (1,337,200) (232,147) 1,105,053 (375,610) (375,610) (375,610) - $ (1,383,207) $ (1,712,810) $ (607,757) $ 1,105,053 - 113 - CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL CAPITAL PROJECTS FUND For the year ended June 30, 2008 REVENUES EXPENDITURES: Capital outlay EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES: Transfers in NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) 10,536,817 12,800,953 6,773,844 6,027,109 (10,536,817) (12,800,953) (6,773,844) 6,027,109 16,650,475 12,956,827 (3,693,648) (10,536,817) 3,849,522 6,182,983 2,333,461 $(10,536,817) $ 3,849,522 $ 6,182,983 $ 2,333,461 -114- CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL REDEVELOPMENT AGENCY LOW/MOD CAPITAL PROJECTS FUND For the year ended June 30, 2008 EXPENDITURES: Current: Community development 96,003 17,030 15,590 1,440 Debt service: Bond issuance cost 432,136 413,208 18,928 TOTAL EXPENDITURES 96,003 449,166 428,798 20,368 EXCESS OF REVENUES OVER Variance with (UNDER) EXPENDITURES 551,630 Final Budget 460,423 Budgeted Amounts OTHER FINANCING SOURCES (USES): Positive Original Final Actual (Negative) REVENUES: - 166,072 166,072 Taxes $ 557,633 $ 729,713 $ 738,730 $ 9,017 Investment income 90,000 90,000 150,491 60,491 TOTAL REVENUES 647,633 819,713 889,221 69,508 EXPENDITURES: Current: Community development 96,003 17,030 15,590 1,440 Debt service: Bond issuance cost 432,136 413,208 18,928 TOTAL EXPENDITURES 96,003 449,166 428,798 20,368 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 551,630 370,547 460,423 89,876 OTHER FINANCING SOURCES (USES): Transfers in - - 166,072 166,072 Transfers out - (268,878) (454,623) (185,745) Bonds and certificates issued - 8,850,000 8,850,000 - Issuance premiums (discounts) - (5,241) (5,241) - TOTAL OTHER FINANCING SOURCES (USES) - 8,575,881 8,556,208 (19,673) NET CHANGE IN FUND BALANCE 551,630 8,946,428 9,016,631 70,203 FUND BALANCE - BEGINNING OF YEAR 2,269,242 2,269,242 2,269,242 - FUND BALANCE - END OF YEAR $ 2,820,872 $ 11,215,670 $ 11,285,873 $ 70,203 See independent auditors' report. - 115 - CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL PUBLIC FINANCING AUTHORITY CAPITAL PROJECTS FUND REVENUES: Investment income EXPENDITURES: Debt service: Bond issuance cost EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out Bonds and certificates issued Issuance premiums (discounts) TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR See independent auditors' report. For the year ended June 30, 2008 Budgeted Amounts Original Final 292,963 Variance with Final Budget Positive Actual (Negative) $ 3,725 $ 3,725 461,500 (168,537) (292,963) (457,775) (164,812) - 15,525,000 216,078 (15,308,922) - 15,302,818 (15,286,858) (30,589,676) - - 15,525,000 15,525,000 - - (60,776) (60,776) - 30,827,818 393,444 (30,434,374) - 30,534,855 (64,331) (30,599,186) 67,419 67,419 67,419 - $ 67,419 $ 30,602,274 $ 3,088 $(30,599,186) - 116 - CITY OF SANTA CLARITA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL REDEVELOPMENT AGENCY CAPITAL PROJECTS FUND - MAJOR FUND For the year ended June 30, 2008 OTHER FINANCING SOURCES (USES): Transfers in - - 5,273,097 Variance with Transfers out (697,042) (1,808,680) (1,052,000) Final Budget Bonds and certificates issued Budgeted Amounts 29,860,000 Positive Issuance premiums (discounts) Original Final Actual (Negative) REVENUES: Taxes $ 2,230,533 $ 2,918,853 $ 2,954,920 $ 36,067 Investment income 18,000 18,000 362,639 344,639 Other revenue - - 40,704 40,704 TOTAL REVENUES 2,248,533 2,936,853 3,358,263 421,410 EXPENDITURES: Current: Community development 974,204 7,011,899 1,553,853 5,458,046 Capital outlay - 1,711,087 4,222,639 (2,511,552) Debt service: Bond issuance costs - - 939,432 (939,432) TOTAL EXPENDITURES 974,204 8,722,986 6,715,924 2,007,062 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 1,274,329 (5,786,133) (3,357,661) 2,428,472 OTHER FINANCING SOURCES (USES): Transfers in - - 5,273,097 5,273,097 Transfers out (697,042) (1,808,680) (1,052,000) 756,680 Bonds and certificates issued - 29,860,000 29,860,000 - Issuance premiums (discounts) - - (160,665) (160,665) TOTAL OTHER FINANCING SOURCES (USES) (697,042) 28,051,320 33,920,432 5,869,112 NET CHANGE IN FUND BALANCE 577,287 22,265,187 30,562,771 8,297,584 FUND BALANCE - BEGINNING OF YEAR 7,124,623 7,124,623 7,124,623 - FUND BALANCE - END OF YEAR $ 7,701,910 $ 29,389,810 $ 37,687,394 $ 8,297,584 See independent auditors' report. - 117 - This page intentionally left blank. -118- INTERNAL SERVICE FUNDS The Internal Service Funds are used to account for goods or services provided by a central service department to other City departments. Self -Insurance - To account for the financing of the City's self-insurance program. Computer Replacement - To account for the financing of the replacement of the City's computer equipment. Vehicle Replacement - To account for the financing of the replacement of the City's automotive equipment. Public Facilities Replacement - To account for the financing of the replacement of the City's public facilities. - 119 - CITY OF SANTA CLARTTA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS ASSETS CURRENT ASSETS: Cash and investments Accounts receivable Interest receivable Advances to other fund TOTAL CURRENT ASSETS NONCURRENT ASSETS: Capital assets: Equipment Less: accumulated depreciation TOTAL NONCURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES: Accounts payable and accrued liabilities NONCURRENT LIABILITIES: Claims payable TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Unrestricted TOTAL NET ASSETS See independent auditors' report. June 30, 2008 - 120 - Self -Insurance Computer Replacement $ 1,685,776 $ 1,389,356 4,858 - 14,184 12,699 3,076,200 - 4,781,018 1,402,055 1,224,568 (751,679) - 472,889 4,781,018 1,874,944 24,695 184,142 70,000 - 94,695 184,142 - 472,889 4,686,323 1,217,913 $ 4,686,323 $ 1,690,802 Public Vehicle Facilities Replacement Replacement Totals $ 3,021,180 $ 14,935,159 $ 21,031,471 3,000 - 7,858 27,647 109,217 163,747 - - 3,076,200 3,051,827 15,044,376 24,279,276 1,530,240 - 2,754,808 (1,101,237) - (1,852,916) 429,003 - 901,892 3,480,830 15,044,376 25,181,168 55,759 261,739 526,335 70,000 55,759 261,739 596,335 429,003 - 901,892 2,996,068 14,782,637 23,682,941 $ 3,425,071 $ 14,782,637 $ 24,584,833 -121 - CITY OF SANTA CLARITA COMBINING STATEMENT OF REVENUES, EXPENSES AND AND CHANGES IN NET ASSETS - INTERNAL SERVICE FUNDS For the year ended June 30, 2008 OPERATING REVENUES: Charges for services Other revenue TOTAL OPERATING REVENUES OPERATING EXPENSES: Services and supplies Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME NONOPERATING REVENUES: Investment income INCOME BEFORE TRANSFERS TRANSFERS: Transfers in CHANGE IN NET ASSETS TOTAL NET ASSETS - BEGINNING OF YEAR TOTAL NET ASSETS - END OF YEAR See independent auditors' report. -122- 1,486,961 164,384 - 103,598 1,486,961 267,982 399,212 129,452 224,387 76,566 623,599 206,018 125,000 748,599 206,018 3,937,724 1,484,784 $ 4,686,323 $ 1,690,802 Computer Self -Insurance Replacement $ 1,866,021 $ 397,434 20,152 - 1,886,173 397,434 1,486,961 164,384 - 103,598 1,486,961 267,982 399,212 129,452 224,387 76,566 623,599 206,018 125,000 748,599 206,018 3,937,724 1,484,784 $ 4,686,323 $ 1,690,802 Public Vehicle Facilities Replacement Replacement $ 418,510 $ - 3,346 - Totals $ 2,681,965 23,498 421,856 - 2,705,463 870 527,362 2,179,577 129,184 - 232,782 130,054 527,362 2,412,359 291,802 (527,362) 293,104 160,643 632,602 1,094,198 452,445 105,240 1,3 87,3 02 - 3,000,000 3,125,000 452,445 3,105,240 4,512,302 2,972,626 11,677,397 20,072,531 $ 3,425,071 $ 14,782,637 $ 24,584,833 -123- CITY OF SANTA CLARITA COMBINING STATEMENT OF CASH FLOWS ALL INTERNAL SERVICE FUNDS For the year ended June 30, 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from interfund services provided Other operating receipts Payments to suppliers NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Cash received from other funds Cash paid to other funds NET CASH PROVIDED (USED) BY NONCAPTTAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets CASH FLOWS FROM INVESTING ACTIVITIES: Investment income 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 TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income Depreciation Change in assets and liabilities: (Increase) decrease in accounts receivable Increase (decrease) in accounts payable and accrued liabilities Increase (decrease) in claims payable NET CASH PROVIDED BY OPERATING ACTIVITIES See independent auditors' report. -124- Computer Self -Insurance Replacement $ 1,866,021 $ 397,434 20,152 - (1,513,728) (9,549) 372,445 387,885 125,000 (3,076,200) (2,951,200) (329,593) 210,203 79,004 (2,368,552) 137,296 4,054,328 1,252,060 $ 1,685,776 $ 1,389,356 $ 399,212 $ 129,452 - 103,598 3,233 154,835 (30,000) - $ 372,445 $ 387,885 Public Vehicle Facilities 1,116,273 Replacement Replacement Totals $ 415,510 $ - $ 2,678,965 3,346 - 23,498 (870) (265,623) (1,789,770) 417,986 (265,623) 912,693 3,000,000 3,125,000 - (3,076,200) 3,000,000 48,800 (141,475) - (471,068) 164,193 662,873 1,116,273 440,704 3,397,250 1,606,698 2,5 80,476 11,53 7,909 19,424,773 $ 3,021,180 $ 14,935,159 $ 21,031,471 $ 291,802 $ (527,362) $ 293,104 129,184 - 232,782 (3,000) - (3,000) - 261,739 419,807 - - (30,000) $ 417,986 $ (265,623) $ 912,693 -125- This page intentionally left blank. -126- FIDUCIARY FUNDS AGENCY FUNDS The Agency Funds are used to account for assets held by the City as an agent for individuals. Assessment District No. 92-2 - To account for monies held to account for debt service requirements of Assessment District No. 92-2. Assessment District No. 99-1 - To account for monies held to account for debt service requirements of Assessment District No. 99-1. Communitv Facilities District No. 2002-1 - To account for monies held to account for debt service requirements of Community Facilities District No. 2002-1. - 127- CITY OF SANTA CLARITA COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES FIDUCIARY FUNDS June 30, 2008 LIABILITIES: Accounts payable and accrued liabilities $ 1,306 $ Agency Funds $ 2,375 Due to other funds 30,000 - 14,350 Community Due to bondholders 157,545 Assessment Assessment Facilities $ 188,851 $ 85,916 $ 1,726,143 District District District No. 92-2 No. 99-1 No. 2002-1 Totals ASSETS: Cash and investments $ 122,303 $ 22,911 $ 39,826 $ 185,040 Cash and investments with fiscal agent 64,250 60,837 1,685,953 1,811,040 Accounts receivable 1,187 1,951 - 3,138 Interest receivable 1,111 217 364 1,692 TOTAL ASSETS $ 188,851 $ 85,916 $ 1,726,143 $ 2,000,910 LIABILITIES: Accounts payable and accrued liabilities $ 1,306 $ 922 $ 147 $ 2,375 Due to other funds 30,000 - 14,350 44,350 Due to bondholders 157,545 84,994 1,711,646 1,954,185 TOTAL LIABILITIES $ 188,851 $ 85,916 $ 1,726,143 $ 2,000,910 See independent auditors' report. -128- CITY OF SANTA CLARITA SCHEDULE OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES ALL AGENCY FUNDS For the year ended June 30, 2008 Balance Balance July 1, June 30, 2007 Additions Deletions 2008 ASSESSMENT DISTRICT NO. 92-2 ASSETS: Cash and investments $ 74,083 $ 48,220 $ - $ 122,303 Cash and investments with fiscal agent 68,424 - 4,174 64,250 Accounts receivable 1,127 60 - 1,187 Interest receivable 1,258 - 147 1,111 TOTAL ASSETS $ 144,892 $ 48,280 $ 4,321 $ 188,851 LIABILITIES: Accounts payable and accrued liabilities $ 1,328 $ - $ 22 $ 1,306 Due to other funds - 30,000 - 30,000 Due to bondholders 143,564 13,981 - 157,545 TOTAL LIABILITIES $ 144,892 $ 43,981 $ 22 $ 188,851 ASSESSMENT DISTRICT NO. 99-1 ASSETS: Cash and investments $ 27,072 $ - $ 4,161 $ 22,911 Cash and investments with fiscal agent 61,360 - 523 60,837 Accounts receivable 327 1,624 - 1,951 Interest receivable 1,587 - 1,370 217 TOTAL ASSETS $ 90,346 $ 1,624 $ 6,054 $ 85,916 LIABILITIES: Accounts payable and accrued liabilities $ 940 $ - $ 18 $ 922 Due to bondholders 89,406 - 4,412 84,994 TOTAL LIABILITIES $ 90,346 $ - $ 4,430 $ 85,916 (Continued) See independent auditors' report. -129- CITY OF SANTA CLARITA SCHEDULE OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES ALL AGENCY FUNDS (CONTINUED) For the year ended June 30, 2008 Balance July 1, 2007 Additions Deletions COMMUNITY FACILITIES DISTRICT NO. 2002-1 ASSETS: Balance June 30, Cash and investments $ 17,265 $ 22,561 $ - $ 39,826 Cash and investments with fiscal agent 1,690,270 - 4,317 1,685,953 Interest receivable - 364 - 364 TOTAL ASSETS $ 1,707,535 $ 22,925 $ 4,317 $ 1,726,143 LIABILITIES: Accounts payable and accrued liabilities - 147 - 147 Due to other funds - 14,350 - 14,350 Due to bondholders 1,707,535 4,111 - 1,711,646 TOTAL LIABILITIES $ 1,707,535 $ 18,608 $ - $ 1,726,143 TOTAL - ALL AGENCY FUNDS ASSETS: Cash and investments $ 118,420 $ 70,781 $ 4,161 $ 185,040 Cash and investments with fiscal agent 1,820,054 - 9,014 1,811,040 Accounts receivable 1,454 1,684 - 3,138 Interest receivable 2,845 364 1,517 1,692 TOTAL ASSETS $ 1,942,773 $ 72,829 $ 14,692 $ 2,000,910 LIABILITIES: Accounts payable and accrued liabilities $ 2,268 $ 147 $ 40 $ 2,375 Due to other funds - 44,350 - 44,350 Due to bondholders 1,940,505 18,092 4,412 1,954,185 TOTAL LIABILITIES $ 1,942,773 $ 62,589 $ 4,452 $ 2,000,910 See independent auditors' report. -130- CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS - 131 - CITY OF SANTA CLARITA CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS COMPARATIVE SCHEDULES BY SOURCE (1) June 30, 2008 and 2007 GOVERNMENTAL FUNDS CAPITAL ASSETS: Land Site improvements Buildings and improvements Equipment Infrastructure Construction in progress TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS INVESTMENT IN GOVERNMENTAL FUNDS ASSETS BY SOURCE: Donation of fixed assets from the County of Los Angeles, at estimated fair market value Other donations General fund TOTAL INVESTMENT IN GOVERNMENTAL FUNDS CAPITAL ASSETS 2008 $ 82,955,324 17,734,424 46,537,031 6,679,725 667,794,922 106,605,795 $ 928,307,221 $ 12,448,203 53,040,043 862,818,975 KITIVI $ 79,279,650 14,074,142 45,530,704 6,227,782 656,695,949 R? 155 071 $ 883,963,302 $ 12,448,203 44,713,880 826,801,219 $ 928,307,221 $ 883,963,302 (1) This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the Statement of Net Assets. See independent auditors' report. -132- CITY OF SANTA CLARITA CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION (1) June 30, 2008 (1) This schedule presents only the capital asset balances related to govemmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the Statement of Net Assets. See independent auditor's report. -133- Buildings Construction Site and in Function Land Improvements Improvements Equipment Infrastructure Progress Total General government $ 20,294,139 $ 802,782 $ 9,790,468 $ 2,298,275 $ $ 120,345 $ 33,306,009 Public safety - - 481,405 27,623 - 509,028 Public works 14,924,448 267,715 1,131,179 3,075,505 - 19,398,847 Parks and recreation 38,290,369 16,663,928 35,133,978 972,368 2.847,677 93,908,320 Community development 9,446,367 - - 305,955 667,794,921 103,637,774 781,185,017 Total $ 82,955,323 $ 17,734,425 $ 46,537,030 $ 6,679,726 $ 667,794,921 $ 106,605,796 $ 928,307,221 (1) This schedule presents only the capital asset balances related to govemmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the Statement of Net Assets. See independent auditor's report. -133- CITY OF SANTA CLARITA CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION For the year ended June 30, 2008 See independent auditors' report. -134- Governmental Governmental Funds Funds Capital Assets Capital Assets Function July 1, 2007 Additions Deletions June 30, 2008 General government $ 32,577,857 $ 728,152 $ - $ 33,306,009 Public safety 509,028 - - 509,028 Public works 19,143,416 255,431 - 19,398,847 Parks and recreation 90,388,912 6,264,339 2,744,931 93,908,320 Community development 741,344,089 41,212,148 1,371,220 781,185,017 Total $ 883,963,302 $ 48,460,070 $ 4,116,151 $ 928,307,221 See independent auditors' report. -134- Z 0 W J Q U F N Q N STATISTICAL SECTION (Unaudited) This part of the City of Santa Clarita's 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 say about the government's overall financial health. CONTENTS Financial Trends These tables contain trend information that may assist the reader in the City's current financial performance by placing it in historical perspective. Revenue Capacity These tables contain information that may help in assessing the viability of the City's most significant revenue sources, the property and sales taxes. Debt Capacity These tables present information that may assist the reader in analyzing the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information These tables contain service and infrastructure indicators that can inform one's understanding how the information in the City's financial statements relate to the services the City provides and the activities it performs. 135- 137-143 144-155 156-162 163-164 165-168 136 - CITY OF SANTA CLARITA NET ASSETS by COMPONENT (1) Last Six Fiscal Years Ended June 30, 2008 (accrual basis of accounting) Primary Government FISCAL YEAR Investment in capital assets, 05-06 a7 07-08 06-07 As Restated 04-05 03-04 02-03 Governmental Activities Restricted 107,644,883 52,576,463 62,752,301 41,540,800 40,362,986 Investment in capital assets, Unrestricted 69,207,512 89,290,905 70,595,199 52,466,674 47,702,349 net of related debt $ 672,306,820 $ 661,210,117 $ 614,300,517 S 160,829,971 $ 110,924,177 $ 90,486,961 Restricted for: Capital Projects 45,993,804 18,134,924 32,030,928 14,530,809 14,679,895 11,707,084 Debt Service 632,680 - 174,028 347 49 53 Specific Projects and Programs 61,018,399 34,441,539 30,547,345 27,009,644 25,683,042 30,115,243 Total Restricted 107,644,883 52,576,463 62,752,301 41,540,800 40,362,986 41,822,380 Unrestricted 66,249,901 87,737,817 71,001,423 53,357,322 49,662,321 32,645,363 Total governmental activities net assets $ 846,201,604 $ 801,524,397 $ 748,054,241 $ 255,728,093 $ 200,949,484 $ 164,954.704 Business -type Activities Investment in capital assets, net of related debt S 63,526,242 $ 62,246,621 $ 63,741,429 $ 57,378,860 $ 38,827,474 $ 28,679,875 Restricted for: Debt Service - - - - - 567,140 Unrestricted 2,957,611 1,553,088 (406,224) (890,648) (1,959,972) (1,092,404) Total business -type activities net assets $ 66,483,853 $ 63,799,709 $ 63,335,205 $ 56,488,212 $ 36,867,502 $ 28,154,611 Primary Government Investment in capital assets, net of related debt 735,833,062 723,456,738 678,041,946 218,208,831 149,751,651 119,166,836 Restricted 107,644,883 52,576,463 62,752,301 41,540,800 40,362,986 42,389,520 Unrestricted 69,207,512 89,290,905 70,595,199 52,466,674 47,702,349 31,552,959 Total Primary Government Net Assets $ 912,685,457 $ 865,324,106 S 811,389,446 $ 312,216,305 $ 237,816,986 $ 193,109,315 Note: 11 i Accounting standards require that net assets be reported in three components in the financial statements: invested in capital assets, net of related debt, restricted, and unrestricted. Net assets are considered restricted only when (1) an external party, such as the State of California or the federal government, places a restriction on how the revenues may be used, or (2) enabling legislations is enacted by the City. (2) City of Santa Clarita implemented GASB 34 reporting module for the fiscal year ended June 30, 2003. Fiscal Year 2005-06 balance was restated as a result of the City's valuation of the estimated historical cost of infrastructure placed in service prior to July I, 2002. See Notes to Basic Financial Statements 416. Source: City of Santa Clarita, Administrative Services Department - Finance Division 137- CITY OF SANTA CLARITA CHANGES in NET ASSETS Last Six Fiscal Years Ended June 30, 2008 ttl (accrual basis of accounting) Program Revenues FISCAL YEAR 07-08 06-07 05-06 04-05 03-04 02 -OT -- Expenses Charges for services: Governmental Activities General government $ 2,737,355 S 302,075 S 186,171 S 377,202 $ 325,190 General government $ 27,488,731 S 26,029,070 $ 24,225,414 $ 9,930,958 $ 10,645,351 S 9,033,093 Public safety 16,482,917 14,398,408 13,821,626 12,437,170 12,113,853 12,107,145 Public works 30,549,888 19,273,980 6,417,841 11,754,949 8,859,452 8,971,939 Parks and recreation 21,817,251 20,573,077 20,988,533 17,637,475 15,370,145 14,515,769 Community development 9,257,881 8,985,449 16,939,976 22,371,678 20,482,573 34,837,564 Unlocated infrastructure depreciation 13,128,617 12,920,310 1,268,939 701,261 243,369 82,564 Interest on long-term debt 3,127,998 2,087,949 1,669,701 1,560,223 1,608,577 1,896,652 Total governmental activites expenses: 121,853,283 104,268,243 85,332,030 76,393,714 69,323,320 81,444,726 Business -type Activities Charges for services: Transit 21,506,317 18,315,106 16,508,457 15,239,173 14,557,850 15,272,143 Total business -type activities expenses: 21,506,317 18,315,106 16,508,457 15,239,173 14,557,850 15,272,143 Total prhnary, government expenses: S 143,359,600 S 122,583,349 S 101,840,487 $ 91,632,887 S 83,881,170 $ 96,716,869 Program Revenues Governmental Activities Charges for services: General government $ 2,737,355 S 302,075 S 186,171 S 377,202 $ 325,190 S 268,054 Public safety 2,291,100 2,131,060 2,032,652 1,921,796 1,143,772 1,146,070 Public works 355,817 3,575,546 2,512,093 2,423,865 2,697,751 2,675,812 Parks and recreation 3,875,539 3,895,422 3,794,662 3,874,109 3,133,880 2,960,491 Conu mity development 26,341,684 20,182,722 19,068,982 20,127,873 20,740,859 16,554,860 Operating grants and contributions 22,600,793 26,641,145 23,465,852 21,301,215 18,503,221 19,239,884 Capital grants and contributions 39,003,536 24,770,306 60,971,404 34,503,830 12,239,868 13,236,601 Total governmental activities program revenues: 97,205,824 81,498,276 112,031,816 84,529,890 58,784,541 56,081,772 Business -type Activities Charges for services: Transit 3,216,239 5,827,778 4,950,584 5,224,575 4,581,799 4,362,529 Operating grants and contributions 11,876,720 12,616,641 3,351,941 15,834,845 8,937,213 2,232,947 Capital grants and contributions 617,421 750,200 Total business -type activities program revenues: 15,710,380 19,194,619 8,302,525 21,059,420 13,519,012 6,595,476 Total primary goverment revenues: $ 112,916,204 $ 100,692,895 $ 120,334,341 $105,589,310 $ 72,303,553 $ 62,677,248 Note: (1) City of Santa Clarita implemented GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department - Finance Division 138- CITY OF SANTA CLARITA CHANGES in NET ASSETS Last Sia Fiscal Years Ended June 30, 20081(1 Net Revenues (expenses): Governmental activities Business -type activities Total net revenues(expenses): General Revenue and Other Changes in Net Asset! Governmental activities Taxes: Sales taus Property taxes, levied for general purposes Franchise taus Real property transfer taxes Transient occupancy taxes Unrestricted revenue in lieu of motor vehicle taxes Unrestricted revenue in lieu of sales taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Transfers Total governmental activities Business -type activities Grants and contributions not restricted to specific programs Unrestricted investment earnings Transfers Total business -type activities: Total primary government: Change in Net Assets Governmental activities Business -type activities Total primary government: (accrual basis of accounting) FISCAL YEAR 07-08 06-07 05-06 0405 03-04 02-03 $ (24,647,459) $ (22,769,967) S 26,699,786 $ 8,136,176 S (10,538,779) $ (25,362,954) S 29,076,388 S 23,790,825 S 22,204,192 $ 22,674,470 $ 27,329,574 S 24,337,912 24,482,930 27,891,202 23,106,806 9,023,363 9,452,945 8,323,522 6,028,903 6,248,912 5,560,153 5,314;454 5,131,964 4,863,519 836,824 1,073,774 1,544,534 1,611,216 027,924 920,676 2,433,651 1,804,923 1,824,394 1,632,137 1,458,388 1,186,141 - - 603,990 10,224,572 10,216,165 9,141,858 8,490,865 8,156,017 6,965,521 7,328,638 - - 1,252,281 1,862,901 223,241 872,475 1,279,029 939,559 4,566,884 4,970,193 1,891,292 1,663,699 655,106 1,710,373 (8,431,120) 441,376 (12,054,795) (13,702,591) (9,737,217) (8734050) 68,737,606 76,240,123 51,869,328 46,642,433 47,113,878 42,689,510 • - 883,615 93,334 - 48,961 26,367 1,050 4,538 17,800 67,450 S 44,090,147 $ 53,470,156 S 78,569,114 S 54,778,609 $ 36,575,099 $ 17,326,556 2,684,144 464,504 4,733,528 19,620,710 8,716,179 124,833 $ 46,774291 $ 53,934,660 S 83.302.642 $ 74399319 S 45291 778 It 17451 vx9 Note: 111 City of Santa Clarita implemented GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department - Finance Division 139 - CITY OF SANTA CLARITA FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years Ended June 30, 2008 (modified accrual basis of accounting) General Fund Reserved Unreserved Total general fiord All Other Governmental Funds Reserved Unreserved: Special revenue fund Debt service fiords Capital projects fund Total all other governmental funds FISCAL YEAR 05-06 07-08 06-07 As Restated 04-05 $ 34,920,547 S 34,699,034 S 20,786,040 S 15,638,513 31,153,879 28,500,824 18,232,779 30,780,939 $ 66.074 526 S 63.199.858 S 39,018,819 S 46.419,452 $ 51,972,970 $ 48,303,588 S 80,399,389 $ 30,388,825 28,377,796 3,827,570 (15,073,824) 2,843,589 (15,873,835) (10,461,382) (4,743,697) (4,402,225) 38,050,255 4,592,332 (249,111) (698,632) S 102.527.186 S 46.262,108 $ 60,332.757 $ 28.131.557 FUND BALANCES Fiscal Year Ended June 30, 2008 Note: (1) Balance as restated, see Notes to Basic Financial Statements # 16B. Source: City of Santa Clarita, Administrative Services Department - Finance Division -140- FISCAL 1 -EAR 03.04 02-03 01-02 00-01 99-00 98-99 S 12,042,182 S 14,034,615 $ 21,368,003 S 16,330,098 S 13,412,456 23,109,773 12,927,211 3,168,903 12,209,902 11,948,231 12,033,130 $ 35.151955 $ 26,961,826 $ 24,536,906 S 28.540.000 $ 25.3K687 $ 12,033.130 $ 41,563,581 $ 9,203,674 S 10,852,416 $ 8,426,033 $ 18,574,159 S 10,850,020 (867,508) 30,014266 34,078,558 30,758,147 22,571,066 28,197,598 (3,944,409) (4,082,126) (4,066,749) - - - (100,527) (196,889) 437,307 228,777 474,522 54,467 S 36,651.137 $ 34.938,925 S 41.301,532 $ 39.412,957 $ 41.619,747 $ 39.102,085 120 100 so 60 40 20 0 FUND BALANCES ALL OTHER GOVERNMENTAL FUNDS Last Ten Fiscal Years Nax50 560.11 5H.82 $41.30 $39.41 S]l8] 5 11 8848 99-00 00-01 01-02 02-03 01-04 04-08 0548 06-07 07-08 Fiscal Year 141- CITY OF SANTA CLARITA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years Ended June 30, 2008 (modified accrual basis of accounting) Revenues: Taxes Licenses and permits Developer fees Investment income Revenue from other agencies Fines and forfeitures Service charges Other revenues Total Revenues Expenditures: Current: General government Public safety Public works Parks and recreation Community development Capital outlays Debt service: Principal Interest, professional services, and fiscal charges Total Expenditures Excess of Revenues over (under) Expenditures Other Financing Sources (Uses) Revenue bonds issuedlissuance premium Proceeds of long-term debt Escrow payment, costs of bonds issuance, and others Transfers -in Transfers -out Total Other Financing Sources (Uses) Net change in fund balances Fund balances (deficit) - Beginning of Year, as restated Fund balances (deficit) - End of Year Debt service as percentage of non capital expenditures FISCAL YEAR 2008 2007 2006 2005 S 88,088,786 $ 70,576,755 $ 66,164,485 S 53,763,779 5,256,748 4,203,933 6,907,826 5,127,705 22,290,808 6,747,767 28,028,933 11,963,054 8,287,441 7,926,763 2,881,133 3,148,731 24,247,611 37,300,213 38,526,364 33,089,887 2,121,570 1,918,954 1,904,273 1,803,686 9,931,041 13,463,673 13,081,649 13,339,462 3,368,879 4,356,961 12,651,674 2,408,463 163,592, 884 146,495,019 170,146,337 124,644,767 25,965,196 23,411,750 24,668,150 11,217,783 16,342,979 14,347,833 13,658,723 12,429,192 25,977,763 19,511,097 6,802,081 8,901,359 20,156,343 18,943,146 17,376,609 15,964,949 7,583,236 9,051,652 17,164,505 22,531,795 44,906,802 57,926,955 49,435,744 35,096,683 1,927,198 2,374,870 1,367,359 2,060,319 4,632,979 2,298,974 2,878,536 1,570,581 147,492,496 147,866,277 133,351,707 109,772,661 16,100,388 (1,371,258) 36,794,630 14,872,106 - 13,894,752 tt1 - - 54,235,000 - 17,700,000 - (226,682) - (17,225,304) - 43,112,541 27,468,089 7,865,612 8,157,999 (54,668,661) (29,881,193) (19,409,716) (20,282,188) 42,452,198 11,481,648 (11.069,408) (12,124,189) 58,552,586 10,110,390 25,725,222 2,747,917 110,049,026 99,351,576 (1) 74,551,009 71,803,092 S 168,601,612 $ 109,461,966 S 100,276,231 S 74,551,009 5.87% 4.95% 5.04% 4.73% NOTE: (1) On January 16, 2007 the Santa Clarita Public Financing Authority issued $13,785,000 Lease Revenue Bonds, Series 2007, for the acquisition of right-of-way. (2) Balance as restated, see Notes to Basic Financial Statements #16. 142- 12,436,244 9,282,089 9,778,478 FISCAL YEAR 11,411,885 12,102,441 - 2004 2003 2002 2001 2000 1999 8,112,935 7,450,660 6,785,186 3,075,346 14,226,090 11,546,673 10,492,037 • $ 43,940,454 $ 39,813,089 $ 35,589,227 $ 34,053,282 $ 30,320,166 $ 28,072,551 10,978,733 5,303,309 3,512,857 33,179,578 2,759,637 3,3419660 2,585,580 19,584,815 7,570,352 7,857,087 17,016,274 16,295,503 7,916,830 3,615,156 1,760,134 919,858 3,788,121 4,165,144 6,303,050 3,439,177 3,233,903 102,311,909 36,119,851 31,157,062 30,209,371 30,133,734 25,047,788 .28,861,626 1,878,808 1,0519371 1,041,945 1,008,466 972,443 1,019,370 1,197,794 . 12,580,933 18,095,424 17,089,401 15,489,302 15,219,587 17,836,700 3,767,800 2,309,846 1,948,808 1,298,924 859,511 1,326,809 111,253,928 107,575,431 107,026,691 107,305,875 87,164,089 86,730,119 12,436,244 9,282,089 9,778,478 8,768,573 8,156,391 11,411,885 12,102,441 12,124,427 11,264,808 11,386,290 10,386,922 11,178,500 8,692,908 8,823,785 8,112,935 7,450,660 6,785,186 3,075,346 14,226,090 11,546,673 10,492,037 9,052,687 8,769,545 9,103,012 21,039,274 23,900,882 16,450,228 13,566,023 10,978,733 8,458,402 19,251,357 33,179,578 46,917,311 43,364,800 27,909,694 19,584,815 4,332,159 1,496,087 533,279 176,061 29,161 26,755 1,760,134 1,958,388 1,598,807 1,5477751 1,501,752 1,434,523 93,840,607 102,311,909 105,147,883 95,312,845 74,517,384 64,273,238 17,413,321 5,263,522 1,878,808 11,993,030 12,646,705 22,456,881 1,558,097 4,400,000 1,558,097 4,400,000 - 2,590,955 - - - 487,227 8,278,692 7,662,207 9,550,514 2,989,329 3,927,765 3,740,077 (18,380,627) (18,421,513) (18,120,682) (11,591,270) (16,392,428) (13,495,185) (7,510,980) (7,643,112) 229,832 (8,601,941) (12,464,663) (9,267,881) 9,902,341 (2,379,590) 2,108,640 3,391,089 182,042 13,189,000 61,900,751 65,838,438 64,722,707 61,331,618 61,149,576 47,960,576 $ 71,803,092 $ 61,900,751 $ 65,838,438 $ 64,722,707 $ 61,331,618 $ 61,149,576 8.24% 4.21% 3.66% 3.32% 3.28% 3.27°% Source: City of Santa Clarita, Administrative Services Department - Finance Division 143- • CITY OF SANTA CLARITA ASSESSED VALUATION (t)and ACTUAL VALUE OF TAXABLE PROPERTY • Last Ten Fiscal Years STATE ASSESSED LOCALLY ASSESSED - SECURED -UTILITY SECURED Fiscal IMPROVE- PERSONAL IMPROVE- PERSONAL OTHER Year LAND MENTS PROPERTY TOTAL LAND MENTS PROPERTY EXEMPTIONS TOTAL 1998-99 1,932,727 558,165 270,790 2,761,682 3,293,436,525 5,288,454,498 81,080,379 (119,145,230) 8,543,826,172 1999-00 1,733,140 323,181 185,010 2,241,331 3,549,417,695 5,661,843,960 91,953,388 (121,319,796) 9,181,895,247 2000-01 2,961,227 298,757 171,028 3,431,012 3,945,586,755 6,169,813,280 91,784,122 (155,105,480) 10,052,078,677 2001-02 2,759,375 327,081 187,242 3,273,698 4,337,350,843 6,540,398,513 95,719,580 (188,756,582) 10,784,712,354 2002-03 2,743,160 314,910 180,275 3,238,345 4,742,666,578 7,042,138,889 91,308,887 (183,110,538) 11,693,003,816 2003-04 5,301,621 43,969,100 205,876 49,476,597 5,312,201,652 7,688,524,882 79,538,536 (187,628,805) 12,892,636,265 2004-05 5,420,327 11,091,534 256,894 16,768,755 6,068,433,252 8,136,867,187 73,449,031 (194,782,110) 14,083,967,360 200546 2,098,608 10,833,957 239,620 13,172,185 7,440,682,741 8,947,087,936 89,939,825 (211,472,197) 16,266,238,305 2006-07 2,156,981 8,312,011 197,013 10,666,005 8,556,960,792 9,766,997,767 104,509,489 (253,946,364) 18,174,521,684 2007-08 1,515,305 6,727,866 - 8,243,171 9,899,005,161 10,912,016,138 98,107,607 (214,371,45 1) 20,694,757,455 ASSESSED VALUATION by CATEGORIES (Toot Secured and Unsecured) Fiscal Year Ended June 30, 2008 PERSONAL PROPERTY J.02 Note: (1) Assessed valuator, 1s based on t00% of full value in accordance with Section 135 of the California Revenue and Taxation Code. Source: HdL Coren & Cone, County of Los Angeles, Auditor -Controller Office, Combined Tax Rolls 2007/08 144- 9 ■ LAND 45.54 E L a LOCALLY ASSESSED 288,487,295 TOTALS 548,934,675 9,216,023,170 9,095,522,529 13.25% 0.05903% 201,615,429 HOME - UNSECURED BEFORE TAXABLE % TOTAL OWNER IMPROVE- PERSONAL OTHER OTHER ASSESSED INCR, DIRECT PROPERTY MENTS PROPERTY EXEMPTIONS 'POT.4L EXEMPTIONS VALUE (DECR.) RATE (2) TAX RELIEF 261,802,791 288,487,295 (1,355,411) 548,934,675 9,216,023,170 9,095,522,529 13.25% 0.05903% 201,615,429 282,745,700 319,794,318 - 602,540,018 9,907,996,392 9,786,676,596 7.600% 0.05794% 199,793,885 240,385,121 369,315,436 (87,800) 609,612,757 10,820,315,726 10,665,122,446 8.98% 0.05824% 199,566,151 273,022,487 407,191,186 (639,000) 679,574,673 11,656,956,307 11,467,560,725 7.52% 0.06100% 199,815,494 281,002,279 422,950,745 (95,000) 703,858,024 12,583,305,723 12,400,100,185 8.13% 0.06192% 199,128,847 254,085,173 411,805,661 (1,135,000) 664,755,834 13,795,632,501 13,606,868,696 9.73% 0.062790/9 199,643,032 242,047,848 399,549,912 (76,000) 641,521,760 14,937,115,985 14,742,257,875 8.34% 0.06432% 205,852,669 216,098,046 453,406,084 (9,513,134) 659,990,996 17,160,386,817 16,939,401,486 14.90% 0.06909% 206,658,586 255,417,833 482,574,856 (7,299,585) 730,693,104 19,177,126,742 18,915,880,793 11.67% 0.08039% 206,464,204 264,708,723 558,804,055 (32,916,267) 790,596,511 21,740,884,855 21,493,597,137 13.63% 0.08327% 220.192.568 25,000 20,000 15,000 10,000 5,000 TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 421,494 0&90 9000 0001 0142 02-03 03-00 0406 0646 0647 07-08 Fiscal Tear (2) Direct Rate Includes Redevelopment Agency areas 145 - CITY OF SANTA CLARITA REDEVELOPMENT AGENCY X11 ASSESSED VALUATION"' and ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years STATE ASSESSED LOCALLY ASSESSED SECURED (UTILITY) SECURED F'IS(. S\I. IMPROVE- PERSONAL IMPROVE- PERSONAL OTHER NEAR LAUD 6IENTS PROPE,R'r1' TOTAL LAND %ILNfS PROPER'IN EXEMPTIONS IO'r AL 1998-99 568,944 S 51,759 $ 29,632 S 150,335 $ 115,222,237 $ 127,657,072 $ 4,474,912 $ (4,120,954) $243,233,267 1999-00 47,103 35,364 20,244 102,711 119,628,829 131,911,448 3,855,740 (1,609,625) 253,786,392 2000-01 43,544 32,692 18,715 94,951 129,489,221 136,444,009 4,069,074 (1,624,719) 268,377,585 2001-02 47,672 35,789 20,489 103,950 142,657,899 145,596,895 3,810,222 (2,524,574) 289,540,442 2002-03 45,897 34,458 19,726 100,081 149,325,297 149,506,716 5,028,543 (2,575,054) 301,285,502 2003-04 52,416 39,351 22,527 114,294 161,106,889 159,691,365 3,806,986 (4,148,124) 320,457,116 2004-05 65,404 49,101 28,109 142,614 190,810,905 166,935,237 2,314,234 (5,083,826) 344,976,550 2005-06 61,007 45,801 26,219 133,027 273,260,130 176,564,344 2,435,378 (4,859,824) 447,400,028 2006-07 50,158 37,657 21,558 109,373 295,792,467 185,299,271 2,545,972 (5,085,710) 478,552,000 2007-08 335,974,647 205,086,767 21346,546 (4,630,171) 538,777,789 SECURED ASSESSED VALUATION (before other exemptions) Fiscal Year 2007-08 PERSONAL PROPERTY (I 1 -The Redevelopment Agency of the City of Santa Clarna was established on November 28, 1989, pursuant to the State of California Health and Safety Code, Section 33000. However, the Agency was not active until fiscal year 1998-99 and the Base Year was calculated in fiscal year 1996-97, which included the Homeowners Tax Relief of that year. (2) -Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Taxation Code Source. County of Los Angeles, Auditor-Controller/Tu Division 146- SECURED 46- LOCALLY ASSESSED S 12,239,116 $ TOTALS S 260,592,584 S (266,351,517) S (5,758,933) S - $ 1,870,400 HOME - UNSECURED TOTALS TAXABLE OWNER IMPROVE- PERSONAL OTHER BEFORE ASSESSED VALUE PROPERTY VENTS PROPER'1'NEXEMPTIONS TOTAL BASEYEAR BASE YEAR VALUE GROWTH TAX RELIEF $ 4,972,866 S 12,239,116 $ (3,000) S 17,208,982 S 260,592,584 S (266,351,517) S (5,758,933) S - $ 1,870,400 4,143,500 14,484,623 - 18,628,123 272,517,226 (266,351,517) 6,165,709 11,924,642 1,860,600 3,796,012 16,424,155 (10,000) 20,210,167 288,682,703 (266,351,517) 22,331,186 16,165,477 1,895,600 4,515,557 14,923,310 (15,000) 19,423,867 309,068,259 (266,351,517) 42,716,742 20,385,556 1,918,000 5,983,748 19,053,059 (30,000) 25,006,807 326,392,390 (266,351,517) 60,040,873 17,324,131 1,890,000 6,272,382 19,035,089 (33,000) 25,274,471 345,845,881 (266,351,517) 79,494,364 19,453,491 1,923,600 6,326,173 22,151,970 (33,000) 28,445,143 373,564,307 (266,351,517) 107,212,790 27,718,426 2,161,147 5,901,959 23,034,914 (91,000) 28,845,873 476,378,928 (266,351,517) 210,027,411 102,814,621 2,053,943 26,593,269 25,569,962 (16,300) 52,146,931 530,808,304 (266,351,517) 264,456,787 54,429,376 1,971,567 28,204,577 48,299,529 (217,300) 76,286,806 615,064,595 (266,351,517) 348 713,078 84,256,291 2.034.432 UNSECURED ASSESSED VALUATION (before other Exemption) Fiscal Year 2007-08 36.87% 1 G PERSONAL PROPERTY 63.13% CITY OF SANTA CLARITA ASSESSED VALUE - TAXABLE PROPERTY Last Ten Fiscal Years CATEGORY 07-08 06-07 FISCAL YEAR 05-06 04-05 03-04 Residential $ 16,165,919,271 $ 13,962,275,972 $ 12,569,640,999 $ 11,097,987,787 $ 10,221,634,945 Commercial 2,081,576,763 1,836,340,797 1,588,835,810 1,258.389,787 1,132,585,601 Industrial 1,293,080,539 1,148,469,489 980,395,598 833,455,573 817,508,597 Irrigated 3,489,768 29,374,674 28,272,540 4,351,050 3,962,743 Dry farm - 49,088,244 48,512,253 45,145,241 43,542,990 Recreational 114,868,032 90,435,287 94,916,719 84,727,948 94,694,674 Institutional 130,907,129 94,705,673 91,312,643 80,606,769 113,908,577 Government 197,676 194,922 190,000 - 493,814 Miscellaneous 810,312 795,449 779,859 764,577 667,091 Vacant land 664,792,342 656,660,955 554,551,820 440,215,418 280,744,871 SBE Nommitary 8,243,171 10,666,005 13,172,185 16,768,755 49,476,597 Possessory Int. 239,115,623 222,654,730 205,526,182 201,323,600 153,302,360 Unsecured 790,596,511 730,697,804 659,990,996 641,526,760 664,760,834 Unknown 83,525,492 103,303,882 36,994,610 29,585,002 TOTA LS: $ 21,493,597,137 $ 18,915,885,493 $ 16,939,401,486 $ 14.742,257,875 $ 13,606,868,696 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ASSESSED VALUE- TAXABLE PROPERTY Last Ten Fiscal Years 98-99 99-00 00-01 01-02 02-03 07-04 04-05 05-06 06-07 07-08 Fiscal Year Source: HdL Coren & Cone, Los Angeles County Assessor 2007/08 Combined Tax Rolls. -148- eR 51dE dOnl Z umdmmal EVacant land Mail othem - 02-03 01-02 00-01 994)0 98-99 $ 9,3 73,65 7,630 $ 8,630,320,972 $ 7,948,529,358 $ 7,306,570,760 $ 6,927,181,010 . 1,043,922,879 955,529,671 879,942,873 797,649,082 742,166,572 735,063,812 693,214,978 660,288,367 597,514,771 466,678,700 . 3,933,315 5,798,245 3,871,007 5,055,001 4,342,301 29,655,961 34,074,195 38,041,655 47,333,049 32,069,164 60,212,317 46,322,531 42,015,479 41,371,556 30,749,352 . 102,142,853 82,619,342 96,186,317 105,635,607 83,480,361 484,173 474,673 465,377 456,265 698,422 - 7,591,441 2,697,123 7,823,618 7,687,998 7,774,167 • 212,233,528 228,265,224 260,536,412 179,422,468 161,050,965 3,238,345 3,273,698 3,431,012 2,241,331 2,241,331 . 109,259,714 75,116,757 73,906,800 77,224,408 72,702,286 703,858,024 679,574,673 609,612,757 602,540,018 548,934,675 . 14,846,193 30,278,643 40,471,414 15,974,282 15,453,223 • $ 12,400,100,185 $ 11,467,560,725 $10,665,122,446 $ 9,786,676,596 $ 9,095,522,529 . Notes: In 1978 the voters of the State of California passed Proposition 13 which limned taxes to a total maximum rate of I% 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 of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the properly is reassessed based upon the added value of the construction or at the purchase • price (market value) or economic value 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 limitation just mentioned. 149- CITY OF SANTA CLARITA ASSESSED VALUE - USE CATEGORY SUMMARY Fiscal Year 2007-08 TOTALS: 53,292 $ 21,740,884,855 100.00% $ 247,287,718 S 21,493,597,137 100.000% ASSESSED VALUE by USE CATEGORY Fiscal Year 2007-08 Ind . Wu 5.9dH. I NET TAXABLE VALUE by USE CATEGORY Fiscal Year 2007-08 NET Commerslal ASSESSED All Others 9.68% TAXABLE CATEGORY PARCELS VALUE PERCENT EXEMPTIONS VALUE PERCENT Residential 48,399 $ 16,206,510,256 74.54% $ 40,590,985 $ 16,165,919,271 75.213% Commercial 774 2,088,849,098 9.61% 7,272,335 2,081,576,763 9.685% Industrial 621 1,294,150,828 5.95% 1,070,289 1,293,080,539 6.016% Irrigated 6 3,489,768 0.02% - 3,489,768 0.016% Recreational 39 122,074,460 0.560/. 7,206,428 114,868,032 0.534% Institutional 86 287,742,311 1.32% 156,835,182 130,907,129 0.609% Government 5 198,820 0.001% 1,144 197,676 0.001% Miscellaneous 10 810,312 0.004% 810,312 0.004% Vacant land 3,352 665,454,050 3.06% 661,708 664,792,342 3.093% SBE Nommitary (112) 8,243,171 0.04% - 8,243,171 0.038% Possessory Int. (2,125) 239,849,003 1.10% 733,380 239,115,623 1.112% Unsecured (6,907) 823,512,778 3.79% 32,916,267 790,596,511 3.678% Unknown 0.00% - 0.000% TOTALS: 53,292 $ 21,740,884,855 100.00% $ 247,287,718 S 21,493,597,137 100.000% ASSESSED VALUE by USE CATEGORY Fiscal Year 2007-08 Ind . Wu 5.9dH. I NET TAXABLE VALUE by USE CATEGORY Source: HdL Coren & Cone, Los Angeles County Assessor 2007/08 Combined Tax Rolls. 75.21% Fiscal Year 2007-08 Industrial Commerslal 6.02% All Others 9.68% 9.09 Source: HdL Coren & Cone, Los Angeles County Assessor 2007/08 Combined Tax Rolls. 75.21% CITY OF SANTA CLARITA DIRECT and OVERLAPPING PROPERTY TAX RATES (rate per $100 of assessed value) Last Ten Fiscal Years 1998-99 CASTAIC 0.001564 0.060786 LOS LAKE COUNTY COUNTY Fiscal ANGELES WATER SCHOOL SANITATION FLOOD Year GENERAL COIJNTY AGENCY DISTRICIS DISTRICTS CONTROL TOTAL 1998-99 1.000000 0.001564 0.060786 0.028022 0.003126 0.003544 1.097042 1999-00 1.000000 0.001314 0.060614 0.026663 0.001015 0.001519 1.091125 2000-01 1.000000 0.001314 0.060614 0.000298 0.000498 0.001552 1.064276 2001-02 1.000000 0.001128 0.123017 0.041235 0.000561 0.001073 1.167014 2002-03 1.000000 0.001033 0.106227 0.069731 0.000487 0.000881 1.178359 2003-04 1.000000 0.000992 0.066000 0.079461 0.000328 0.000462 1.147243 2004-05 1.000000 0.000923 0.056169 0.064493 0.000321 0.000245 1.122151 2005-06 1.000000 0.000795 0.049327 0.064422 0.000000 0.000049 1.114593 2006-07 1.000000 0.000660 0.040000 0.060360 0.000000 0.000050 1.101070 2007-08 1.000000 0.000000 0.040000 0.074050 0.000000 0.000000 1.114050 DIRECT and OVERLAPPING PROPERTY TAX RATES Fiscal Year 2007-08 t.z000ao 1.000000 GENERAL 6.800000 0.600000 0.400000 0.300000 { \ SCHOOL CASTAIC LAKE DISTRICTS SANITATION WATER AGENCY DISTRICTS 0.000000 LA COUNTY FLOOD CONTROL Source: HdL Coren & Cone, Los Angeles County Assessor 2007-08 Tax Rate Table 151- CITY OF SANTA CLARITA DIRECT and OVERLAPPING PROPERTY TAX RATES (rate per $100 of assessed value) One Year Detail of Rates producing Revenue for City and Associated Redevelopment Agencies City General Fund Direct Rates RDA Incremental Rate Total Direct Rate City Share Prop. 13 0.05779 of 1% plus applicable Consolidated Fire Protection District of LA Co. (007.30) Roll Year per Prop. 13 Debt Rates Total City Rates voter approved debt 0.00801 2007-08 0.079870 0.000000 0.079870 1.04000% 0.08327% Agency 2007-08 City of Santa Clarita Tax District 1 (249.01) 0.05735 Castaic Lake Water Agency (302.01) 0.05779 Children's Institutional Tuition Fond (400.21) 0.00283 Consolidated Fire Protection District of LA Co. (007.30) 0.16341 County School Service Fund Newhall (581.06) 0.00801 County School Service Hart William S. Hart (757.06) 0.00034 County School Services (400.15) Development Center Handicapped Minor Newhall (581.07) Educational Augmentation Food Impound (400.01) Educational Revenue Augmentation Fund(ERAF) (400.00) Greater LA Co. Vector Control (061.80) LA County Library (003.01) LA County Fire • Ffw (007.31) LA County Flood Control Improvement District (030.10) LA County Flood Control Maintenance (030.70) LA County General (001.05) LA County Ace= Cap Outlay (001.20) Newhall Scholl District (581.01) 0.00143 0.00088 Notes: General fund tax rates are representative and based upon the direct and overlapping rates for the largest General Fund tax rates area (TRA) by net taxable value. Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information. 0.13377 The percentages presented in the columns 0.08255 above do not sum across rows. RDA rate 0.00032 is based on the largest RDA tax rate area 0.02364 (TRA) and includes only rate(s) from 0.00323 indebtedness adopted prior to 1989 per 0.00176 California State statute. RDA direct and 0.00996 overlapping rates are applied only to the 0.14051 incremental property values. In 1978, 0.00009 California voters passed Proposition 13 0.08349 which set the property tax at a 1.00% fixed Santa Clarita Community College (814.04) 0.03744 amount This 1.00% is shared by all the Santa Clarita Street Light Maintenance #2 (249.32) 0.02253 taxing agencies for which the subject Santa Clarita Valley Sanitation Dist. La Co. 0.02503 property resides within. In addition to Valencia Areawide Landscape TI S.C. 0.01924 1.00% fixed amount, property owners are William S. Hart Elementary School Fund (757.07) 0.04289 charged taxes as a percentage of assessed William S. Hart Union High (757.02) 0.08151 property values for the payment of any Total Prop. 13 Rate: 1.00000 voter approved bonds. Castaic Lake Water Agency (302.01) 0.04000 William S. Hari Un.Hsd Debt Services (757.51) 0.01028 Newhall Elementary School District Debt Services 1999 Ser. B (581.53) 0.01533 Newhall Elementary School District Debt Services 1999 Ser. A (581.52) 0.01402 Santa Clarita Community College Debt Services 2001 Ser. 2005 (814.50) 0.00626 Santa Clarita Community College Debt Services 2006 Ser. 2007 (814.55) 0.00776 Santa Clarita Community College Debt Services 2005 Refunding Bonds (814.53) 0.00385 Santa Clarita Community College Debt Services 2001 Ser. 2003 (814.52) 0.00198 Santa Clarita Community College Debt Services 2001 Ser. 2002 (814.51) 0.00122 William & Hart Unified Debt Services (757.52) 0.01336 Total 'Tax Rate 0.11405 Source; HdL Coren & Cone, Los Angeles County Assessor 2007/08 Tax Rate Table 152 - CITY OF SANTA CLARITA PRINCIPAL PROPERTY TAXPAYERS Current Fiscal Year and Two Fiscal Years Ago FISCAL YEAR 2007-08 FISCAL YEAR 2005-06 1.27 % PERCENT of PERCENT of Number TOTAL TOTAL CITY Number TOTAL TOTAL CITY of ASSESSED ASSESSED of ASSESSED ASSESSED OWNER/TAXPAYER Parcels VALUE VALUE Parcels VALUE VALUE Valencia Town Center EQR Valencia LLC Casden Santa Clarita LLC Sam's Real Estate Business Trust/WalMart Prado Town Center West LLC Rnef America Reit II Corporation Newhall Land and Farming Company Princess Cruises Inc. ERP Operating Prism River Oaks Limited Partnership EQR Town Center LLC Henry Mayo Newhall Memorial California Institute of Arts CPF Promenade LLC EQR Essex Place Financing Limited Lexington Lion Clarita Limited Partnershil Total All Others Total Assessed Valuation 30 S 277,077,500 1.27 % 30 $ 227,588,430 1.33 % 218 91,285,050 0.42 217 54,881,437 0.32 25 78,029,956 0.36 25 74,999,960 0.44 4 74,050,394 0.34 - - - 267 72,754,504 0.33 8 48,696,944 0.28 2 72,650,100 0.33 296 72,554,608 0.33 142 124,754,967 0.73 5 66,006,818 0.30 7 60,186,928 0.35 5 65,098,719 0.30 - - - 7 53,641,335 0.25 - - - • - - 3 50,687,860 0.30 - - - 16 63,386,867 0.37 - - - 2 48,610,900 0.28 - - - 6 48,643,800 0.28 923,148,984 4.25 % 753,794,293 4.41 % 20,817,735,871 95.75 16,357,948,724 95.59 S 21,740,884,855 100.00 % S 17,111,743,017 100.00 % NOTE: The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Prior years' information are not available at this time. Source: HdL Coren & Cone, LA County Assessor 2007/08 Combined Tax Rolls -153- 114 - CTTY OF SANTA CLARITA PROPERTY TAX LEVIES, TAX COLLECTIONS, AND DELINQUENCY Last Ten Fiscal Years COLLECTED WITHIN THE FISCAL YEAR TOTAL C01.11 ONS FISCAL TAXES OF TIE LEVY COLLECTIONS IN TO DATE DELINQUENT PERCENT YEAR LIVED AMOUNT PERCENT OF LEVY SUREEQUENTYEARE(1) AMOUNT(l) PERCENT OF LEVY (I) AMOUNT DELINQUENCY I991199 4.695,918 6.50,128 91.1% WA N/A N/A 135.7% 2.89% IM`M 6.652.430 6.156.536 97A% WA WA WA 195.9% 2.94% 2006411 7.188.685 6.993.761 91.3% N/A WA N/A 194.924 211% 2MIA2 7.141.49 7,542.204 914% WA N/A N/A 199.205 2.57.. 200240 1.496.391 8.214.3% F7.4% WA WA WA 219.501 2-58% 2M,M 9.211,388 9.066.213 928% WA WA WA 205.115 211% 2064-05 10AIL983 9.818,450 916% N/A WA WA 240.533 2.38% 2005-06 11.593.852 11,292.331 914% WA WA WA 301.515 2.60% 200601 12,804.630 12.311.614 %2% WA WA WA 482016 3.80% 2W144 16.483.825 13.154.184 950% WA N/A N/A 129641 5,04% nsa... unao a000a, 2..1402 moxas 2enae. moos m0sac 1.1u11 21.11, [lata yr v aisma Rrnummw aoarouasrawuae NOTES III For Mx iremmcnt mvcnue. LA County does nal provide ti,wlofpnoryc collectlolss. Thmfam.Ih iNormali0n about su6uqucmml¢tb�u aM total wlkclions la daRU Ml available Anmle X111 -A of de Cowrlutwn of16e Sure of Caldomia adopted by tie cimwmie in lure 1918_ precludes the City from a Ince propertg ux levy. All Eercral-purpose property wes am levied by tie County and allocated to other, v.rr rmmW cmidn on a pmdem,trdrcd fm,nula. Souse. Cowry of LA Deparwem of Audim.{9nwller 155 - FISCAL CERTIFICATES CITY OF SANTA CLARITA RATIO OF OUTSTANDING DEBT by TYPE Last Ten Fiscal Years GOVERNMENTAL ACTIVITIES TAX ALLOCATION CAPITAL YEAR OF PARTICIPATION(]) (3) LOANS NOTES BONDS (2) BOND -S(4)(5) LEASES TOTAL 1998-99 19,670,000 - - 3,059,483 - - - 464,572 23,194,055 1999-00 19,670,000 - 2,000,000 3,019,844 - - - 394,878 25,084,722 2000-01 19,670,000 3,200,000 1,870,000 2,859,195 - - - 322,347 27,921,542 2001-02 19,475,000 3,200,000 2,940,000 2,665,846 - - - 262,056 28,542,902 2002-03 18,975,000 2,665,000 4,213,913 2,507,371 - - - 183,909 28,545,193 2003-04 18,335,000 2,040,000 6,333,828 - - - - 103,275 26,812,103 2004-05 17,640,000 1,390,000 5,698,192 - - - - 23,798 24,751,990 2005-06 17,700,000 710,000 5,029,113 - - - - 12,211 23,451,324 2006-07 16,760,000 - 4,328,207 - 13,785,000 - - 36,401 34,909,608 2007-08 15,790,000 15,525,000 3,593,734 13,575,000 29,860,000 8,850,000 23,676 87,217,410 NOTES: (1) In 1991 the Santa Clarita Public Financing Authority issued $22,940,000 aggregate principal amount of Local Agency (Redevelopment) Revenue Bonds Series 1991. Simultaneously with the receipt of the Bond proceeds, the Authority acquired $22,940,000 Certificates of Participation issued by the Santa Clarita Redevelopment Agency, of which the proceeds were transferred to the City to finance and/or refinance the design, acquisition, improvement or construction of land, the City Hall Building and certain road improvements, and to refinance certain debt. The Agency leased back the facilities to the City for lease payments to be made by the City to Financing Authority equal to the principal and interest due on the principal and interest due on the revenue bonds. At this point of time, the RDA was not active. -The 1991 Series certificates were later refunded in fiscal year 1997-98 by the Certificates of Participation Series 1997 of $19,670,000. As a result, the 1991 Series certificates are considered to be defeased and the liability for those certificates were removed from the general long-term debt. -On July 1, 2005, the Santa Clarita Public Financing Authority issued $17,700,000 in Certificates of advance refund $17,640,000 of outstanding 1997 Series certificates. As a result, the 1997 Series were considered defeased and the liability for those certificates were removed from the long-term liability. -1n November 2001, the Authority issued $3,200,000 in Certificates of Participation for the acquisition of parkland. (2) On January 16, 2007, the Santa Clarita Public Financing Authority issued $13,785,000 Lease Revenue Bonds, Series 2007 for the acquisition of right-of-way. (3) On December I, 2007, the Santa Clarita Public Financing Authority issued $15,525,000 in Certificates of Participation for the acquisition of open space and parkland. (4) On June 1, 2008, the Santa Clarita Redevelopment Agency issued $29,860,000 in Non Housing Tax Allocation Bonds to fund certain redevelopment projects within the Newhall Redevelopment Project area. (5) On June 1, 2008, the Santa Clarita Redevelopment Agency issued $8,850,000 in Low/Mcd Housing Tax Allocation Bonds to fund certain redevelopment Housing projects within the Newhall Redevelopment Project area. Sources: City of Santa Clarita, Administrative Services Department - Finance Division County of Los Angeles Auditor -Controller. 156 - OUTSTANDING DEBT per CAPITA Last Ten Fiscal Years 2,600 T— - - -. - - - 2,000 1,500 1,000 5 500- 0 5712 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 Fiscal Year 157. PERCENTAGE BUSINESS -TYPE ACTIVITIES of MASTER TOTAL TAXABLE DEBT LEASE LEASE PRIMARY ASSESSED PER OBLIGATIONS PAYABLE TOTAL GOVERNMENT VALUE CAPITA 550,092 6,062,682 6,612,774 29,806,829 0.33% $ 1,095.03 284,106 5,378,351 5,662,457 30,747,179 0.31% S 1,099.17 - 4,656,704 4,656,704 32,578,246 0.31% $ 1,114.47 • 3,897,133 3,897,133 32,440,035 0.28% $ 1,063.50 • 3,088,996 3,088,996 31,634,189 0.26% S I,P26.15 - 2,236,624 2,236,624 29,048,727 0.21% S 923.59 - 1,919,312 1,919,312 26,671,302 0.18% S 803.86 - 1,586,319 1,586,319 25,037,643 0.15% $ 711.54 - 1,236,869 1,236,869 36,146,477 0.19% S 979.13 - 870,149 870,149 88,087,559 0.41% $ 2,254.84 OUTSTANDING DEBT per CAPITA Last Ten Fiscal Years 2,600 T— - - -. - - - 2,000 1,500 1,000 5 500- 0 5712 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 Fiscal Year 157. CITY OF SANTA CLARITA RATIO OF GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years GENERAL BONDED DEBT OUTSTANDING per CAPITA Last Ten Fiscal Years 350 300 250 - $354 zoo 150 %173 100 SISI47 edea Sla3 ally �7 $124 $110 50 - — 0 T -TAT 98-99 99-00 00-01 01.02 02-03 03-04 04-05 05-06 06-07 07-08 Fiscal Year Source: (1) State of California, Finance Department 158- PERCENTAGE OUTSTANDING GENERAL BONDED DEBT of TAXABLE DEBT FISCAL REVENUE CERTIFICATES of ASSESSED PER YEAR POPULATION (I BONDS PARTICIPATION TOTAL VALUE CAPITA 1998-99 146.979 - 19,670,000 19,670,000 0.22% 134 1999-00 151,260 - 19,670,000 19,670,000 0.20% 130 2000-01 155,124 - 22,870,000 22,870,000 0.21% 147 2001-02 158,289 - 22,675,000 22,675,000 0.20% 143 2002-03 162,875 21,640,000 21,640,000 0.17% 133 2003-04 164,916 20,375,000 20,375,000 0.15% 124 2004-05 166,958 - 19,030,000 19,030,000 0.13% 114 2005-06 167,412 - 18,410,000 18,410,000 0.11% 110 2006-07 177,158 13,893,228 16,760,000 30,653,228 0.16% 173 2007-08 177,045 13,575,000 31,315,000 44,890,000 0.21% 254 GENERAL BONDED DEBT OUTSTANDING per CAPITA Last Ten Fiscal Years 350 300 250 - $354 zoo 150 %173 100 SISI47 edea Sla3 ally �7 $124 $110 50 - — 0 T -TAT 98-99 99-00 00-01 01.02 02-03 03-04 04-05 05-06 06-07 07-08 Fiscal Year Source: (1) State of California, Finance Department 158- CITY OF SANTA CLARITA DIRECT AND OVERLAPPING BONDED DEBT June 30, 2008 2007-08 Assessed Valuation: $21.493,597,137 Net of Redevelopment Agency Incremental Value of $348.713,078) 2007-08 Population: 177,045 Percent City's Share Total Debt Applicable of Debt 06/30/2008 To City (I) 06/30/2008 • OVERLAPPING TAX AND OVERLAPPING BONDED DEBT: (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and tax allocation bonds and non -bonded capital lease obligations. • Los Angeles County Flood Control District S 99,210,000 2.432 % S 2,412,787 Combined Direct Debt (S44,890,000) ....................................................... 0.21% Newhall County Water District - I.D. No. 2 (Sewer and Water issues) 170,000 99.138-99.214 168,592 • Santa Clarita Community College District 152,402,974 61.914 94,358,777 William S. Han Union High School District 144,186,106 61.908 89,258,409 William S. Hart Union High School District - Community Facilities District No. 87-1 3,144,562 100.000 3,144,562 • William S. Han Union High School District - Community Facilities District No. 89.1 1,052,442 100.000 1,052,442 William S. Hart Union High School District - Community Facilities District No. 90-1 750,000 70.348 527,610 Los Angeles County Community College and Unified School Districts 8,695,865,000 0.0000 1,739 - Castaic Union School District 11,111,914 23.327 2,592,076 Newhall School District 32,070,000 57.572 18,521,066 Saugus Union School District 91,287,532 73.139 66,766,788 - Sutphin Springs Union School District 11,770,000 71.972 8,471,104 City of Santa Clarita Open Space and Parkland Assessment District 15,525,000 100.000 15,525,000 - City of Santa Clarita Community Facilities District No. 2002-1 17,205,000 100.000 17,205,000 - City of Santa Clarita 1915 Act Bonds 1,180,000 100.000 1,180,000 Los Angeles County Regional Park and Open Space Assessment District 269,995,000 2.405 6,493,380 • Total Overlapping Tax and Assessment Debt 327,679,332 DIRECT AND OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations 1,019,552,788 2.405 % 24,520,245 • Los Angeles County Pension Obligations 352,255,398 2.405 8,471,742 Los Angeles County Superintendent of Scbools - Certificates of Participation 17,861,064 2.405 429,559 S Los Angeles County Sanitation District No. 32 Authority 37,822,416 64.254 24,302,415 • Los Angeles County Sanitation District No. 23 Authority 4,206,664 0.200 8,413 Santa Clarita Community College District - Certificates of Participation 28,675,000 61.914 17,753,840 - William S. Hart Union High School District - Certificates of Participation 18,620,000 61.905 11,526,711 - Castaic Union School District - Certificates of Participation 22,000,325 23.327 5,132,016 Newhall School District - Certificates of Participation 4,754,675 57.752 2,745,920 - Saugus Union School District - Certificates of Participation 845,000 73.139 618,025 Sulphur Springs Union School District - Certificates of Participation 28,799,058 71.972 20,727,258 Los Angeles Unified School District - Certificates of Participation 498,121,710 0.00002 100 - City of Santa Clarita - Certificates of Participation 29,365,000 100.000 29,365,000 Total Direct and Overlapping General Fund Debt 145,601,244 COMBINED TOTAL DEBT S 473a84576 (z) (1) Percentage of overlapping agency's assessed 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 2007-08 Assessed Valuation Per Capita Total Overlapping Tax and Assessment Debt........._ ..................................... 1.52% $1,850.83 Combined Direct Debt (S44,890,000) ....................................................... 0.21% 165.86 Combined Total Debt...... _......................_............................................ 2.24% $2,673.22 STATE SCHOOL BUILDING AID REPAYABLE AS OF6/30/2008: SO Source: Hdl, -159- CITY OF SANTA CLARITA LEGAL DEBT MARGIN INFORMATION Last Ten Fiscal Years Assessed valuation Conversion percentage Adjusted assessed valuation Debt limit percentage Debt limit Total net debt applicable to limit: General obligation bonds Legal debt margin FISCAL YEAR 07-08 06-07 05-06 04-05 S 21,493,597,137 S 19,177,131,442 S 17,160,386,817 S 14,937,115,985 25% 25% 25% 250/ 5,373,399,284 4,794,282,861 4,290,096,704 3,734,278,996 15% 15% 15% 15% 806,009,893 719,142,429 643,514,506 560,141,849 S 806,009,893 $ 719,142,429 $ 643,514,506 S 560,141.849 Total debt applicable to the limit as a percentage of debt limit 0% 0% 0% 0% Section 43605 of 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% market value. Effective with 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the State. Source: City of Santa Clarim, Administrative Services Department - Finance Division 160- FISCAL YEAR 03-04 02-03 01-02 00-01 99-00 98-99 $ 13,795,632,501 $ 12,583,305,723 S 11,656,956,307 $ 10,820,315,726 $ 9,907,996,392 $ 9,216,023,170 25% 25% 25% 25% 25% 25% 3,448,908,125 3,145,826,431 2,914,239,077 2,705,078,932 2,476,999,098 2,304,005,793 15% 15% 15% 15% 15% 15% 517,336,219 471,873,965 437,135,862 405,761,840 371,549,865 345,600,869 $ 517,336,219 $ 471,873,965 $ 437,135,862 $ 405,761,840 $ 371,549,865 $ 345,600,869 900 sw 700 ew H O_ 500 400 C .� 3w 700 iw 0% 0% LEGAL DEBT MARGIN Last Ten Fiscal Years 9&99 99-00 00-01 01-02 02-03 03-04 04-03 05-06 0647 07-08 FISCAL YEAR 161- 9&% 61- CITY OF SANTA CLARITA PLEDGED -REVENUE COVERAGE Last Ten Fiscal Years NOTE: (1) Includes Other revenues, Transfers -in,, and Capital contributions (2) Includes Transfers -out and Other expenses Source: City of Santa Clarita, Administrative Services Department - Finance Division 162- LESS NET Fiscal TRANSIT OPERATING AVAILABLE DEBT SERVICE Year REVENUES (1) EXPENSES (2) REVENUES Principal Interest COVERAGE 1998-99 10,906,892 9,268,960 1,637,932 754,667 287,604 9.56% 1999-00 12,108,910 10,217,313 1,891,597 950,317 351,533 10.75°/ 2000-01 21,469,569 11,636,514 9,833,055 1,005,753 445,170 6.76% 2001-02 25,041,599 12,582,811 12,458,788 759,571 228,698 3.95% 2002-03 15,714,048 13,167,728 2,546,320 808,137 192,799 6.37% 2003-04 24,171,361 13,693,876 10,477,485 852,372 135,063 4.09% 2004-05 35,677,983 14,037,109 21,640,874 317,312 102,395 1.18% 2005-06 22,041,436 17,242,035 4,799,401 332,993 86,230 1.90% 2006-07 19,468,288 19,033,240 435,048 349,449 69,388 2.15°/ 2007-08 24,888,921 22,204,777 2,684,144 366,720 60,298 1.72% NOTE: (1) Includes Other revenues, Transfers -in,, and Capital contributions (2) Includes Transfers -out and Other expenses Source: City of Santa Clarita, Administrative Services Department - Finance Division 162- • • • CITY OF SANTA CLARITA • • DEMOGRAPHIC and ECONOMIC STATISTICS Last Ten Calendar Years • • .AVERAGE AVERAGE PER • CITY OF ANNUAL LOS ANGELES ANNUAL CAPITA SANTA CLARITA PERCENTAGE COUNTY PERCENTAGE PERSONAL PERSONAL UNEMPLOYMENT • YEAR POPULATION(I) INCREASE POPULATION (1) INCREASE INCOME (5) INCOME (2) RATE (3) • 1998 143,836 1.51% 9,225,788 0.86% $ 251,125 $ 27,220 6.60% 1999 146,979 2.19% 9,330,116 1.13% 260,991 27,973 5.90% • 2000 151,260 2.91% 9,487,409 1.69% 277,335 29,232 5.400/6 • 2001 155,124 2.55% 9,653,900 1.75% 294,472 30,503 5.700/6 2002 158,289 2.04% 9,817,400 1.69% 302,650 30,828 6.800/. • 2003 162,875 2.90% 9,966,200 1.52% 313,456 31,452 7.00% • 2004 164,916 1.25% 10,107,451 1.42% 335,355 33,179 6.50% 2005 166,958 1.24% 10,166,417 0.58% 357,735 35,188 5.30% • 2006 167,412 0.27% 10,245.572 0.78% 378,235 36,917 4.20% 2007 177.158 5.82% 10,331,939 0.84% 403.627 39,066 (4) 2.70% • 2008 177,045 406% 10,363,850 0.31% 433,986 41,875 4.70% r . u CITY OF SANTA CLARITA POPULATION -PERCENT CHANGE Last Ten Years 700 600 —5.82% 500 400 300 2.910NO —2.909%. 2.55% 200 —2.19% —2.049% — 1.51% — 1.24% 100 —1.25 ° —0.27% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 100 YEAR Sources: (1) State of California, Finance Department (2) U.S. Department of Commerce, Bureau of Economic Analysis (BEA) Personal Income and Unemployment rates are for the regional area, Los Angeles. The City of Santa Clarita's related information is not available. (3) State of California, Department of Employment Development (EDD) (4) Annual data is not available; average figures for first 10 months of the calendar year were utilized. (5) Expressed in millions. 163- CITY OF SANTA CLARITA PRINCIPAL EMPLOYERS (t( Current Fiscal Year and Three Fiscal Years Ago 2008 2005 PERCENT PERCENT NUMBER of NUMBER of of TOTAL of TOTAL EMPLOYER EMPLOYEES EMPLOYMENT EMPLOYEES EMPLOYMENT Six Flag Magic Mountain 3,689 15.64% 3,878 19.56% Princess Cruises 2,100 8.90% 1,577 7.95% Henry Mayo Newhall Memorial Hospital 1,212 5.14% 1,240 6.25% H.R. Textron 845 3.58% 662 3.34% The Master's College 755 3.20% 755 3.81% Specialty Laboratories 725 3.07% 670 3.38% Arvato Services 586 2.48% 474 2.39% California Institute of Ans 500 2.12% 515 2.60% Aerospace Dynamics 450 1.91% 435 2.19% Fanfare Media Works 407 1.73% 490 2.47% Total All Others 11,269 47.77% 10,696 53.95% 12,323 52.23% 9,131 46.05% Total employment in Santa Clarita (1) 23,592 100.00% 19,827 100.00% NOTE: (1)Non-governmental employers Source: 2008 Santa Clarita Valley - Real Estate and Economic Outlook 164- CITY OF SANTA CLARITA FULL-TIME and PART-TIME CITY EMPLOYEES by FUNCTION Last Ten Fiscal Years FISCAL YEAR Function 07-08 06-07 05-06 04-05 03-04 02-03 01-02 00-01 99-00 98-99 General government 91.75 86.00 96.00 79.00 78.00 78.00 75.00 68.50 64.50 62.00 Public safety(1) - - - - - Public works 136.50 133.50 115.00 146.00 138.00 150.00 150.50 138.00 134.00 119.00 Community development 35.00 33.00 36.00 20.00 20.00 20.00 19.00 18.00 18.00 17.00 Parks and Recreation 110.50 108.00 106.00 101.00 99.00 84.00 80.00 80.00 73.00 65.75 Transit 11.00 11.00 8.00 8.00 8.00 7.00 7.00 7.00 8.00 7.00 Totals 384.75 371.50 361.00 354.00 343.00 339.00 331.50 311.50 297.50 270.75 400M 350.00 300.00 250.00 W0.00 150.00 100.00 saw am CITY OF SANTA CLARITA - EMPLOYEES Last Ten Fiscal Years 371.50 31.75 98-99 99-00 M01 01-02 02-03 0304 04-05 05-06 06-07 07-08 Fiscal Year (I) Police and Fire services have been provided by the County Source: City of Santa Clarita, Administrative Services Department - Finance Division 165- 98-99 65- CITY OF SANTA CLARITA OPERATING INDICATORS by FUNCTION Last Ten Fiscal Years FISCAL YEAR Function 07-08 06-07 05-06 04-05 03-04 Police: Parking citation issued(t) Parking revenue collected Public works: Street resurfacing (miles) Parks and Recreation: Number of recreation classes Number of facility rentals (times) 5,257 4,587 6,042 5,960 5,040 S 288,076 $ 334,927 $ 27,257 $ 10,427 $ 10,324 154 15.4 16.5 12.5 7.5 2,393 2,535 2,357 2,443 2,469 9,767 19,645 19,435 17,739 15,005 Transit: Number of customers served(2) 3,821,299 3,733 299 3,718,640 3,527,000 3,429,913 NOTE: (1) The City of Santa Clarita contracts Los Angeles County, Sheriff Department for its Police services. The number of citation issued and money collected are within the City's boundaries. (2) Number of customers served include those outside of the City boundaries. Source: City of Santa Clerics, Administrative Services Department - Finance Division 166- FISCAL YEAR 02-03 01-02 00-01 99-00 98-99 3,893 3,674 3,322 Not Avail Not Avail $ 7,011 $ 6,239 $ 5,762 Not Avail Not Avail 6.5 6.5 6.5 5.5 5.5 2,267 1,929 1,874 1,479 1,534 12,765 11,505 10,245 8,985 8,500 3,006,739 2.991,605 3,964,613 2,384,919 2.235,079 167 - CITY OF SANTA CLARITA CAPITAL ASSET STATISTICS by FUNCTION Last Ten Fiscal Years FISCAL YEAR Function 07-08 06-07 05-06 04-05 03-04 02-03 01-02 00-01 99-00 98-99 Public works: Streets (miles) 496 496 496 462 462 452 452 452 426 426 Street lights (1) 14,429 14,000 13,200 13,000 12,000 12,000 11,647 11,647 - - Traffic signals (City Jurisdiction) 176 166 167 165 158 151 141 134 129 118 Traffic signals (Joint -Jurisdiction) 4 4 5 5 4 2 2 2 - - Parks and recreation: Number of parks 20 19 18 17 16 16 15 13 12 12 Community centers 1 I 1 - - - - - - - Transit: Stations 4 4 4 4 4 4 4 3 3 2 NOTE: (1) All of the above referred street lights aretwere owned and maintained by Edison Company. The Highway Safety Lights (HSL) are the streetlights attached to traffic signals (200) and those are the City owned and maintained through a contract with the County. The City took over the streetlights from County in 1998 and the City Engineering division established the inventory reports since 2001. Source: City of Santa Clarita, Administrative Services Department - Finance Division 168- "s!?i,'_ •: �,.:a �;,,s1irY: .�:,�;+:' i_7°nx:^ [gip' ,t ,:v%.' ^,C^ '.".r.. •)�. DIEHL, EVANS & COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS 6T CONSULTANTS A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATION'S 5 CORPORATE PARK, SUITE 100 IRVINE, CALIFORNIA 92606-5165 (949) 399-0600 • FAX (949) 399-0610 www.diehicyans.com The Honorable Mayor and Members of City Council City of Santa Clarita Santa Clarita, California December 11, 2008 MICHAEL R. WDIN, CPA CRAIG W.SPRAKliR,CPA NIT[: P_ PATEL. CPA ROBERT J. CALLANAN, CPA 'PHILIP H. HOLTKAMP, CPA 'THOMAS M PERLOWSKI, CPA `HARVEY 1. SCHROEDER, CPA KENNETH K AMES, CPA -WILLIAM C PENTL, CPA •A PROFESSIONAL CORPORATION We have audited the financial statements of the City of Santa Clarita for the year ended June 30, 2008, and have issued our report thereon dated December 11, 2008. Professional standards require that we provide you with the following information related to our audit. Our Responsibility Under Auditing Standards Generally Accepted in the United States of America: As stated in our engagement letter dated May 30, 2008, our responsibility, as described by professional standards, is to express 'an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. As part of our audit, we considered the internal control of the City of Santa Clarita. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters. I Planned Scope and Timing of the Audit: We performed the audit according to the planned scope and timing previously communicated to you in our meeting with the Mayor about planning matters on August 26, 2008. -1- OTHER OFFICES AT: 2965 ROOSEVELT STREET 613 W. VALLEY PARKWAY, SUITE 330 CARLSBAD, CALIM- RNIA 92008-2389 ESCONDIDO, CALIFORNIA 92025-2598 (760) 729-2343 • FAX (760) 729-2234 (760) 741-3141 . FAX (760) 741-9890 .1i 1L^k C:' � iY..�'f'k'Sw�. �fL3T" ^3"l. M 373,1 :. - . S., F1.r "..r`l :"j./)�1.: •f.�.'A" �I - fii'i•�S3 fp ��..Ijhii iy .....<.'.-`.1: 31:iyi:� �•� .�I`r... Ya i�.'I i� i,f..f4 � -x'45'"'1' �`F.' � %Y.�:� �t 4� � f1i.. fvY•,•`s'��� Yti `1 1 i[ ��•:;y'.t t ,fi .y :y- �j•� �, :y.�5'3,. .1*ii - .S`,Y �:5i f. nP '"".r :.'0 Fa.54^� - Y yf.'�;:::y_. :.'��".:�I•. �• _ �:��tti'r < ..e.S I'Si ♦ .L:%i" < o.}i,� n.M1W_ • t..f..i, x •it Significant Audit Findings: Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City of Santa Clarita are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended June 30, 2008. We noted no transactions entered into by the City of Santa Clarita during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: a. Management's estimate of the fair market value of investments, which is based on market 11 values by outside sources. b. The estimated useful lives for capital assets, which are based on industry standards. c. The estimated net pension obligation for the City's defined benefit pension plan, which is based on an actuarial valuation. We evaluated the key factors and assumptions used to develop these, estimates in determining that they were reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements was reported in Note 8 regarding the defined benefit pension plan. Difficulties Encountered in Perfonning the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. The following material misstatements detected as a result of audit procedures were corrected by management: a. Cash and accounts payable were understated as a result of certain checks dated prior to June 30, 2008 that were not released until July 2008. -2- - .. _ •iY ^.g: aa^ - :rc,� a;Y'" k:'` '2�� - yi ''r`; :�i'Po, �i"t1t, ^�:i rr�;, �,:i . -,f'r. ^a �.f.���lE :"vi, 7 ;:�. _•; •"�: �>'PL -n. �, ,;,�Sr: r") -f%:«7" _ .•f'' .il :��... t..: .t -','f-'��:41� 9'.�s' r�. 1i ^,(�(.,-., i�•c _ .:�'� t .. a"�"{� 7 .;1::'R,rJ r. - .6. f�✓M -'C^' •�Y, rii :���: ��if�~� 'YYiir' e`,j `:?•l~w_Air - `rY' �.S�r �k a��v:"r:t�%�. � 1 ,,'�-�i :�i,^ R`,r�•i� ..�`•." �i� .F .�- "I,�r)rf�i.. � :� .:,r.. .. - .. _ Significant Audit. Findings: (Continued): Corrected and Uncorrected Misstatements (Continued) b. Certain taxes and intergovernmental revenues were not recorded correctly in the fund financial statements. c. Cash was not reconciled as a result of certain general ledger postings related to payroll accruals as of June 30, 2008. d. Cash and accounts payable were understated as a result of certain checks dated prior to June 30, 2008 that were not released until July 2008. e. Certain taxes and intergovernmental revenues were not recorded correctly in the fund financial statements. f. Cash was not reconciled as a result of certain general ledger postings related to payroll accruals as of June 30, 2008. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested and received certain representations from management that are included in the management representation letter dated December 15, 2008. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City of Santa Clarita's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City of Santa Clarita's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the City Council and management of the City of Santa Clarita and is not intended to be, and should not be, used by anyone other than these specified parties. -3- L I 1 1 1 1 11 1 I I I 1 I 1 I 1 DIE]HL, EVANS & COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS 1 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA COMPONENT UNIT FINANCIAL STATEMENTS ' WITH REPORT ON AUDIT BY INDEPENDENT ' CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 2008 .1 1 1 1 1 1 1 1 1 1 1 1 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA TABLE OF CONTENTS June 30, 2008 Page Independent Auditors' Report- - 1 - 2 Management's Discussion and Analysis 3 - 7 Basic Financial Statements: 9 Statement of Net Assets 10 Statement of Activities 11 Balance Sheet - Governmental Funds 12-13 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 15 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 16-17 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 18 Notes to Basic Financial Statements 19-33 Supplementary Information: 35 Computation of Set -Aside Capital Projects Fund's Excess Surplus 36 Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 37-38 ' DIEHL EVANS & COMPANY LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS MICHAEL R LUDIN, CPA A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS CRAIG W SPRAKER, CPA NI TIN P PATEL, CPA ROBERT] CALLANAN, CPA 5 CORPORATE PARK, SUITE 100 -PHOM EL HOLTKAMP, CPA IRVINE, CALIFORNIA 92606-5165 -HARVEY I SCDER, CPA (949) 399-0600 • FAX (949) 399-0610 KENNETH R AMES, CPA www.dlehlevans com 'WILLIAM C PENTZ, CPA p November 26, 2008 •A PROFESSIONAL CORPORATION INDEPENDENT AUDITORS' REPORT The Board of Directors of the Redevelopment Agency of the City of Santa Clarita Santa Clarita, California We have audited the accompanying financial statements of the governmental activities and each major fund of the Redevelopment Agency of the City of Santa Clarita, California (a component unit of the City of Santa Clarita, California) (the Agency), as of and for the year ended June 30, 2008, which collectively comprise the Agency's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the Agency's management. Our responsibility is to express opinions on these financial statements based on our audit. 1, 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 Controller 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 basic 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 and each major fund of the Agency as of June 30, 2008, and the respective changes in financial position thereof and the respective budgetary comparison for the Redevelopment Capital Projects major governmental fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. �1 1 IOTHER OFFICES AT -1- 2965 ROOSEVELT STREET 613 W VALLEY PARKWAY, SUITE 330 CARLSBAD, CALIFORNIA 92008-2389 ESCONDIDO, CALIFORNIA 92025-2598 (760) 729-2343 - FAX (760) 729-2234 (760) 741-3141 - FAX (760) 741-9890 In accordance with Government Auditing Standards, we have also issued our report dated November 26, 2008 on our consideration of the Agency's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis on pages 3 through 7 is not a required part of the basic financial statements, but is supplementary information required by accounting principles generally accepted in the United States of America. 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 Agency's basic financial statements. The computation of the excess surplus of the Low/Moderate Income Housing Capital Projects Fund is presented for additional analysis and is not a required part of the basic financial statements. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. FOR M 1��������,l�,���,i�,,������������������ �, i11 1 , M110 -2- 1 1 1 1 1 F] REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2008 Our discussion and analysis of the City of Santa Clarita Redevelopment Agency's (the Agency) financial performance for the fiscal year ended June 30, 2008 provides a comparison of current -year to prior -year ending results based on the government -wide statements, an analysis on the Agency's overall financial position, results of operations to assist users in evaluating the Agency's financial position, and a discussion of significant changes that occurred in funds. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of currently known facts, decisions, and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the Agency's financial statements. FINANCIAL HIGHLIGHTS • The Agency's tax increment revenues increased by $547,071, or 17.39% over the previous fiscal year. • The change in the Agency's net assets (deficit) totaled $(2,849,523), resulting in a net addition in the deficit of 276.97%. • The Agency issued two tax allocation bonds, totaling $38,710,000. These bond proceeds will be used for capital improvements and low/moderate income housing within the project area. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements in three components as follows: 1.) Government -Wide Financial Statements: The "Statement of Net -Assets" and "Statement of Activities" provide information about the activities of the Agency as a whole and present a long-term view of the Agency's finances. 2.) Fund Financial Statements: The fund statements tell how the Agency's services were financed in the short term, as well as what remains for future spending. Fund financial statements also report the Agency's operation in more detail than the government -wide statements by providing information about each of the Agency's funds. 3.) Notes to Basic Financial Statements: The notes provide additional information necessary to enable the user to fully understand the various financial statements. See independent auditors' report. -3- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2008 REPORTING THE AGENCY AS A WHOLE - Government -wide Financial Statements The Statement of Net Assets and the Statement of Activities One of the most important questions asked about the Agency's finances is, "Is the Agency as a whole better or worse off as a result of the year's activities?" The "Statement of Net Assets" and the "Statement of Activities" report information about the Agency as a whole and about its activities in a way to answer this question. These statements include all assets and liabilities of the Agency using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current -year's revenues and expenses are taken into account, regardless of when cash is received or paid. These two statements report the Agency's net assets and changes. Net assets are the difference between assets and liabilities, which is one way to measure the Agency's financial health or financial position. Over time, increases or decreases in the Agency's net assets are an indication of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as changes in the Agency's tax base and the effects of changes in statutory requirements to assess the overall health of the Agency. The "Statement of Net Assets" and the "Statement of Activities and Changes in Net Assets" presents information distinguished by function type. The Agency's basic service of community development is principally supported by tax increment revenues and investment income and, therefore, all related activities are considered to be within the governmental activities function. REPORTING THE AGENCY'S FUNDS - Fund Financial Statements Fund Financial Statements The fund financial statements provide detailed information about the Agency's funds. A fund is a grouping of related accounts used to account for and accumulate financial information related to a specific activity or objective. Some funds are required to be established by state law and bond covenants; however, management established other funds to help it control and manage money for particular purposes or to show it is meeting legal responsibilities for using certain taxes, grants, and other resources. The Agency has only governmental type funds. See independent auditors' report. -4- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2008 REPORTING THE AGENCY'S FUNDS - Fund Financial Statements (Continued) Governmental Funds The Agency's basic services are reported within three governmental funds. Governmental funds financial statements focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. 1 The governmental fund statements provide a detailed short-term view of the Agency's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to i finance the Agency's programs. The differences between the results of the governmental fund financial statements and those of the government -wide financial statements are explained in a reconciliation following each governmental fund financial statement. GOVERNMENT -WIDE FINANCIAL ANALYSIS See independent auditors' report. -5- r The following is a condensed version of the statements of net assets for the fiscal years ended June 30, 2008 and 2007. TABLE 1 Net Assets Governmental Activities 2008 2007 Assets: Current assets $ 52,393,295 $ 10,055,749 Liabilities: Long-term liabilities outstanding 55,331,833 10,461,382 Other liabilities 939,820 623,202 Total Liabilities 56,271,653 11,084,584 Net Assets (Deficit): Restricted 40,344,272 2,279,701 Unrestricted (44,222,630) (3,308,536) Total Net Assets (Deficit) $ (3.878.358) (1,028,835) See independent auditors' report. -5- r REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2008 GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED) The Agency's net assets are comprised of two components: restricted net assets and unrestricted net assets. As of June 30, 2008, restricted net assets realized an overall improvement in net asset position, with the restricted assets exceeding related liabilities by an additional $38,064,571. Unrestricted net assets realized a decrease in net asset position of $(40,914,094). Restricted net assets are subject to external restrictions and must be used to satisfy the Agency's requirements for compliance related to low- and moderate -income housing. The unrestricted net asset deficit is representative of the Agency's funding, through the support of advances from the City of Santa Clarita, of those operational and program expenditures that exceed the amount of tax increment revenues and other income. The cost of the Agency's activities for 2008 was $7,097,341, which represents an increase of $4,531,051 from the previous year. This increase was primarily the result of approximately $124,403 of additional pass-through payments, $3,660,583 in land purchases within the project area and the issuance costs of the tax allocation bonds. Agency activities are funded by tax increment revenues and advances from the City of Santa Clarita. The following is a condensed version of the changes in net assets for the fiscal years ended June 30, 2008 and 2007. TABLE 2 Changes in Net Assets REVENUES: Tax increment Investment earnings Other revenue Total Revenues EXPENSES: Community development expenses Interest expense Total Expenses CHANGE IN NET ASSETS See independent auditors' report. Governmental Activities 2008 2007 $ 3,693,650 513,464 40,704 4,247,818 5,792,082 1,305,259 7,097,341 (2.849,523) $ 3,146,579 195,548 2,720 3,344,847 2,194,047 372,243 2,566,290 $ 778,557 i 1 1 1 1 CJ t 1 rl REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) rJune 30, 2008 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The Agency does not own any capital assets. Debt At the end of fiscal year 2008, the Agency had total debt outstanding of $55,331,833, which is an increase of $44,870,451 or 428.92% from the prior year. Long-term liabilities at June 30, 2008 and June 30, 2007 is summarized below: 1 2008 2007 Tax allocation bonds payable, net $ 38,544,094 $ - Advances from the City of Santa Clarita 16,787,739 10,461,382 Total long-term liabilities 55,331,833 10,461,382 The Agency's chang a in long-term liabilities consisted of the following: • Issuance of Tax Allocation Bonds. • Interest of $1,191,357 and an additional advance of $5,135,000 was added to the advances from the City of Santa Clarita. Additional information regarding the Agency's debt is located in the Notes 3 and 4 of the notes to basic financial statements. CONTACTING THE AGENCY'S FINANCIAL DIVISION This financial report is designed to provide a general overview of the Agency's finances and to show the Agency's accountability for the money it receives. If you have questions about this report, or need - additional financial information, contact the City's Administrative Services Department, at the City of C Santa Clarita, 23920 Valencia Boulevard, Suite 295, Santa Clarita, California 91355, or (661) 255-4920. See independent auditors' report. -7- THIS PAGE LEFT BLANK INTENTIONALLY t IV 1 1 1 11 -1 L 1 'I 1 1 i BASIC FINANCIAL STATEMENTS 1 1 I s It t 11 Woz 11 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET ASSETS June 30, 2008 ASSETS: Cash and investments (Note 2) Cash and investments with fiscal agent (Note 2) Receivables: Tax increment Interest Land held for resale Deferred charges TOTAL ASSETS LIABILITIES: Accounts payable and accrued liabilities Interest payable Due to other governments (Note 5) Noncurrent liabilities (Notes 3 and 4): Due within one year Due in more than one year TOTAL LIABILITIES NET ASSETS (DEFICIT): Restricted for: Low and moderate income housing Debt service Redevelopment projects Unrestricted (deficit) TOTAL NET ASSETS (DEFICIT) See independent auditors' report and notes to basic financial statements. -10- Governmental Activities $ 48,034,447 1,202,456 99,737 96,819 1,607,196 1,352,640 52,393,295 149,813 113,902 676,105 55,331,833 56,271,653 11,295,816 1,202,456 27,846,000 (44,222,630) $ (3,878,358) 1 1 1 1 1 1 t 1 1 1 1 1 1 1 1 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF ACTIVITIES For the year ended June 30, 2008 PROGRAM EXPENSES: Community development - redevelopment Interest expense TOTAL PROGRAM EXPENSES GENERAL REVENUES: Tax increment Investment earnings Otherrevenue TOTAL GENERAL REVENUES CHANGE IN NET ASSETS NET ASSETS (DEFICIT) - BEGINNING OF YEAR NET ASSETS (DEFICIT) - END OF YEAR See independent auditors' report and notes to basic financial statements. -11- Governmental Activities $ 5,792,082 1,305,259 7,097,341 3,693,650 513,464 40,704 4,247,818 (2,849,523) (1,028,835) $ (3,878,358) REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA BALANCE SHEET - GOVERNMENTAL FUNDS June 30, 2008 ASSETS Cash and investments Cash and investments with fiscal agent Receivables: Tax increment Interest Land held for resale TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable and accrued liabilities Due to other governments Deferred revenue TOTAL LIABILITIES FUND BALANCES: Reserve for land held for resale Reserved for low/moderate income housing Reserved for debt service Unreserved, reported in: Capital projects funds TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES See independent auditors' report and notes to basic financial statements. -12- Debt Service Funds Low/Moderate Redevelopment Income Housing 913,904 288,552 $ 913,904 $ 288,552 913,904 288,552 913,904 288,552 $ 913,904 $ 288,552 Capital Projects Funds Low/Moderate Redevelopment Income Housing Total Governmental Funds $ 36,781,086 $ 11,253,361 $ 48,034,447 - - 1,202,456 81,956 17,781 99,737 72,145 24,674 96,819 1,607,196 - 1,607,196 $ 38,542,383 $ 11,295,816 $ 51,040,655 $ 149,813 $ - $ 149,813 676,105 - 676,105 29,071 9,943 39,014 854,989 9,943 864,932 1,607,196 - 1,607,196 - 11,285,873 11,285,873 - - 1,202,456 36,080,198 - 36,080,198 37,687,394 11,285,873 50,175,723 $ 38,542,383 $ 11,295,816 $ 51,040,655 -13- THIS PAGE LEFT BLANK INTENTIONALLY A t 1-1 1 -14- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARPfA, CALIFORNIA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS June 30, 2008 Fund balances for governmental funds Amounts reported for governmental activities in the Statement of Net Assets are different because: Debt issuance costs are reported as an expenditure in the governmental funds in the year that the costs are incurred. On the statement of net assets, such costs are reported as deferred charges and amortized over the life of the debt. Unamortized deferred charges at June 30, 2008 are: Long-term liabilities applicable to government activities are not due and payable I in the current period and, therefore, are not reported in the governmental funds. The Agency's long-term liabilities are: Advances from the City of Santa Clarita $ (16,787,739) Tax allocation bonds payable (38,710,000) Less: Unamortized net bond discount 165,906 Interest on long-term liabilities is not accrued in the governmental funds. On the statement of net assets such costs are reported as interest payable. t 11 A portion of interest receivable is not available to pay for current period expenditures and, therefore, are deferred in the governmental funds. Net assets (deficit) of governmental activities See independent auditors' report and notes to basic financial statements. -15- $ 50,175,723 1,352,640 (55,331,833) (113,902) 39,014 $ (3,878,358) REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the year ended June 30, 2008 REVENUES: Tax increment Investment income Other revenue TOTAL REVENUES EXPENDITURES: Current: Community development: Administration Professional services Tax increment passed through to other agencies Capital outlay Debt service: Bond issuance costs Interest TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Bonds issued Bond discounts Advances from City Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES AT BEGINNING OF YEAR FUND BALANCES AT END OF YEAR See independent auditors' report and notes to basic financial statements. -16- Debt Service Funds Low/Moderate Redevelopment Income Housing 1 1 1,191,357 1,191,357 (1,191,356) 6,326,357 - 1,052,000 454,623 (5,273,097) (166,072) 2,1051260 288,551 913,904 288,552 $ 913,904 $ 288,552 t t 1 1 1 1 1 i 1 1 1 1 1 1 1 1 Capital Projects Funds Total 355,396 Low/Moderate Governmental Redevelopment Income Housmg Funds $ 2,954,920 $ 738,730 $ 3,693,650 362,639 150,491 513,132 40,704 - 40,704 3,358,263 889,221 4,247,486 339,806 15,590 355,396 269,251 - 269,251 944,796 - 944,796 4,222,639 - 4,222,639 939,432 413,208 1,352,640 - - 1,191,357 6,715,924 428,798 8,336,079 (3,357,661) 460,423 (4,088,593) 29,860,000 8,850,000 38,710,000 (160,665) (5,241) (165,906) - - 6,326,357 5,273,097 166,072 6,945,792 (1,052,000) (454,623) (6,945,792) 33,920,432 8,556,208 44,870,451 30,562,771 9,016,631 40,781,858 7,124,623 2,269,242 9,393,865 $ 37,687,394 $ 11,285,873 $ 50,175,723 -17- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES For the year ended June 30, 2008 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because: The issuance of long -tern debt provides current financial resources to governmental funds, while repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has an effect on net assets. Also, governmental funds report debt issuance costs as expenditures and premiums, discounts, and other similar items as other financing source (uses) when debt is first issued, whereas the amortization of these items is reported in the statement of activities. The effects of these differences are as follows: Issuance of tax allocation bonds Advances received from the City of Santa Clanta Bond discounts Bond issuance costs Accrued interest expense reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as an expenditure in governmental funds Investment income in the statement of activities that does not provide current financial resources is not reported as revenue in the governmental funds. Change in net assets in governmental activities See independent auditors' report and notes to basic financial statements. -18- $ (38,710,000) (6,326,357) 165,906 1,352,640 $ 40,781,858 (43,517,811) (113,902) 332 $ (2,849,523) r 11 1 1 1 u t NOTES TO BASIC FINANCIAL STATEMENTS 1 1 Ll t Ll 1 1 �-19- 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2008 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. Reporting Entity: The Redevelopment Agency of the City of Santa Clarita, California (the Agency) was established on November 28, 1989, pursuant to the State of California Health and Safety Code, Section 33000. The primary purpose of the Agency is to encourage private redevelopment of property and to rehabilitate areas suffering from economic disuse arising from inadequate street layout and street access, lack of open space, landscaping and other improvements and facilities necessary to establish and maintain the economic growth of the City of Santa Clarita (the City). On February 22, 1994, the Board of Directors of the Agency passed Ordinance No. 94-3, which adopted the Agency's redevelopment plan (the Plan). The Plan was formed pursuant to applicable provisions of the Community Redevelopment Law (Section 33000 of the Health and Safety Code) and the Community Redevelopment Financial Assistance and Disaster Project Law (Section 34000 of the Health and Safety Code) to reconstruct areas destroyed or damaged by the Northridge Earthquake on January 17, 1994. On February 28, 1996, the Superior Court of the State of California for the County of Los Angeles invalidated the Plan. A new plan was adopted by the City's Board of Directors on July 8, 1997 by Ordinance No. 97-12. The Agency is a component unit of the City, as the City Council acts as director of the Agency, designates management and has full accountability for the Agency's fiscal matters. B. Basis of Presentation: The Agency has adopted the provisions of GASB Statement No. 34 (Statement 34) of the Governmental Accounting Standards Board, "Basic Financial Statements - and Management's Discussion and Analysis - For State and Local Governments. " Statement 34 established standards for external financial reporting for all state and local governmental entities which includes a statement of net assets, a statement of activities and the inclusion of a management's discussion and analysis section that provides an analysis of the Agency's overall financial position and changes in financial position. See independent auditors' report. -20- 1J 1 1 [i 1 t �q 1 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA 1 NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) iJune 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): B. Basis of Presentation (Continued): The classification of net assets on the Statement of Net Assets can be reported as follows: ' • Invested in capital assets, net of related debt - This component of net assets consists of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds are not included in the calculation of invested in capital assets, net of related debt. Rather, that portion of the debt is included in the same net assets component as the unspent proceeds. • Restricted - This component of net assets consists of constraints placed on net asset use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws and/or regulations of other governments, or constraints imposed by law through constitutional provisions or enabling legislation. • Unrestricted net assets - This component of net assets consists of net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt." 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 interfund activity has been removed from these statements. The governmental activities of the Agency are supported by tax increment revenues. The "Statement of Activities" demonstrates the degree to which the direct expenses of a given 1 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, or ' 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. For the year ended June 30, 2008, the Agency did not have any program revenues. Tax I increment and other items not properly included among program revenues are reported instead as general revenues. See independent auditors' report. I -21- 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): B. Basis ofTresentation (Continued): Fund Financial Statements: The accounting system of the Agency is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self -balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditures. Major individual governmental funds are reported as separate columns in the fund financial statements. The Agency reports the following major governmental funds: The Redevelopment Debt Service Fund is used to account for the resources accumulated and payments made for principal and interest on long-term liabilities. The Low/Moderate Income Housing Debt Service Fund is used to account for the restricted financial resources accumulated and payments made for principal and interest on long-term liabilities associated with low and moderate income housing activities. The Redevelopment Capital Projects Fund is used to account for financial resources to be used for the administration of the Agency's redevelopment activities and the improvement of blighted areas within the project area, except those resources required to be accounted for in another fund. The Low/Moderate Income Housing Capital Project Fund is used to account for restricted financial resources to be used to increase the supply of available low- and moderate -income housing in the area. C. Measurement Focus and Basis of Accounting: Measurement Focus: "Measurement focus" is a term used to describe which transactions are recorded within the various financial statements. "Basis of accounting" refers to when transactions are recorded, regardless of the measurement focus applied. See independent auditors' report. -22- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' C. Measurement Focus and Basis of Accounting (Continued): The government -wide "Statement of Net Assets" and the "Statement of Activities" are reported Ij 1 u fl 1 using the economic resources measurement focus. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the government are reported. The governmental fund financial statements are reported using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balances (net current assets) are considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. When both restricted and unrestricted resources are available for use, it is the Agency's policy to use restricted resources first; then use unrestricted resources as they are needed. Basis of Accounting: The government -wide "Statement of Net Assets" and "Statement of Activities" are reported using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned, and expenses are recorded when the liability is incurred or economic asset used, regardless of the timing of related cash flows. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place. Private -sector standards of accounting and financial reporting issued prior to December 1, 1989, are generally followed in the government -wide financial statements to the extent that those standards do not conflict or contradict guidance of the Governmental Accounting Standards Board. The governmental fund financial statements are reported on the modified accrual basis of accounting. Under this basis of accounting, revenues are recognized when measurable and available. "Measurable" means knowing or being able to reasonably estimate the amount; "available" means collectible within the current period, or soon enough thereafter to pay current liabilities. For this purpose, the government considers tax increment revenues levied and investment earnings to be available if they are collected within 60 days of the end of the current fiscal period. See independent auditors' report. -23- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA ' NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' C. Measurement Focus and Basis of Accounting (Continued): The government -wide "Statement of Net Assets" and the "Statement of Activities" are reported Ij 1 u fl 1 using the economic resources measurement focus. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the government are reported. The governmental fund financial statements are reported using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balances (net current assets) are considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. When both restricted and unrestricted resources are available for use, it is the Agency's policy to use restricted resources first; then use unrestricted resources as they are needed. Basis of Accounting: The government -wide "Statement of Net Assets" and "Statement of Activities" are reported using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned, and expenses are recorded when the liability is incurred or economic asset used, regardless of the timing of related cash flows. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place. Private -sector standards of accounting and financial reporting issued prior to December 1, 1989, are generally followed in the government -wide financial statements to the extent that those standards do not conflict or contradict guidance of the Governmental Accounting Standards Board. The governmental fund financial statements are reported on the modified accrual basis of accounting. Under this basis of accounting, revenues are recognized when measurable and available. "Measurable" means knowing or being able to reasonably estimate the amount; "available" means collectible within the current period, or soon enough thereafter to pay current liabilities. For this purpose, the government considers tax increment revenues levied and investment earnings to be available if they are collected within 60 days of the end of the current fiscal period. See independent auditors' report. -23- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): D. Encumbrances: Encumbrance accounting is employed in the major governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year-end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be reappropriated and honored during the subsequent year. E. Cash and Investments: The Agency's cash and investments, except for amounts held by bond trustee, are pooled for investment purposes with those of the City. Investments are stated at fair value (quoted market price or the best available estimate thereof). F. Capital Assets and Depreciation: Capital assets, which consist of fumiture, fixtures and equipment, are reported in the government -wide financial statements. "Capital assets" are defined by the Agency as assets with an initial cost of more than $5,000 and an estimated life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are 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. The Agency has no capital assets as of June 30, 2008. G. Deferred Charges: Deferred charges represent capitalized costs incurred in connection with the issuance of long-term liabilities. These costs are amortized over the life of the debt on a straight-line basis. H. Property Taxes and Tax Increment Financing: The Agency's primary source of revenue comes from property taxes, referred to in the accompanying financial statements as "tax increment revenue." The assessed valuation of all property within each project area was determined on the date of adoption of the project area. Except for certain amounts provided by law (see Note 5), property taxes related to the incremental increase in assessed values after the adoption of the project area have been allocated to the Agency, while all property taxes on the "frozen" assessed valuation as of the adoption date have been allocated to the City and other districts. See independent auditors' report. -24- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA ' NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) tJune 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): H. Property Taxes and Tax Increment Financing (Continued): The Agency is required by law to set aside 20% of gross tax increment revenues allocated to it ' for the purpose of increasing, improving or preserving the community's supply of low- and moderate -income housing. The Agency accounts for these monies in the Set -Aside Capital Projects Fund. The entire fund balance of this fund is reported as a reservation. Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments on November 1 and February 1 and become delinquent after December 10 and April 10. The County bills and collects the property taxes for the Agency. I. Self -Insurance Programs: The Agency participates in the self-insurance programs of the City. Disclosures relating to the self-insurance programs can be found in the City's Comprehensive Annual Financial Report. J. Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results 1 could differ from those estimates. 2. CASH AND INVESTMENTS. Cash and Investments: Cash and investments at June 30, 2008, are classified in the accompanying financial statements as follows: Cash and investments $ 48,034,447 Cash and investments with fiscal agent 1,202,456 49,236,903 ' Cash and investments at June 30, 2008, consisted of the following: Pooled with City of Santa Clarita, California $ 12,045,447 Investments in Local Agency Investment Fund 35,989,000 Investments held by bond trustee: Money market mutual funds 1,202,456 49,236,903 See independent auditors' report. -25- i REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): Investment Authorized by the California Government Code and the Agency's Investment Policy: The table below identifies the investment types that are authorized for the Agency by the California Government Code (or the Agency's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the Agency's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment Type Local Agency Bonds U.S. Treasury Obligations State of California Obligations CA Local Agency Obligations U.S. Government Sponsored Enterprise Securities Banker's Acceptances Commercial Paper Negotiable Certificates of Deposit Repurchase Agreements Medium -Term Notes Money Market Mutual Funds Mortgage Pass -Through Securities County Pooled Investment Funds Local Agency Investment Fund (LAIF) Maximum Maturity 5 years 5 years 5 years 5 years Maximum Percentage or Amount of Portfolio* None None None None Maximum Investment in One Issuer None None None None 5 years None None 180 days 40% 30% 270 days 25% 10% 5 years 30% None 1 year None - None 5 years 30% None 5 years 15% 10% 5 years 20% None N/A None None N/A $ 40 M None * - Excluding amounts held by bond trustee that are not subject to California Government Code restrictions. N/A - Not Applicable See independent auditors' report. -26- i] t 1 J 1 t t i 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): 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 Agency's investment policy. The investment types authorized for investments held by bond trustee are U.S. Treasury Obligations, Money market mutual funds, and the Local Agency Investment Fund (LAIF). 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 Agency manages its exposure to interest rate risk is by purchasing a combination of shorter- 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. The investments in LAIF and the money market mutual fund investments held by bond trustee are highly liquid, as deposits can be converted to cash usually within 24 hours. Disclosures Relating to Credit Risk: Generally, credit risk in 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 money market mutual fund investments held by bond trustee have a rating of AAA as reported by Standards and Poor's. The investments in LAIF are not rated. Concentration of Credit Risk: The investment policy of the Agency contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. See independent auditors' report. -27- REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 2. CASH AND INVESTMENTS (CONTINUED): 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. to a transaction (e.g., broker-dealer), 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 Agency'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 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure the Agency's deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The Agency had no cash deposits with depository financial institutions during the year ended June 30, 2008. Investment in State Investment Pool: The Agency is a voluntary participant in the California 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. Each Agency may invest up to $40,000,000 and may also invest without limitation in special bond proceeds accounts. Investments in LAIF are highly liquid, as deposits can be converted to cash within twenty-four hours without loss of interest. The fair value of the Agency's investment in this pool is reported in the accompanying financial statements at amounts based upon the Agency's prorata 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. Additional Information: Information regarding the exposure of the City's cash and investment pool to interest rate risk, credit risk, concentration of credit risk and custodial risk is available in the City's Comprehensive Annual Financial Report. 1 C 1 I! 1 L f j 1 See independent auditors' report. 1 -28- 11 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 3. ADVANCES FROM THE CITY OF SANTA CLARITA: Advances payable and accrued interest to the City were as follows for the year ended June 30, 2008: Accrued Loans Interest Total Balance at July 1, 2007 $ 9,163,116 $ 1,298,266 $ 10,461,382 Additions 5,135,000 1,191,357 6,326,357 Reclassification of interest 2,396,571 (2,396,571) - Payments to City - - - Balance at June 30, 2008 16,694,687 $ 93,052 16.787,739 Interest at an annual rate of prime minus one percent (7.25% for the eleven months ended May 31, 2008) was charged on the advances. On June 1, 2008, the advances were refinanced and consolidated into one note. The new note matures June 1, 2043 and bears simple interest calculated on an annual basis at a fixed rate of 6.8%. There is no fixed payment schedule for this note; however, all outstanding principal and accrued interest are due at maturity. 4. TAX ALLOCATION BONDS: See independent auditors' report. I `M Balance at Balance at Due July 1, June 30, Within 2007 Additions Deletions 2008 One Year Series 2008 $ - $ 29,860,000 $ - $ 29,860,000 $ - Housing Set -Aside - 8,850,000 - 8,850,000 - Subtotal - 38,710,000 - 38,710,000 - Deferred amounts for issuance premium/ (discounts) - (165,906) - (165.906) - $ - $ 38.544,094 $ - $ 38.544.094 - See independent auditors' report. I `M REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 4. TAX ALLOCATION BONDS (CONTNUED): A. Series 2008 Bonds: On June 12, 2008, the Agency issued the Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series 2008 (2008 Bonds) in the amount of $29,860,000. Proceeds of the 2008 Bonds will used to finance certain redevelopment projects of the Agency, fund a debt service reserve account, and pay for costs of the bond issuance. The bonds were issued at a net discount of $160,665, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis. This bond issue is comprised of $12,065,000 serial bonds maturing annually on October 1 through 2028 and three term bonds (totaling $17,795,000) maturing on October 1, 2032, October 1, 2037, and October 1, 2042 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the 2008 Bonds is payable semi-annually on October 1 and April 1 at rates ranging from 4.00% to 4.75% for the serial bonds and 4.75% to 5.00% for the term bonds. The annual debt service requirements on the 2008 Bonds are as follows: Year Ending June 30, 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2042 Totals See independent auditors' report. Principal 400,000 420,000 435,000 450,000 2,550,000 3,105,000 3,830,000 4,820,000 6,095,000 7,755,000 E. • :•1 111 -30- Interest $ 1,114,374 1,380,148 1,363,748 1,346,648 1,328,948 6,352,738 5,783,476 5,030,178 4,018,156 2,710,097 1,006,875 31,435,386 Total $ 1,114,374 1,780,148 1,783,748 1,781,648 1,778,948 8,902,738 8,888,476 8,860,178 8,838,156 8,805,097 8,761,875 61,295,386 t i] 1 1 1 t �I t 1� J 1 ' REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) ' June 30, 2008 1 4. TAX ALLOCATION BONDS (CONTINUED): IB. Housing Set -Aside Bonds: On June 12, 2008, the Agency issued the Santa Clarita Redevelopment Agency Housing ' Set -Aside Tax Allocation Bonds, Series 2008 (Housing Set -Aside Bonds) in the amount of $8,850,000. Proceeds of the Housing Set -Aside Bonds will be used to finance low and moderate income housing projects and programs, fund a reserve fund, and pay for costs of the ' bond issuance. The bonds were issued at a net discount of $5,241, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis. The bond issue is comprised of $3,550,000 serial bonds maturing annually on October 1 through 2028 and three term bonds (totaling $5,300,000) maturing on October 1, 2032, October 1, 2037, and October 1, 2042 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the Housing Set -Aside Bonds is payable semi-annually on October 1 and April 1 at rates ranging from 4.00% to 4.875% for the serial bonds and 5.00% for the term bonds. I The annual debt service requirements on the Housing Set -Aside Bonds are as follows: L� it C] 1 1 1 Year Ending June 30. 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2042 Totals See independent auditors' report. Principal 120,000 125,000 125,000 135,000 750,000 910,000 1,125,000 1,430,000 1,815,000 2,315,000 $ 8,850.000 -31- Interest $ 335,205 415,156 410,256 405,256 400,056 1,913,781 1,746,741 1,524,825 1,218,088 814,375 300,625 9,484,364 Total $ 335,205 535,156 535,256 530,256 535,056 2,663,781 2,656,741 2,649,825 2,648,088 2,629,375 2,615,625 18,334,364 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 5. DUE TO OTHER GOVERNMENTS: Pursuant to California Health and Safety Code Section 33607.5, the Agency is required to make statutory payments to taxing entities that were affected by the adoption of the Agency's redevelopment plan. The payments to the affected taxing entities are to be allocated between each taxing entity in proportion to the share of property taxes each entity receives in the year the funds are allocated. The Agency is currently required to make annual payments equal to 20% of the gross tax increment received. Beginning in the eleventh fiscal year that tax increments are received, the Agency will be required to pay an additional 16.8% of gross tax increment revenue based on the increase in assessed value over the tenth fiscal year. Beginning in the thirty-first fiscal year, the Agency will be required to pay an additional 11.2% of gross tax increment revenue based on the increase in assessed value over the thirtieth fiscal year. In addition to these statutory payments, the Agency is required to make additional payments to certain affected taxing entities pursuant to separate agreements. For the fiscal year ended June 30, 2008, the Agency's required pass through payments totaled $944,796. As of June 30, 2008, the Agency still owed $676,105 of this amount to other governments. 6. INTERFUND TRANSFERS: Transfer In to Fund Redevelopment Debt Service Fund Low/Moderate Income Housing Debt Service Fund Redevelopment Capital Projects Fund Low/Moderate Income Housing Capital Projects Fund Transfers Out of Fund Amount Redevelopment Capital Projects Fund $ 1,052,000 Low/Moderate Income Housing Capital Projects Fund 454,623 Redevelopment Debt Service Fund 5,273,097 Low/Moderate Income Housing Debt Service Fund 166,072 $ 6,945,792 The transfer from the debt service funds to the capital projects funds provide funding for the Agency's redevelopment activities. The transfers from the capital projects funds to the debt service funds provide funding for debt service. 1 11 1 1 1 1 1 See independent auditors' report. 1 -32- 1 1 1 i 1 1 1 1 i 1 1 1 1 1 1 REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2008 7. COMMITMENTS: The Agency's Low/Moderate Income Housing Fund has accumulated excess surplus fund balance as defined by the California Health and Safety Code. The Agency is required to develop a plan to eliminate the excess surplus within the time frame allowed by the California Health and Safety Code. If the Agency does not eliminate the excess surplus within the time frame, significant penalties could be assessed, including transferring such excess surplus to the County Housing Authority and/or California Department of Housing and Community Development. See independent auditors' report. -33- THIS PAGE LEFT BLANK INTENTIONALLY -34- u 11 u 1 1 SUPPLEMENTARY INFORMATION 1 n 1 1 -35- i REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA COMPUTATION OF THE LOW/MODERATE INCOME HOUSING CAPITAL PROJECTS FUND'S - EXCESS SURPLUS July 1, 2007 OPENING FUND BALANCE - JULY 1, 2007 LESS: Encumbrances AVAILABLE LOW/MODERATE INCOME HOUSING FUNDS LMTATION (GREATER OF $1,000,000 OR FOUR YEARS SET-ASIDE): Set-aside for last four years: 2006-2007 2005-2006 2004-2005 2003-2004 TOTAL SET-ASIDE FOR LAST FOUR YEARS Base limitation GREATER AMOUNT COMPUTED EXCESS SURPLUS - JULY 1, 2007 See independent auditors' report. -36- $ 629,316 565,935 332,994 208,145 $ 1,736,390 $ 1,000,000 $ 2,269,242 (49,844) 2,219,398 1,736,390 $ 483,008 DIEHL EVANS & COMPANY LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS MICHAEL R LUDIN, CPA A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS CRAIG W SPRAKER, CPA NTTIN P PATEL. CPA ROBERT J CALLANAN, MOM CPA ' 5 CORPORATE PARK, SUITE 100 ' H HOLTKAMP, CPA ''THOMAS M PERLOWSKI, CPA IRVINE, CALIFORNIA 92606-5165 'HARVEY J SCHROEDER. CPA (949) 399-0600 • FAX (949) 399-0610 KENNETH R AMES, CPA www dlehlevanS com 'WILLIAM C PENTZ, CPA 1 November 26, 2008 'A PROFESSIONAL CORPORATION INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED ' IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Board of Directors of the Redevelopment Agency of the City of Santa Clarita Santa Clarita, California We have audited the financial statements of the governmental activities and each major fund of the Redevelopment Agency of the City of Santa Clarita, California (the Agency), a component unit of the City of Santa Clarita, California (the City), as of and for the year ended June 30, 2008, which ' collectively comprise the Agency's basic financial statements and have issued our report thereon dated November 26, 2008. 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. 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 opinion 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 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. -37- OTHER OFFICES AT 2965 ROOSEVELT STREET 613 W VALLEY PARKWAY, SUITE 330 CARLSBAD, CALIFORNIA 92008-2389 ESCONDIDO, CALIFORNIA 92025-2598 (760) 729-2343 • FAX (760) 729-2234 (760) 741-3141 • FAX (760) 741-9890 Internal Control Over Financial Reporting (Continued) A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Agency's internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the financial statements of the Agency are free of material misstatements, 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 Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State Controller's Office and as interpreted in the Suggested Auditing Procedures for Accompanying Compliance Audits of California Redevelopment Agencies, issued by the Governmental Accounting and Auditing Committee of the California Society of Certified Public Accountants. 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. The report is intended for the information and use of the Board of Directors and management of the Redevelopment Agency of the City of Santa Clarita, California and the California 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. i -38- 1 1 1 1 1 1 1 I 1 1 1 1 1 1 I r. Jar I. _ •r .f f. ,i f !'i _ _ DIEHL, EVANS & COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS 5 CORPORATE PARK, SUITE 100 IRVINE, CALIFORNIA 92606-5165 (949) 399-0600 9 FAX (949) 399-0610 www.diehlevans com December 18, 2008 Mr. Darren Hernandez City of Santa Clarita 23920 Valencia Blvd., Suite 295 Santa Clarita, CA 91355-2196 Dear Darren: MICHAEL R LUDIN. CPA CRAIG W. SPRAKER, CPA NITIN P PATEL, CPA ROBERT CALLANAN. CPA `PHILIP 11 HOLTKAMP, CPA 'THOMAS M PERLOWSKI, CPA •HARVEY ISCHROEDER,CPA KENNETH R. AMES, CPA -WILLIAM C PENTZ. CPA •A PROFESSIONAL CORPORATION Enclosed is the Santa Clarita Redevelopment Agency's Annual Report of Financial Transactions for the year ended June 30, 2008. We filed the Annual Report electronically with the State Controller's Office on December 18, 2008. Please have the enclosed cover page signed by an official of the Agency and mail it as soon as possible to: State Controller's Office Division of Accounting and Reporting Local Government Reporting Section - Redevelopment Unit Post Office Box 942850 Sacramento, CA 94250 Other reports to be submitted to the State Controller's Office by December 31, 2008 include HCD's signature form and schedules, two copies of the audit report and a copy of the Statement of Indebtedness filed October 1, 2008. A copy of the report is enclosed for your records. Very truly yours, DIEHL, EVANS & COMPANY, LLP Enclosures OTHER OFFICES AT. 2965 ROOSEVELT STREET 613 W. VALLEY PARKWAY, SUITE 330 CARLSBAD, CALIFORNIA 92008-2389 ESCONDIDO, CALIFORNIA 92025-2598 (760) 729-2343 • FAX (760) 729-2234 (760) 741-3141 • FAX (760) 741-9890 rte. 7,nF'":MiW �''" "�'" ,z�1,-':,'.�{l� - ,,� � x any r ,''�. , • r�J' 4y �y� ..;. S�yj. ��' o t a t -- ..1" _:..-....' — ......�bJ1J'n. av sr,1;iA'_t �'-_. r« :'1:.sr': J,o..r_�-__ t�,.A.4':.;=.T:;s.-:, ,(':{•G r _ �'S-` {y-.? Y � «a- ,-- ... >-.:�'.'Y;s,. �i:�2_£v'h ;:4' f_ti. Yt?1.'J�..r.l CL c V V L. X E E E E E E E N -' ' tE �o o 0 0 0 0 0 0 0 0 0 0 o M x N ,O (7 O N ^ O a o O, Off, O o N 4 l7 � T LL ' I m n m W 1. oMo m ago 2 m" o� Q• m T O, y Q c 1 .o o iL �o n LL 0 0 0 0 0 0 0 ci 'a {n O., 'L N N N N N N N o o o —O I v. -illi -• _ E'•.- ;O;'''.'I'.4'T_ x• -m• . REDEVELOPMENT AGENCIES FINANCIAL TRANSACTIONS REPORT COVER PAGE Santa Clarita Redevelopment Agency Fiscal Year: 2008 ID Number: 13981983600 Submitted by: Signature Title Name (Please Print) Date Per Health and Safety Code section 33080, this report is due within six months after the end of the fiscal year. The report is to include two (2) copies of the agency's component unit audited financial statements, and the report on the Status and Use of the Low and Moderate Income Housing Fund (HCD report). To meet the filing requirements, all portions must be received by the California State Controller's Office. To file electronically: To file a paper report: 1. Complete all forms as necessary. 1. Complete all forms as necessary. 2. Transmit the completed output file using a File 2. Sign this cover page, and mail complete report to either Transfer Protocol (FTP) program or via diskette. address below with 2 audits and the HCD report. 3. Sign this cover page and mail to either address below with 2 audits and the HCD report. Report will not be considered filed until receipt of this signed cover page. Mailing Address: State Controller's Office Division of Accounting and Reporting Local Government Reporting Section P. O. Box 942850 Sacramento, CA 94250 Express Mailing Address: State Controller's Office Division of Accounting and Reporting Local Government Reporting Section 3301 C Street, Suite 700 Sacramento, CA 95816 Supplement to the Annual Report of Community Redevelopment Agencies Redevelopment Agency ID Number: 13981983600 Name of Redevelopment en Santa Clarita Redevelopment Agency Mark the appropriate box below to indicate the ending date of your agency's fiscal year. Report data for that period only. 01 September 2007l December 2007 0 June 2008 Return this form to the California State Controller's Office. If you have any questions regarding this form please contact: U.S. Bureau of the Census, Shannon Doyle, 1-800-242.4523 A. Personnel Expenditures Report your government's total expenditures for salaries and wages during the year, including amounts paid on force account construction projects. 700 IS 285, 155 B. Mortgage Revenue Bond Interest Payments Report your government's total amount of interest paid on mortgage revenue bonds during the year. U20 IS U.S Bureau ofthe Census —Revised 6!2008 Supplement to the Annual Report of Community Redevelopment Agencies Redevelopment A en ID Number: 13981983600 Name of Redevelopment Agency: Santa Clarita Redevelopment Agency Mark the appropriate box below to indicate the ending date of your agency's fiscal year. Report data for that period only. U September 2007 0 December 2007 U June 2008 Return this form to the California State Controller's Office. If you have any questions regarding this form please contact: US. Bureau of the Census, Shannon Doyle, 1-800.242-4523 A. Personnel Expenditures Report your government's total expenditures for salaries and wages during the year, including amounts paid on force account construction projects. Z00 S 285, 155 B. Mortgage Revenue Bond Interest Payments Report your government's total amount of interest paid on mortgage revenue bonds during the year. U20 $ U.S Bureau of the Census — Revised WON DIEHL, EVANS & COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS 5 CORPORATE PARK, SUITE 100 IRVINE, CALIFORNIA 92606-5165 (949) 399-0600 • FAX (949) 399-0610 www.diehlevans com December 18, 2008 INDEPENDENT ACCOUNTANTS' COMPILIATION REPORT Board of Directors Santa Clarita Redevelopment Agency Santa Clarita, California MICHAEL R LUDIN, CPA CRAIG W SPRAKER. CPA NITIN P PATEL, CPA ROBERT J CALLANAN. CPA 'PHILIP H HOLTKAMP, CPA 'TliOMAS M PERLOWSKI. CPA •HARVEY ISCHROEDER.CPA KENNETH R AMES. CPA 'WILLIAM C PENTZ, CPA •A PROFESSIONAL CORPORATION We have compiled the accompanying Financial Transactions Report and Supplement to the Annual Report of the Santa Clarita Redevelopment Agency (Report) for the 2007-2008 fiscal year included in the accompanying prescribed form. 0 Our compilation is limited to presenting in the form prescribed by the California State Controller's office information that is the representation of management. We have not audited or reviewed the accompanying Report and, accordingly, do not express an opinion or any other form of assurance on it. The Report is presented in.accordance with the requirements of the California State Controller's office, which differ from accounting principles generally accepted in the United States of America. Accordingly, the Report is not designed for those who are not informed about such differences. �p�p C� .fid �oLD�Y` OTHER OFFICES AT: 2965 ROOSEVELT STREET 613 W. 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