COMPREHENSIVE ANNUAL FINANCIAL REPORT

Transcription

1 19 65 CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended September 30, 2012 City of South Lake Tahoe C A L I F O R N I A

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3 C I T Y O F S O U T H L A K E T A H O E C A L I F O R N I A Comprehensive Annual Financial Report For the fiscal year ended September 30, 2012 Prepared by FINANCE DEPARTMENT

4 Printing and design by Redwood Printing, South Lake Tahoe, California. Printed on 50% post consumer paper.

5 City of South Lake Tahoe Comprehensive Annual Financial Report For the Year Ended September 30, 2012 Table of Contents Page Introductory Section Transmittal Letter... 1 GFOA Certificate of Achievement for Excellence in Financial Reporting Organization Chart Principal Officials Financial Section Independent Auditor s Report on Basic Financial Statements Management s Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Governmental Funds: Balance Sheet Reconciliation of the Governmental Funds - Balance Sheet with the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Net Change in Fund Balances - Total Governmental Funds with the Statement of Activities Statements of Revenues, Expenditures and Changes in Fund Balances Budget and Actual: General Fund Housing and Economic Development Fund City Housing and Economic Development Fund Proprietary Funds: Statement of Net Assets Statement of Revenues, Expenses and Changes in Fund Net Assets Statement of Cash Flows Fiduciary Funds: Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets Notes to Basic Financial Statements... 53

6 Supplemental Information: Major Governmental Funds, Other Than the General Fund and Special Revenue Funds: Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual: City Capital Projects Fund Redevelopment Debt Service Fund City Debt Service Fund Non-major Governmental Funds: Combining Balance Sheets Combining Statements of Revenues, Expenditures and Changes in Fund Balances Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Internal Service Funds: Combining Statement of Net Assets Combining Statements of Revenues, Expenses and Changes in Fund Net Assets Combining Statements of Cash Flows Agency Funds: Combining Statement of Changes in Assets and Liabilities All Agency Funds Statistical Section Statistical Section (Summary) Financial Trends: Net Assets by Component Changes in Net Assets Fund Balance, Governmental Funds Changes in Fund Balance, Governmental Funds Revenue Capacity: Assessed Value of Taxable Property Property Tax Rates, All Overlapping Governments Principal Secured Taxpayers Property Tax Levies and Collections Debt Capacity: Ratio of Outstanding Debt by Type Computation of Direct and Overlapping Debt Legal Bonded Debt Margin Information Bonded Debt Pledged-Revenue Coverage Demographic and Economic Information: Demographic and Economic Statistics Principal Employers

7 Operating Information: Full-Time Equivalent City Government Employees by Function Operating Indicators by Function/Program Capital Asset Statistics by Function/Program

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9 March 8, 2013 To the Honorable Mayor and Members of the City Council, and Citizens of the City of South Lake Tahoe, California We are pleased to submit to you the City of South Lake Tahoe Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, This transmittal letter highlights the purpose and content of the CAFR. I invite you to review this comprehensive financial report and hope you enjoy reading it. Report Purpose The purpose of this report is to comprehensively communicate the fiscal condition of the City of South Lake Tahoe. The report contains three major sections that present introductory, financial and statistical information about the City. Management assumes full responsibility for the completeness and reliability of the information provided in this report, including the accuracy of the data and fairness of presentation, including all footnotes and disclosures. Audited Financial Statements Each year the City s financial records are audited by an independent Certified Public Accounting firm. The firm of Maze and Associates has completed the independent audit using Generally Accepted Accounting Principles and Generally Accepted Auditing Standards. The Independent Auditor s Report, including the audited financial statements, as of September 30, 2012, are included in the Financial Section of this report. The Auditors have issued an unqualified opinion, stating that the basic financial statements, present fairly, in all material respects, the financial position of the City of South Lake Tahoe as of September 30, An unqualified opinion is the best opinion an independent auditor can give and this is what we would expect to receive. The opinion pertains to the financial position of all governmental activities, business-type activities, each major fund, the aggregate remaining funds, the respective changes in the financial position and cash flow, where applicable, including the respective budgetary comparisons listed as part of the basic financial statements for the year then ended, in conformity with accounting principles generally accepted in the United States of America. 1

10 Financial Information The City s overall financial position improved in Net assets city-wide totaled $116.5 million at year end, an increase of $55.3 million over the prior year. The increase primarily resulted from the transfer of the South Tahoe Redevelopment Agency s net liabilities to the Successor Agency due to the dissolution of the former. Revenues before transfers and extraordinary item totaled $52.5 million, a decrease of $1.2 million, and expenses totaled $47.4 million, a decrease of $6.0 million over the prior year. The City s General Fund unassigned fund balance (previously called undesignated) increased $0.7 million to $10.6 million. A more detailed discussion of city-wide financial information and operating results, by major fund, including the General Fund, is provided in the Management s Discussion and Analysis portion of the Financial Section of this report. Historical financial information is presented in the Statistical Section of this report. The Statistical Section does not contain information on general obligation debt as the City has not issued any general obligation debt within the last tenyears. City Profile The City of South Lake Tahoe is a general law city and was incorporated on November 30, 1965, governed by a Council/Manager form of government made up of five council members elected to four-year, overlapping terms. The City provides a wide range of services including: police and fire protection, snow removal, street maintenance, airport management, public transportation, parks and recreation, planning, building and safety, public improvements, and general administration. Recreational facilities include the South Tahoe Ice Arena, Recreation and Swimming Pool Complex, Campground by the Lake, Regan Beach, El Dorado Beach, Bijou Golf Course, the Senior Citizens Center, and Lakeview Commons. The City encompasses an area of approximately nine square miles with an average elevation of 6,200 feet above sea level. A year round resort community, South Lake Tahoe had a permanent population of 21,343 in The City is located within the Lake Tahoe Basin, neighboring the State of Nevada, approximately 80 miles east of Sacramento, California, and 50 miles southwest of Reno, Nevada. Most of the moisture received in the Tahoe Basin comes in the form of snow that generally falls from November through April, and averages 20 feet of accumulated snowfall annually. One of the largest and most popular ski areas in the western United States, Heavenly Valley, is located adjacent to the City. Temperatures are generally moderate with winter averages ranging from 40 degrees to lows in the 20 s. Summer time highs average in the upper 70 s with lows in the 50 s. The City works closely with various other local and regional governmental agencies, including El Dorado County, California, Douglas County, Nevada, the California Tahoe Conservancy, the Lahontan Regional Water Quality Control Board, the California Department of Forestry, the California Department of Transportation and the Tahoe Regional Planning Agency. 2

11 Economic Condition, Outlook, and Activity The City of South Lake Tahoe s largest revenue sources in 2012 were grants, property taxes, and transient occupancy taxes making up 23%, 16% and 17% respectively of total revenues before extraordinary items. Grants allowed the City to fund a variety of capital and environmental improvement projects city-wide. Major grant funded projects included erosion control in Bijou, Al Tahoe, and Rocky Point areas and along the Upper Truckee River, and construction of Lakeview Commons. Revenues from property taxes collected within the City and the former South Tahoe Redevelopment Agency s Project Area One boundaries that are included in governmental activities decreased $3.0 million from the previous year primarily due to the dissolution of the South Tahoe Redevelopment Agency and accounting for the property taxes allocated to the Successor Agency in a separate trust fund. The El Dorado County Assessor s office anticipates continued lower assessed values on a number of properties, resulting from the collapse of the housing and credit markets in October 2008, but likely not as severe as in recent years. As a world-class destination for skiing, outdoor recreation and entertainment, South Lake Tahoe s economy remains highly dependent upon its number one industry tourism, and the related transient occupancy tax (TOT) and sales tax revenues associated with visitors to the community. Although both of these revenue sources realized increases in the last two fiscal years, the pro-longed economic recession has had a significant effect on tourism. TOT comprised 17% of total revenue, while sales taxes including Measure Q made up 12% of total revenue in Revenues from TOT increased 2% or $0.2 million city-wide in 2012 over the prior year which was the same change from 2010 to Sales taxes including Measure Q increased by 7% or $0.4 million city-wide which is also the same change from 2010 to Revenues from service charges totaled 7% of city-wide revenue in 2012, and were $0.4 million lower than the prior year city-wide. These charges include parks and recreation program fees, and user fees for non-general government services such as engineering, planning and permitting. Economic growth and recovery in the United States remains slow and fragile. Unemployment is one of the biggest concerns nationwide, with 8.8 million jobs having been lost nationwide during the downturn and over 12 million Americans unemployed. The average unemployment rate in the City of South Lake Tahoe in fiscal year 2011/12 was 14.6% down from 16.7% last fiscal year. This rate is significantly higher than the State of California at 10.8% and the national rate at 8.3%. The City implemented cost containment measures to reduce budgeted expenses over the last four fiscal years and is expecting very modest revenue growth (less than 2% per year) over the next five years. Redevelopment California enacted legislation that required the dissolution of all redevelopment agencies. ABx1 26 dissolved redevelopment agencies as of February 1, 2012, and provided for the designation of successor agencies and required these successor agencies to wind down the affairs of the dissolved redevelopment agencies and to make payments due for enforceable obligations, dispose of all assets of the former redevelopment agency, and to remit 3

12 unencumbered balances of redevelopment agency funds, including housing funds, to the county auditor-controller for distribution to taxing entities. ABx1 26 and subsequently AB 1484 required three agreed upon procedure reviews, several additional reporting requirements, and three new governing bodies to oversee the winding down process. Below are the major points of the legislation as it pertains to the city's financial statements: ABx1 26 required that each county auditor controller (CAC) conduct agreed upon procedures (AUP) review of the process of the dissolution of the redevelopment agencies and the formation of successor agencies and housing successor agencies. The AUP review was designed to establish the redevelopment agency's assets and liabilities at the time of dissolution, as well as the agency's pass-through obligations, and any indebtedness incurred. The CACs were required to report their findings to the State Controller's Office (SCO) by July 1, 2012; under AB 1484 the deadline was extended to October 1, ABx1 26 required each former redevelopment agency, now called Successor Agency, to identify its outstanding financial obligations to other agencies and businesses, and adopt a listing of all recognized obligations and corresponding payment schedules in a six-month format. AB 1484 required the Recognized Obligation Payment Schedule (ROPS) for the period of January 1, 2013 to June 30, 2013, be submitted by the Successor Agency, after approval by the Oversight Board, before September 1, 2012 to the Department of Finance (DOF) and the CAC. Subsequent Oversight Board approved ROPS must be submitted to the DOF and to the CAC no fewer than 90 days before the date of property tax distribution. AB 1484 also gave the DOF significant authority to approve or reject payment of obligations, transfer of assets, and findings and conclusions of the agreed upon procedures performed. AB 1484 modified existing law by adding provisions relating to the transfer of housing responsibilities associated with dissolved redevelopment agencies and defined the term "housing asset" for these purposes. The Housing Successor Agency submitted to the Department of Finance (DOF) before August 1, 2012, a list of all housing assets transferred to it by the dissolved South Tahoe Redevelopment Agency, with an explanation of how the listed assets meet the criteria set forth in AB AB 1484 required each Successor Agency to hire a CAC approved licensed accountant with experience in local governmental accounting to perform a Due Diligence Review/AUP of the unobligated balances available for transfer to other taxing entities. The Due Diligence Review (DDR) of the Low-Moderate income Housing Fund (LMIHF) was completed by October 1, 2012, and the DDR of the Non-Housing Redevelopment Agency Fund (Non- Housing RDA) is currently pending completion. Upon completion of each DDR, it was or will be submitted to the Oversight Board for review and approval. At the same time, the Successor Agency submitted or will submit a copy of the DDR to the CAC and the DOF. Under ABx1 26, the dissolution of redevelopment included the determination that all contracts and agreements between the City and the South Tahoe Redevelopment Agency were null and void. 4

13 Strategic Priorities The South Lake Tahoe City Council s Strategic Priorities are: Economic Development Highlights of the strategies for economic development within the City include supporting the implementation of the community Prosperity Plan, collaborating with regional, state and federal agencies as well as the development of public-private partnerships to attract, retain and expand local businesses, retail opportunities, quality affordable housing, and stimulate tourism. Strategies in this area also include securing a developer to complete the Chateau convention center project, expanding and improving Airport operations, pursuing other development opportunities, initiating opportunities for citywide access to Wi-Fi and emerging technologies and completing the City s General Plan and Tahoe Valley Community Plan. Fiscal Sustainability Highlights of the strategies for ensuring the City s fiscal sustainability include reorganization of operations and the prioritization of programs and services to ensure the provision of strategic and essential services within a transparent and balanced budget. Strategies in this area also include development of a five-year financial plan, maintenance of the General Fund 25% operating reserve as required by Council policy, implementation of a financial trend monitoring system, the establishment of a Fiscal Sustainability Committee, and a financing plan for replacement of major capital assets and for capital improvements. Improve the Built Environment Highlights of the strategies to improve the City s built environment include updating the appearance and infrastructure on State Highway 50/Lake Tahoe Boulevard, creating a timeless entry experience to the City and key neighborhoods for residents and guests, building more bike paths, enforcing signage and City codes, and establishing neighborhood service teams. Strategies in this area also include working in partnership with the Lake Tahoe Visitors Authority, Lodging Association and local Chambers of Commerce to create a Lodging Quality Initiative, investing in City roads, lighting and landscaping, and facilitation of new business improvement districts. Public Trust and Accountability Highlights of the strategies for public trust and accountability include implementing a comprehensive public communications function, enhancing public engagement by expanding or establishing community surveys, a citizen s academy, and advisory committees, neighborhood advisory councils and media partnerships. Strategies in this area also include nurturing citizen involvement through creation of volunteer opportunities, online services to receive and respond to citizen s ideas, suggestions and concerns, a monthly cable television live call-in talk show, a performance measurement system and the regular evaluation of customer satisfaction with City services. Partnership Development Highlights of the strategies for partnership development include the creation of neighborhood advisory councils, promoting, enhancing and increasing community-based partnerships in crime prevention, fire and public safety, emergency preparedness and community policing. Strategies in this area also include partnering with community organizations and service providers to facilitate neighborhood cleanup programs, youth 5

14 programs, and address the needs of the City s growing Latino population. Other strategies in this area include creation of a legislative strategy with the League of California Cities, State of California, State of Nevada and the Federal Government, partnering with various groups to create more community events and activities, and ensuring that the City Council meets with the governing boards of various organizations within the community. Quality Core Services Highlights of the strategies for quality core services include focusing on maintaining excellent public safety services, expanding recreational opportunities, maintaining city parks and recreation facilities for the enjoyment of our community, ensuring timely completion of capital improvement projects, keeping the public informed about the City s affairs through access to information, and delivering professionally managed work products, contracts, services and programs. Financial Management The City s comprehensive system of internal controls is designed to protect its assets and to sustain the integrity of its financial systems. Financial matters are conducted in compliance with the City Council s adopted Comprehensive Financial Policies, summarized below. Managers at all levels are responsible for implementing City financial policies and controls, and for regularly monitoring their effectiveness. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met while recognizing that the cost of a control should not exceed the benefits likely to be derived. The auditors have reviewed the City s internal control structure and have found no material weaknesses. Budget The City Council legally adopts an annual budget. The City s Budget Policy requires that the City maintain a structurally balanced budget with current revenues sufficient to support current expenditures. The City complies with the annual appropriations limit in accordance with Article XIIIB of the Constitution of the State of California and Government Code section Operating program appropriations not spent during the fiscal year do not automatically carryover into the next fiscal year, and lapse at year-end. One-time revenues are appropriated for one-time expenditures only. To determine the effect of current year decisions on the City s future, a five-year financial forecast projecting revenues and expenditures is developed during each year s budget process, and updated at mid-year. The City Council receives a monthly budget and financial status report that includes an analysis of budgeted versus actual revenues, expenditures and receivables on a year-to-date basis. A mid-year budget analysis is presented to the Council for review. Budget amendments necessary for continued operations through the end of the fiscal year may be presented to the City Council at mid-year, but are not intended to provide additional avenues for departments to request funding for items not originally approved in the annual budget. The City Council may make supplemental and emergency appropriations during the fiscal year. However, prior certification that revenues in excess of those currently budgeted are available is required. Appropriations may be reduced at any time during the fiscal year, if necessary. Only 6

15 the City Council, by resolution, may transfer monies between funds and from un-appropriated balances or fund balances to any fund account. Reserves The Reserve Policy requires the City to maintain an Uncommitted General Fund reserve at a minimum of 25% of General Fund operating expenses. The reserve represents one-time revenues available to provide temporary financing for extraordinary cash needs such as costs related to a natural disaster, an economic recession, or an unexpected liability. Funds may be appropriated from this operating reserve upon demonstration to the City Council that the remaining balance is sufficient to offset potential downturns in revenue sources and to provide adequate cash for daily financial needs. Funds must be allocated each year in the budget process to replace any use of the reserve during the preceding fiscal year. To the extent that funds accumulate in excess of the required reserve, these one-time funds may be transferred to the Capital Projects Fund upon completion of the annual audit. Capital Improvement Plan The City Council adopts an annual Capital Improvement Plan (CIP). The CIP may include current year project budgets as well as planned future year projects where funding has not yet been secured or legally authorized. Funding allocations for future years of the CIP are therefore subject to change. Every CIP project has a project manager who is responsible for preparing the project proposal and ensuring required phases are completed on schedule. The project manager monitors project revenues and expenditures, and ensures that all regulations and laws are observed. Each approved CIP project is required to contain a statement of fiscal impact on the annual operating budget and the source of funding for this impact. Preserving Capital Investments The City invests in capital assets such as property, equipment, facilities and infrastructure. The City also plans and budgets for ongoing maintenance, long-term renovation and/or replacement of capital assets as necessary. Capital assets are defined as having an initial cost of more than $7,000 and an estimated life in excess of three years. Capital assets are depreciated using the straight-line method of depreciation. Debt Management The City s Debt Management Policy provides operating guidelines for all major debt transactions of the City, the South Tahoe Joint Powers Financing Authority and the South Tahoe Redevelopment Agency. The City manages its debt to ensure high credit quality, access to credit markets and financial flexibility. Debt is issued only in those cases where public policy, equity and economic efficiency favor debt over cash (pay-as-you-go) financing. Whenever possible, the debt shall be self-supporting. Debt is used primarily to finance long-term capital projects, paying for facilities or equipment over their useful lives and concurrent with the stream of benefits from these facilities. The City maintains a central system for all debt-related records, adheres to all continuing disclosure requirements, and strives to maintain positive relationships with members of the investment community. Strengthening Financial Position The City takes proactive steps to strengthen and preserve its General Fund revenues. It seeks to promote a diversified economic base through commercial and industrial development and redevelopment opportunities. The City encourages the expansion of businesses that will provide opportunities for residents to work and live in the community. 7

16 Grants from federal, state or private organizations are a means of enhancing available revenues, but they rarely provide a long-term, stable economic base. Requests to the City Council for approval of a grant acceptance must include all associated financial impacts such as long-term maintenance responsibilities, required City matching funds, and additional staff resources. The City administers grants in compliance with laws, regulations and the requirements of the granting agency or donor. The City Code requires reimbursement to the General Fund for the reasonable cost of administrative functions performed by City staff paid out of General Fund revenues (e.g. Legal, Finance, Human Resources) for departments funded by fees, rates or other revenues. These costs are allocated based on the value of time spent on such services and may be adjusted from time to time as necessary to respond to changes in the cost of service. The City provides certain services and enterprise fund activities to residents and businesses that are funded in whole or in part by user fees intended to cover all or a portion of the cost of providing such services. To the extent such user fees do not cover the entire cost of providing such services the General Fund subsidizes the additional expense. User fees are examined and adjusted periodically to ensure the stability of the General Fund. The City maintains a uniform revenue collection program, the costs of which are passed on to delinquent customers as a penalty in the collection process. Property liens, special assessments, withholding entitlements and collection agency proceedings are employed when necessary to collect delinquent revenues due to the City. Cash Handling The City s cash handling policy provides guidelines for the establishment, use and safeguarding of petty cash funds, cashiering operations and to strengthen the City s internal controls in these areas. Investments The City s cash management system monitors expenditures and revenues, enabling the City to invest funds to the fullest extent possible. The City attempts to obtain the highest investment yield only after an investment meets the criteria established for safety and liquidity. The City s Investment Policy allows for investment in allowable securities in compliance with California Government Code Section It seeks to diversify its investment portfolio through a mix of various security types, issuers and maturities. Securities are purchased based on competitive bids from pre-authorized investment broker/dealers. Securities purchased are held in the City s name by third party safekeeping trust department. Financial Reporting Accurate and understandable financial reporting provides accountability over the City s financial affairs and ensures compliance with applicable statutory and regulatory requirements. The City Council receives a Quarterly Investment Report as required under the California Government Code. The Finance Director submits a Monthly Financial Report to the City Council as required by City Code. Financial reports are available for public inspection, and are posted on the City s website. Productivity The City monitors and reviews its methods of service delivery to ensure that services are delivered in the most cost-effective manner possible. This review process encompasses a wide 8

17 range of productivity considerations, including technology, contracting for services, customer service, and training and performance measurement. Risk Management To mitigate significant property losses and exposure to liability from third party injuries, the City has adopted a policy of professional and prudent management of risk exposures. Risk management objectives include providing adequate insurance, employee safety training and incentive program, third party indemnification and an Emergency Management Plan consistent with regional, state and federal requirements. Meetings and Travel The City s policy regarding meetings and travel expense reimbursements is in compliance with Assembly Bill 1234, enacted by the California State Legislature in January While AB1234 applies primarily to elected officials and advisory body members, the City has extended the provisions of this law for travel, meeting and meal costs to all employees. Finance Department The Finance Department provides the following centralized financial services for the City: Accounting and Financial Services Division provides for financial policies, budget development and management, debt financing and management, financial analysis and reporting, general ledger accounting, financial audits, grant administration, payroll and accounts payable. Revenue Division is responsible for revenue and delinquency collection, business and professions taxes, cash management, daily bank deposits, city-wide accounts receivable processing; in addition, the division provides revenue collection, disbursement and financial reporting for several business improvement districts. Certificate of Achievement for Excellence in Financial Reporting 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 South Lake Tahoe for its comprehensive annual financial report for the fiscal year ended September 30, This was the fifth consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. There are a number of benefits to the City in participating in these programs beyond simply receiving recognition for our efforts. In striving to meet certification program standards and goals, we are able to produce reports that better communicate complex financial information. 9

18 As part of the review process, other municipal finance professionals review our reports from a fresh perspective and provide comments for improvement. We believe that this results in continuous improvements in reporting and communicating the City s financial results to elected officials, the public, and other interested parties. Acknowledgements The dedicated efforts of the entire Finance Department made the development of this report possible. Timely and efficient accounting practices and coordination with the City s independent auditors were essential in producing this document. Thank you also to the City departments that contributed their statistical information for this report. Special recognition goes to Olga Tikhomirova, Accountant, for her outstanding work in the publication of this report. In addition, I would like to thank our auditors, Maze and Associates, for their assistance in the development and review of this document. Lastly, the vision and continued support of the City Council and our City Manager, Nancy Kerry in providing for the professional operation of the City s Finance Department is extremely important to our success and to the financial sustainability of the City. Respectfully submitted, Debbie McIntyre, Accounting Manager 10

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20 ORGANIZATIONAL STRUCTURE CITY CLERK CITY TREASURER CITY COUNCIL CITY MANAGER CITY ATTORNEY ELECTORATE PUBLIC SAFETY SERVICES POLICE FIRE PARKS & REC STREETS FACILITIES COMMUNITY SERVICES SPECIAL EVENTS COMMUNICATIONS & MARKETING DEVELOPMENT SERVICES ECONOMIC DEVLPMT REDVLPMT HOUSING CIVIL ENGINEERING BUILDING PLANNING AIRPORT PARKING SOLID WASTE TRANSIT INTERNAL SERVICES HUMAN RESOURCES FINANCE LEGAL SERVICES SPECIAL PROJECTS ENGINEERING SERVICES CAPITAL IMPRVMNT STORMWATER ENVIRONMNTL PROGRAMS FLEET 12

21 List of Principal Officials September 30, 2012 CITY COUNCIL Claire Fortier, Mayor Tom Davis, Mayor Pro-Tem Hal Cole, Councilmember Bruce Grego, Councilmember Angela Swanson, Councilmember EXECUTIVE MANAGEMENT City Manager City Clerk City Attorney City Treasurer Director of Finance Director of Development Services Director of Engineering Services Director of Community Services Chief of Police/Fire Nancy Kerry Susan Alessi Patrick Enright David Olivo Michael Nakama Hilary Roverud Sarah Hussong-Johnson Vacant Brian Uhler 13

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25 City of South Lake Tahoe Management s Discussion and Analysis MANAGEMENT S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2012 As management of the City of South Lake Tahoe, California, (City) we offer readers of the City s financial statements this narrative overview and analysis of the financial activities of the City for fiscal year ended September 30, We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report, and with the City s financial statements, which follow this discussion. Financial Highlights Net Assets: The assets of the City (which include the value of capital assets in general fund and enterprise funds) exceeded its liabilities at September 30, 2012, by $116,503,613 (net assets). Of this amount, $23,678,138 (unrestricted net assets) may be used to meet the government s ongoing obligations to citizens and creditors, but is subject to designation for specific City programs. Changes in Net Assets: The government s total net assets increased by $55,278,306 during the fiscal year ended September 30, The increase in net assets is attributable to an extraordinary gain of $50,183,375 due to the dissolution of the South Tahoe Redevelopment Agency. The City assumed the successor agency role to its former Redevelopment Agency. The assets and liabilities reported in the governmental activities as of January 31, 2012 were transferred to a fiduciary fund that accounts for activities of the Successor Agency. Additional information on the dissolution of the redevelopment agency can be found under Note 15 of the Notes to the Basic Financial Statements section of this report. Governmental Funds: As of September 30, 2012, the City s governmental funds reported combined ending fund balances of $26,848,352 a decrease of $10,183,590 in comparison with the prior year. Approximately 29 percent of this total amount, $7,731,982, is available for spending at the government s discretion (committed, assigned, and unassigned fund balance) within the guidelines of the funding sources. The governmental funds had an extraordinary loss of $12,488,031 due to the dissolution of the South Tahoe Redevelopment Agency as of January 31, All assets and liabilities of the former redevelopment agency were transferred to the fiduciary funds. Additional information on the dissolution of the redevelopment agency can be found under Note 15 of the Notes to the Basic Financial Statements section of this report. Long Term Liabilities: The City s total debt (noncurrent liabilities) decreased by $77,884,165, largely due to the former Redevelopment Agency s debt being transferred to the Successor Agency Trust fund in the amount of $82,950,000. The City also issued Certificates of Participation in the amount of $5,765,000 which is discussed later and in Note 7 of the Notes to the Basic Financial Statements section of this report. Debt by the business-type activities decreased by $426,475 as a result of normal scheduled debt service payments. 17

26 City of South Lake Tahoe Management s Discussion and Analysis General Fund: At September 30, 2012, unrestricted fund balance of the general fund was $11,323,216. This represents an increase of $773,093 or 7.3 percent from prior year. $712,247 of these funds is assigned for specific purposes such as inventories, prepaid expenses and economic uncertainties. $10,610,969 represents unassigned fund balance and includes a 25 percent General Fund reserve as required per City s financial policy. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City s basic financial statements. The City s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of South Lake Tahoe s finances, in a manner similar to a private sector business. The statement of net assets presents information on all of the City of South Lake Tahoe s assets and liabilities, with the difference between the two reported as net assets. Over time, increase or decreases in net assets may serve as a useful indicator of whether the financial position of the City of South Lake Tahoe is improving or deteriorating. The statement of activities presents information showing how the government s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of South Lake Tahoe that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of South Lake Tahoe include general government, public safety, public works, parks and recreation, streets, and interest on long-term debt. The government-wide financial statements include not only the City of South Lake Tahoe, but also four component units: the South Tahoe Redevelopment Agency, the Housing Authority, the South Tahoe Joint Powers Financing Authority, and the South Tahoe Joint Powers Parking Financing Authority. Financial information for these component units is reported within the funds of the City. The government-wide financial statements can be found on pages of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of South Lake Tahoe, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of South Lake Tahoe 18

27 City of South Lake Tahoe Management s Discussion and Analysis can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as balances on spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the governmentwide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental fund and governmental activities. The City of South Lake Tahoe maintains fifty-three governmental funds. Information is presented separately in the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances for the general fund, City s housing and economic development, capital projects, and debt service funds, redevelopment agency debt service and housing and economic development funds, all of which are considered to be major funds. Data from the other thirty-seven governmental funds is combined into a single, aggregated presentation. Individual fund data for each of these other governmental funds is provided in the form of combining statements elsewhere in this report. The City of South Lake Tahoe adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget in the required supplementary information. Budgetary comparisons for other funds are provided elsewhere in this report. The governmental fund financial statements can be found on pages and of this report. Proprietary funds. The City of South Lake Tahoe maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of South Lake Tahoe uses enterprise funds to account for its transit, airport, parking garage, and parking management operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of South Lake Tahoe s various functions. The City of South Lake Tahoe uses internal service funds to account for its motor pool and medical and workers compensation self-insurance operations. Because all of these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Transit, Airport, Parking Garage and Parking Management operations. 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 elsewhere in this report. The proprietary fund financial statements can be found on pages of this report. 19

28 City of South Lake Tahoe Management s Discussion and Analysis Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of South Lake Tahoe s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City of South Lake Tahoe maintains two different types of fiduciary funds. The trust fund is used to provide a funding mechanism for Other Postemployment Benefits (OPEB) by accumulating assets that are accounted for in the Retiree Health Savings Plan Trust Fund. The Agency funds report resources held by the City of South Lake Tahoe in a custodial capacity for private organizations and other governments. The fiduciary fund financial statement can be found on pages of this report. 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. The notes to the financial statements can be found on pages of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City s and redevelopment agency s general fund and debt service funds budgetary comparison schedules. Required supplementary information can be found on pages of this report. The combining statements referred to earlier in connection with other governmental funds and internal service funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government s financial position. In the case of the City of South Lake Tahoe, assets exceeded liabilities by $116,503,613 at the close of the most recent fiscal year. By far the largest portion of the City of South Lake Tahoe s net assets, 66.4 percent reflects its investment in capital assets (i.e. land, buildings, machinery and equipment). The City of South Lake Tahoe uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of South Lake Tahoe s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Additional portion of the City of South Lake Tahoe s net assets, 13.3 percent, represents resources that are subject to external restrictions on how they may be used. The remaining balance of $23,678,138 may be used to meet the government s ongoing obligation to citizens and creditors, but is subject to designation for specific City programs. 20

29 City of South Lake Tahoe Management s Discussion and Analysis City of South Lake Tahoe Statement of Net Assets September 30, 2012 and 2011 Governmental activities Business-type activities Total ASSETS Current and other assets $ 68,055,520 79,332,230 $ 1,458, ,669 $ 69,513,728 $ 80,080,899 Capital assets 64,447,044 76,166,490 28,717,732 29,809,477 93,164, ,975,967 Total Assets 132,502, ,498,720 30,175,940 30,558, ,678, ,056,866 LIABILITIES Long-term liabilities 27,307, ,764,965 7,407,858 7,834,333 34,715, ,599,298 Other liabilities 10,845,566 11,700, , ,765 11,459,758 12,232,261 Total Liabilities 38,152, ,465,461 8,022,050 8,366,098 46,174, ,831,559 NET ASSETS Invested in capital assets net of related debt 56,492,790 20,509,244 20,883,400 21,631,385 77,376,190 42,140,629 Restricted 14,486,329 51,916, ,956 1,223,793 15,449,285 53,140,034 Unrestricted 23,370,604 (33,392,226) 307,534 (663,130) 23,678,138 (34,055,356) Total Net Assets $ 94,349,723 $ 39,033,259 $ 22,153,890 $ 22,192,048 $ 116,503,613 $ 61,225,307 At the end of the current fiscal year, the City of South Lake Tahoe is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. At year-end, 94.3 percent of the City of South Lake Tahoe s business-type activities net assets were invested in capital assets. City of South Lake Tahoe Net Assets September 30, 2012 and 2011 (in thousands) Unrestricted Restricted Invested in capital assets -40,000-20, ,000 40,000 60,000 80,000 The City s overall net assets increased by $55,278,306 from prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business-type activities. 21

30 City of South Lake Tahoe Management s Discussion and Analysis REVENUES: City of South Lake Tahoe Changes in Net Assets September 30, 2012 and 2011 Governmental Activities Business-type Activities Total Program revenues: Charges for services $ 3,625,503 $ 3,985,703 $ 1,751,783 $ 2,192,440 $ 5,377,286 $ 6,178,143 Operating grants and contributions 2,400,067 2,783,790 3, ,909 2,403,257 3,420,699 Capital grants and contributions 12,179,227 7,296, ,633 1,233,156 12,623,860 8,529,512 General revenues: Property taxes 6,005,873 6,118, ,005,873 6,118,078 Incremental property taxes 2,648,900 5,576, ,648,900 5,576,585 Sales taxes 6,261,989 5,852, ,261,989 5,852,278 Transient occupancy taxes 8,824,694 8,670, ,824,694 8,670,091 Franchise taxes 1,340,024 1,243, ,340,024 1,243,425 Other taxes 5,618,648 5,483, ,618,648 5,483,643 Other revenue 1,075,961 2,345, , ,765 1,411,363 2,595,106 Transfers (527,457) (620,593) 527, , Total Revenues 49,453,429 48,734,697 3,062,465 4,932,863 52,515,894 53,667,560 EXPENSES: General Government 7,982,091 8,475, ,982,091 8,475,475 Public safety 18,471,859 17,854, ,471,859 17,854,548 Public works 4,506,477 7,142, ,506,477 7,142,409 Parks and recreation 5,432,663 6,142, ,432,663 6,142,621 Streets 3,895,781 4,182, ,895,781 4,182,843 Interest on long-term debt 4,031,469 5,623, ,031,469 5,623,197 Transit ,281 1,385, ,281 1,385,435 Airport - - 1,574,321 1,430,962 1,574,321 1,430,962 Parking Garage - - 1,076,015 1,192,525 1,076,015 1,192,525 Parking Managements ,006 17, ,006 17,241 Total Expenses 44,320,340 49,421,093 3,100,623 4,026,163 47,420,963 53,447,256 Excess (Deficiency) of Revenues Over (Under) Expenditures Before Extraordinary Items 5,133,089 (686,396) (38,158) 906,700 5,094, ,304 Extraordinary Gain (Loss) 50,183, ,183,375 - Changes in Net Assets 55,316,464 (686,396) (38,158) 906,700 55,278, ,304 Net Assets - Beginning 39,033,259 39,719,655 22,192,048 21,285,348 61,225,307 61,005,003 Net Assets - Ending $ 94,349,723 $ 39,033,259 $ 22,153,890 $ 22,192,048 $ 116,503,613 $ 61,225,307 Governmental activities. Overall, the net assets from governmental activities increased by $55,316,464. Citywide revenues increased by $718,732 or 1.5 percent and expenditures decreased by $5,100,753 or 10.3 percent from prior fiscal year. Key elements of the changes are as follows: The transfer of redevelopment agency s long term liabilities fund balances to the Successor Agency resulted in extraordinary gain of $50,183,375. Incremental property taxes decreased by $2,927,685 primarily due to the dissolution of the Redevelopment agency. Property taxes distributed to the Successor Agency were reported in the Trust Fund account effective February 1, 2012 and are no longer part of the City s tax revenue. Other miscellaneous revenues that include use of money and property, motor vehicle in lieu, and other miscellaneous revenue decreased by $1,269,380 due to reduction in interest rates and fund balances, the reduction of MVIL amounts received from the State, and the reduced amount of cost allocation funds received from the dissolved redevelopment agency. 22

31 City of South Lake Tahoe Management s Discussion and Analysis The reduction in incremental property tax and miscellaneous revenue was offset by the increase of capital grants and contributions by $4,882,871 or 66.9 percent from prior year due to the increased capital improvement projects construction activity primarily for erosion control projects. The expenses were reduced by $1.6 million in interest on long-term debt category due to the dissolution of the South Tahoe Redevelopment Agency. An overall reduction in staff along with employees paying 100 percent of their portion of CalPERS retirement costs has attributed to significant salary and benefits savings. 20,000 City of South Lake Tahoe 2012 Expenses and Program Revenues -Governmental Activities Thousands 15,000 10,000 5,000 0 General Public safety Public works Parks and Government recreation Streets 2012 expenses 2012 program revenues Interest on long-term debt Business-type activities. Business-type activities decreased the City s net assets by $38,158. This decrease in retained earnings primarily resulted from the transfer of transit revenue receipts and operations administration to Tahoe Transportation District (TTD) and from a reduction in Parking Garage revenues and was offset by increase in revenue from Parking Management program that was in active operations for the entire year. Financial Analysis of the Governmental Funds As noted earlier, the City of South Lake Tahoe uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City s governmental funds is to provide information on nearterm inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of South Lake Tahoe s governmental funds reported combined ending fund balances of $26,848,352, a decrease of $10,183,590 in comparison with the prior year. This decrease is attributed to the dissolution of the South Lake Tahoe Redevelopment Agency. All assets and liabilities of the former redevelopment agency were transferred to the fiduciary funds. 23

32 City of South Lake Tahoe Management s Discussion and Analysis The general fund is the chief operating fund of the City of South Lake Tahoe. At the end of the current fiscal year, unrestricted fund balance of the general fund was $11,323,216, while total fund balance reached $16,211,858. As a measure of the general fund s liquidity, it may be useful to compare only the unrestricted fund balance to total fund expenditures. Unrestricted fund balance represents 46 percent of the total general fund expenditures, of which most are expenditures for daily operations of the City. The fund balance of the City s general fund increased by $760,868 during the current fiscal year. Key factors in this increase are as follows: City received a greater portion of the transient occupancy tax revenue due to the dissolution of the South Tahoe Redevelopment Agency. This tax will be used for the debt service on the 2006 Series A Lease Revenue Bonds that were previously an obligation of the South Tahoe Redevelopment Agency. Total expenditures decreased by $597,940 due to budget cuts and elimination of positions across all departments. Proprietary funds. The City of South Lake Tahoe s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net assets of all proprietary funds at the end of the year amounted to $1,555,020. The total decrease in net assets was $3,483,986. This decrease is primarily attributed to a decrease in internal service funds. Factors that created the decrease were use of the prepaid net OPEB asset and creation of OPEB liability, increased claim cost for both health insurance and workers compensation insurance, and an increase in potential claim liabilities in workers compensation insurance. General Fund Budgetary Highlights Original budget compared to final budget. During the year both, the original estimated revenues and original budgeted appropriations, increased. The estimated revenues increased by $2,549,874 primarily in the taxes and assessments revenue category due to the dissolution of the South Tahoe Redevelopment Agency and the City receiving a greater portion of the transient occupancy tax. The budgeted appropriations increased by $1,127,291. The increase was primarily for general government and public safety functions and attributed to a required increase in budget for overtime within both the fire and police budgets, and an increase in outside legal cost within the City Attorney s budget due to on-going lawsuits. Appropriations carry forward from previous year totaled $105,000 mainly for repairs and technology purchases. Final budget compared to actual results. The most significant differences between estimated revenues and actual revenues and budgeted appropriations and actual expenditures were as follows: Revenue source Estimated revenues Actual revenues Variance with Final Budget Positive (Negative) Taxes and assessments $20,134,914 $21,049,773 $914,859 Charges for services 2,868,931 2,566,461 (302,470) 24

33 City of South Lake Tahoe Management s Discussion and Analysis Expenditures function Budgeted appropriations Actual expenditures Variance with Final Budget Positive (Negative) General government $6,579,356 $5,964,396 $614,960 Public works 2,193,425 1,803, ,464 Debt service 43, ,406 (744,996) Taxes and assessments reflect an increase in two of the City s major revenue sources - sales tax and transient occupancy tax. City also received a greater portion of transient occupancy tax from the former redevelopment agency. Charges for services decreased due to the reduced number of tourists using both the golf course and the campground due to the large fee increase implemented in Savings in general government and public works are attributed to salary savings due to elimination of positions and reorganization of departments. Debt service expenditures increased due to the dissolution of the City s redevelopment agency. The City absorbed the debt service for 2006 Series A Lease Revenue bonds issued by the South Tahoe Joint Powers Financing Authority. The revenue pledged is the rental lease payments made by the City. $30 $25 $20 $15 $10 $5 $0 General Fund Expenditures: Original and Final Budgets vs. Actual (in millions) General Govt. Public Safety Public Works Parks & Rec Capital Outlay Original Final Actual Debt Service Capital Asset and Debt Administration Capital assets. The City s investment in capital assets for its governmental and business-type activities as of September 30, 2012, amounts to $93,164,776 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, machinery and equipment, bike paths, streets, runways, and basin and stream environment zone (SEZ) construction. Major capital assets events during the fiscal year included the following: Transfer of the Redevelopment Agency s assets consisting of land, streetscape and SEZ improvements to Successor Agency in the amount of $20,278,594 (net of depreciation). Capitalization of $14,021,305 in SEZ completed projects in governmental activities and $11,098,345 in runways completed projects in business-type activities. 25

34 City of South Lake Tahoe Management s Discussion and Analysis City of South Lake Tahoe Capital Assets (Net of depreciation) September 30, 2012 and 2011 Governmental activities Business-type activities Total Land $ 901,153 $ 13,884,729 $ 4,288,170 $ 4,288,170 $ 5,189,323 $ 18,172,899 Intangibles 97,652 97, ,652 97,652 Construction in progress 20,567,188 23,399,146-10,941,155 20,567,188 34,340,301 Buildings 3,631,220 4,024,727 11,588,673 12,264,695 15,219,893 16,289,422 Vehicles and Equipment 2,709,039 3,145,242 1,406,383 1,599,109 4,115,422 4,744,351 Improvements other than buildings 756, , , ,424 Bike Paths 1,793,043 1,939, ,793,043 1,939,198 Streets 6,172,324 9,451, ,172,324 9,451,278 Streetscape - 3,436, ,436,233 Runways ,434, ,348 11,434, ,348 Basin and SEZ construction 27,818,974 15,909, ,818,974 15,909,861 Total $ 64,447,044 $ 76,166,490 $ 28,717,732 $ 29,809,477 $ 93,164,776 $ 105,975,967 Additional information on the City of South Lake Tahoe s capital assets can be found in Note 6 to the basic financial statements. Long-term debt. At the end of the current fiscal year, the City of South Lake Tahoe s total long-term debt outstanding decreased by $80,053,457 or 69.7 percent from the prior year. South Tahoe Redevelopment Agency s debt of $82,950,000 was transferred to the Successor Agency Trust fund. In July of 2012 the South Tahoe Joint Powers Financing Authority (STJPFA) issued the Certificates of Participation in the amount of $5,765,000 proceeds of which are used to finance street and other capital improvements within the City. City of South Lake Tahoe Summary of Outstanding Long-term Debt September 30, 2012 and 2011 Governmental activities Business-type activities Total Revenue bonds $18,150,000 $103,570,000 $7,540,000 $7,795,000 $25,690,000 $111,365,000 COPs 5,765, ,765,000 - Loans payable 1,897,576 1,412, , ,140 2,191,908 1,856,710 Capital lease obligations 1,119,497 1,598, ,119,497 1,598,152 Total $26,932,073 $106,580,722 $7,834,332 $8,239,140 $34,766,405 $114,819,862 Additional information on the City of South Lake Tahoe s long-term debt can be found in Note 7 to the basic financial statements. Economic Factors and Next Year s Budgets and Rates The following economic factors currently affect the City of South Lake Tahoe and were considered in developing the 2012/2013 fiscal year budget. 26

35 City of South Lake Tahoe Management s Discussion and Analysis Unemployment remains one of the biggest concerns nation-wide and locally as well. The unemployment rate in the City of South Lake Tahoe as of September 2012 was 12.3%. While this rate is an improvement from the peak of 18.3% in March 2010, the City s unemployment rate remains significantly higher than California at 9.8% and the national rate of 7.6%. Property tax is the largest source of revenue for the general fund and represents approximately $5.9 million, or 20% of the City s General Fund budgeted revenues for flat to actuals of $5,845,191. Property tax revenue has declined by 8.4% since its peak in The total assessed valuation of real property in the city totaled $3.9 billion for Fiscal Year , a 2.6 percent decrease from the previous year. The City s largest development project, the Chateau, which included hotel rooms/condominiums, retail, commercial, and a convention center, has been on hold for five years now, with the developer recently exiting bankruptcy. The City continues to facilitate discussions with new potential investors for this highly visible project in the heart of the City s tourist center, near Heavenly Village. Transient occupancy tax (TOT), the second largest revenue stream for the City s General Fund grew by 2.3 percent in fiscal year compared to fiscal year , yet still falls short of the peak TOT revenue received in fiscal year representing a 16.7 percent decline from that year. TOT is expected to continue to increase in fiscal year based on improving occupancy; however, it was conservatively budgeted flat over the prior fiscal year s budget. Sales tax, the next largest revenue stream for the City s General Fund grew by 5.1 percent in fiscal year compared to fiscal year Sales tax is expected to continue to increase in fiscal year as new retailers continue to play a role in keeping South Lake Tahoe s economy improving. In November 2012, the City welcomed the opening of a new TJ Maxx store at the Y, a more locally-oriented commercial area which the City expects to contribute to the increase in sales tax within South Lake Tahoe city limits. Sales tax is budgeted at $3.9 million in General Fund budget and represents 13% of the total revenues and 6.7 percent increase over the prior fiscal year s actuals. Two new revenue sources were enacted in and budget years, which include the expansion of paid parking and Measure B business tax approved by voters in June The City reorganized considerably in 2011 and 2012 to address a $5.2 million annual deficit. In fiscal year some additional reorganization took place eliminating six positions, creating two new positions, and reorganizing various departments. These reorganization changes resulted in savings of approximately $350,000. Pension and health care costs continue to grow. The City implemented the new health plan design and expects to achieve long-term savings in the years to come. The City is also realizing approximately $1 million in savings because employees are now paying 100 percent of their employee portion of CalPERS benefits. During the current fiscal year, the unassigned fund balance in the general fund was $10,610,969. The City of South Lake Tahoe has appropriated $699,565 of this amount for spending in the fiscal year budget. This action was taken as an additional measure to mitigate the impact of the recession on the fiscal year budget. Requests for Information This Comprehensive Annual Financial Report is designed to provide citizens, taxpayers, investors, and creditors with an assessment of the City s financial position. Questions concerning any of the 27

36 City of South Lake Tahoe Management s Discussion and Analysis information provided in this report or requests for additional financial information should be addressed to the City of South Lake Tahoe Finance Department, at 1901 Airport Road, Suite 210, South Lake Tahoe, CA

37 STATEMENT OF NET ASSETS AND STATEMENT OF ACTIVITIES The Statement of Net Assets and the Statement of Activities summarize the City s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis the effect of all the City s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated. The Statement of Net Assets reports the difference between the City s total assets and the City s total liabilities, including all the City s capital assets and all its long-term debt. The Statement of Net Assets focuses the reader on the composition of the City s net assets, by subtracting total liabilities from total assets. The Statement of Net Assets summarizes the financial position of all the City s Governmental Activities in a single column, and the financial position of all the City s Business-Type Activities in a single column; these columns are followed by a Total column that presents the financial position of the entire City. The City s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Since the City s Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund transactions and balances. The City s Business Type Activities include all its Enterprise Fund activities. The Statement of Activities reports increases and decreases in the City s net assets. It is also prepared on the full accrual basis, which means it includes all the City s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis used in the Governmental Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures. The Statement of Activities presents the City s expenses first, listed by program, and follows these with the expenses of its business-type activities. Program revenues that is, revenues which are generated directly by these programs are then deducted from program expenses to arrive at the net expense of each governmental and business-type program. The City s general revenues are then listed in the Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net Assets is computed and reconciled with the Statement of Net Assets. Both these Statements include the financial activities of the City, the South Tahoe Redevelopment Agency (dissolved as of January 31, 2012), the South Tahoe Joint Powers Financing Authority, the South Tahoe Joint Powers Parking Financing Authority, and the Housing Authority of the City of South Lake Tahoe, which are legally separate but are component units of the City because they are controlled by the City, which is financially accountable for the activities of these entities. 29

38 STATEMENT OF NET ASSETS SEPTEMBER 30, 2012 Governmental Business-Type Activities Activities Total ASSETS Cash and investments available for City operations (Note 3) $19,644,027 $1,065,697 $20,709,724 Restricted cash and investments (Note 3) 8,239, ,956 9,202,643 Accounts receivable - net 8,446, ,052 8,782,668 Interest receivable 22,789 22,789 Internal balances (Note 4D) 906,497 (906,497) Inventory 329, ,049 Prepaid Items 134, ,510 Loans receivable (Note 5) 30,332,345 30,332,345 Capital assets (Note 6): Nondepreciable 21,565,993 4,288,170 25,854,163 Depreciable 42,881,051 24,429,562 67,310,613 Total Assets 132,502,564 30,175, ,678,504 LIABILITIES Accounts payable 4,252, ,893 4,371,302 Accrued expenses 1,792,054 1,792,054 Deposits 349,671 30, ,440 Due to developers 113,538 1, ,890 Unearned revenue 14,192 14,192 Net OPEB Obligation (Note 9C) 325, ,132 Compensated absences (Note 1G): Due within one year 1,673,438 36,704 1,710,142 Uninsured losses payable (Note 10): Due within one year 931, ,620 Due in more than one year 1,768,714 1,768,714 Long-term debt (Note 7): Due within one year 1,393, ,474 1,819,986 Due in more than one year 25,538,561 7,407,858 32,946,419 Total Liabilities 38,152,841 8,022,050 46,174,891 NET ASSETS (Note 8) Invested in capital assets, net of related debt 56,492,790 20,883,400 77,376,190 Restricted for: Claims 750, ,000 Capital projects 1,655,286 1,655,286 Debt service and operations 7,716, ,956 8,679,662 Special revenue projects 4,364,337 4,364,337 Total Restricted Net Assets 14,486, ,956 15,449,285 Unrestricted 23,370, ,534 23,678,138 Total Net Assets $94,349,723 $22,153,890 $116,503,613 See accompanying notes to financial statements 30

39 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2012 Net (Expense) Revenue and Program Revenues Changes in Net Assets Operating Capital Charges for Grants and Grants and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities: General government $7,982,091 $2,037,021 $725,703 $257,156 ($4,962,211) ($4,962,211) Public safety 18,471, ,590 1,674,364 (16,412,905) (16,412,905) Public works 4,506,477 55,754 11,922,071 7,471,348 7,471,348 Parks and recreation 5,432,663 1,082,697 (4,349,966) (4,349,966) Streets 3,895,781 65,441 (3,830,340) (3,830,340) Interest on long-term debt 4,031,469 (4,031,469) (4,031,469) Total Governmental Activities 44,320,340 3,625,503 2,400,067 12,179,227 (26,115,543) (26,115,543) Business-type Activities: Transit 314,281 54,526 3,190 ($256,565) (256,565) Airport 1,574, , ,633 (458,340) (458,340) Parking Garage 1,076, ,105 (342,910) (342,910) Parking Management 136, , , ,798 Total Business-type Activities 3,100,623 1,751,783 3, ,633 (901,017) (901,017) Total $47,420,963 $5,377,286 $2,403,257 $12,623,860 (26,115,543) (901,017) (27,016,560) General revenues: Taxes: Property taxes 6,005,873 6,005,873 Incremental property taxes 2,648,900 2,648,900 Sales taxes 6,261,989 6,261,989 Transient occupancy taxes 8,824,694 8,824,694 Franchise taxes 1,340,024 1,340,024 Other taxes 5,618,648 5,618,648 Motor vehicle in lieu, unrestricted 12,348 12,348 Use of money and property 251,926 5, ,328 Miscellaneous 811, ,000 1,141,687 Transfers (Note 4D) (527,457) 527,457 Extraordinary item (Note 15) Assets transferred to/liabilities assumed by Successor Agency 50,183,375 50,183,375 Total general revenues, transfers and extraordinary item 81,432, ,859 82,294,866 Change in Net Assets 55,316,464 (38,158) 55,278,306 Net Assets-Beginning 39,033,259 22,192,048 61,225,307 Net Assets-Ending $94,349,723 $22,153,890 $116,503,613 See accompanying notes to financial statements 31

40 32

41 MAJOR GOVERNMENTAL FUNDS The funds described below were determined to be Major Funds by the City in fiscal Individual non-major funds may be found in the Supplemental section. General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The major revenue sources for this Fund are sales taxes, property taxes, unrestricted revenues from the State, fines and forfeitures and interest income. Expenditures are incurred for public safety, most street work and the other services described above. Housing & Economic Development Fund Established by the South Tahoe Redevelopment Agency to account for tax allocations set aside, CDBG, and HOME funds for the purpose of increasing or improving the City s supply of low or moderate income housing. City Housing & Economic Development Fund Established to account for CDBG, HOME and other funds obtained for the purpose of increasing or improving the City s supply of low or moderate-income housing. City Capital Projects Fund Established to account for the construction and maintenance of the City projects. Funding sources for the City Capital Projects Fund are the General Fund and grant funds from various granting agencies. Redevelopment Debt Service Fund Established to account for the financing and construction activities in the redevelopment project areas. Funding sources for Redevelopment Debt Service are project area Tax Increment and Transient Occupancy Tax. City Debt Service Fund - Established to account for the financing and construction activities within City limits. 33

42 GOVERNMENTAL FUNDS BALANCE SHEET SEPTEMBER 30, 2012 City Housing & Housing & City Redevelopment Economic Economic Capital Debt General Development Development Projects Service ASSETS Cash and investments available for City operations (Note 3) $9,930,102 $711,712 Restricted cash and investments (Note 3) Accounts receivable - net 2,316, ,963 $4,920,408 Interest receivable 22,789 Due from other funds (Note 4B) 2,672,779 Prepaid items 134,510 Inventory 329,049 Loans receivable (Note 5) 30,332,345 Advances to other funds (Note 4C) 3,675,083 1,240,012 Total Assets $19,080,685 $31,320,020 $6,160,420 LIABILITIES Accounts payable $619,628 $120,065 $2,750,196 Accrued expenditures 1,792,054 Due to other funds (Note 4B) 1,754,938 Deposits 343,607 Due to developers 113,538 Deferred revenue 30,332,345 Advances from other funds (Note 4C) Total Liabilities 2,868,827 30,452,410 4,505,134 FUND BALANCES (Note 8): Nonspendable 4,138,642 1,240,012 Restricted 750, ,610 Committed 415,274 Assigned 712,247 Unassigned 10,610,969 Total Fund Balances 16,211, ,610 1,655,286 Total Liabilities and Fund Balances $19,080,685 $31,320,020 $6,160,420 See accompanying notes to financial statements 34

43 City Other Total Debt Governmental Governmental Service Funds Funds $1,541,713 $3,398,910 $15,582,437 8,202,219 8,202, ,420 8,446,164 22,789 2,672, , ,049 30,332,345 1,184,220 6,099,315 $9,743,932 $5,516,550 $71,821,607 $737,638 $4,227,527 1,792,054 $500, ,841 2,672,779 6, , ,538 30,332,345 1,527,226 3,958,115 5,485,341 2,027,226 5,119,658 $44,973,255 1,184,220 6,562,874 7,716,706 3,219,180 12,553, , ,247 (4,006,508) 6,604,461 7,716, ,892 26,848,352 $9,743,932 $5,516,550 $71,821,607 35

44 36

45 Reconciliation of the GOVERNMENTAL FUNDS -- BALANCE SHEET with the STATEMENT OF NET ASSETS September 30, 2012 Total fund balances reported on the governmental funds balance sheet $26,848,352 Amounts reported for Governmental Activities in the Statement of Net Assets are different from those reported in the Governmental Funds above because of the following: CAPITAL ASSETS Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. 64,447,044 ALLOCATION OF INTERNAL SERVICE FUND NET ASSETS Internal service funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance and motor pool maintenance to individual governmental funds. The net current assets of the Internal Service Funds are therefore included in Governmental Activities in the following line items in the Statement of Net Assets. Cash and investments available for City operations $4,061,590 Restricted cash and investments 37,468 Accounts receivable - net 452 Interfund balance 292,523 Accounts payable (24,882) Unearned revenues (14,192) Prepaid net OPEB asset (325,132) Uninsured losses payable (2,668,714) Compensated absences (111,627) 1,247,486 ACCRUAL OF NON-CURRENT REVENUES AND EXPENSES Revenues which are deferred on the Fund Balance Sheets because they are not available currently are taken into revenue in the Statement of Activities. 30,332,345 LONG-TERM ASSETS AND LIABILITIES The assets and liabilities below are not due and payable in the current period and therefore are not reported in the Funds: Long-term debt (26,932,073) Non-current portion of compensated absences (1,561,811) Non-current portion of uninsured losses payable (31,620) NET ASSETS OF GOVERNMENTAL ACTIVITIES $94,349,723 See accompanying notes to financial statements 37

46 GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED SEPTEMBER 30, 2012 City Housing & Housing & City Redevelopment Economic Economic Capital Debt General Development Development Projects Service REVENUES Taxes and assessments $21,049,773 $3,736,747 Licenses, permits and impact fees 1,195,883 Fines and penalties 207,862 Use of money and property 214,943 $7,677 $11,758 7,491 Intergovernmental revenue 2,495, ,830 9,557,158 Charges for current services 2,566,461 82,438 37,468 Other revenue 548,025 23,340 Total Revenues 28,278, ,945 9,629,724 3,744,238 EXPENDITURES Current: General government 5,964,396 1,160, , ,701 Public safety 13,496,198 Public works 1,803,961 Parks and recreation 2,564,009 Streets Capital outlay 1,740 11,506,380 Debt service: Principal 31,539 2,642,458 Interest and fiscal charges 756,867 37,468 2,607,845 Total Expenditures 24,618,710 1,160,175 11,716,306 5,401,004 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 3,660,064 (233,230) (2,086,582) (1,656,766) OTHER FINANCING SOURCES (USES) Proceeds from sale of property 24,974 Issuance of debt Transfers in (Note 4A) 1,795,319 $122,168 1,103, , ,400 Transfers (out) (Note 4A) (4,719,489) (1,103,255) (2,979) (301,947) (2,548,317) Total Other Financing Sources (Uses) (2,899,196) (981,087) 1,100, ,855 (2,402,917) NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS 760,868 (981,087) 867,046 (1,799,727) (4,059,683) EXTRAORDINARY ITEMS (NOTE 15) Assets transferred to Housing Successor 564 Assets transferred to/liabilities assumed by Successor Agency (8,791,425) NET CHANGE IN FUND BALANCES 760,868 (981,087) 867,610 (1,799,727) (12,851,108) BEGINNING FUND BALANCES 15,450, ,087 3,455,013 12,851,108 ENDING FUND BALANCES $16,211,858 $867,610 $1,655,286 See accompanying notes to financial statements 38

47 City Other Total Debt Governmental Governmental Service Funds Funds $948,385 $25,734, ,387 1,408,270 13, ,874 $2, , ,657 2,144,088 15,033,903 2,364,846 5,051,213 1,184,394 1,755,759 2,369 6,980,531 49,562, ,640 7,565,370 1,627,755 15,123, ,263 2,409,224 2,041,548 4,605,557 2,516,402 2,516,402 55,553 11,563, ,029 3,121, , ,717 4,031, ,572 7,544,907 50,936,674 (493,203) (564,376) (1,374,093) 24,974 5,765,000 5,765,000 3,033,711 4,625,783 11,414,438 (588,802) (4,261,089) (13,525,878) 8,209, ,694 3,678,534 7,716,706 (199,682) 2,304, (3,697,170) (12,488,595) 7,716,706 (3,896,852) (10,183,590) 4,293,744 37,031,942 $7,716,706 $396,892 $26,848,352 39

48 Reconciliation of the NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS with the STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2012 The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets and current liabilities on the modified accrual basis, with the Change in Net Assets of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis. NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS ($10,183,590) Amounts reported for governmental activities in the Statement of Activities are different because of the following: CAPITAL ASSETS TRANSACTIONS Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense. The capital outlay and other expenditures are therefore added back to fund balance 11,882,457 Retirements of capital assets are deducted from the fund balance (396,040) Depreciation expense is deducted from the fund balance (2,927,269) Capital assets transferred to the Successor Agency (20,278,594) LONG-TERM DEBT PROCEEDS AND PAYMENTS Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Assets. Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Assets the repayment reduces long-term liabilities. Repayment of debt principal is added back to fund balance 3,121,026 Proceeds from issuance of debt is deducted from fund balance (5,765,000) Establishment of new loans is deducted from fund balance (657,377) Long-term debt assumed by Successor Agency 82,950,000 ACCRUAL OF NON-CURRENT ITEMS The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change): Deferred revenue 747,056 Compensated absences 268,003 Uninsured losses payable 1,620 ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and motor pool maintenance to individual funds. The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with governmental funds is reported with governmental activities, because they service those activities. Change in Net Assets - All Internal Service Funds (3,445,828) CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $55,316,464 See accompanying notes to financial statements 40

49 GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2012 Variance with Budgeted Amounts Final Budget Positive Original Final Actual Amounts (Negative) REVENUES: Taxes and assessments $17,649,000 $20,134,914 $21,049,773 $914,859 Licenses, permits, and impact fees 1,029,900 1,080,700 1,195, ,183 Fines and penalties 317, , ,862 (109,638) Use of money and property 279, , ,943 (64,307) Intergovernmental revenue 2,428,325 2,520,575 2,495,827 (24,748) Charges for current services 2,905,931 2,868,931 2,566,461 (302,470) Other revenue 708, , ,025 (118,105) Total Revenues 25,318,126 27,868,000 28,278, ,774 EXPENDITURES: Current: General government 6,209,249 6,579,356 5,964, ,960 Public safety 12,721,399 13,382,250 13,496,198 (113,948) Public works 2,128,500 2,193,425 1,803, ,464 Parks and recreation 2,668,900 2,686,111 2,564, ,102 Capital outlay 14,197 1,740 12,457 Debt Service: Principal 36,958 36,958 31,539 5,419 Interest and fiscal charges 6,452 6, ,867 (750,415) Total Expenditures 23,771,458 24,898,749 24,618, ,039 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,546,668 2,969,251 3,660, ,813 OTHER FINANCING SOURCES (USES) Proceeds from sale of property 24,974 24,974 Transfers in 2,076,304 1,963,459 1,795,319 (168,140) Transfers (out) (3,939,499) (5,521,699) (4,719,489) 802,210 Total other financing sources (uses) (1,863,195) (3,558,240) (2,899,196) 659,044 NET CHANGE IN FUND BALANCE ($316,527) ($588,989) 760,868 $1,349,857 BEGINNING FUND BALANCE 15,450,990 ENDING FUND BALANCE $16,211,858 See accompanying notes to financial statements 41

50 HOUSING & ECONOMIC DEVELOPMENT FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2012 Variance with Budgeted Amounts Final Budget Positive Original Final Actual Amounts (Negative) REVENUES: Use of money and property $5,500 $10,000 ($10,000) Intergovernmental revenue 2,017,077 2,817,077 (2,817,077) Charges for services 391, ,100 (432,100) Total Revenues 2,414,177 3,259,177 (3,259,177) EXPENDITURES: Current: General government 2,246,662 3,075,662 3,075,662 Total Expenditures 2,246,662 3,075,662 3,075,662 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 167, ,515 (183,515) OTHER FINANCING SOURCES (USES) Transfers in 551, ,668 $122,168 (429,500) Transfers (out) (441,184) (457,184) (1,103,255) (646,071) Total other financing sources (uses) 110,484 94,484 (981,087) (1,075,571) NET CHANGE IN FUND BALANCE $277,999 $277,999 (981,087) ($1,259,086) BEGINNING FUND BALANCE 981,087 ENDING FUND BALANCE See accompanying notes to financial statements 42

51 CITY HOUSING & ECONOMIC DEVELOPMENT FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2012 Variance with Budgeted Amounts Final Budget Positive Original Final Actual Amounts (Negative) REVENUES: Use of money and property $5,500 $5,500 $7,677 $2,177 Intergovernmental revenue 9,274,412 10,997, ,830 (10,160,171) Charges for services 436, ,600 82,438 (354,162) Total Revenues 9,716,512 11,439, ,945 (10,512,156) EXPENDITURES: Current: General government 11,135,605 11,418,696 1,160,175 10,258,521 Total Expenditures 11,135,605 11,418,696 1,160,175 10,258,521 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,419,093) 20,405 (233,230) (253,635) OTHER FINANCING SOURCES (USES) Transfers in 1,899, ,159 1,103, ,096 Transfers (out) (536,092) (557,184) (2,979) 554,205 Total other financing sources (uses) 1,363,408 69,975 1,100,276 1,030,301 NET CHANGE IN FUND BALANCE BEFORE EXTRAORDINARY ITEM ($55,685) $90, ,046 $776,666 EXTRAORDINARY ITEM Assets transferred to Housing Successor 564 NET CHANGE IN FUND BALANCE ($55,685) $90, ,610 $776,666 BEGINNING FUND BALANCE ENDING FUND BALANCE $867,610 See accompanying notes to financial statements 43

52 44

53 MAJOR PROPRIETARY FUNDS Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges. Transit Fund Established for the activities associated with the operations and maintenance of the City s public transit activities and has particular emphasis on serving the elderly and the handicapped. Airport Fund - Established for the operation, development and maintenance of the South Lake Tahoe Airport. Parking Garage Fund Established for all activities necessary to provide administration, operations, capital improvements, maintenance, financing and related debt service of parking garages. Parking Management Fund Established for metered areas, parking enforcement and parking citations. Funding for this program is received from parking meters and citation revenue. 45

54 PROPRIETARY FUNDS STATEMENT OF NET ASSETS SEPTEMBER 30, 2012 Business-type Activities-Enterprise Funds Governmental Activities- Parking Parking Internal Service Transit Airport Garage Management Totals Funds ASSETS Current Assets: Cash and investments available for City operations (Note 3) $223,767 $606,652 $78,985 $156,293 $1,065,697 $4,061,590 Restricted cash and investments (Note 3) 962, ,956 37,468 Accounts receivable - net 214,239 71,276 50, , Total Current Assets 438, ,928 1,041, ,830 2,364,705 4,099,510 Non-Current Assets: Advances to other funds (Note 4C) 292,523 Capital assets (Note 6): Nondepreciable 1,315,373 1,509,181 1,463,616 4,288,170 Depreciable 4,230,008 14,163,583 6,035,971 24,429,562 Total Noncurrent Assets 5,545,381 15,672,764 7,499,587 28,717, ,523 Total Assets 5,983,387 16,350,692 8,541, ,830 31,082,437 4,392,033 LIABILITIES Current Liabilities: Accounts payable 53,131 20,833 37,397 7, ,893 24,882 Unearned revenue 14,192 Deposits 30,769 30,769 Due to developers 1,352 1,352 Current portion of long-term debt (Note 7) 156, , ,474 Compensated absences (Note 1G) 36,704 36, ,627 Uninsured losses payable (Note 10) 900,000 Total Current Liabilities 53, , ,397 7, ,192 1,050,701 Long-Term Liabilities: Advance from other funds (Note 4C) 906, ,497 Net OPEB obligation (Note 9C) 325,132 Uninsured losses payable (Note 10) 1,768,714 Long-term debt (Note 7) 137,858 7,270,000 7,407,858 Total Long-Term Liabilities 137,858 8,176,497 8,314,355 2,093,846 Total Liabilities 53, ,990 8,483,894 7,532 8,928,547 3,144,547 NET ASSETS (NOTE 8): Invested in capital assets, net of related debt 5,545,381 15,378,432 (40,413) 20,883,400 Restricted for debt service and operations 962, ,956 Unrestricted 384, ,270 (864,909) 199, ,534 1,247,486 Total Net Assets $5,930,256 $15,966,702 $57,634 $199,298 $22,153,890 $1,247,486 See accompanying notes to financial statements 46

55 PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Business-type Activities-Enterprise Funds Governmental Activities- Parking Parking Internal Service Transit Airport Garage Management Totals Funds OPERATING REVENUES Charges for current services $46,712 $733,105 $292,804 $1,072,621 $4,377,986 Rental and reimbursements $54, , , ,198 Other income 330, ,000 Total Operating Revenues 54, ,348 1,063, ,804 2,081,783 4,711,184 OPERATING EXPENSES Salaries and wages 341, , ,738 Payroll expenses 247,471 10,610 61, , ,479 Contracted services 23, ,386 3, ,510 5,659 Supplies 3, ,834 23,659 10, ,676 57,042 Communication 9,169 2,845 12,014 3,108 Repairs and maintenance 69,645 69,645 16,129 Advertising and printing Insurance 2,905 2,905 Claims 4,086,877 General expenses 10,152 56,635 66,787 4,601,214 Depreciation (Note 6) 308, , ,365 1,248,935 Total Operating Expenses 314,281 1,552, , ,406 2,474,007 9,757,300 Operating Income (Loss) (259,755) (881,107) 589, ,398 (392,224) (5,046,116) NONOPERATING REVENUES (EXPENSES) Interest expense (21,866) (602,150) (2,600) (626,616) Investment earnings 1,137 1,567 2, ,402 16,305 Local transportation funds 3,190 3,190 Total Nonoperating Revenues (Expenses) 4,327 (20,299) (599,787) (2,265) (618,024) 16,305 Income (Loss) Before Contributions and Transfer (255,428) (901,406) (10,547) 157,133 (1,010,248) (5,029,811) Capital grants and contributions 444, ,633 Transfers in (Note 4A) 496,757 30, ,457 2,083,983 Transfers out (Note 4A) (500,000) Net Contributions and Transfers 941,390 30, ,090 1,583,983 Change in net assets (255,428) 39,984 (10,547) 187,833 (38,158) (3,445,828) BEGINNING NET ASSETS 6,185,684 15,926,718 68,181 11,465 22,192,048 4,693,314 ENDING NET ASSETS $5,930,256 $15,966,702 $57,634 $199,298 $22,153,890 $1,247,486 See accompanying notes to financial statements 47

56 PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Business-type Activities-Enterprise Funds Governmental Activities- Parking Parking Internal Service Transit Airport Garage Management Totals Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers ($20,321) $653,755 $1,063,105 $257,473 $1,954,012 $4,716,719 Payments to suppliers 47,034 (269,811) (216,044) (66,075) (504,896) (4,670,318) Payments to employees (588,186) (10,610) (61,972) (660,768) (979,960) Payments to OPEB trust 1,987,750 Claims paid (3,432,501) Cash Flows from Operating Activities 26,713 (204,242) 836, , ,348 (2,378,310) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Payment of interfund balances (163,516) (1,568) (165,084) (107,392) Transfers in 496,757 30, ,457 2,083,983 Transfers out (500,000) Grant revenues 3,190 3,190 Cash Flows from Noncapital Financing Activities 3, ,757 (163,516) 29, ,563 1,476,591 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from issuance of debt Capital grants 444, ,633 Capital asset additions (157,190) (157,190) Principal payments on debt (149,808) (255,000) (404,808) Interest paid (21,866) (602,150) (2,600) (626,616) Cash Flows from Capital and Related Financing Activities 115,769 (857,150) (2,600) (743,981) CASH FLOWS FROM INVESTING ACTIVITIES Interest 1,137 1,567 2, ,067 16,305 Cash Flows from Investing Activities 1,137 1,567 2, ,067 16,305 Net Cash Flows 31, ,851 (181,852) 156, ,332 (885,414) Cash and investments at beginning of period 192, ,801 1,223,793 1,613,321 4,984,472 Cash and investments at end of period $223,767 $606,652 $1,041,941 $156,293 $2,028,653 $4,099,058 Reconciliation of Operating Income (Loss) to Cash Flows from Operating Activities: Operating income (loss) ($259,755) ($881,107) $589,240 $159,398 ($392,224) ($5,046,116) Adjustments to reconcile operating income (loss) to cash flows from operating activities: Depreciation 308, , ,365 1,248,935 Change in assets and liabilities: Receivables, net (74,847) (18,945) (35,331) (129,123) Other assets 1,987,750 Accounts payable and other accrued expenses 53,131 (10,576) 12,846 5,359 60, ,056 Cash Flows from Operating Activities $26,713 ($204,242) $836,451 $129,426 $788,348 ($2,378,310) See accompanying notes to financial statements 48

57 FIDUCIARY FUNDS RETIREE HEALTH SAVINGS PLAN TRUST FUND This fund accounts for accumulation of resources to be used for retirement healthcare benefits. REDEVELOPMENT OBLIGATION RETIREMENT PRIVATE-PURPOSE TRUST FUND This fund was established to account for the accumulation of resources to be used for payments at appropriate amounts and times in the future. AGENCY FUNDS Agency funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the Citywide financial statements, but are presented in separate Fiduciary Fund financial statements. 49

58 FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET ASSETS SEPTEMBER 30, 2012 Redevelopment Obligation Retiree Health Retirement Savings Plan Private-Purpose Agency Trust Fund Trust Fund Funds ASSETS Cash and investments available for operations (Note 3) $3,210,526 $3,033,392 Restricted cash and investments (Note 3) $5,038,197 9,783, ,234 Accounts receivable Land held for redevelopment 479,727 Capital Assets (Note 15): Land 13,083,846 Depreciable capital assets, net 6,991,284 Total Assets 5,038,197 33,549,273 $3,881,626 LIABILITIES Accounts payable $6,243 $21,405 Deposits and other accruals 2,220,997 Due to developers 1,639,224 Long-term liabilities (Note 15): Due in one year 1,605,000 Due in more than one year 81,345,000 Total Liabilities 82,956,243 $3,881,626 NET ASSETS (DEFICIT) Held in trust for OPEB benefits or other governments $5,038,197 ($49,406,970) See accompanying notes to financial statements 50

59 FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2012 ADDITIONS Retiree Health Savings Plan Trust Fund Redevelopment Obligation Retirement Private-Purpose Trust Fund Taxes and assessments $2,638,000 Employer Contributions (Note 9C) $2,277,250 Interest income 387,261 20,177 Other income 748,883 DEDUCTIONS Total Additions 2,664,511 3,407,060 Premiums paid 1,879,250 General government 539,876 Net investment expense 22,383 Interest and fiscal charges 2,090,779 Total deductions 1,901,633 2,630,655 Net Change in Net Assets before Extraordinary Item 762, ,405 EXTRAORDINARY ITEM (NOTE 15) Assets transferred to/liabilities assumed by Successor Agency (50,183,375) NET ASSETS (DEFICIT) HELD IN TRUST FOR OPEB BENEFITS OR OTHER GOVERNMENTS Beginning of year 4,275,319 End of year $5,038,197 ($49,406,970) See accompanying notes to financial statements 51

60 52

61 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The City of South Lake Tahoe is a year-round resort community with a permanent estimated population of 21,343. The City operates under the Council-Manager form of government and provides the following services: public safety (police and fire), highways and streets, airport management, transportation, recreation, planning and zoning, public improvements and general administration. A. Reporting Entity The City is governed by a five member council elected by City residents. The City is legally separate and fiscally independent which means it can issue debt, set and modify budgets and fees and sue or be sued. These financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government s operations and so data from these units are combined with data of the primary government. PRIMARY GOVERNMENT The financial statements of the City of South Lake Tahoe include the activities of the City and blended component units discussed below. While these component units are separate legal entities, their financial activities are integral to those of the City. Their financial activities have been aggregated and merged (termed blending ) with those of the City in the accompanying financial statements. BLENDED COMPONENT UNITS The South Tahoe Redevelopment Agency was established to assist in the clearance and rehabilitation of City areas determined to be in a declining condition. The Agency has the same governing board as the City, and all accounting and administrative functions are performed by City staff and consultants. The financial activities of the Agency have been included in the Housing and Economic Development and Low/Moderate Income Housing Special Revenue Funds, the Redevelopment Debt Service Fund, and the Redevelopment Capital Projects Fund. As discussed in Note 15, the Agency was dissolved effective February 1, The South Tahoe Joint Powers Financing Authority was formed by the City and Agency to finance the acquisition of public improvements. The City Council sits as the Authority s Board and the Authority s debt service expenditures are financed by the City and Agency. Financial activities have been included in the City and Redevelopment Debt Service Funds. The South Tahoe Joint Powers Parking Financing Authority was formed by the City and Agency to finance the acquisition of certain public capital improvements, including parking facilities to aid the Agency s redevelopment plan. The City Council sits as the Authority s Board and the Authority s debt service expenditures are financed by the City and Agency. Financial activities have been included in the Parking Enterprise Fund. The Housing Authority of the City of South Lake Tahoe, California, was established to provide housing for the City's low and moderate income residents. The City Council sits as the Authority s Board and all accounting and administrative functions are performed by City staff. The financial activities of the Authority have been included in the City Housing & Economic Development Special Revenue Fund. 53

62 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) The Retiree Health Savings Plan Trust is governed by the City s Resolutions & and is used to account for contributions and investment income restricted to pay medical and dental benefits. Benefit and contribution provisions are established by the City Council. Eligibility, actuarial interest rates, administration and certain other tasks are the responsibility of the Council established by the above Resolution. The financial activities of the Plan have been included in these financial statements in the Retiree Health Savings Plan Trust Fund. B. Basis of Presentation The City s Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the U.S.A. Government-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category governmental, proprietary, and fiduciary are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. C. Major Funds Major funds are defined as funds that have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds. 54

63 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) The City reported the following major governmental funds in the accompanying financial statements: General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The major revenue sources for this Fund are sales taxes, property taxes, transient occupancy taxes, unrestricted revenues from the State, fines and forfeitures and interest income. Expenditures are incurred for public safety, most street work and the other services described above. Housing & Economic Development Fund Established by the Redevelopment Agency of the City of South Lake Tahoe to account for tax allocations set aside, CDBG, and HOME funds for the purpose of increasing or improving the City s supply of low or moderate income housing. City Housing & Economic Development Fund - Established to account for CDBG, HOME and other funds obtained for the purpose of increasing or improving the City s supply of low or moderate-income housing. City Capital Projects Fund Established to account for the construction and maintenance of the City projects. The funding sources for City Capital Projects are the General Fund and grant funds from various granting agencies. Redevelopment Debt Service Fund Established to account for the financing and construction activities in the redevelopment project areas. Funding source for Redevelopment Debt Service is project area Tax Increment and Transient Occupancy Tax. City Debt Service Fund - Established to account for the financing and construction activities within City limits. The City reported all its enterprise funds as major funds in the accompanying financial statements: Transit Fund Established for the activities associated with the operations and maintenance of the City s public transit activities and has particular emphasis on serving the elderly and the handicapped. Airport Fund - Established for the operation, development and maintenance of the South Lake Tahoe Airport. Parking Garage Fund Established for all activities necessary to provide administration, operations, capital improvements, maintenance, financing and related debt service of parking garages. Parking Management Fund Established for parking metered areas, parking enforcement and parking citations. Funding for this program is received from parking meters and citation revenue. The City also reports the following fund types: Internal Service Funds The Health, Vision, and Dental Self Insurance, Workers Compensation Self Insurance, and Motor Pool Internal Service Funds; all of which provide services to other departments on a cost-reimbursement basis. 55

64 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) Fiduciary Funds Fiduciary funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the City-wide financial statement, but are presented in separate Fiduciary Fund financial statements and consist primarily of funds held as an agent for various special assessment districts, other organizations, and the South Tahoe Basin Waste Management Authority, as well as the City of South Lake Tahoe Health Benefits Trust, which accounts for accumulation of resources to be used for retirement healthcare benefits, and the Redevelopment Obligation Retirement Private-Purpose Trust Fund, which accounts for the activities of the Successor Agency to the South Tahoe Redevelopment Agency. D. Basis of Accounting The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and accumulated unpaid vacation, sick pay and other employee amounts, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Other revenues susceptible to accrual are sales taxes and interest revenue. Forfeitures, licenses, permits and miscellaneous revenue are not susceptible to accrual because they are not measurable until received in cash. Grant funding received in advance of the related expenditure is accounted for as deferred revenue. Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net assets may be available to finance program expenditures. The City s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. 56

65 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) The City follows Statements and Interpretations of the Financial Accounting Standards Board and its predecessors issued on or before November 30, 1989, in accounting for its business-type activities, unless those pronouncements conflict with Government Accounting Standards Board pronouncements. E. Materials, Parts and Supplies Materials, parts and supplies and inventories are held for consumption and are valued at cost on a first-in, first-out basis. General Fund supplies are recorded as an expenditure at the time individual supply items are used. F. Property Tax El Dorado County assesses properties and bills, collects, and distributes property taxes to the City. The County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on January 1 of the preceding fiscal year. Secured property tax is due in two installments, on November 1 and March 1, and becomes a lien on those dates. It becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is due on July 1, and becomes delinquent on August 31. The term "unsecured" refers to taxes on personal property other than real estate, land and buildings. These taxes are secured by liens on the property being taxed. Property tax revenues are recognized by the City in the fiscal year they are assessed, provided they become available as defined above. G. Compensated Absences Compensated absences comprise unused vacation leave, vested sick pay and certain compensated time off, which are accrued as earned. The City s liability for compensated absences is recorded in various Governmental funds or Proprietary funds as appropriate. The liability for compensated absences is determined annually. For all governmental funds, amounts representing permanent liquidations are recorded as fund liabilities; the long-term portion is recorded in the Statement of Net Assets. Governmental Business-Type Activities Activities Total Beginning Balance $1,934,184 $35,905 $1,970,089 Increase 1,539,378 48,270 1,587,648 Decrease (1,800,124) (47,471) (1,847,595) Ending Balance $1,673,438 $36,704 $1,710,142 Current Portion $1,673,438 $36,704 $1,710,142 Compensated absences are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund. 57

66 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) H. New and Closed Funds The City Housing & Economic Development Special Revenue Fund was established to account for the activities related to the assets assumed by the City as Housing Successor to the housing activities of the former Redevelopment Agency. The Redevelopment Obligation Retirement Private-Purpose Trust Fund was established to account for the activities of the Successor Agency to the former Redevelopment Agency. The City Debt Service Fund, Homeland Security Special Revenue Fund, Ice Arena Special Revenue Fund and Stateline Capital Projects Fund were all established during fiscal year As discussed in Note 15, as a result of the dissolution of the Redevelopment Agency, the following funds were closed as of February 1, 2012: Housing & Economic Development Special Revenue, Low/Moderate Income Housing Special Revenue, Redevelopment Special Revenue, Redevelopment Debt Service and Redevelopment Capital Projects. NOTE 2 - BUDGETS AND BUDGETARY ACCOUNTING A. Budgeting Procedures The City follows these procedures in establishing the budgetary data on a modified accrual basis, reflected in the accompanying financial statements: 1. The department heads prepare a budget request based upon the previous year s expenditures and current year estimates for the fiscal year commencing the following October 1; 2. The City Manager submits his proposed City budget the first week in September each year to the City Council, who make decisions regarding department budgets; 3. The budget is legally enacted through passage of an appropriation resolution at the first regular City Council meeting in October; 4. The approved budget is placed in the City accounting system and monitored by the Accounting Division of the General Services Department; 5. Department Heads are authorized to transfer budgeted amounts between expenditure categories within the department. Revisions that alter the total expenditures of any department must be approved by the City Manager and Finance Director; the legally adopted budget requires that expenditures not exceed total appropriations at the fund level, unless approved by resolution of the City Council; 6. Budgets for governmental funds, except for the CLEEP Grant Special Revenue Fund, Arts Program Special Revenue Fund, Equipment Capital Projects Fund and Redevelopment Capital Project Fund, are adopted on a basis consistent with generally accepted accounting principles. Budgeted amounts are as originally adopted and as further amended by the City Council; 58

67 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 2 - BUDGETS AND BUDGETARY ACCOUNTING (Continued) 7. Capital projects budgets are primarily long-term in nature; however, the budgets are established on a year-by-year basis, except for the Stateline Capital Projects Fund; and 8. Appropriations lapse at the close of the fiscal year to the extent they have not been expended or encumbered. Encumbrance accounting requires that purchase orders, contracts and other commitments for the expenditures of monies be recorded in the books in order to reserve that portion of the applicable appropriation. The City s encumbrance accounting is an extension of the formal budgetary process. It reports encumbrances outstanding at year end as a component of assigned, committed of restricted fund balance, since they are not expenditures. Unencumbered appropriations lapse at year end. The total amount of encumbrances outstanding as of September 30, 2012, that were re-appropriated into the fiscal year budget was $223,107 of which $28,276 is attributed to the General Fund and $194,831 to special revenue funds. B. Excess of Expenditures over Appropriations The funds below incurred expenditures in excess of its budget in the amount below as the result of unanticipated expenses. Sufficient resources were available within the funds to finance these excesses: Fund Amount Special Revenue Funds: Ski Run Business Improvement $919 Tourism Improvement District 128,533 Vacation Home Rental Programs 10,677 NOTE 3 CASH AND INVESTMENTS The City pools cash from all sources and all funds except cash and investments with fiscal agents so that it can be invested at the maximum yield consistent with safety and liquidity, while individual funds can make expenditures at any time. A. Policies California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City s cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City s name and places the City ahead of general creditors of the institution. 59

68 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 3 CASH AND INVESTMENTS (Continued) The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. In order to increase security, the City employs the Trust Department of a bank as the custodian of certain City managed investments, regardless of their form. The City s investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. B. Classification Cash and investments are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or other agreements. Cash and investments comprised the following at September 30, 2012: Cash and investments available for City operations $20,709,724 Restricted cash and investments 9,202,643 Total City cash and investments 29,912,367 Cash and investments available for operations in Fiduciary Funds 6,243,918 Restricted cash and investments in Fiduciary Funds 15,670,321 Total Cash and Investments $51,826,606 Cash and Investments Available for Operations is used in preparing proprietary fund statements of cash flows because these assets are highly liquid and are expended to liquidate liabilities arising during the year. C. Investments Authorized by the California Government Codes and the City s Investment Policy The City s Investment Policy and the California Government Code allow the City to invest in the following, provided the credit ratings of the issuers are acceptable to the City; and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City s Investment Policy where the City s Investment Policy is more restrictive. 60

69 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 3 CASH AND INVESTMENTS (Continued) Minimum Maximum Maximum Credit Percentage Authorized Investment Type Maturity Quality Allowed Certificates of Deposit No Limit AAA 5%, not to exceed $500,000 Bankers' Acceptances 180 days No Limit 20% and $1,000,000 per institution Securities of the U.S. Government or its agencies No Limit No Limit No Limit Repurchase Agreements 30 days No Limit $1,000,000 per institution Commercial Paper 270 days AAA 25% and $1,000,000 per institution Medium-Term Corporate Notes 5 years A 30% and $1,000,000 per institution Local Agency Investment Fund (State Pool) No Limit No Limit $40 million Negotiable Certificates of Deposit No Limit No Limit No Limit Passbook Savings Account Demand Deposit 10 working days No Limit No Limit Governmental Security Mutual Funds 5 years AAA 15% Bonds or notes issued by California Local agencies No Limit A No Limit Bond Proceeds 5 years No Limit No Limit Notes and Bonds of the 50 States No Limit A No Limit D. Investments Authorized for the Retiree Health Savings Plan Trust The authorized investments for the Retiree Health Savings Plan Trust were established pursuant to the Declaration of Trust. The Trust has elected to invest assets in a mutual fund, however the Trust is authorized to invest in time deposits, shares of common and preferred stock, mortgages, bonds, leases, notes, debentures, equipment or collateral trust certificates, rights, warrants, convertible or exchangeable securities and other corporate, individual or government securities or obligations, annuity, retirement or other insurance contracts, mutual funds, or in units of any other common, collective or commingled trust fund. 61

70 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 3 CASH AND INVESTMENTS (Continued) E. Investments Authorized by Debt Agreements The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City resolutions, bond indentures or State statutes. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: Minimum Maximum Maximum Credit Percentage Authorized Investment Type Maturity Quality Allowed U.S. Treasury Bonds No Limit None No Limit Government National Mortgage Bonds No Limit None No Limit Federal National Mortgage Bonds No Limit AA No Limit Demand Deposits No Limit A-1 or better No Limit Repurchase Agreements No Limit None No Limit Bankers' Acceptances 270 days None No Limit Commercial Paper 180 days A or higher 10% Bonds, Warrants or Other Indebtedness No Limit A or higher No Limit Local Agency Investment Fund (State Pool) No Limit None No Limit Money Market Funds No Limit Am or better No Limit F. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City generally manages its interest rate risk by holding investments to maturity. 62

71 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 3 CASH AND INVESTMENTS (Continued) 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 or earliest call date: U.S. Government Agencies: Twelve Months Investment Type or Less Total Callable $1,005,493 $1,005,493 Local Agency Investment Fund (State Pool) 23,780,586 23,780,586 OPEB Trust - Mutual Funds 5,038,197 5,038,197 Money Market Funds 18,977,819 18,977,819 Medium Term Notes 1,025,522 1,025,522 Total Investments $49,827,617 49,827,617 Cash with Trustee 433 Cash in Banks and on Hand 1,998,556 Total Cash and Investments $51,826,606 The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At September 30, 2012, these investments matured in an average of 242 days. 63

72 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 3 CASH AND INVESTMENTS (Continued) G. Credit Risk 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 actual rating as of September 30, 2012, for each investment type as provided by Standard and Poor s. Investment Type AAA/AAAm AA+ Total Available for Operations: U.S. Government Agencies: Callable $1,005,493 $1,005,493 Medium Term Notes 1,025,522 1,025,522 Restricted: M oney M arket Funds $18,977,819 18,977,819 Not Rated: Totals $18,977,819 $2,031,015 21,008,834 OPEB Trust - M utual Funds 5,038,197 Local Agency Investment Fund (State Pool) 23,780,586 Exempt from Credit Rating Disclosures: Cash with Trustee 433 Cash in Banks and on Hand 1,998,556 Total Investments $51,826,606 64

73 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 4 INTERFUND TRANSACTIONS A. Transfers Between Funds With Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to reimburse a fund, which has made an expenditure on behalf of another fund. Less often, a transfer may be made to open or close a fund. Transfers between funds during the fiscal year ended September 30, 2012, were as follows: Fund Receiving Transfers Fund Making Transfers Amount Transferred Reasons for transfer General Fund City Capital Projects Fund $276,719 (A) Non-Major Governmental Funds 1,018,600 (A),(B),(C) Internal Service Fund 500,000 (C) Housing & Economic Development Fund Non-Major Governmental Funds 122,168 (A),(D) City Housing & Economic Development Fund Housing & Economic Development Fund 1,103,255 (E) City Capital Projects Fund City Debt Service Fund 588,802 (D) Redevelopment Debt Service Fund General Fund 145,400 (F) City Debt Service Fund General Fund 652,406 (A) Redevelopment Debt Service Fund 2,381,305 (E) Airport Enterprise Fund General Fund 496,757 (A) Parking Management Enterprise Fund Non-Major Governmental Funds 30,700 (A) Non-Major Governmental Funds General Fund 1,340,943 (A) City Housing & Economic Development Fund 2,979 (A) City Capital Projects Fund 25,228 (A) Redevelopment Debt Service Fund 167,012 (A) Non-Major Governmental Funds 3,089,621 (A),(B),(E) Internal Service Funds General Fund 2,083,983 (B),(E) Total Interfund Transfers $14,025,878 Reasons for Transfer (A) (B) (C) (D) (E) (F) To fund operations. To reimburse administrative expenses. To return unused funds. To fund capital projects. To close out fund. To transfer Mello Roos collected by the City. 65

74 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 4 INTERFUND TRANSACTIONS (Continued) B. Current Interfund Balances Current interfund balances arise in the normal course of business and are expected to be repaid the next fiscal year. At September 30, 2012, the General Fund was owed by the following funds: Funds Amount City Capital Projects Fund $1,754,938 City Debt Service Fund 500,000 Special Revenue Funds: EMS 287,473 Boat Patrol 27,854 Domestic Violence Grant 56,406 Ice Arena 1,735 Capital Project Funds: Stateline Capital Projects 44,373 $2,672,779 C. Long-Term Interfund Balance At September 30, 2012, the funds below had made advances which were not expected to be repaid within the next year. Fund Receiving Advance Fund Making Advance Amount of Advance City Debt Service Fund General Fund $216,968 Vehicle Replacement Special Revenue Fund 277,723 City Capital Projects Fund 1,240,012 Workers' Compensation Self Insurance Internal Service Fund 292,523 Current balance reflected as Due To Other Funds (500,000) Long-Term Portion 1,527,226 Stateline Capital Projects Fund General Fund 3,958,115 Parking Garage Enterprise Fund Stateline Capital Projects Fund 906,497 $6,391,838 66

75 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 4 INTERFUND TRANSACTIONS (Continued) A Loan and Repayment Agreement was signed between the City and the Agency on March 16, 2004, under which the Agency agreed to reimburse the City for the costs and expenses related to the implementation of the South Tahoe Redevelopment Plan. The loans bear interest at the lesser of the applicable LAIF rate or ten percent per annum. In the fiscal year, the Agency made a payment of $500,000 to the City. As of September 30, 2012, the long-term portion of principal and accumulated interest was $3,535,370 and $709,959, respectively. The Agency repays the City for debt service related to certain State Revolving Loans which the City owes to the State. These loans were used to finance erosion control projects completed as part of Redevelopment activities. The balance of the advance was $1,240,012 at September 30, The Stateline Capital Projects Fund is owed $906,497 from the Parking Garage Enterprise Fund which bears 5% simple interest per year beginning October 1, 2003, and is repayable after parking garage revenues have exceeded bond payment obligations and operating expenses for the year and after the garage has been operational for a minimum of two full years from operation commencement. As of September 30, 2012, the principal and accumulated interest was $585,000 and $321,497, respectively. With the dissolution of the redevelopment Agency as discussed in Note 15, the City determined these advances would be payable by City funds, and therefore, were not transferred to the Successor Agency. D. Internal Balances Internal balances are presented in the government-wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business-type activities. 67

76 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 5 REDEVELOPMENT AGREEMENTS, LOANS RECEIVABLE AND DEFERRED REVENUE The Redevelopment Agency engaged in programs designed to encourage business enterprises, construction or improvement in low-to-moderate income housing, or other projects. With the dissolution of the Redevelopment Agency as discussed in Note 15, the City agreed to become the successor to the Redevelopment Agency s housing activities and as a result, the City assumed the loans receivable of the Redevelopment Agency s Housing & Economic Development Special Revenue Fund as of February 1, Under these programs, grants or loans are provided with favorable terms to businesses, homeowners or developers who agree to spend these funds in accordance with the Agency s terms. Although these notes are expected to be repaid in full, their balance has been offset in the fund financial statements by deferred revenue as they are not expected to be repaid during the subsequent fiscal year. These loans receivable comprised the following at September 30, 2012: Balance at Additions to Interest Balance at Loan Program September 30, 2011 Principal Accrued Collections September 30, 2012 Housing Rehabilitation Loans $1,318,107 $47,429 ($778) $1,364,758 Interest on loans 114,303 $15, ,490 First-Time Homebuyer Loans 3,830, ,892 (39,036) 4,070,112 Interest on loans 618,921 80, ,370 Moderate Income Loans 1,109,409 (78,300) 1,031,109 Interest on loans 62,645 19,689 82,334 Business Loans 247,472 97,035 (36,824) 307,683 Interest on loans 21,110 6,337 27,447 Projects Loans 20,073,643 20,073,643 Interest on loans 2,189, ,976 2,546,399 Total $29,585,289 $423,356 $478,638 ($154,938) $30,332,345 A. Housing Rehabilitation Loans The Redevelopment Agency administers a housing rehabilitation loan program using State Housing Community Development funds and Redevelopment Low & Moderate Income Housing funds. Under the Program, individuals with incomes below a certain level are eligible to receive low interest, thirty year loans, secured by deeds of trust, for rehabilitation work on their homes. The loan repayments may be amortized over the life of the loans, deferred or a combination of both. B. First Time Home-Buyer Loans The Agency engages in a first time home-buyer program designed to encourage home ownership among low income persons. This program is funded by Community Development Block Grant, HOME, and Redevelopment Low- & Moderate-Income Housing Funds and is designed to make homes affordable for first-time homebuyers by providing low-interest, deferred payment second mortgages to eligible low-income persons. The deferred loans bear interest at 2% - 3%, require no monthly payments, are not due until the property is sold, transferred or rented and are collateralized by second deeds of trust. 68

77 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 5 REDEVELOPMENT AGREEMENTS, LOANS RECEIVABLE AND DEFERRED REVENUE (Continued) C. Moderate Income Loans The Agency engages in moderate income loan programs to make homes affordable to moderate income homebuyers by providing low-interest, deferred payment second loans to eligible individuals or households. This program is funded with South Tahoe Redevelopment Agency Housing Funds. The Agency will provide a second loan of up to $100,000. All loans are secured by second deeds of trust on the properties to be purchased. D. Business Loans The Agency engages in business loan programs designed to provide assistance to small businesses located within the City to increase job creation and retention. Under this program, loans are provided for a period up to ten years with interest rates determined based on the business financial needs. As of September 30, 2012, the Agency made loans to eleven business owners. All loans are secured by deeds of trust. E. Projects Loans The Agency provides loans funded by HOME, CDBG and Redevelopment Low-&-Moderate Housing Funds to assist recipients in the rehabilitation and operation of affordable housing in the City. These loans are collateralized by deeds of trust with interest rates up to 3%. As of September 30, 2012, the Agency made twelve loans to eight organizations. NOTE 6 CAPITAL ASSETS All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. The City s policy is to capitalize all assets with costs exceeding certain minimum thresholds and with useful lives exceeding two years. All capital assets with limited useful lives are depreciated over their estimated useful lives. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year s pro rata share of the cost of capital assets. Depreciation of all capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on the statement of net assets as a reduction in the book value of capital assets. 69

78 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 6 CAPITAL ASSETS (Continued) Depreciation is provided using the straight line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives and capitalization thresholds listed below to capital assets: Life Threshold Buildings $50,000 Vehicles 3-6 5,000 Furniture, machinery, and equipment ,000 Buses 10 5,000 Transit center buildings ,000 Terminal buildings ,000 Streets ,000 Bike paths ,000 Streetscape ,000 Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. 70

79 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 6 CAPITAL ASSETS (Continued) A. Capital Asset Additions and Retirements Capital assets at September 30 comprise: Balance at Transfers to Balance at September 30, 2011 Additions Retirements Transfers Successor Agency September 30, 2012 Governmental activities Capital assets not being depreciated: Land $13,884,729 $100,270 ($13,083,846) $901,153 Intangible assets 97,652 97,652 Construction in progress 23,399,146 11,585,387 ($396,040) ($14,021,305) 20,567,188 Total capital assets not being depreciated 37,381,527 11,685,657 (396,040) (14,021,305) (13,083,846) 21,565,993 Capital assets being depreciated: Buildings 16,196,809 16,196,809 Vehicles 2,250,960 68,162 (82,860) 2,236,262 Furniture and equipment 13,007, ,638 (481,754) 12,654,661 Improvements other than buildings 1,160,229 1,160,229 Bike paths 2,923,097 2,923,097 Streets 26,425,608 (3,287,695) 23,137,913 Streetscape 4,844,069 (4,844,069) Basin and stream environment zone construction 19,000,020 14,021,305 (1,807,922) 31,213,403 Total capital assets being depreciated 85,808, ,800 (564,614) 14,021,305 (9,939,686) 89,522,374 Less accumulated depreciation for: Buildings (12,172,082) (393,507) (12,565,589) Vehicles (1,824,262) (133,703) 82,860 (1,875,105) Furniture and equipment (10,289,233) (499,300) 481,754 (10,306,779) Improvements other than buildings (281,805) (121,973) (403,778) Bike paths (983,899) (146,155) (1,130,054) Streets (16,974,330) (751,538) 760,279 (16,965,589) Streetscape (1,407,836) (53,902) 1,461,738 Basin and stream environment zone construction (3,090,159) (827,191) 522,921 (3,394,429) Total accumulated depreciation (47,023,606) (2,927,269) 564,614 2,744,938 (46,641,323) Net capital assets being depreciated 38,784,963 (2,730,469) 14,021,305 (7,194,748) 42,881,051 Governmental activity capital assets, net $76,166,490 $8,955,188 ($396,040) ($20,278,594) $64,447,044 With the dissolution of the redevelopment Agency as discussed in Note 15, a Successor Agency assumed the capital assets of the Redevelopment Agency as of February 1, 2012, which has been reported as a transfer above and as an Extraordinary Item in the Statement of Activities. 71

80 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 6 CAPITAL ASSETS (Continued) Balance at Balance at September 30, 2011 Additions Retirements Transfers September 30, 2012 Business-type activities Capital assets not being depreciated: Land $4,288,170 $4,288,170 Construction in progress 10,941,155 $157,190 ($11,098,345) Total capital assets not being depreciated 15,229, ,190 (11,098,345) 4,288,170 Capital assets, being depreciated: Buses and vehicles 1,255,021 1,255,021 Transit center buildings 6,512,815 6,512,815 Terminal buildings 4,318,678 ($3,671) 4,315,007 Runways 10,721,820 (4,524,522) 11,098,345 17,295,643 Machinery and equipment 3,808,017 (32,131) 3,775,886 Parking garage 7,942,112 7,942,112 Total capital assets being depreciated 34,558,463 (4,560,324) 11,098,345 41,096,484 Less accumulated depreciation for: Buses and vehicles (910,968) (44,469) (955,437) Transit center buildings (2,308,933) (263,715) (2,572,648) Terminal buildings (2,517,318) (177,942) 3,671 (2,691,589) Runways (10,005,472) (380,187) 4,524,522 (5,861,137) Machinery and equipment (2,552,961) (148,257) 32,131 (2,669,087) Parking garage (1,682,659) (234,365) (1,917,024) Total accumulated depreciation (19,978,311) (1,248,935) 4,560,324 (16,666,922) Total capital assets being depreciated, net 14,580,152 (1,248,935) 11,098,345 24,429,562 Business-type activity capital assets, net $29,809,477 ($1,091,745) $28,717,732 B. Depreciation Allocation Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program are as follows: Governmental Activities General government $113,009 Public safety 244,542 Public works 933,443 Parks and recreation 554,617 Streets 1,081,658 Current Year Depreciation Expense $2,927,269 Business-Type Activities Transit $308,184 Airport 706,386 Parking Garage 234,365 Current Year Depreciation Expense $1,248,935 72

81 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 7 - LONG-TERM DEBT The City and Agency generally incurs long-term debt to finance projects or purchase assets which have useful lives equal to or greater than the related debt. In governmental fund types, debt discounts and issuance costs are recognized in the current period. Debt discounts and issuance costs incurred by proprietary fund types are amortized over the term of the debt using the bonds-outstanding method, which approximates the effective interest method. A. Current Year Transactions and Balances Balance at Transfer to Balance at Current September 30, 2011 Additions Retirements Successor Agency September 30, 2012 Portion Governmental Activities Redevelopment Agency Obligations Refunding Revenue Bonds, 1999 Series A, 4.0% %, due serially until 10/1/2030 $8,205,000 $115,000 $8,090,000 Refunding Revenue Bonds, 2003 Series A, 2.0% -5.45%, due serially until 10/1/ ,650,000 40,000 10,610,000 Refunding Revenue Bonds, 2004 Series A, 2.0% - 5.0%, due serially until 10/1/ ,470, ,000 11,270,000 Refunding Revenue Bonds, 2005 Series A, 5.0%, due serially until 10/1/ ,330, ,000 33,350,000 Refunding Revenue Bonds, 2007 Series A 4.0%-5.0%, due serially until 10/1/ ,825, ,000 19,630,000 Subtotal Redevelopment 84,480,000 1,530,000 82,950,000 Refunding Revenue Bonds, 2006 Series A, 3.75% % due serially until 10/1/ ,090, ,000 $18,150,000 $970, Certificates of Participation 2.0% - 4.0%, due serially until 9/1/2042 $5,765,000 5,765, State Revolving Fund Loan, 2.8%, due 2/4/ ,716 57, ,960 59, State Revolving Fund Loan, 2.6%, due 3/2/ , , , , State Revolving Fund Loan, 2.6% due 3/19/ ,061 9, ,732 9, California Energy Commission Loan 15,157 3% due serially until 6/22/ , ,461 Capital lease obligations: Mower/Tractor Lease 4.22% due serially until 11/26/ ,054 25,345 93,709 26,426 H.P. Server 3.86% due serially until 12/15/2011 6,194 6,194 Tymco Sweepers 3.45% serially until 2/15/ , ,487 Various Equipment 4.15% due serially until 12/1/2016 1,222, ,629 1,025, ,874 Subtotal City 22,100,722 6,422,461 1,591,110 26,932,073 1,393,512 Total $106,580,722 $6,422,461 $3,121,110 $82,950,000 $26,932,073 $1,393,512 Business-type Activities 1998 State Department of Transportation Loan 5.05%, due serially until 8/14/2013 $320,805 $144,420 $176,385 $150, State Department of Transportation Loan 4.594% due serially until 9/22/29 123,335 5, ,947 5,635 Parking Revenue Bonds, 2002 Series A, 4.25% - 7.0%, due serially until 10/1/2027 7,795, ,000 7,540, ,000 Total $8,239,140 $404,808 $7,834,332 $426,474 With the dissolution of the Redevelopment Agency as discussed in Note 15, a Successor Agency assumed the long-term debt and loans of the Redevelopment Agency as of February 1, 2012, which has been reported as a transfer above and as an Extraordinary Item in the Statement of Activities. For a detailed discussion of each of the bonds that were transferred, see Note 15 D. 73

82 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 7 - LONG-TERM DEBT (Continued) As part of the winding down of the Redevelopment Agency s affairs, the City reviewed each of the Agency s debt issues and determined that the City was obligated for the 2006 Series A Refunding Lease Revenue Bonds and the 2002 Series A Parking Revenue Bonds. Therefore, both bond issuances have been recategorized as City debt. B. Long-Term Debt Issues Refunding Lease Revenue Bonds 2006 Series A On April 7, 2006, the South Tahoe Joint Powers Financing Authority issued the Refunding Lease Revenue Bonds 2006 Series A, in the amount of $23,245,000, the proceeds of which were used to refund Lease Revenue Bonds, 1995 Series A. Interest on the Refunding Lease Revenue Bonds Series A is payable annually on each October 1. Principal matures annually on the same date, October 1. The 2006 Series A bonds are secured and repayable from a pledge of lease rental payments from the General fund Certificates of Participation On July 1, 2012, the City entered into an agreement with the South Tahoe Joint Power Financing Authority for a lease amount of $5,765,000. Proceeds from the Certificates were used to finance street and other capital improvements within the City. The Certificates bear interest of 2% to 4%. Principal and interest payments are payable semi-annually on each March 1 and September 1 of each year until 2042, commencing September 1, The debt service is funded by transfers from the General Fund. The total principal and interest remaining to be paid on the loan was $5,765,000 as of September 30, State Revolving Fund Loans As of September 30, 2012, the City had drawn down $1,023,515 under a 1997 State Revolving Fund Loan with the State of California. Proceeds from the loan were used along with grant funds to construct the Stateline erosion control project. The loan is secured by the project and repayable from Transient Occupancy Taxes of the City. Principal and interest is payable annually on February 4 of each year until As of September 30, 2012, the City had drawn down $1,998,000 under a 1998 State Revolving Fund Loan with the State of California. Proceeds from the loan were used along with grant funds to construct the Stateline erosion control project. The loan is secured by the project and repayable from Transient Occupancy Taxes of the City. Principal and interest is payable annually on March 2 of each year until As of September 30, 2012, the City had drawn down $190,936 under a 2002 State Revolving Fund Loan with the State of California. Proceeds from the loan were used along with grant funds to construct the Stateline erosion control project. The loan is secured by the project and repayable from Transient Occupancy Taxes of the City. Principal and interest is payable annually on March 19 of each year until

83 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 7 - LONG-TERM DEBT (Continued) The City has pledged future transient occupancy tax revenues for the repayment of the state revolving fund loans. The pledge of future transient occupancy tax revenues ends upon repayment of $1,240,115 remaining debt service on the loans, which is scheduled to occur in For fiscal year 2012, transient occupancy tax revenue amounted to $4,739,028 which represented coverage of 27.5 times over the $172,455 of debt service California Energy Commission Loan During fiscal year , the City entered into an agreement with the California State Department of Energy Resources Conservation and Development Commission for a loan amount of $657,461. Proceeds from the loan were used to upgrade the chiller replacement, interior and exterior lighting upgrade and data center server cooling control upgrade. The loan bears interest of 3.00%. Principal and interest payments are payable semiannually on December 22 and June 22 of each year until 2026, commencing December 22, The loan is repayable from savings made from energy costs and the City s General Fund. Capital Lease Obligations The City has various capital lease obligations under a Master Equipment Lease Purchase Agreement the City entered into with Bank of America on May 9, On January 29, 2009, the City entered into a lease agreement for two street sweepers. Principal and interest payments of $68,144 are due annually on February 15, until the lease matures in The City paid off the lease balance of $250,487 in fiscal year State Department of Transportation Loans 1998 State Department of Transportation Loan During fiscal the City entered into an agreement with the State Department of Transportation for a loan amount of $1,855,000. Proceeds from the loan were used to defease the T-Hanger Certificates of Participation. The loan bears interest of 5.05%. Principal and interest payments are payable annually on August 14 of each year until State Department of Transportation Loan On September 3, 2009, the City entered into an agreement with the State Department of Transportation for a loan amount of $128,456. Proceeds from the loan were used for the reconstruction of the airport terminal aprons at the Lake Tahoe Airport. The loan bears interest of 4.54%. Principal and interest payments are payable annually on October 30 until The City has pledged future airport gross revenues to repay the 1998 and 2010 State Department of Transportation loans through 2014 and 2029, respectively. The Airport Enterprise Fund s total principal and interest remaining to be paid on the loans were $186,582 and $165,805 as of September 30, 2012, respectively. The Airport Enterprise Fund s total principal and interest paid for the current year and total customer revenues were $171,674 and $671,348, respectively. 75

84 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 7 LONG-TERM DEBT (Continued) Parking Revenue Bonds 2002 Series A On July 25, 2002, the South Tahoe Joint Powers Financing Authority issued the Parking Revenue Bonds 2002 Series A, in the amount of $9,000,000, the proceeds of which were used for the acquisition and construction of an approximately 420-space parking facility in connection with the Park Avenue Redevelopment Project. Interest on the Parking Revenue Bonds Series A is payable semiannually on each June 1 and December 1. Principal matures annually each December 1. Principal on the Bonds maturing on December 1, 2027 is subject to mandatory redemption commencing December 1, The bonds are secured by and are repayable from operation revenues from the parking garage and certain surplus special tax revenues of the South Tahoe Redevelopment Agency Community Facilities District No The Authority has pledged future parking gross revenues, net of specified operating expenses, to repay the Parking Revenue Bonds through Net parking revenues are required to be at least 1.3 times over the annual principal and interest payments on the bonds. The Parking Garage Enterprise Fund s total principal and interest remaining to be paid on the bonds is $12,508,600. The Parking Enterprise Fund s principal and interest paid for the current year and total customer net revenues were $791,725 and $1,025,907, respectively. C. Debt Service Requirements Aggregate principal and interest payments on all outstanding long-term debt are as follows at September 30, 2012: Governmental Activities Business-type Activities For the Year Ending September 30 Principal Interest Principal Interest 2013 $1,393,512 $1,169,388 $426,474 $532, ,593,869 1,089, , , ,655,083 1,029, , , ,697, , , , ,664, , , , ,777,075 3,480,529 2,213,663 1,750, ,444,712 1,491,802 3,108, , ,005, , ,000 26, ,220, , ,480, ,000 Total $26,932,073 $11,403,880 $7,834,332 $5,026,655 76

85 NOTE 8 NET ASSETS AND FUND EQUITY A. Net Assets NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 Net Assets is the excess of all the City s assets over all its liabilities, regardless of fund. Net Assets are divided into three captions. These captions apply only to Net Assets, which is determined at the government-wide and proprietary fund levels, and are described below: Invested in capital assets, net of related debt describes the portion of Net Assets which is represented by the current net book value of the City s capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of Net Assets which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements, and redevelopment funds restricted to low and moderate income purposes. Unrestricted describes the portion of Net Assets which is not restricted to use. B. Governmental Fund Balance The City s fund balances are on spending constraints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint: Nonspendable fund balances represent balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for resale are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then nonspendable amounts are required to be presented as a component of the applicable category. 77

86 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 8 NET ASSETS AND FUND EQUITY (Continued) Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Encumbrances and nonspendable amounts subject to restrictions are included along with spendable resources. Committed fund balances have constraints imposed by resolution of the City Council which may be altered only by resolution of the City Council. Encumbrances and nonspendable amounts subject to council commitments are included along with spendable resources. Assigned fund balances are amounts constrained by the City s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or City Manager and may be changed at the discretion of the City Council or City Manager. This category includes encumbrances; nonspendables, when it is the City s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed. Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual General Fund balance and residual fund deficits, if any, of other governmental funds. 78

87 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 8 NET ASSETS AND FUND EQUITY (Continued) Detailed classifications of the City s Fund Balances, as of September 30, 2012, are below: City Housing & Housing & City Redevelopment City Other General Economic Economic Capital Debt Debt Governmental Fund Balance Classifications Fund Development Development Project Service Service Funds Total Nonspendables: Items not in spendable form: Inventories $329,049 $329,049 Prepaid expenses 134, ,510 Long-term interfund receivables 3,675,083 $1,240,012 $1,184,220 6,099,315 Total Nonspendable Fund Balances 4,138,642 1,240,012 1,184,220 6,562,874 Restricted for: Debt service $7,716,706 7,716,706 General liability claims 750, ,000 Housing and economic development $867, ,610 Gas tax 411, ,585 Public safety 506, ,646 Snow removal 822, ,968 Solid waste 168, ,484 Vehicle replacement 141, ,081 Community improvement 629, ,739 Ski run improvement 8,936 8,936 Tourism improvement 181, ,235 Measure S 301, ,704 Transportation 46,802 46,802 Total Restricted Fund Balances 750, ,610 7,716,706 3,219,180 12,553,496 Committed to: Capital projects 415, ,274 Total Committed Fund Balances 415, ,274 Assigned to: Economic Contingency/Litigation 683, ,971 Encumbrances 28,276 28,276 Total Assigned Fund Balances 712, ,247 Unassigned: General fund 10,610,969 10,610,969 Other governmental funds Deficit residuals (4,006,508) (4,006,508) Total Unassigned Fund Balances 10,610,969 (4,006,508) 6,604,461 Total Fund Balances $16,211,858 $867,610 $1,655,286 $7,716,706 $396,892 $26,848,352 79

88 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 8 NET ASSETS AND FUND EQUITY (Continued) C. Contingency Arrangements and Reserve Policies A General Fund Contingency of 1% of total budgeted departmental expenditures is appropriated annually for unanticipated needs such as, expenses associated with natural disasters, unexpected liabilities created by federal or state legislation, new public safety or health needs, new service needs, revenues shortfalls, service enhancements or opportunities to achieve cost savings. These funds are to be used prior to any utilization of the General Fund undesignated fund balance. Replacement funds are to be allocated each year to replace any use of the Contingency Fund during the preceding fiscal year. The Reserve Policy requires the City to maintain an Undesignated General Fund reserve at a minimum of 25% of General Fund operating expenses. Funds may be appropriated from the Undesignated Fund Balance upon demonstration to the City Council that the remaining balance is sufficient to offset potential downturns in revenue sources and to provide adequate cash for daily financial needs. Funds must be allocated each year in the budget process to replace any use of the Undesignated Fund Balance during the preceding fiscal year. To the extent that fund accumulate in excess of the required Undesignated General Fund Reserve, these onetime funds may be transferred to the Capital Projects Fund upon completion of the annual audit. D. Fund Deficits The following funds had fund balance or net assets deficits at September 30, 2012: Funds Deficit Amount Domestic Violence Grant Special Revenue Fund $176 Ice Arena Special Revenue Fund 4,081 Stateline Capital Projects Fund 3,095,754 Motor Pool Internal Service Fund 119,910 The above deficits are expected to be eliminated by future revenues. NOTE 9 PENSION PLANS A. Deferred Compensation Plan City employees may defer a portion of their compensation under a City sponsored Deferred Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this Plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency defined by the Plan. The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City s property and are not subject to City control, they have been excluded from these financial statements. 80

89 NOTE 9 PENSION PLANS (Continued) NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 B. California Public Employees Retirement System Substantially all full time City employees are eligible to participate in pension plans offered by California Public Employees Retirement System (CALPERS), an agent multiple employer defined benefit pension plan which acts as a common investment and administrative agent for its participating member employers. CALPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. The City s employees participate in the separate Safety (police and fire) and Miscellaneous (all other) Employee Plans. Benefit provisions under both Plans are established by State statute and City resolution. Benefits are based on years of credited service, equal to one year of full time employment. Funding contributions for both Plans are determined annually on an actuarial basis as of September 30 by CALPERS; the City must contribute these amounts. The Plans provisions and benefits in effect at September 30, 2012, are summarized as follows: Safety Miscellaneous Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life Retirement age Monthly benefits, as a % of annual salary 3% % Required employee contribution rates 9% 8% Required employer contribution rates: % Police Tier % Police Tier % Police Tier % Fire Tier % Fire Tier % Fire Tier % The City s labor contracts for miscellaneous and certain public safety employees require it to pay employee contributions as well as its own. CALPERS determines contribution requirements using a modification of the Entry Age Normal Method. Under this method, the City s total normal benefit cost for each employee from date of hire to date of retirement is expressed as a level percentage of the related total payroll cost. Normal benefit cost under this method is the level amount the City must pay annually to fund an employee s projected retirement benefit. This level percentage of payroll method is used to amortize any unfunded actuarial liabilities. The actuarial assumptions used to compute contribution requirements are also used to compute the actuarial accrued liability. The City uses the actuarially determined percentages of payroll to calculate and pay contributions to CALPERS. The City does not have a net pension obligation since it pays these actuarially required contributions monthly. Annual Pension Costs, representing the payment of all contributions required by CALPERS, for the last three fiscal years were as follows: 81

90 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 9 PENSION PLANS (Continued) Annual Percentage Net Fiscal Year Pension of APC Pension Ending Cost (APC) Contributed Obligation Miscellaneous Plan September 30, 2010 $1,280, % $0 September 30, ,405, % 0 September 30, ,905, % 0 Safety Plan September 30, 2010 $2,246, % $0 September 30, ,852, % 0 September 30, ,952, % 0 CALPERS uses the market related value method of valuing the Plan s assets. An investment rate of return of 7.50% is assumed, including inflation at 3.0%. Annual salary increases are assumed to vary by duration of service. The City s unfunded actuarial accrued liability is being amortized as a level percentage of payroll on a closed basis. The remaining amortization period ends eleven and nineteen years after the valuation date for Miscellaneous and Safety, respectively. The Miscellaneous Plan s actuarial value (which differs from fair value) and funding progress over the past three years are set forth below at their actuarial valuation date of June 30: Miscellaneous Plan: Actuarial Annual Unfunded Valuation Accrued Unfunded Funded Covered Liability as a Date Liability Value of Assets Liability Ratio Payroll % of Payroll 2009 $61,600,443 $49,615,954 $11,984, % $8,658, % ,583,750 51,921,442 13,662, % 7,861, % ,111,763 54,406,816 15,704, % 7,673, % As required by State law, effective July 1, 2005, the City s Safety Police and Fire Plans were terminated, and the employees in those plans were required by CALPERS to join State-wide pools. One of the conditions of entry to these pools was that the City true-up any unfunded liabilities in the former Plans, either by paying cash or by increasing its future contribution rates through a Side Fund offered by CALPERS. The City satisfied its Safety Police and Fire Plans liabilities of $6,020,686 and $5,653,098, respectively, by agreeing to contribute those amounts to the Side Fund through an addition to its normal contribution rates over the following 18 years for both Plans. 82

91 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 9 PENSION PLANS (Continued) CALPERS has calculated actuarial values funding progress for all pool participants in total which is presented below at June 30: Safety Plan: Actuarial Unfunded Valuation Entry Age Accrued Unfunded Funded Annual Covered Liability as a Date Liability Value of Assets Liability Ratio Payroll % of Payroll 2009 $9,721,675,347 $8,027,158,724 $1,694,516, % $973,814, % ,165,475,166 8,470,235,152 1,695,240, % 955,980, % ,951,745,049 9,135,654,246 1,816,090, % 949,833, % Audited annual financial statements are available from CALPERS at P.O. Box , Sacramento, CA C. Other Postemployment Benefits The City provides postretirement health, dental, and vision care benefits for retirees under the City of South Lake Tahoe Other Post Employment Benefit Plan, a single-employer defined benefit healthcare plan. The benefits vary depending upon the years of service of the retiree. Employees hired on or after January 1, 2008 will participate in a Retiree Medical Savings Account (RMSA) instead of being eligible to continue to participate in the City s health plan during retirement. Financial statement information is included in the City s Basic Financial Statements in the Retiree Health Savings Plan Trust Fund. The City provides for continued membership in the City s Medical / Dental Plan and pays a percentage of the retiree s premiums as follows: Years of Service Percent of Premiums less than 10 0% % % + 5% for each additional year % + 5% for each additional year % The City elected to establish an irrevocable trust to provide a funding mechanism for the OPEB and the activities of the Trust are accounted for in the Retiree Health Savings Plan Trust Fund. 83

92 NOTE 9 - PENSION PLANS (Continued) NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 Funding Policy and Actuarial Assumptions The City s policy is to prefund these benefits by accumulating assets in the Trust Fund discussed above pursuant to City Council Resolution (Resolution). Projections of benefits for financial reporting purposes are based on the substantive plan (the plan understood by employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of calculations. The annual required contribution (ARC) was determined as part of a September 30, 2010, actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) an investment trend of increasing rate of return from 5.10% in 2012 to 6.50% for years starting 2034, (b) 3.25% projected annual salary increase, and (c) a healthcare trend of declining annual increases ranging from 10% in 2013 to 5% for years starting The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations and new estimates are made about the future. The City s OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis using a 30-year amortization period. In accordance with the Resolution, the City s annual contributions to the Plan are based on pay-as-yougo financing plus an additional amount to prefund benefits as determined by the Council. Generally accepted accounting principles permit assets to be treated as OPEB assets and deducted from the Actuarial Accrued Liability when such assets are placed in an irrevocable trust or equivalent arrangement. During the fiscal year ended September 30, 2012, the City contributed $2,277,250 to the Plan, including $1,879,250 for pay-as-you-go premiums plus an additional $398,000 to prefund benefits. As a result, the City has calculated and recorded the Net OPEB Obligation, representing the difference between the ARC, and contributions, as presented below: Annual required contribution (ARC) $4,187,000 Investment (income)/loss on Net OPEB asset (79,000) Adjustment to ARC 157,000 Annual OPEB cost 4,265,000 Contributions made: City's portion of current year premiums paid 1,879,250 Contributions to the trust 398,000 Total contributions 2,277,250 (Decrease) increase in net OPEB asset (1,987,750) Net OPEB asset September 30, ,662,618 Net OPEB obligation September 30, 2012 ($325,132) 84

93 NOTE 9 - PENSION PLANS (Continued) NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 The Plan s annual required contributions and actual contributions for the year ended September 30, are as follows: Fiscal Year Annual OPEB Cost (AOC) Actual Contribution Percentage of AOC Contributed Net OPEB Asset (Obligation) 9/30/2010 $1,973,894 $2,082, % $1,698,348 9/30/2011 2,260,059 2,224,329 98% 1,662,618 9/30/2012 4,265,000 2,277,250 53% (325,132) The Schedule of Funding Progress presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Trend data from the actuarial studies is presented below: Overfunded (Underfunded) Actuarial Actuarial Overfunded Liability as (Underfunded) Percentage Valuation Value of Accrued Accrued Funded Covered of Covered Date Assets Liability Liability Ratio Payroll Payroll 1/1/2007 $0 $31,126,000 ($31,126,000) 0% $14,797, % 9/30/2008 3,040,000 28,860,000 (25,820,000) 11% $12,622, % 9/30/2010 4,262,000 48,252,000 (43,990,000) 9% 10,218, % NOTE 10 - RISK MANAGEMENT A. Insurance Coverage The City is a member of the Public Agency Risk Sharing Authority of California (PARSAC), a joint powers authority which provides annual general liability coverage up to $35,000,000 in the aggregate. The City retains the risk for the first $250,000 in general liability claims. The City is a member of Local Agency Workers Compensation Excess Joint Powers Authority (LAWCX), which provides workers compensation insurance coverage up to $45,000,000. The City retains the risk of the first $500,000 in losses for each accident and employee under this policy. PARSAC and LAWCX were established for the purpose of providing general liability and excess workers compensation protection for their members. Each entity is governed by a board consisting of representatives from member municipalities. The board controls the operations of each entity, including selection of management and approval of the annual budget. Financial statements for the Authority may be obtained from PARSAC, 1525 Response Road, Suite One, Sacramento, CA Audited financial statements are available from LAWCX at 6371 Auburn Boulevard, Citrus Heights, California

94 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 10 - RISK MANAGEMENT (Continued) The City is self-insured for medical and vision care up to a maximum $125,000 per person, per year, based on years of service. Claims are funded on a pay-as-you-go basis. During the year ended September 30, 2012, the City paid $2,422,687 and $76,734 in medical, dental and vision claims, respectively. B. Liability for Uninsured Claims The Governmental Accounting Standards Board (GASB) requires municipalities to record their liability for uninsured claims and to reflect the current portion of this liability as an expenditure in their financial statements. As discussed above, the City has coverage for such claims, but it has retained the risk for the deductible, or uninsured portion of these claims. The City s liability for uninsured claims is limited to worker s compensation, general liability claims, as discussed above, and was estimated by management based on prior years claims experience as follows: Workers' Compensation Claims 2012 General Liability Claims Totals 2011 Beginning Balance $2,014,338 $33,240 $2,047,578 $1,854,201 Liability for current fiscal year claims and claims incurred but not reported (IBNR) 3,293, ,294,521 2,685,597 Claims paid (2,639,425) (2,340) (2,641,765) (2,492,220) Ending Balance $2,668,714 $31,620 $2,700,334 $2,047,578 Balance due within one year $900,000 $31,620 $931,620 $933,240 In addition to the above amounts, the City has also restricted $750,000 of general fund balance for general liability future claims to comply with requirements of PARSAC. NOTE 11 - SOUTH LAKE TAHOE BASIN WASTE MANAGEMENT AUTHORITY The City, El Dorado County, California, and Douglas County, Nevada, formed the South Lake Tahoe Basin Waste Management Authority on February 17, 1994, to provide cost effective management of solid waste generated in the Southern Tahoe Basin. The Authority is a separate legal entity and exercises full powers and authorities within the scope of the related Joint Powers Agreement including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Obligations and liabilities of the Authority are not those of the City. The Authority is governed by a board consisting of representatives from each member agency. The board controls the operations of the Authority, including selection of management and approval of operating budgets, independent of any influence by member agencies beyond their representation on the Board. 86

95 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 11 - SOUTH LAKE TAHOE BASIN WASTE MANAGEMENT AUTHORITY (Continued) In fiscal the Authority signed agreements with a third party operator to operate a materials recovery facility (MRF) constructed on a site owned by the operator. As of September 30, 1995, the Authority loaned the operator funds to construct the MRF. In addition, during fiscal the authority loaned the operator an additional $35,500 and $106,186 for the acquisition of a conveyer belt and construction of the building, respectively. The loans were paid off in fiscal The City acts as the fiscal agent for the Authority. The Authority s assets and liabilities are, therefore, included within the City s Agency Funds. NOTE 12 - PARK AVENUE COMMUNITY FACILITIES DISTRICT NO BONDS, WITHOUT AGENCY COMMITMENT In prior years, the Agency sponsored the issuance of the Community Facilities District No , Special Tax Bonds which were used to finance certain improvements as part of the Park Avenue Project (See Note 5). In 2008 the Community Facilities District No Bonds were refunded by issuing Series 2007 Special Tax Refunding Bonds. The outstanding balance of these bonds at September 30, 2012, was $6,705,000. The Bonds are repayable from special taxes to be assessed on properties in the District. These assessments are to be used to repay debt service on the Bonds and other expenditures of the District. The Agency acts solely as the collecting and paying agent for the District s Bonds, but it has no direct or contingent liability or moral obligation for the payment of this debt, which is not included in the general debt of the Agency. NOTE 13 - COMMITMENTS & CONTINGENCIES The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City. The City participates in several federal and State grant programs. These programs have been audited by the City's independent accountants in accordance with the provisions of the Federal Single Audit Act amendments of 1996 and applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. 87

96 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 13 - COMMITMENTS & CONTINGENCIES (Continued) A. MV Transportation v. City of South Lake Tahoe, et al. This is a complaint filed in the Nevada Bankruptcy Court against South Tahoe Area Transit Authority ( STATA ), each member entity of STATA (Tahoe Transportation District, Tahoe Regional Planning Agency, Douglas County, Heavenly Valley, L.P., the Ridge Tahoe Property Owners Association, Columbia Properties Tahoe, LLC dba Montbleu, Lake Tahoe Casino Reality, I, LLC, dba Lake Tahoe Horizon Casino and Resort, LV Casino LLC dba Lake Tahoe Horizon Casino and Resort; Harrah s Operating Company, Inc.; Harvey s Tahoe Management Company, Inc. Lakeside Inn, Inc., dba Lakeside Inn and Casino and the individual members of the Board of Directors of STATA), and the individual representatives of these member entities (Kathay Lovell and Rick Angelocci for the City). The original lawsuit was filed by MV Transportation in El Dorado County in June Once STATA filed for bankruptcy on September 13, 2010, the case was transferred to bankruptcy court in Reno, Nevada. MV filed their First Amended Complaint on November 1, MV Transportation has alleged a breach of contract by STATA. MV Transportation claims it is owed over $3 million in payments. The City (and all other defendants) filed a Motion to Dismiss the eleven causes of action against the City in the adversarial action. On March 14, 2011, the court heard the matter and granted Motions to Dismiss on all eleven causes of action against the City. Seven of the causes of action were dismissed without leave to amend. These include: breach of contract; breach of implied covenant of good faith and fair dealing; negligence; alter ego; unjust enrichment; quantum merit; and constructive trust. Four of the causes of action were dismissed with leave to amend. MV Transportation was given until April 22, 2011, to re-file a complaint on the four causes of action which it may amend. These causes of action include: third party beneficiary; negligent misrepresentation; conspiracy; and interference with contractual relations. The City has filed another Motion to Dismiss, which was to be heard on August The Bankruptcy Court has continued the hearing indefinitely until the other motions in the case are heard, on which the City is not taking a position. The motion was expected to be heard in the Spring of In January of 2013, the Court concluded the hearing on all of the Defendant s Motions to Dismiss against the Adversarial Complaints Filed by MV Transportation and the Trustee. Parties were ordered to mediation which is expected to occur in April or May The City will vigorously defend this action and believes there is a strong likelihood that the case will be dismissed against the City. If MV Transportation prevails against the City, MV will seek $3 million from the member entities for the debt of STATA. The $3 million dollars will be split among the member entities. The City s potential share will likely be in excess of $300,000. NOTE 14 RELATED PARTY TRANSACTIONS The GIFT fund was incorporated as a 501(C)3 non-profit corporation with the California Secretary of State in March, The fund was subsequently granted tax exempt status by the Franchise Tax Board of the State of California and the Internal Revenue Service. The formation of GIFT was supported by the City Council of the City of South Lake Tahoe with the intent to promote, develop and support the City of South Lake Tahoe s park, recreation, public safety, neighborhood improvement and cultural art programs and projects through the tax exempt donations of private individuals. 88

97 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 14 RELATED PARTY TRANSACTIONS (Continued) The GIFT bylaws require a board of between five to seven elected members that serve two year terms. One annual meeting of the board is required as is the filing of an annual tax return. The board has almost exclusively consisted of City employees. Tax returns have been filed each year however the board has not been regularly conducting its annual meeting. For fiscal year no donations were collected, and $250 was disbursed. The bank balance of the GIFT fund as of September 30, 2012 was $37,855. The current GIFT board will in the next year emphasize the recruitment of new board members who are not City employees, with the goal of continuing to promote, develop and support the City of South Lake Tahoe s park, recreation, public safety, neighborhood improvement, cultural art programs and projects. NOTE 15 REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES A. Redevelopment Dissolution In an effort to balance its budget, the State of California adopted ABx1 26 on June 28, 2011, amended by AB 1484 on June 27, 2012, which suspended all new redevelopment activities except for limited specified activities as of that date and dissolved redevelopment agencies on February 1, The suspension provisions prohibited all redevelopment agencies from a wide range of activities, including incurring new indebtedness or obligations, entering into or modifying agreements or contracts, acquiring or disposing of real property, taking actions to adopt or amend redevelopment plans and other similar actions, except actions required by law or to carry out existing enforceable obligations, as defined in ABx1 26. In addition, ABx1 26 directed the State Controller to review the activities of all redevelopment agencies and successor agencies to determine whether an asset transfer, as defined in AB 1484, between an agency and any public agency or private party occurred on or after January 1, If an asset transfer did occur and the public agency that received the asset is not contractually committed to a third party for the expenditure or encumbrance of the asset, the legislation purports to the require the State Controller to order the asset returned to the redevelopment agency. The State Controller s Office has not completed its asset transfer review. Effective February 1, 2012, the Redevelopment Agency was dissolved. Certain assets of the Redevelopment Agency were to be distributed to a Housing Successor and all remaining Redevelopment Agency assets and liabilities were to be distributed to a Successor Agency. Under the provisions of AB 1484, the City can elect to become the Housing Successor and retain the housing assets. The City elected to become the Housing Successor and on February 1, 2012, certain housing assets were transferred to the City s Housing and Economic Development Special Revenue Fund. The City also elected to become the Successor Agency and on February 1, 2012, the Redevelopment Agency s remaining assets were distributed to and liabilities were assumed by the Successor Agency. 89

98 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 15 REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) ABx1 26 requires the establishment of an Oversight Board to oversee the activities of the Successor Agency and one was established on April 30, The activities of the Successor Agency are subject to review and approval of the Oversight Board, which is comprised of seven members, including one member of the City Council and one former Redevelopment Agency employee appointed by the Mayor. The activities of the Housing Successor are reported in the City Housing & Economic Development Special Revenue Fund as the City has control of those assets, which may be used in accordance with the low and moderate income housing provisions of California Redevelopment Law. The activities of the Successor Agency are reported in the Redevelopment Obligation Retirement Private- Purpose Trust Fund as the activities are under the control of the Oversight Board. The City provides administrative services to the Successor Agency to wind down the affairs of the former Redevelopment Agency. Assets and Transfer to Transfer to Ending Liabilities Successor Housing Balance (Prior to transfer) Agency Successor February 1, 2012 ASSET S Current assets: Cash and investments available for operations $17,868,337 $17,867,773 $564 Accounts Receivable 10,470 10,470 Loan Receivable 29,585,289 29,585,289 Advances to other funds 1,289,540 1,289,540 Total current assets 48,753,636 48,753, Noncurrent assets: Land held for resale 479, ,727 Capital Assets: Land 13,083,846 13,083,846 Depreciable capital assets, net 7,194,748 7,194,748 Total noncurrent assets 20,758,321 20,758,321 Total Assets 69,511,957 69,511, LIABILITIES Current liabilities: Accounts payable $166,309 $166,309 Deferred revenue 29,585,289 29,585,289 Customer deposits 2,564 2,564 Advances from other funds 6,490,606 6,490,606 Due to the City 500, ,000 Long-term debt: Notes due in one year 1,605,000 1,605,000 Notes due in more than one year 81,345,000 81,345,000 Total liabilities 119,694, ,694,768 NET ASSETS ($50,182,811) ($50,183,375) $564 90

99 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 15 REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) B. Cash Cash and investments of the Successor Agency as of September 30, 2012 are discussed in Note 3 above. Information presented in the following footnotes represents other assets and liabilities of the Successor Agency as of September 30, C. Capital Assets The Successor Agency assumed the capital assets of the Redevelopment Agency as of February 1, Capital assets recorded at September 30 comprise: Capital assets not being depreciated: Transfer From Redevelopment Agency Balance at February 1, 2012 Additions September 30, 2012 Land $13,083,846 $13,083,846 Total capital assets not being depreciated 13,083,846 13,083,846 Capital assets being depreciated: Streets 3,287,695 3,287,695 Streetscape 4,844,069 4,844,069 Basin/SEZ Construction 1,807,922 1,807,922 Total capital assets being depreciated 9,939,686 9,939,686 Less accumulated depreciation for: Streets (760,279) ($54,795) (815,074) Streetscape (1,461,738) (107,803) (1,569,541) Basin/SEZ Construction (522,921) (40,866) (563,787) Total accumulated depreciation (2,744,938) (203,464) (2,948,402) Net capital assets being depreciated 7,194,748 (203,464) 6,991,284 Capital assets, net $20,278,594 ($203,464) $20,075,130 91

100 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 15 REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) D. Long-Term Debt As discussed in Note 7, the Successor Agency assumed the long-term debt of the Redevelopment Agency as of February 1, Current year balances are as follows: Transfer from Amounts Due Redevelopment Agency Balance at Current in More Than as of February 1, 2012 September 30, 2012 Portion One Year Fiduciary Activities Redevelopment Agency Obligations Refunding Revenue Bonds, 1999 Series A, 4.0% %, due serially until 10/1/30 $8,090,000 $8,090,000 $125,000 $7,965,000 Refunding Revenue Bonds, 2003 Series A, 2.0% -5.45%, due serially until 10/1/33 10,610,000 10,610,000 45,000 10,565,000 Refunding Revenue Bonds, 2004 Series A, 2.0% - 5.0%, due serially until 10/1/34 11,270,000 11,270, ,000 11,065,000 Refunding Revenue Bonds, 2005 Series A, 5.0%, due serially until 10/1/35 33,350,000 33,350,000 1,025,000 32,325,000 Refunding Revenue Bonds, 2007 Series A 4.0%-5.0% due serially until 10/1/38 19,630,000 19,630, ,000 19,425,000 Total $82,950,000 $82,950,000 $1,605,000 $81,345,000 The annual debt service requirements to maturity for the outstanding debt at September 30, 2012, were as follows: Fiduciary Funds For the Year Ending September 30 Principal Interest 2013 $1,605,000 $4,144, ,680,000 4,067, ,765,000 3,985, ,850,000 3,897, ,945,000 3,804, ,270,000 17,470, ,440,000 14,301, ,620,000 10,121, ,170,000 4,573, ,605, ,125 Total $82,950,000 $66,504,785 Refunding Revenue Bonds, 1999 Series A On April 1, 1999, the South Tahoe Joint Powers Financing Authority issued the Refunding Revenue Bonds, 1999 Series A, the proceeds of which were used to advance refund and retire the outstanding Subordinate Bond Anticipation Notes, 1996 Series A, ( Refunded Bonds ). Interest on the 1999 Series A Bonds is payable semiannually on each April 1 and October 1. Principal matures annually each October 1. Principal on the 1999 Series A Bonds maturing on October 1, 2021 and 2030 is subject to mandatory redemption commencing October 1, 2016 and 2022, respectively. 92

101 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 15 REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) Refunding Revenue Bonds, 2003 Series A and Subordinate Bond Anticipation Notes, 2003 Series B On May 1, 2003, the South Lake Tahoe Joint Powers Financing Authority issued the Refunding Revenue Bonds, 2003 Series A and Subordinate Bond Anticipation Notes, 2003 Series B, the proceeds of which were used to advance refund the outstanding Subordinate Bond Anticipation Notes, 1999 Series A and 1999 Series B, ( Refunded Bonds ), and to make improvements in the Project Area. These proceeds, along with Refunded Bonds reserve fund monies, were used to purchase U.S. government securities which were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the Refunded Bonds. Interest on the 2003 Series A Bonds is payable semiannually on each April 1 and October 1. Principal matures annually each October 1. Principal on the 2003 Series A Bonds maturing on October 1, 2027, and 2033 is subject to mandatory redemption commencing October 1, 2021 and 2028, respectively. Refunding of the Subordinate Bond Anticipation Notes, 2003 Series B $9.4 million was advance refunded in fiscal year 2004, $9.9 million was advance refunded in fiscal year 2005, $18.6 million was refunded in fiscal year 2007, as discussed below. Refunding Revenue Bonds, 2004 Series A On August 19, 2004, the South Tahoe Joint Powers Financing Authority issued $12,205,000 principal amount of Refunding Revenue Bonds, 2004 Series A, the proceeds of which were used to refund $9,400,000 of the outstanding Subordinate Bond Anticipation Notes, 2003 Series A, ( Refunded Bonds ) and to provide financing for redevelopment activities. Interest on the 2004 Series A Bonds is payable semiannually on April 1 and October 1. Principal matures annually on October 1. Principal on the 2004 Series A Bonds maturing October 1, 2029 and 2034 are subject to mandatory redemption commencing 2021 and 2030, respectively. Refunding Revenue Bonds, 2005 Series A In fiscal , the Agency issued $39,255,000 principal amount of Refunding Revenue Bonds, 2005 Series A, the proceeds of which were used to refund the portion of the Authority s Subordinate Bond Anticipation Notes (South Tahoe Redevelopment Project Area No. 1) 2003 Series B maturing October 1, 2005 in the principal amount of $9,900,000, to refund the Authority s $28,555,000 Refunding Revenue Bonds (South Tahoe Redevelopment Project Area No.1) 1995 Series B, of which $25,215,000 remain outstanding, to make a deposit to the Reserve Account in connection with the issuance of the 2005 Bonds and to pay the costs of issuance of the 2005 Bonds. As a result of the refunding, the aggregate debt service was decreased by $3,156,809 and the economic gain of $1,933,384 was realized. Interest of the 2005 Bonds is payable on October 1, 2005 and semiannually thereafter on April 1 and October 1 of each year. 93

102 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 15 REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) Refunding Revenue Bonds 2007 Series A On August 2, 2007, the South Tahoe Joint Powers Financing Authority issued the Refunding Revenue Bonds 2007 Series A, the proceeds of which were used to refund and retire the Subordinate Bond Anticipation Notes, 2003 Series B. Interest on the Refunding Bonds Series A is payable semiannually on each April 1 and October 1. Principal matures annually on October 1. Pledged Revenue Debt service on the 2007 Series A, 2005 Series A, 2004 Series A, 2003 Series A Bonds, and the 1999 Series A Bonds are secured by and are repayable from a primary pledge of property tax increment received by the Agency. Transient occupancy tax revenues levied by the Agency are pledged as a secondary revenue source, but only to the extent that property tax increment is insufficient to pay bond debt service, and only for bond debt service. Transient occupancy tax revenues levied by the Agency which are not used for debt service on the Bonds revert to the City. The Agency has pledged all future tax increment revenues for the repayment of the 1999, 2003, 2004, 2005, and 2007 Refunding Revenue Bonds. The pledge of all future tax increment revenues ends upon repayment of $149,454,785 remaining debt service on the Bonds, which is scheduled to occur in With the dissolution of the Redevelopment Agency discussed above, Tax Increment is no longer distributed, and instead the Successor Agency receives payments from the County s Redevelopment Property Tax Trust Fund (RPTTF) that are to be used to fund debt service on the Bonds, with no distinction between housing and non-housing revenues. Using both property taxes received by the redevelopment Agency prior to the dissolution and by the Successor Agency after the dissolution total collections were $5,286,900 which represented coverage of 115% of the $4,585,293 of debt service. Defeased Bonds As of September 30, 2012, the Agency had three defeased bond issues. Outstanding balances for the refunded portion of the Refunding Revenue Bonds, 1995 Series B was $22,810,000. Outstanding balances for the refunded portion of the Subordinate Bond Anticipation Notes, 1999 Series A and B was $8,090,000, which was refunded by the Subordinate Bond Anticipation Notes, 2003 Series A. In fiscal 2005, the Subordinate Bond Anticipation Notes, 2003 Series A was partially refunded by the Refunding Revenue Bonds, 2005 Series A. The outstanding balance for the refunded portion of the Subordinate Bond Anticipation Notes, 2003 Series A was $10,610,

103 NOTES TO THE BASIC FINANCIAL STATEMENTS For the Year Ended September 30, 2012 NOTE 15 REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued) E. Commitments and Contingencies State Approval of Enforceable Obligations The Successor Agency prepares a Recognized Obligation Payment Schedule (ROPS) semi-annually that contains all proposed expenditures for the subsequent six-month period. The ROPS is subject to the review and approval of the Oversight Board as well as the State Department of Finance. Although the State Department of Finance may not question items included on the ROPS in one period, they may question the same items in a future period and disallow associated activities. The amount, if any, of current obligations that may be denied by the State Department of Finance cannot be determined at this time. The Successor Agency expects such amounts, if any, to be immaterial. State Asset Transfer Review The activities of the former Redevelopment Agency and the Successor Agency are subject to further examination by the State of California and the amount, if any, of expenditures which may be disallowed by the State cannot be determined at this time. In addition, the State Controller s Office will be conducting a review of the propriety of asset transfers between the former Redevelopment Agency or the Successor Agency and any public agency that occurred on or after January 1, 2011 and the amount, if any, of assets that may be required to be returned to the Successor Agency cannot be determined at this time. The Successor Agency expects such amounts, if any, to be immaterial. 95

104 96

105 MAJOR GOVERNMENTAL FUNDS, OTHER THAN GENERAL FUND AND SPECIAL REVENUE FUNDS 97

106 CITY CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2012 Variance Positive Budget Actual (Negative) REVENUES Intergovernmental revenue $21,538,551 $9,557,158 ($11,981,393) Charges for current services 37,468 37,468 Use of money and property 11,758 11,758 Other revenue 23,340 23,340 Total Revenues 21,538,551 9,629,724 (11,908,827) EXPENDITURES General government 172,458 (172,458) Capital outlay 26,672,685 11,506,380 15,166,305 Debt service: Interest and fiscal charges 37,468 (37,468) Total Expenditures 26,672,685 11,716,306 14,956,379 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (5,134,134) (2,086,582) 3,047,552 OTHER FINANCING SOURCES (USES) Transfers in 5,000, ,802 (4,411,198) Transfers (out) (1,151,332) (301,947) 849,385 Total Other Financing Sources (Uses) 3,848, ,855 (3,561,813) NET CHANGE IN FUND BALANCES ($1,285,466) (1,799,727) ($514,261) BEGINNING FUND BALANCE 3,455,013 ENDING FUND BALANCE $1,655,286 98

107 REDEVELOPMENT DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE PERIOD OCTOBER 1, 2011 TO FEBRUARY 1, 2012 Variance Positive Budget Actual (Negative) REVENUES Taxes and assessments $3,736,747 $3,736,747 Use of money and property 5,491 7,491 $2,000 Total Revenues 3,742,238 3,744,238 2,000 EXPENDITURES General government 150, ,701 (1) Debt service: Principal 2,642,458 2,642,458 Interest and fiscal charges 2,607,845 2,607,845 Total Expenditures 5,401,003 5,401,004 (1) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,658,765) (1,656,766) 1,999 OTHER FINANCING SOURCES (USES) Transfers in 145, ,400 Transfers (out) (3,142,791) (2,548,317) 594,474 Total Other Financing Sources (Uses) (2,997,391) (2,402,917) 594,474 NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS (4,656,156) (4,059,683) 596,473 EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency (8,791,425) NET CHANGE IN FUND BALANCE ($4,656,156) (12,851,108) $596,473 BEGINNING FUND BALANCE 12,851,108 ENDING FUND BALANCE 99

108 CITY DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2012 Variance Positive Budget Actual (Negative) REVENUES Use of money and property $2,800 $2,369 ($431) Total Revenues 2,800 2,369 (431) EXPENDITURES General government 15,000 15,000 Debt service: Principal Interest and fiscal charges 610, , ,969 Total Expenditures 625, , ,969 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (622,741) (493,203) 129,538 OTHER FINANCING SOURCES (USES) Issuance of debt 5,753,842 5,765,000 11,158 Transfers in 3,669,938 3,033,711 (636,227) Transfers (out) (588,802) (588,802) Total Other Financing Sources (Uses) 9,423,780 8,209,909 (1,213,871) NET CHANGE IN FUND BALANCES $8,801,039 7,716,706 ($1,084,333) BEGINNING FUND BALANCE ENDING FUND BALANCE $7,716,

109 NON-MAJOR GOVERNMENTAL FUNDS 101

110 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2012 SPECIAL REVENUE FUNDS Low/Moderate CLEEP Income Snow Gas Tax Grant Housing Redevelopment Removal ASSETS Cash and investments available for City operations $425,808 $579 $836,368 Accounts receivable - net 37,306 Advances to other funds Total Assets $463,114 $579 $836,368 LIABILITIES Accounts payable $51,529 $13,400 Due to other funds Deposits Advances from other funds Total Liabilities 51,529 13,400 FUND BALANCE Nonspendable Restricted 411,585 $ ,968 Committed Unassigned Total Fund Balances 411, ,968 Total Liabilities and Fund Balances $463,114 $579 $836,

111 SPECIAL REVENUE FUNDS Vehicle Solid Safety AB3229 Local Law Asset Street Replacement Waste Sales Tax COPS Enforcement Forfeiture Sweeping EMS $141,081 $168,484 $81,017 $58,758 $3,629 $66,717 $244,863 46,136 17,088 $585, ,723 $418,804 $168,484 $127,153 $58,758 $3,629 $66,717 $261,951 $585,429 $7,637 $2,328 $2,159 $2,714 $37,351 $ ,473 7,637 2,328 2,159 2,714 37, ,249 $277, ,081 $168, ,516 56,430 1,470 64, , , , , ,516 56,430 1,470 64, , ,180 $418,804 $168,484 $127,153 $58,758 $3,629 $66,717 $261,951 $585,429 (Continued) 103

112 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2012 SPECIAL REVENUE FUNDS Ski Run General Plan/ Clean Business Measure S Community Community Abatement Improvement Maintenance Plan ASSETS Cash and investments available for City operations $5,084 $197,608 $8,936 $301,859 $60,041 Accounts receivable - net 38,930 43,328 Advances to other funds Total Assets $44,014 $240,936 $8,936 $301,859 $60,041 LIABILITIES Accounts payable $284 $3,587 $155 Due to other funds Deposits Advances from other funds FUND BALANCE Total Liabilities 284 3, Nonspendable Restricted 43, ,349 $8, ,704 $60,041 Committed Unassigned Total Fund Balances 43, ,349 8, ,704 60,041 Total Liabilities and Fund Balances $44,014 $240,936 $8,936 $301,859 $60,

113 SPECIAL REVENUE FUNDS DUI/ Domestic Traffic Explore Tourism Vacation Boat Violence Safety Tahoe Improvement Home Patrol Grant Grant Transit Center District Arts Program Safe Haven Rental Program $51,002 $542,228 $16 $175,393 $48,307 $77,023 3,079 $48,307 $77,023 $54,081 $542,228 $16 $175,393 $3,879 $20,793 $3,779 $536,140 $246 27,854 56,406 3,500 31,733 77,199 7, , ,574 46,802 6,088 $16 175,147 (176) 16,574 (176) 46,802 6, ,147 $48,307 $77,023 $54,081 $542,228 $16 $175,393 (Continued) 105

114 NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2012 SPECIAL REVENUE FUNDS CAPITAL PROJECTS FUNDS Redevelopment Avoid Homeland Ice Capital Police Grant Security Arena Equipment Projects ASSETS Cash and investments available for City operations $4,823 $24,616 Accounts receivable - net 9,993 $24,000 Advances to other funds Total Assets $14,816 $24,616 $24,000 LIABILITIES Accounts payable $24,535 $26,346 Due to other funds 1,735 Deposits Advances from other funds FUND EQUITY Total Liabilities 24,535 28,081 Nonspendable Restricted $14, Committed Unassigned (4,081) Total Fund Balances 14, (4,081) Total Liabilities and Fund Balances $14,816 $24,616 $24,

115 CAPITAL PROJECTS FUND Stateline Capital Projects Total Nonmajor Governmental Funds $3,398,910 $2, , ,497 1,184,220 $909,298 $5,516,550 $737,638 $44, ,841 2,564 6,064 3,958,115 3,958,115 4,005,052 5,119, ,497 1,184,220 3,219,180 (4,002,251) (4,006,508) (3,095,754) 396,892 $909,298 $5,516,

116 NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED SEPTEMBER 30, 2012 SPECIAL REVENUE FUNDS Low/Moderate CLEEP Income Snow Gas Tax Grant Housing Redevelopment Removal REVENUES Taxes and assessments $221,344 Licenses, permits and impact fees Fines and penalties Use of money and property $6,351 $3 $2,924 1,576 Intergovernmental revenue 704,828 1,054,373 Charges for current services Other revenue ($1,643) Total Revenues 711, ,924 (1,643) 1,277,293 EXPENDITURES Current: General government 117,640 Public safety Public works Parks and recreation Streets 1,241,887 1,172,061 Capital outlay 918 Debt Service: Principal repayment 176,535 Interest and fiscal charges 33,251 Total Expenditures 1,242, ,640 1,381,847 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (531,626) 3 2,924 (119,283) (104,554) OTHER FINANCING SOURCES (USES) Transfers in 605, , ,868 Transfers (out) (150,544) Total Other Financing Sources (Uses) 605,249 (150,544) 169, ,868 NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS 73,623 3 (147,620) 50, ,314 EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency (1,912,083) (810,988) NET CHANGE IN FUND BALANCES 73,623 3 (2,059,703) (760,280) 286,314 BEGINNING FUND BALANCES (DEFICITS) 337, ,059, , ,654 ENDING FUND BALANCES (DEFICITS) $411,585 $579 $822,

117 SPECIAL REVENUE FUNDS Vehicle Solid Safety AB3229 Local Law Asset Street Replacement Waste Sales Tax COPS Enforcement Forfeiture Sweeping EMS $66,000 $580,248 $912 $ $305 $544 $ ,265 $17,007 18,191 65,998 1,039,036 18,869 66, , ,570 17, ,910 1,039,223 1,615 75,085 65,761 35,792 76, ,660 1, , ,454 9,094 10, ,487 3,103 3,723 7,553 12,197 2,948 89,721 65,761 35,792 76, , ,660 6,672 63, ,310 49,809 (18,785) (75,920) (573,557) 96,563 16, ,037 (425,091) (11,039) (1,722) (15,469) (122,461) (425,091) (11,039) 14,786 (15,469) 246,037 (122,461) 6,672 63,637 66,219 38,770 (3,999) (91,389) (327,520) (25,898) 6,672 63,637 66,219 38,770 (3,999) (91,389) (327,520) (25,898) 412, ,847 53,297 17,660 5, , , ,078 $418,804 $168,484 $119,516 $56,430 $1,470 $64,003 $224,600 $297,180 (Continued) 109

118 NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED SEPTEMBER 30, 2012 SPECIAL REVENUE FUNDS Ski Run General Plan/ Clean Business Measure S Community Community Abatement Improvement Maintenance Plan REVENUES Taxes and assessments Licenses, permits and impact fees $90 Fines and penalties 7,762 Use of money and property $ $1,276 Intergovernmental revenue 6,095 Charges for current services 132,279 $182,456 $2,196 Other revenue 66,750 4 Total Revenues 138, ,456 7,926 68,026 2,200 EXPENDITURES Current: General government Public safety Public works 146, ,732 16,719 7,800 Parks and Recreation 17,994 Streets Capital outlay Debt Service: Principal repayment Interest and fiscal charges Total Expenditures 146, ,732 16,719 17,994 7,800 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (8,221) 29,724 (8,793) 50,032 (5,600) OTHER FINANCING SOURCES (USES) Transfers in Transfers (out) (803) (30,700) Total Other Financing Sources (Uses) (803) (30,700) NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS (9,024) (976) (8,793) 50,032 (5,600) EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency NET CHANGE IN FUND BALANCES (9,024) (976) (8,793) 50,032 (5,600) BEGINNING FUND BALANCES (DEFICITS) 52, ,325 17, ,672 65,641 ENDING FUND BALANCES (DEFICITS) $43,730 $237,349 $8,936 $301,704 $60,

119 SPECIAL REVENUE FUNDS DUI/ Domestic Traffic Explore Tourism Vacation Boat Violence Safety Tahoe Improvement Home Patrol Grant Grant Transit Center District Arts Program Safe Haven Rental Program $80,793 64,001 $148,939 $211,385 5,250 $52,346 $1, ,756 1,932,970 11, , ,939 70,519 1,934, ,472 97,390 82, ,605 79,990 1,915, ,390 82,839 80,521 1,915, ,605 47,404 66,100 (10,002) 19,173 73,867 $57,852 33,182 $19,749 (1,617) (231,344) (150,000) (19,333) (45,141) (1,617) (231,344) 57,852 (116,818) (19,333) 19,749 (45,141) 45,787 (165,244) 57,852 (126,820) (160) 19,749 28,726 45,787 (165,244) 57,852 (126,820) (160) 19,749 28,726 (29,213) 165,068 (57,852) 173,622 6,248 $16 (19,749) 146,421 $16,574 ($176) $46,802 $6,088 $16 $175,147 (Continued) 111

120 NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED SEPTEMBER 30, 2012 SPECIAL REVENUE FUNDS CAPITAL PROJECT FUNDS Redevelopment Avoid Homeland Ice Capital Police Grant Security Arena Equipment Projects REVENUES Taxes and assessments Licenses, permits and impact fees Fines and penalties Use of money and property ($13) Intergovernmental revenue $33,580 Charges for current services $24,000 Other revenue 68,830 Total Revenues 33,580 68,817 24,000 EXPENDITURES Current: General government Public safety 37,808 68,736 Public works Parks and recreation 28,081 Streets Capital outlay $54,635 Debt Service: Principal repayment Interest and fiscal charges Total Expenditures 37,808 68,736 28,081 54,635 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (4,228) 81 (4,081) (54,635) OTHER FINANCING SOURCES (USES) Transfers in 32,983 3,053,364 Transfers (out) (2,461) Total Other Financing Sources (Uses) 30,522 3,053,364 NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS 26, (4,081) 2,998,729 EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency (974,099) NET CHANGE IN FUND BALANCES 26, (4,081) 2,024,630 BEGINNING FUND BALANCES (DEFICITS) (11,478) (2,024,630) ENDING FUND BALANCES (DEFICITS) $14,816 $81 ($4,081) 112

121 CAPITAL PROJECT FUND Stateline Capital Projects Total Nonmajor Governmental Funds $948, ,387 13,012 $43, ,419 2,144,088 2,364,846 1,184,394 43,166 6,980, ,640 1,627, ,263 2,041,548 2,516,402 55, ,029 85, ,717 85,556 7,544,907 (42,390) (564,376) 4,625,783 (3,053,364) (4,261,089) (3,053,364) 364,694 (3,095,754) (199,682) (3,697,170) (3,095,754) (3,896,852) 4,293,744 ($3,095,754) $396,

122 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 LOW & MODERATE GAS TAX INCOME HOUSING Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and assessments Licenses, permits and impact fees Fines and penalties Use of money and property $500 $6,351 $5,851 $2,360 $2,924 $564 Intergovernmental revenue 499, , ,070 Charges for current services Other revenue 500 (500) Total Revenues 500, , ,421 2,360 2, EXPENDITURES Current General government Public safety Public works Streets 1,342,232 1,241, ,345 Parks and recreation Capital outlay 3, ,857 Debt service: Principal repayment Interest and fiscal charges Total Expenditures 1,346,007 1,242, ,202 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (845,249) (531,626) 313,623 2,360 2, OTHER FINANCING SOURCES (USES) Transfers in 605, , ,210 (426,210) Transfers (out) (150,544) (150,544) Total Other Financing Sources (Uses) 605, , ,666 (150,544) (426,210) NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS ($240,000) 73,623 $313,623 $278,026 (147,620) ($425,646) EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency (1,912,083) NET CHANGE IN FUND BALANCE 73,623 (2,059,703) BEGINNING FUND BALANCES (DEFICITS) 337,962 2,059,703 ENDING FUND BALANCES (DEFICITS) $411,

123 REDEVELOPMENT SNOW REMOVAL VEHICLE REPLACEMENT Variance Variance Variance Positive Positive Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $220,000 $221,344 $1,344 $1,642 ($1,643) ($3,285) 2,000 1,576 (424) $1,200 $678 ($522) 953,000 1,054, ,373 16,437 18,191 1,754 1,642 (1,643) (3,285) 1,175,000 1,277, ,293 17,637 18,869 1, , , ,000 30,000 1,528,629 1,172, , , ,535 (7,434) 9,832 9, ,685 33,251 7,434 2,566 3,103 (537) 117, , ,738,415 1,381, ,568 42,398 12,197 30,201 (116,003) (119,283) (3,280) (563,415) (104,554) 458,861 (24,761) 6,672 31, , ,991 41, , ,868 (1) 37,500 (37,500) 128, ,991 41, , ,868 (1) 37,500 (37,500) $12,235 50,708 $38,473 ($172,546) 286,314 $458,860 $12,739 6,672 ($6,067) (810,988) (760,280) 286,314 6, , , ,132 $822,968 $418,804 (Continued) 115

124 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 SOLID WASTE SAFETY SALES TAX Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and assessments $66,000 $66,000 $560,000 $580,248 $20,248 Licenses, permits and impact fees Fines and penalties Use of money and property $535 1, (717) Intergovernmental revenue Charges for current services Other revenue Total Revenues 66,050 66, , ,031 19,531 EXPENDITURES Current General government Public safety 1,615 1,615 83,275 75,085 8,190 Public works 48,071 1,333 46,738 Streets Parks and recreation Capital outlay Debt service: Principal repayment 50,298 10,913 39,385 Interest and fiscal charges 2,839 3,723 (884) Total Expenditures 49,686 2,948 46, ,412 89,721 46,691 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 16,364 63,637 47, , ,310 66,222 OTHER FINANCING SOURCES (USES) Transfers in Transfers (out) (425,091) (425,091) Total Other Financing Sources (Uses) (425,091) (425,091) NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS $16,364 63,637 $47,273 ($3) 66,219 $66,222 EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency NET CHANGE IN FUND BALANCE 63,637 66,219 BEGINNING FUND BALANCES (DEFICITS) 104,847 53,297 ENDING FUND BALANCES (DEFICITS) $168,484 $119,

125 AB3229 COPS LOCAL LAW ENFORCEMENT GRANT ASSET FORFEITURE Variance Variance Variance Positive Positive Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $200 $305 $105 $2,571 $544 ($2,027) 100, ,265 15,265 $31,392 $17,007 ($14,385) 10,000 (10,000) 100, ,570 15,370 31,392 17,007 (14,385) 12, (12,027) 90,200 65,761 24,439 49,999 35,792 14,207 95,785 76,464 19,321 90,200 65,761 24,439 49,999 35,792 14,207 95,785 76,464 19,321 10,000 49,809 39,809 (18,607) (18,785) (178) (83,214) (75,920) 7,294 16,508 16,508 (11,039) (11,039) (1,600) (1,722) (122) (15,469) (15,469) (11,039) (11,039) 14,908 14,786 (122) (15,469) (15,469) ($1,039) 38,770 $39,809 ($3,699) (3,999) ($300) ($98,683) (91,389) $7,294 38,770 (3,999) (91,389) 17,660 5, ,392 $56,430 $1,470 $64,003 (Continued) 117

126 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 STREET SWEEPING EMS Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and assessments Licenses, permits and impact fees $1,500 $912 ($588) Fines and penalties Use of money and property $1,000 $187 ($813) Intergovernmental revenue Charges for current services 89,738 65,998 (23,740) Other revenue 1,132,464 1,039,036 (93,428) Total Revenues 91,238 66,910 (24,328) 1,133,464 1,039,223 (94,241) EXPENDITURES Current General government Public safety 1,094, , ,015 Public works 384, , ,117 Streets 117, ,454 15,060 Parks and recreation Capital outlay Debt service: Principal repayment 250, ,487 1 Interest and fiscal charges 21,970 7,553 14,417 Total Expenditures 774, , ,595 1,094, , ,015 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (682,824) (573,557) 109,267 38,789 96,563 57,774 OTHER FINANCING SOURCES (USES) Transfers in 220, ,037 25,227 Transfers (out) (125,000) (122,461) 2,539 Total Other Financing Sources (Uses) 220, ,037 25,227 (125,000) (122,461) 2,539 NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS ($462,014) (327,520) $134,494 ($86,211) (25,898) $60,313 EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency NET CHANGE IN FUND BALANCE (327,520) (25,898) BEGINNING FUND BALANCES (DEFICITS) 552, ,078 ENDING FUND BALANCES (DEFICITS) $224,600 $297,

127 SKI RUN CLEAN COMMUNITY ABATEMENT BUSINESS IMPROVEMENT Variance Variance Variance Positive Positive Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $90 $90 $10,000 7,762 (2,238) $1,100 $111 ($989) $500 ($500) ,959 6, , ,279 (12,721) 193,000 $182,456 (10,544) 152, ,485 (13,574) 193, ,456 (11,044) 10,000 7,926 (2,074) 158, ,706 11, , ,732 81,198 15,800 16,719 (919) 158, ,706 11, , ,732 81,198 15,800 16,719 (919) (6,546) (8,221) (1,675) (40,430) 29,724 70,154 (5,800) (8,793) (2,993) 6,726 (6,726) 5,000 (5,000) (959) (803) 156 (30,700) (30,700) (959) (803) 156 (23,974) (30,700) (6,726) 5,000 (5,000) ($7,505) (9,024) ($1,519) ($64,404) (976) $63,428 ($800) (8,793) ($7,993) (9,024) (976) (8,793) 52, ,325 17,729 $43,730 $237,349 $8,936 (Continued) 119

128 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 MEASURE S MAINTENANCE GENERAL PLAN/COMMUNITY PLAN Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and assessments Licenses, permits and impact fees Fines and penalties Use of money and property $1,276 $1,276 Intergovernmental revenue Charges for current services $18,000 $2,196 ($15,804) Other revenue $65,000 66,750 1,750 2,000 4 (1,996) Total Revenues 65,000 68,026 3,026 20,000 2,200 (17,800) EXPENDITURES Current General government Public safety Public works 60,302 7,800 52,502 Streets Parks and recreation 97,097 17,994 79,103 Capital outlay Debt service: Principal repayment Interest and fiscal charges Total Expenditures 97,097 17,994 79,103 60,302 7,800 52,502 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (32,097) 50,032 82,129 (40,302) (5,600) (34,702) OTHER FINANCING SOURCES (USES) Transfers in 9,400 (9,400) Transfers (out) Total Other Financing Sources (Uses) 9,400 (9,400) NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS ($22,697) 50,032 $72,729 ($40,302) (5,600) $34,702 EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency NET CHANGE IN FUND BALANCE 50,032 (5,600) BEGINNING FUND BALANCES (DEFICITS) 251,672 65,641 ENDING FUND BALANCES (DEFICITS) $301,704 $60,

129 BOAT PATROL DOMESTIC VIOLENCE GRANT DUI/TRAFFIC SAFETY GRANT Variance Variance Variance Positive Positive Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $80,793 $80,793 73,752 64,001 ($9,751) $213,031 $148,939 ($64,092) 154, ,794 (9,751) 213, ,939 (64,092) 110,447 97,390 13, ,603 82, , ,447 97,390 13, ,603 82, ,764 44,098 47,404 3,306 18,428 66,100 47,672 (1,419) (1,617) (198) (183,229) (231,344) (48,115) $57,852 $57,852 (1,419) (1,617) (198) (183,229) (231,344) (48,115) 57,852 57,852 $42,679 45,787 $3,108 ($164,801) (165,244) ($443) $57,852 57,852 45,787 (165,244) 57,852 (29,213) 165,068 (57,852) $16,574 ($176) (Continued) 121

130 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 EXPLORE TAHOE TRANSIT CENTER TOURISM IMPROVEMENT DISTRICT Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and assessments Licenses, permits and impact fees Fines and penalties Use of money and property $48,700 $52,346 $3,646 $1,686 $1,686 Intergovernmental revenue Charges for current services 17,900 6,756 (11,144) $1,805,000 1,932, ,970 Other revenue 11,417 11,417 Total Revenues 66,600 70,519 3,919 1,805,000 1,934, ,656 EXPENDITURES Current General government Public safety Public works 99,782 79,990 19,792 Streets Parks and recreation 1,786,950 1,915,483 (128,533) Capital outlay Debt service: Principal repayment Interest and fiscal charges 531 (531) Total Expenditures 99,782 80,521 19,261 1,786,950 1,915,483 (128,533) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (33,182) (10,002) 23,180 18,050 19,173 1,123 OTHER FINANCING SOURCES (USES) Transfers in 33,182 33,182 Transfers (out) (150,000) (150,000) (18,050) (19,333) (1,283) Total Other Financing Sources (Uses) (116,818) (116,818) (18,050) (19,333) (1,283) NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS ($150,000) (126,820) $23,180 (160) ($160) EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency NET CHANGE IN FUND BALANCE (126,820) (160) BEGINNING FUND BALANCES (DEFICITS) 173,622 6,248 ENDING FUND BALANCES (DEFICITS) $46,802 $6,

131 SAFE HAVEN VACATION HOME RENTAL PROGRAMS AVOID POLICE GRANT Variance Variance Variance Positive Positive Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $175,000 $211,385 $36, ,250 4, $240,748 $33,580 ($207,168) 175, ,472 41, ,748 33,580 (207,168) 132, ,605 (10,677) 226,207 37, , , ,605 (10,677) 226,207 37, ,399 42,572 73,867 31,295 14,541 (4,228) (18,769) $19,749 $19,749 32,983 32,983 (45,141) (45,141) (14,542) (2,461) 12,081 19,749 19,749 (45,141) (45,141) 18,441 30,522 12,081 $19,749 19,749 ($2,569) 28,726 $31,295 $32,982 26,294 ($6,688) 19,749 28,726 26,294 (19,749) 146,421 (11,478) $175,147 $14,816 (Continued) 123

132 BUDGETED NON-MAJOR FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 HOMELAND SECURITY ICE ARENA Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and assessments Licenses, permits and impact fees Fines and penalties Use of money and property ($13) ($13) Intergovernmental revenue Charges for current services $24,000 $24,000 Other revenue $70,000 68,830 (1,170) Total Revenues 70,000 68,817 (1,183) 24,000 24,000 EXPENDITURES Current General government Public safety 70,000 68,736 1,264 Public works Streets Parks and recreation 49,847 28,081 $21,766 Capital outlay Debt service: Principal repayment Interest and fiscal charges Total Expenditures 70,000 68,736 1,264 49,847 28,081 21,766 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (25,847) (4,081) 21,766 OTHER FINANCING SOURCES (USES) Transfers in Transfers (out) Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCES BEFORE EXTRAORDINARY ITEMS 81 $81 ($25,847) (4,081) $21,766 EXTRAORDINARY ITEMS Assets transferred to/liabilities assumed by Successor Agency NET CHANGE IN FUND BALANCE 81 (4,081) BEGINNING FUND BALANCES (DEFICITS) ENDING FUND BALANCES (DEFICITS) $81 ($4,081) 124

133 REDEVELOPMENT CAPITAL PROJECTS Variance Positive Budget Actual (Negative) 54,635 $54,635 54,635 54,635 (54,635) (54,635) 494,372 3,053,364 2,558, ,372 3,053,364 2,558,992 $439,737 2,998,729 $2,558,992 (974,099) 2,024,630 (2,024,630) 125

134 126

135 INTERNAL SERVICE FUNDS 127

136 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS SEPTEMBER 30, 2012 Health, Vision Workers' and Dental Compensation Self Self Motor Insurance Insurance Pool Total ASSETS Current Assets: Cash and investments available for City operations $1,307,278 $2,754,311 $1 $4,061,590 Restricted cash and investments ,035 37,468 Accounts receivable - net Total current assets 1,307,711 2,791, ,099,510 Non-Current Assets: Advances to other funds 292, ,523 LIABILITIES Total Assets 1,307,711 3,083, ,392,033 Current Liabilities: Accounts payable 1,175 14,971 8,736 24,882 Unearned revenue 14,192 14,192 Compensated absences 111, ,627 Uninsured losses payable 900, ,000 Total current liabilities 15, , ,363 1,050,701 Long-Term Liabilities: Net OPEB obligation 325, ,132 Uninsured losses payable 1,768,714 1,768,714 Total long-term liabilities 325,132 1,768,714 2,093,846 NET ASSETS Total Liabilities 340,499 2,683, ,363 3,144,547 Unrestricted (Deficit) 967, ,184 (119,910) 1,247,486 Total Net Assets (Deficit) $967,212 $400,184 ($119,910) $1,247,

137 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Health, Vision Workers' and Dental Compensation Self Self Motor Insurance Insurance Pool Total OPERATING REVENUES Charges for services $2,743,512 $847,830 $786,644 $4,377,986 Other 324,525 8, ,198 Total Operating Revenues 3,068, , ,644 4,711,184 OPERATING EXPENSES Salaries and wages 28, , , ,738 Payroll expenses 10, , ,479 Contracted services 2,754 2,905 5,659 Supplies 19,076 8,112 29,854 57,042 Communication 396 2,712 3,108 Repairs and maintenance 16,129 16,129 Advertising and printing Claims 2,509,925 1,576,952 4,086,877 General expenses 4,581,092 2,399 17,723 4,601,214 Total Operating Expenses 7,152,266 1,707, ,189 9,757,300 Operating Income (Loss) (4,084,229) (851,342) (110,545) (5,046,116) NONOPERATING REVENUES (EXPENSES) Interest income 1,933 15,625 (1,253) 16,305 Income (Loss) Before Transfers (4,082,296) (835,717) (111,798) (5,029,811) Transfers in 1,879, ,733 2,083,983 Transfers (out) (500,000) (500,000) Change in Net Assets (2,703,046) (835,717) 92,935 (3,445,828) BEGINNING NET ASSETS (DEFICIT) 3,670,258 1,235,901 (212,845) 4,693,314 ENDING NET ASSETS (DEFICIT) $967,212 $400,184 ($119,910) $1,247,

138 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Health, Vision Workers' and Dental Compensation Self Self Motor Insurance Insurance Pool Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $3,073,572 $856,503 $786,644 $4,716,719 Payments to suppliers (4,604,185) (2,163) (63,970) (4,670,318) Payments to or on behalf of employees (39,419) (119,932) (820,609) (979,960) Payment to OPEB Trust 1,987,750 1,987,750 Claims paid (2,509,925) (922,576) (3,432,501) Cash Flows from Operating Activities (2,092,207) (188,168) (97,935) (2,378,310) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Collection (payment) of interfund balances (1,848) (105,544) (107,392) Transfers in 1,879, ,733 2,083,983 Transfers out (500,000) (500,000) Cash Flows from Noncapital Financing Activities 1,379,250 (1,848) 99,189 1,476,591 CASH FLOWS FROM INVESTING ACTIVITIES Interest 1,933 15,625 (1,253) 16,305 Cash Flows from Investing Activities 1,933 15,625 (1,253) 16,305 Net Cash Flows (711,024) (174,391) 1 (885,414) Cash and investments at beginning of period 2,018,735 2,965,737 4,984,472 Cash and investments at end of period $1,307,711 $2,791,346 $1 $4,099,058 Reconciliation of operating income (loss) to net cash flows from operating activities: Operating income (loss) ($4,084,229) ($851,342) ($110,545) ($5,046,116) Change in assets and liabilities: Net OPEB asset 1,987,750 1,987,750 Accounts and other payables 4, ,174 12, ,056 Cash Flows from Operating Activities ($2,092,207) ($188,168) ($97,935) ($2,378,310) 130

139 AGENCY FUNDS 131

140 Special Assessment District AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Balance at Balance at September 30, 2011 Additions Deductions September 30, 2012 Assets Cash and investments $4,572 $4,572 Total Assets $4,572 $4,572 Liabilities Deposits $4,572 $4,572 Other Agency Funds Assets Cash and investments $10,158 $69,763 $70,799 $9,122 Accounts receivable $660 $660 Total Assets $10,818 $69,763 $71,459 $9,122 Liabilities Deposits $10,818 $69,763 $71,459 $9,122 Tahoe Basin Solid Waste Management Authority Assets Cash and investments $2,417,103 $15,288 $203,683 $2,228,708 Total Assets $2,417,103 $15,288 $203,683 $2,228,708 Liabilities Accounts payable $18,991 $2,414 $21,405 Deposits and other accruals 2,398,112 12, ,683 2,207,303 Park Avenue CFD $2,417,103 $15,288 $203,683 $2,228,708 Assets Cash and investments $611,559 $906,217 $730,299 $787,477 Cash with fiscal agents 915,079 66, ,234 Accounts receivable Total Assets $1,526,735 $906,217 $797,241 $1,635,711 Liabilities Accounts payable $4,230 $4,230 Due to developers $1,522,505 $906, ,011 $1,635,711 Parent/School Partnership $1,526,735 $906,217 $797,241 $1,635,711 Assets Cash and investments $1,791 $10 $1,801 Total Assets $1,791 $10 $1,801 Liabilities Due to developers $1,791 $10 $1,801 $1,791 $10 $1,

141 South Tahoe Refuse Trust Fund AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Balance at Balance at September 30, 2011 Additions Deductions September 30, 2012 Assets Cash and investments $1,703 $9 $1,712 Total Assets $1,703 $9 $1,712 Liabilities Due to developers $1,703 $9 $1,712 Totals - All Agency Funds $1,703 $9 $1,712 Assets Cash and investments $3,046,886 $991,287 $1,004,781 $3,033,392 Cash and investments with fiscal agents 915,079 66, ,234 Accounts receivable Total Assets $3,962,722 $991,287 $1,072,383 $3,881,626 Liabilities Accounts payable $23,221 $2,414 $4,230 $21,405 Deposits and other accruals 2,413,502 82, ,142 2,220,997 Due to developers 1,525, , ,011 1,639,224 Total Liabilities $3,962,722 $991,287 $1,072,383 $3,881,

142 134

143 STATISTICAL SECTION (SUMMARY) This part of the City 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 says about the City s overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit. Financial Trends These schedules contain trend information to help the reader understand how the City s financial performance and well being have changed over time: 1. Net Assets by Component 2. Changes in Net Assets 3. Fund Balances of Governmental Funds 4. Changes in Fund Balance of Governmental Funds Revenue Capacity These schedules contain information to help the reader assess the City s most significant local revenue source, the property tax: 1. Assessed and Estimated Actual Value of Taxable Property 2. Property Tax Rates, All Overlapping Governments 3. Principal Secured Taxpayers 4. Property Tax Levies and Collections Debt Capacity These schedules present information to help the reader assess the affordability of the City s current levels of outstanding debt and the City s ability to issue additional debt in the future: 1. Ratio of Outstanding Debt by Type 2. Computation of Direct and Overlapping Debt 3. Computation of Legal Bonded Debt Margin 4. Bonded Debt Pledged Revenue Coverage, Redevelopment Agency Tax Allocation Bonds Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City s financial activities take place: 1. Demographic and Economic Statistics 2. Principal Employers Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City s financial report relates to the services the City provides and the activities it performs: 1. Full-Time Equivalent City Government Employees by Function 2. Operating Indicators by Function/Program 3. Capital Asset Statistics by Function/Program Sources Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. 135

144 136

145 Net Assets by Component Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year Ended September 30, Governmental activities Invested in capital assets, net of related debt $ - $ - $ - $ - $ 4,029,582 $ 8,551,597 $ 13,206,249 $ 19,742,406 $ 20,509,244 $ 56,492,790 Restricted 23,016,966 26,048,068 30,142,001 35,781,140 44,804,791 52,792,576 54,916,889 53,872,714 51,916,241 14,486,329 Unrestricted (71,790,580) (60,150,109) (54,496,879) (41,837,246) (37,335,673) (32,433,410) (32,887,267) (33,895,465) (33,392,226) 23,370,604 Total governmental activities net assets $ (48,773,614) $ (34,102,041) $ (24,354,878) $ (6,056,106) $ 11,498,700 $ 28,910,763 $ 35,235,871 $ 39,719,655 $ 39,033,259 $ 94,349,723 Business-Type activities Invested in capital assets, net of related debt $ 12,070,255 $ 13,117,769 $ 11,563,745 $ 11,461,548 $ 12,305,386 $ 15,687,677 $ 18,664,291 $ 20,600,059 $ 21,631,385 $ 20,883,400 Restricted 1,410,703 1,433,255 1,581,345 1,698,705 1,516,633 1,352,023 1,693,932 1,239,307 1,223, ,956 Unrestricted (341,829) (2,089,475) (1,106,152) (1,473,241) (918,116) (732,405) (1,233,902) (554,018) (663,130) 307,534 Total business-type activities net assets $ 13,139,129 $ 12,461,549 $ 12,038,938 $ 11,687,012 $ 12,903,903 $ 16,307,295 $ 19,124,321 $ 21,285,348 $ 22,192,048 $ 22,153, Primary government Invested in capital assets, net of related debt $ 12,070,255 $ 13,117,769 $ 11,563,745 $ 11,461,548 $ 16,334,968 $ 24,239,274 $ 31,870,540 $ 40,342,465 $ 42,140,629 $ 77,376,190 Restricted 24,427,669 27,481,323 31,723,346 37,479,845 46,321,424 54,144,599 56,610,821 55,112,021 53,140,034 15,449,285 Unrestricted (72,132,409) (62,239,584) (55,603,031) (43,310,487) (38,253,789) (33,165,815) (34,121,169) (34,449,483) (34,055,356) 23,678,138 Total primary government net assets $ (35,634,485) $ (21,640,492) $ (23,879,685) $ 5,630,906 $ 24,402,603 $ 45,218,058 $ 54,360,192 $ 61,005,003 $ 61,225,307 $ 116,503,613 Source: City of South Lake Tahoe Finance Department Notes: The City implemented GASB Statement 34 beginning in FY ended September 30, 2003.

146 Changes in Net Assets Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Expenses Fiscal Year Ended September 30, Governmental Activities: General Government $ 5,373,571 $ 4,629,829 $ 6,049,820 $ 11,189,879 $ 7,723,493 $ 8,130,864 $ 8,974,313 $ 9,326,600 $ 8,475,475 $ 7,982,091 Public safety 11,309,779 10,710,534 12,291,831 13,296,714 14,942,928 15,397,135 16,315,707 16,337,431 17,854,548 18,471,859 Public works 31,605,375 3,716,507 2,824,251 3,238,011 4,681,155 8,976,429 3,562,448 3,895,600 7,142,409 4,506,477 Parks and recreation 3,184,646 2,876,253 3,247,315 3,782,697 5,178,475 5,844,381 5,821,494 5,724,957 6,142,621 5,432,663 Streets 2,304,540 2,458,997 2,700,485 2,607,845 3,972,212 4,095,217 5,793,417 4,076,844 4,182,843 3,895,781 Interest on long term debt 11,013,650 6,661,005 8,231,645 6,528,628 7,069,990 5,545,854 5,784,474 5,630,493 5,623,197 4,031,469 Total Governmental Activities Expenses 64,791,561 31,053,125 35,345,347 40,643,774 43,568,253 47,989,880 46,251,853 44,991,925 49,421,093 44,320,340 Business-Type Activities: Transit 1,857,913 1,953,238 1,934,291 1,940,845 1,968,015 1,958,344 1,412,907 1,427,853 1,385, ,281 Airport 1,359,906 1,262,142 1,151,359 1,371,615 2,087,157 1,754,032 1,533,655 1,419,280 1,430,962 1,574,321 Parking Garage 641,382 1,260,303 1,307,682 1,321,740 1,306,224 1,043,192 1,295,760 1,242,778 1,192,525 1,076,015 Parking Management , ,006 Total Business-Type Activities Expenses 3,859,201 4,475,683 4,393,332 4,634,200 5,361,396 4,755,568 4,242,322 4,089,911 4,026,163 3,100, Total Primary Government expenses $ 68,650,762 $ 35,528,808 $ 39,738,679 $ 45,277,974 $ 48,929,649 $ 52,745,448 $ 50,494,175 $ 49,081,836 $ 53,447,256 $ 47,420,963 Program Revenues Governmental Activities: Charges for Services: General Government $ 768,816 $ 2,063,429 $ 2,449,369 $ 2,527,661 $ 2,952,433 $ 2,780,013 $ 2,454,730 $ 2,145,884 $ 1,901,852 $ 2,037,021 Public Safety 909, , , , , , , , , ,590 Public Works 694,427 12,527 17,071 10, ,196 15,961 11,301 11,456 42,209 55,754 Parks and Recreation 1,743,492 1,593,912 1,563,422 1,690,134 1,741,348 1,805,034 1,784,705 1,483,784 1,420,387 1,082,697 Streets 43,816 76,181 50,853 78,366 67, , ,850 62,761 65,663 65,441 Operating Grants and Contributions 1,171,208 1,512,730 1,282,836 9,137,229 3,068,020 5,900,633 3,409,226 2,824,975 2,783,790 2,400,067 Capital Grants and Contributions 13,532,650 10,222,668 6,714,458 7,806,129 12,157,944 14,407,663 7,832,970 6,645,939 7,296,356 12,179,227 Total Governmental Activities Program Revenues 18,864,063 16,257,128 12,710,744 21,788,780 20,806,674 26,269,118 17,016,632 13,944,610 14,065,849 18,204,797 Business Type Activities: Charges for Services: Transit 849, , , , , , , , ,937 54,526 Airport 445, , , , , , , , , ,348 Parking Garage 151, , , , , , ,556 1,093,049 1,096, ,105 Parking Management , ,804 Operating Grants and Contributions 634, , ,121 1,239,809 1,758, , , , ,909 3,190 Capital Grants and Contributions 5,067, , , ,665 26,147 4,098,372 3,204,922 2,831,242 1,233, ,633 Total Business-Type Activities Program Revenues 7,148,543 3,372,759 3,506,519 3,744,621 4,174,873 7,304,268 5,718,960 5,551,327 4,062,505 2,199,606 Total Primary Government revenues $ 26,012,606 $ 19,629,887 $ 16,217,263 $ 25,533,401 $ 24,981,547 $ 33,573,386 $ 22,735,592 $ 19,495,937 $ 18,128,354 $ 20,404,403

147 Fiscal Year Ended September 30, Net (Expense)/Revenue Governmental Activities $ (45,927,498) $ (14,795,997) $ (22,634,603) $ (18,854,994) $ (22,761,579) $ (21,720,762) $ (29,235,221) $ (31,047,315) $ (35,355,244) $ (26,115,543) Business-Type Activities 3,289,342 (1,102,924) (886,813) (889,579) (1,186,523) 2,548,700 1,476,638 1,461,416 36,342 (901,017) Total Primary Government net (Expense)/Revenue ($42,638,156) $ (15,898,921) $ (23,521,416) $ (19,744,573) $ (23,948,102) $ (19,172,062) $ (27,758,583) $ (29,585,899) $ (35,318,902) $ (27,016,560) 139 General Revenues and Other Changes in Net Assets Governmental Activities: Taxes: Property taxes $ 4,319,937 $ 4,587,213 $ 4,700,846 $ 5,576,489 $ 6,349,842 $ 6,081,995 $ 6,270,926 $ 6,124,667 $ 6,118,078 $ 6,005,873 Incremental property taxes 2,238,649 4,964,939 4,744,731 5,233,873 5,911,106 7,330,807 7,489,176 7,507,727 5,576,585 2,648,900 Educational Revenue Augmentation Fund payment (56,257) (80,897) (138,021) (194,097) Sales taxes 3,748,888 4,245,049 5,005,772 7,499,467 7,346,746 6,871,050 6,124,288 5,455,969 5,852,278 6,261,989 Transient occupancy taxes 9,954,669 10,856,026 11,357,165 11,932,173 10,209,841 10,047,114 8,271,773 8,455,767 8,670,091 8,824,694 Franchise taxes 1,134,056 1,095,735 1,115,824 1,215,495 1,249,593 1,279,456 1,408,472 1,201,835 1,243,425 1,340,024 Other taxes 1,632,156 1,637,438 3,364,413 3,265,103 4,825,668 5,220,688 4,996,213 5,353,658 5,483,643 5,618,648 Motor vehicle in lieu 1,134,056 1,041, , , , ,469 65,185 72, ,936 12,348 Use of money and property 489, , ,469 1,706,950 2,184,924 1,731, , , , ,926 Gain/(loss) from sales of properties - 125, ,784 12, Miscellaneous 911,361 1,102,056 1,311,868 1,173,709 1,407,983 1,327, ,725 1,623,431 1,810, ,687 Transfers (622,691) (380,493) (345,822) (423,189) (3,319,043) (902,581) (538,219) (639,831) (620,593) (527,457) Extraordinary item Assets transferred to/liabilities assumed by Successor Agency ,183,375 Total Governmental Activities 24,883,875 29,467,570 32,381,766 37,153,766 36,286,803 39,093,652 35,560,329 35,531,099 34,668,848 81,432,007 Business-type activities Use of money and property 24,335 3,167 60,037 56,032 60,984 57,440 18, ,125 5,402 Miscellaneous 9,951 41,684 58,343 58,432 69,076 17, ,356 59, , ,000 Loss on sale of capital assets (146,612) Transfers 622, , , ,189 3,319, , , , , ,457 Total Business-Type Activies 656, , , ,653 3,449, ,131 1,340, , , ,859 Total Primary Government 25,540,852 29,892,914 32,845,968 37,691,419 39,735,906 39,924,783 36,900,717 36,230,710 35,539,206 82,294,866 Change in Net Assets Governmental Activities (21,043,623) 14,671,573 9,747,163 18,298,772 13,525,224 17,372,890 6,325,108 4,483,784 (686,396) 55,316,464 Business-Type Activities 3,946,319 (677,580) (422,611) (351,926) 2,262,580 3,379,831 2,817,026 2,161, ,700 (38,158) Total Primary Government $ (17,097,304) $ 13,993,993 $ 9,324,552 $ 17,946,846 $ 15,787,804 $ 20,752,721 $ 9,142,134 $ 6,644,811 $ 220,304 $ 55,278,306 Source: City of South Lake Tahoe Finance Department Note: The City implemented GASB Statement 34 beginning in FY ended September 30, 2003.

148 Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Fund Balances prior to GASB 54 implementation Fund Balances upon GASB 54 implementation $60,000 $60,000 $50,000 $50,000 Thousands $40,000 $30,000 Thousands $40,000 $30,000 $20,000 $20,000 $10,000 $10,000 $ $ Unreserved Reserved Nonspendable Restricted Committed Assigned Unassigned 140 Fiscal Year Ended September 30, General Fund Reserved $5,790,343 $6,486,637 $6,352,143 $6,918,730 $6,556,484 $5,855,710 $5,395,188 $5,166,684 Unreserved: Designated 1,239,349 1,239,349 1,078, , ,592 1,442, , ,796 Undesignated - 2,590,740 7,936,879 11,783,479 14,810,316 13,817,366 13,333,120 11,278,785 Nonspendable $4,150,867 $4,138,642 Restricted 750, ,000 Committed Assigned 678, ,247 Unassigned 9,871,319 10,610,969 Total General Fund $7,029,692 $10,316,726 $15,367,633 $19,657,801 $22,322,392 $21,115,311 $19,195,543 $17,125,265 $15,450,990 $16,211,858 (a)

149 Fiscal Year Ended September 30, All Other Governmental Funds Reserved $13,841,666 $14,734,876 $16,926,397 $15,939,334 $18,116,908 $20,960,717 $20,487,726 $18,258,012 Unreserved, Designated, Reported in: Special Revenue Funds 54, , , , , , , ,045 Capital Projects Funds 17,703 Unreserved, Undesignaged, Reported in: Special Revenue Funds 3,407,196 3,865,166 5,119,751 4,475,526 5,409,949 6,325,576 4,809,681 6,106,699 Capital Project Funds (3,647,520) (4,095,808) (4,227,583) (762,353) 406, , ,411 (539,772) Nonspendable Special Revenue Funds $479,727 $1,184,220 Capital Projects Funds 1,412,470 1,240,012 Restricted Special Revenue Funds 5,285,624 3,219,180 Housing & Economic Development Funds 981,087 - City Housing & Econ. Develop. Funds - 867,610 Redevelopment Debt Service Fund 12,851,108 - City Debt Service Fund - 7,716,706 Capital Projects Funds - - Committed Special Revenue Funds 768,868 - Capital Projects Funds 2,042, ,274 Assigned Special Revenue Funds Capital Projects Funds Unassigned Special Revenue Funds 263,882 (4,257) Capital Projects Funds (2,504,357) (4,002,251) Total All Other Governmental Funds $13,655,561 $14,810,492 $18,166,602 $20,000,544 $24,169,737 $28,423,685 $26,236,910 $24,031,984 $21,580,952 $10,636,494 (a) Source: City of South Lake Tahoe Finance Department Notes: 1. The City implemented GASB Statement 34 beginning in FY ended September 30, (a) The change in total fund balance for the General Fund and Other Governmental Funds is explained in Management's Discussion and Analysis.

150 Changes in Fund Balance of Governmental Funds Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year Ended September 30, Revenues Taxes and assessments $ 23,797,075 $ 26,645,949 $ 27,621,479 $ 32,036,707 $ 31,785,472 $ 32,570,188 $ 30,563,539 $ 29,709,825 $ 28,180,393 $ 25,734,905 Licenses, permits and impact fees 696,677 1,027,804 1,149,788 1,112,422 1,261,237 1,445,312 1,325,167 1,170,064 1,253,122 1,408,270 Fines and penalties 579, , , , , , , , , ,874 Use of money and property 830, ,638 1,201,419 1,929,969 2,415,501 1,937,829 1,059, , , ,657 Intergovernmental revenue 12,531,486 11,907,599 9,326,074 10,460,274 15,790,771 19,292,649 11,974,370 10,996,144 11,651,283 15,033,903 Charges for current services 2,672,658 3,547,573 4,221,966 4,044,350 5,829,360 5,615,762 5,067,168 4,976,556 5,147,534 5,051,213 Developer reimbursements ,426, ,919 2,580,826 30, Other revenue 4,095,838 2,051,282 1,747,509 2,062,356 2,075,704 2,237,448 2,182,881 1,929,524 2,130,484 1,755,759 Total Revenue 45,203,122 46,349,032 45,657,072 59,475,278 60,324,865 66,041,966 52,586,181 49,722,920 49,141,623 49,562, Expenditures Current: General government 5,815,303 6,631,287 7,034,580 8,890,409 12,598,776 10,918,158 12,216,507 9,826,621 8,222,642 7,565,370 Public safety 10,844,573 11,283,871 11,712,864 13,277,804 13,383,756 14,125,964 14,789,345 15,577,803 16,468,321 15,123,953 Public works 2,861,458 2,843,245 2,416,855 2,833,915 4,742,243 3,794,015 3,648,098 3,171,455 2,882,613 2,409,224 Parks and recreation 2,887,872 2,680,118 2,847,643 3,161,633 4,667,947 5,230,867 5,184,210 5,191,671 5,238,389 4,605,557 Streets 2,005,255 1,983,932 2,112,792 2,225,305 3,374,526 2,940,159 4,444,314 2,786,239 3,022,175 2,516,402 Educational Revenue Augmentation Fund payment 56,257 80, , , Capital outlay 16,011,604 9,695,477 3,946,320 13,498,959 7,657,475 16,023,917 6,540,643 7,251,753 7,320,801 11,563,673 Debt service: Principal repayment 1,713,353 1,806,211 1,669,061 2,658,215 1,903,597 2,403,354 2,668,163 2,750,429 2,836,183 3,121,026 Interest and fiscal charges 7,353,513 6,661,005 7,985,563 6,350,448 6,964,860 5,545,854 5,784,474 5,630,493 5,623,197 4,031,469 Total Expenditures 49,549,188 43,666,043 39,863,699 53,090,785 55,293,180 60,982,288 55,275,754 52,186,464 51,614,321 50,936,674 Excess (deficiency) of revenues over (under) expenditures (4,346,066) 2,682,989 5,793,373 6,384,493 5,031,685 5,059,678 (2,689,573) (2,463,544) (2,472,698) (1,374,093) Other Financing Sources (Uses) Proceeds from sale of properties - 151, ,784 12,389 2,313 24,974 Payment to refunded debt escrow agent (40,565,137) (9,400,000) (36,377,758) (22,860,000) (19,107,394) Proceeds from issuance of debt 48,797,864 12,205,000 39,255,000 23,542,993 22,809, , ,765,000 Bond issuance premium - - 1,016, , Transfers in 5,229,677 3,862,164 4,164,253 7,264,406 7,302,069 9,808,155 8,403,762 7,680,662 6,752,213 11,414,438 Transfers out (6,937,849) (5,059,862) (5,444,527) (8,870,457) (9,201,670) (11,820,966) (10,200,064) (9,504,711) (8,407,135) (13,525,878) Total Other Financing Sources (Uses) 6,524,555 1,758,976 2,613,644 (260,383) 1,802,099 (2,012,811) (1,416,970) (1,811,660) (1,652,609) 3,678,534 Net Change in Fund Balances Before Extraordinary Items 2,178,489 4,441,965 8,407,017 6,124,110 6,833,784 3,046,867 (4,106,543) (4,275,204) (4,125,307) 2,304,441 Extraordinary Items Assets transferred to Housing Successor Assets transferred to/liabilities assumed by Successor Agency (12,488,595) Net Change in Fund Balance $ 2,178,489 $ 4,441,965 $ 8,407,017 $ 6,124,110 $ 6,833,784 $ 3,046,867 $ (4,106,543) $ (4,275,204) $ (4,125,307) $ (10,183,590) Debt Service as a percentage of non-capital expenditures 22.4% 24.7% 31.8% 24.2% 20.5% 16.4% 17.6% 19.1% 21.2% 30.5% Source: City of South Lake Tahoe Finance Department Note: 1. The City implemented GASB Statement 34 beginning in FY ended September 30, Governmental Funds exclude Enterprise funds (Transit, Airport, and Parking Garage) that are classified as Proprietary Funds.

151 Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) $5,000,000 $2,500,000 $ City - Secured Property City - Unsecured Property Assessed Value Total Less: Taxable Total Fiscal Secured Unsecured Assessed Tax-Exempt Assessed Direct Year Property Property Value Property Value Tax Rate (2) 2003 $2,394,779 $83,797 $2,478,576 $20,241 $2,458,336 1% ,753,167 73,780 2,826,948 19,314 2,807,634 1% ,993,592 75,568 3,069,160 18,457 3,050,703 1% ,315,576 77,254 3,392,830 17,565 3,375,265 1% ,691,716 92,580 3,784,296 17,072 3,767,223 1% ,996, ,777 4,098,700 16,610 4,082,090 1% ,208, ,967 4,318,713 16,277 4,302,437 1% ,256, ,697 4,370,259 15,974 4,354,285 1% ,909,772 98,317 4,008,089 15,809 3,992,280 1% ,814,276 88,802 3,903,078 15,687 3,887,391 1% Source: El Dorado County Auditor Controller Office Notes: 1. The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over-rides. These values are considered to be full market values. 2. California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. 143

152 Property Tax Rates All Overlapping Governments Last Ten Fiscal Years (Rate per $100 of assessed value) $1.2 Per Hundred $ $1.0 $ Lake Tahoe Unified School District Basic County Wide Levy Basic Lake County Tahoe Unified Fiscal Wide School Year Levy District Total Source: El Dorado County Auditor's Office 144

153 Principal Secured Taxpayers Top 10 Tax Payers Current Year and Six Years Ago Top 10 Secured Tax Payers Principal Property Taxpayers 8.55% Other Property Taxpayers 91.45% % of Total % of Total Taxable Secured Taxable Secured Assessed Assessed Assessed Assessed Employer Land Use Value Rank Value 2 Value Rank Value 1 First American Trust FSB Timeshare Properties $ 68,340, % Roppongi-Tahoe LP Hotel 49,903, % 45,831, % Heavenly Valley LP / Heavenly Resort Properties Ski Resort 44,927, % 49,685, % Lake Tahoe Development Co, LLC Commercial $ 43,896, % Marriott Ownership Resorts Timeshare Properties 24,241, % $ 55,000, % Tahoe Crescent LP Commercial 23,161, % 19,144, % City National Bank Commercial 20,108, % TSI Investments Commercial 18,444, % South Tahoe Refuse Co. Inc. Industrial 17,488, % Seven Springs LP Commercial 15,627, % 14,363, % Robert M. and Lisa Maloff Hotel 13,549, % Lake Tahoe Resort Partners Resort / Timeshare 26,127, % Trans-Sierra Investments Commercial/Residential 35,803, % Sierra Shores Inc. Resort / Timeshare 17,022, % Stardust Vacation Club Timeshare Properties 13,858, % Total $ 326,141, % $ 290,387, % Source: California Municipal Statistics, Inc. Notes: Local Secured Assessed Valuation : $3,315,375, Local Secured Assessed Valuation : $3,814,275, The Finance Department began collecting data for this schedule in fiscal year

154 Property Tax Levies and Collections Last Nine Fiscal Years $10,000 $9,000 $8,000 $7,000 Thousands $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $ Tax Levied and Collected Secured Unsecured Total Percent Property Property Property of Total Tax Levied Tax Levied Tax Levied Tax Fiscal and and and Collections Year Collected Collected Collected to Tax Levy 2004 $ 4,379,757 $ 95,503 $ 4,475, % ,491, ,653 4,593, % ,352, ,868 5,466, % ,112, ,596 6,237, % ,145, ,727 6,275, % ,349, ,123 6,539, % ,220, ,618 6,347, % ,865, ,354 5,982, % ,775,084 70,107 5,845, % Source: El Dorado County Auditor-Controller's Office Notes: 1. The City of South Lake Tahoe is on the Teeter plan with El Dorado County, thus the amount of property tax levied is the amount of property tax collected. 2. The Finance Department began collecting data for this schedule in fiscal year

155 Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-Type Activites Refunding Bond Lease Certificates Lease Lease Parking Ratio of total O/S Fiscal Revenue Anticipation Revenue of Purchase Revenue Revenue Total primary Per Debt to total Year Bonds Notes Bonds Participation Financing Loan Bonds Bonds Loan government Capita Personal Income 2003 $ 70,605,000 $ 37,930,000 $ 965,835 $ - $ 843,624 $ 2,639,362 $ 274,165 $ 9,000,000 $ 1,546,831 $ 123,804,817 $ 5, % ,720,000 28,530, , ,017 2,500, ,050 9,000,000 1,453, ,667,411 5, % ,595,000 18,630, , ,070 2,357, ,724 9,000,000 1,354, ,993,543 5, % ,415,000 18,630, , ,333 2,209, ,082 8,850, , ,954,897 5, % ,310, ,559-2,194,998 2,058,746 88,440 8,660, , ,458,042 5, % ,390, ,830-1,987,597 1,903,522 54,170 8,455, , ,696,672 5, % ,215,000-62,312-2,145,862 1,744,159 17,687 8,245, , ,020,410 5, % ,940,000-31,157-1,865,203 1,580,546 8,842 8,030, , ,914,556 5, % ,570, ,598,152 1,412,570-7,795, , ,819,862 5, % ,150, ,765,000 1,119,497 1,897,576-7,540, ,332 34,766,405 1, % 147 Source: City of South Lake Tahoe

156 Computation of Direct and Overlapping Debt September 30, Assessed Valuation $3,903,077,660 Redevelopment Incremental Valuation 570,177,677 Adjusted Assessed Valuation $3,332,899,983 Percentage City's Share of Total Debt Applicable (1) Debt OVERLAPPING TAX AND ASSESSMENT DEBT: Lake Tahoe Unified School District $80,175, % $50,455,523 South Lake Tahoe Recreational Facilities Community Facilities District No ,364, % 2,746,920 City of South Lake Tahoe Community Facilities District No ,705, % 6,705,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 59,907,443 OVERLAPPING OTHER DEBT: Lake Tahoe Community College District Certificates of Participation 1,475, % 928,232 TOTAL OVERLAPPING OTHER DEBT 928,232 TOTAL OVERLAPPING DEBT 60,835,675 DIRECT DEBT: City of South Lake Tahoe General Fund Obligations 23,915, % 23,915,000 TOTAL DIRECT DEBT 23,915,000 TOTAL DIRECT AND OVERLAPPING DEBT $84,750,675 (2) (1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is whithin the city's boundaties and dividing it by each unit's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Ratios to Assessed Valuation: Total Overlapping Tax and Assessment Debt 1.53% Ratios to Adjusted Assessed Valuation: Total Direct Debt ($23,915,000) 0.72% Combined Total Debt 2.54% STATE SCHOOL BUILDING AID REPAYABLE AS OF 9/30/12: $0 Source: California Municipal Statistics, Inc. Note: Information is as of 09/30/

157 Computation of Legal Bonded Debt Margin September 30, 2012 (amounts expressed in thousands) ASSESSED VALUATION: Secured property assessed value, net of exempt real property $3,798,589 BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) $142,447 AMOUNT OF DEBT SUBJECT TO LIMIT: Total Bonded Debt $0 Less Tax Allocation Bonds, Sales Tax Revenue Bonds, and Certificates of Participation not subject to limit 0 Amount of debt subject to limit 0 LEGAL BONDED DEBT MARGIN $142,447 Total net debt Total Net Debt Legal applicable to the limit Fiscal Debt Applicable to Debt as a percentage Year Limit Limit Margin of debt limit 2004 $ 102,520 0 $ 102, % , , % , , % , , % , , % , , % , , % , , % , , % Source: City of South Lake Tahoe Finance Department Notes: (a) California Government Code, Section sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth the limit to account for the adjustment of showing assessed valuation at full cash value. (b) The Finance Department began collecting data for this schedule in FY

158 Bonded Debt Pledged-Revenue Coverage Last Nine Fiscal Years S.T. Joint Powers Financing Authority Pledged Revenues: Transient Occupancy Tax Revenues $ 4,538,256 $ 5,011,598 $ 4,867,097 $ 4,726,553 $ 5,081,618 $ 4,161,797 $ 3,916,351 $ 4,038,845 $ 4,027,000 Property Tax Increment Revenues 3,889,814 3,681,296 4,021,005 4,506,107 5,069,995 5,716,035 5,590,117 3,730,345 4,003,572 Total Revenue 8,428,070 8,692,894 8,888,102 9,232,660 10,151,613 9,877,832 9,506,468 7,769,190 8,030,572 Bond Year Debt Service - Parity Bonds: 1995 Series B 1 2,023,655 2,010, Series A - 558, , , , , , , , Series A 603, , , , , , , , , Series A , , , , , , Series A ,618,629 1,890,000 2,675,375 2,679,000 2,675,500 2,674,875 2,692, Series A ,927 1,160,279 1,162,379 1,159,179 1,167,678 Total Debt Service - Parity Bonds 2,627,535 3,171,818 2,781,045 3,357,298 5,173,307 5,749,548 5,751,813 5,745,580 5,786,558 Debt Service Coverage - Parity Bonds 321% 274% 320% 275% 196% 172% 165% 135% 139% Pledged Revenue after Parity Debt 5,800,535 5,521,076 6,107,057 5,875,362 4,978,306 4,128,284 3,754,658 2,023,610 2,244, Bond Year Debt Service - Subordinate Bonds: 1995 Lease Bonds 1,935,700 1,935,700 1,920, Series B Notes 992,571 1,378,354 1,064, , Lease Bonds ,693,618 1,809,931 1,808,994 1,811,838 1,814,507 1,824,506 Total Debt Service - Subordinate Bonds 2,928,271 3,314,054 2,985,024 2,564,744 1,809,931 1,808,994 1,811,838 1,814,507 1,824,506 Debt Service Coverage - Subordinate Bonds 198% 167% 205% 229% 275% 228% 207% 112% 123% S.T. Joint Powers Parking Financing Authority Operating Revenue $ 631,832 $ 874,587 $ 942,817 $ 824,348 $ 947,408 $ 1,313,350 $ 1,122,451 $ 1,096,054 $ 650,000 Operating Expense 312, , , , , , , , ,900 Net Operating Revenue 319, , , , , , , , ,100 Bond Year Debt Service 802, , , , , , , , ,500 Surplus Special Tax Revenue 190, , , , , , , , ,525 Surplus Special Tax Coverage Requirement 110% 110% 110% 110% 110% 110% 110% 110% 110% Net Surplus Special Tax Revenue 172, , , , , , , , ,114 Net Maximum Annual Debt Service 629, , , , , , , , ,975 Debt Service Coverage 51% 80% 47% 30% 150% 128% 138% 151% 66% 1 - Refunded by 2005 Series A Bonds 2 - Bond debt service to be paid from capitalized interest unitl Oct payment. 3 - Total debt service of $2,254,629 offset by capitalized interest of $636,000. Source: City of South Lake Tahoe Finance Department Note: The Finance Department began collecting data for this schedule in fiscal year

159 Demographic and Economic Statistics Last Ten Fiscal Years 50 $1,500 Thousands Millions $1,000 $ $ City Population Total Personal Income Thousands $50 $40 $30 $20 $10 $ Per Capita Personal Income 17.5% 15.0% 12.5% 10.0% 7.5% 5.0% 2.5% 0.0% City of SLT Unemployment Rate State of CA Unemployment Rate National Unemployment Rate Fiscal Year Total Per Capita City of SLT State of CA National Ended City Personal Personal Unemployment Unemployment Unemployment September 30, Population Income Income Rate (e) Rate (e) Rate (e) , ,858,776 (a) 18,452 (b) 7.7% 6.9% 6.0% , ,596,364 (a) 18,452 (b) 7.4% 6.4% 5.6% , ,032,904 (a) 18,456 (b) 6.7% 5.6% 5.2% , ,445,634 (a) 25,661 (c) 6.4% 5.0% 4.7% , ,268,344 (a) 25,661 (c) 6.8% 5.1% 4.5% , ,014,850 (a) 25,661 (c) 8.6% 6.5% 5.3% , ,195,256 (a) 25,661 (c) 13.9% 10.5% 8.5% ,346 (d) 547,759,706 (a) 25,661 (c) 17.0% 12.4% 9.7% , ,174,177 (a) 25,661 (c) 16.7% 12.1% 9.2% , ,682,723 (a) 25,661 (c) 14.6% 10.8% 8.3% Sources: California State Department of Finance California Employment Development Department U.S. Census Bureau, factfinder Census 2000 data; southlaketahoeprospector.com Notes: (a) Calculated by multiplying City Population by Per Capita Personal Income (b) Based on 2000 Census (c) Based on American Community Survey, 5-Year Estimates (d) As revised by California State Department of Finance 151

160 Principal Employers Current Year and Five Years Ago Principal Employers Principal Employers 17.5% Other Workforce 82.5% Percentage Percentage Product/ Number of of Total City Number of of Total City Employer Service Employees Rank Workforce Employees Rank Workforce Barton Memorial Hospital Health Services % % Lake Tahoe Unified School District Education % % El Dorado County Government % % Heavenly Mountain Resort Ski Industry % % United States Forest Service Government % % Lake Tahoe Community College Education % % Marriott Corporation Lodging % % Raley's Supermarket Food/Drug % % City of South Lake Tahoe Government % % South Tahoe Public Utility District Utilities % % Subtotal 2, % 3, % Total Workforce 15,379 15,874 Sources: South Tahoe Public Utility District Finance Department City of South Lake Tahoe Finance Department California Labor Market Info Data Library Notes: The Finance Department began collecting this data in fiscal year

161 Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years FTE's Housing & Redevelopment Airport Parks and Recreation Public Works Fire Police General government Fiscal Year Ended September 30, Function General government Public Works Police Fire Parks and Recreation Airport Housing & Redevelopment Total Source: City of South Lake Tahoe HR and Finance Departments 153

162 Operating Indicators by Function/Program Last Eight Fiscal Years Fiscal Year Function/Program Police: Police calls for Service Law violations: Homicide Forcibile Rape Robbery Assault Violent Crimes, Total 22, , , , , , , , Burglary Larceny Motor Vehicle Theft Property Crimes, Total Total Arrests, including citations and juvenile 2,002 2,355 1,761 1,934 2,037 1,413 1,517 1,300 Community Development: Street reconstruction (travel lane miles) Paving/Patching performed in-house (square feet) N/A N/A N/A N/A , , N/A , N/A N/A Community Recreation: (3) Swimming Pool Campground Golf Course N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 49,200 38,800 12,735 Fire: Number of incidents related to: Fires Hazardous Conditions/Hazardous Material Rescue, Medical Aid Number of calls related to: Citizen Assistance Good Intent False Calls Weather Related , N/A , , , , , , , Source: City of South Lake Tahoe Notes: 1. The Finance Department began collecing data for this schedule in fiscal year N/A denotes information not available 3. This section's data and calculation approach has been revised starting FY

163 Capital Asset Statistics by Function/Program Last Eight Fiscal Years Fiscal Year Function/Program Police: Fire: Police stations Police vehicles, Total Patrol units N/A N/A Fire stations Fire vehicles, Total Fire apparatus (1) JPA Ambulances (2) Community Recreation: Community services: Athletic Fields Parks Ice Arena Skate Park Park Acerage Golf Courses Public Swimming Pools Bike Trails Public Beaches Recreation Center Senior Center Airport: Runway length in feet 8,544 8,544 8,544 8,541 8,541 8,541 8,541 8,541 Aircraft Operations 23,326 21,268 28,035 22,333 23,224 23,181 22,925 23,075 Air Carriers: Major Commuters Source: City of South Lake Tahoe Notes: (1) Fire apparatus is a multi-purpose vehicle carrying professionals and equipment for a wide range of fire-fighting and rescue tasks. (2) The ambulance vehicles are the property of California Tahoe Emergency Services Operations Authority JPA. (a) N/A denotes information not available. (b) The Finance Department began collecting data for this schedule in fiscal year

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