City of Union City
Union City, California
Comprehensive Annual Financial Report
For the year ended June 30, 2006
INTRODUCTORY SECTION
City of Union City
Table of Contents
i
Page
Introductory Section
Letter of Transmittal ............................................................................................................................... ....... v
Location Map ............................................................................................................................... ................... x
City Council and Staff.......................................................................................................................... .......... xi
Organizational Chart ............................................................................................................................... ...... xii
Certificate of Achievement for Excellence in Financial Reporting -
Government Finance Officers Association............................................................................................ xiii
Financial Section
Independent Auditors’ Report..................................................................................................................... 1
Basic Financial Statements:
Management’s Discussion and Analysis ............................................................................................... 3
Government- Wide Financial Statements:
Statement of Net Assets..................................................................................................................... 15
Statement of Activities and Changes in Net Assets ...................................................................... 16
Governmental Funds Financial Statements:
Balance Sheet.......................................................................................................................... ............ 22
Reconciliation of the Governmental Funds Balance Sheet
to the Government- Wide Statement of Net Assets ................................................................. 25
Statement of Revenues, Expenditures and Changes in Fund Balances...................................... 26
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government- Wide
Statement of Activities and Changes in Net Assets................................................................ 28
Proprietary Fund Financial Statements:
Statement of Net Assets..................................................................................................................... 30
Statement of Revenues, Expenses and Changes in Net Assets.................................................... 31
Statement of Cash Flows ................................................................................................................... 32
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Assets................................................................................................... 34
Notes to Basic Financial Statements ....................................................................................................... 35
City of Union City
Table of Contents, Continued
ii
Page
Financial Section, Continued
Required Supplementary Information:
Budgetary Control and Budgetary Accounting.................................................................................... 72
Defined Benefit Pension Plan.................................................................................................................. 76
Supplementary Information:
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:
Community Development Agency Debt Service Fund ................................................................ 79
Community Redevelopment Agency Capital Project Fund......................................................... 80
Special Assessment Debt Service Fund ........................................................................................... 81
Non- Major Governmental Funds:
Combining Balance Sheet.................................................................................................................. 86
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances .................................................................................................. 92
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Measure B/ ACTIA Special Revenue Fund..................................................................................... 98
511 Plan Area Special Revenue Fund .............................................................................................. 99
Special Parks Special Revenue Fund ............................................................................................... 100
State Gas Tax Special Revenue Fund............................................................................................... 101
Street Lights and Landscaping Special Revenue Fund................................................................. 102
Housing and Community Development Special Revenue Fund ................................................ 103
HOME Special Revenue Fund.......................................................................................................... 104
Fire Equipment Acquisition Special Revenue Fund...................................................................... 105
DIPSA Development Special Revenue Fund.................................................................................. 106
DIPSA Maintenance District Special Revenue Fund..................................................................... 107
EMS Enhancement Special Revenue Fund ..................................................................................... 108
Traffic Signal Special Revenue Fund ............................................................................................... 109
Supplemental Law Enforcement Special Revenue Fund.............................................................. 110
Local Law Enforcement Special Revenue Fund............................................................................. 111
Clean Water Program Special Revenue Fund ................................................................................ 112
Retirement/ Benefit Reserve Special Revenue Fund ..................................................................... 113
Leisure Revolving Special Revenue Fund....................................................................................... 114
Recycling and Waste Management Special Revenue Fund.......................................................... 115
911 Emergency Communication Response System Special Revenue Fund............................... 116
Code Enforcement Special Revenue Fund...................................................................................... 117
Traffic Congestion Special Revenue Fund...................................................................................... 118
Used Oil Block Grant Special Revenue Fund ................................................................................. 119
Housing In- Lieu Special Revenue Fund ......................................................................................... 120
Public Safety Parcel Tax Special Fund............................................................................................. 121
Post- Employment Medical Benefits Special Revenue Fund......................................................... 122
Union Landing PBID Special Revenue Fund ................................................................................. 123
Allied Waste Vehicle Special Fund .................................................................................................. 124
City of Union City
Table of Contents, Continued
iii
Page
Financial Section, Continued
Supplementary Information, Continued
Schedule of Revenues, Expenditures and Changes in Fund Balances –
Budget and Actual, Continued:
Alameda County Waste Import Mitigation Special Fund............................................................ 125
Pension Obligation Bonds Debt Service Fund ............................................................................... 126
Community Facilities District Debt Service Fund ......................................................................... 127
Tri- Cities Waste Management Debt Service Fund......................................................................... 128
Public Facilities Authority Debt Service Fund ............................................................................... 129
Capital Improvement Capital Project Fund.................................................................................... 130
Capital Facilities Improvements Capital Project Fund ................................................................. 131
Bridge Benefit District Capital Project Fund .................................................................................. 132
Community Facilities District Capital Project Fund...................................................................... 133
Internal Service Funds:
Combining Statement of Net Assets................................................................................................ 136
Combining Statement of Activities and Changes in Net Assets.................................................. 137
Combining Statement of Cash Flows .............................................................................................. 138
Agency Funds:
Combining Statement of Changes in Assets and Liabilities......................................................... 140
Statistical Section
Net Assets by Component...................................................................................................................... ....... 142
Changes in Net Assets ............................................................................................................................... .... 143
Fund Balances of Governmental Funds ....................................................................................................... 145
Changes in Fund Balances of Governmental Funds .................................................................................. 146
Assessed Value and Estimated Actual Value of Taxable Property .......................................................... 147
Direct and Overlapping Property Tax Rates ............................................................................................... 148
Principal Property Tax Payers – Current Year and Nine Years Ago ....................................................... 149
Property Tax Levies & Collections – Last Ten Years.................................................................................. 150
Special Assessment Collections.................................................................................................................... 151
Property Values and Construction................................................................................................................ 152
Bank Deposit Summary........................................................................................................................ ......... 153
Ratios of Outstanding Debt by Type ........................................................................................................... 154
Schedule of Direct and Overlapping Debt................................................................................................... 155
Legal Debt Margin Information .................................................................................................................... 156
Pledged- Revenue Coverage....................................................................................................................... ... 158
General Fund Expenditures by Function..................................................................................................... 159
General Fund Revenues by Function ........................................................................................................... 160
Taxable Sales Transactions – Last 10 Calendar Years ................................................................................ 161
City of Union City
Table of Contents, Continued
iv
Page
Statistical Section, Continued
Taxable Sales Transactions – By Type of Business ..................................................................................... 162
Adopted and Final Budget for 2005- 6 and 2006- 7 Adopted Budget for
Unrestricted General Fund ...................................................................................................................... 163
Summary of Revenues, Expenditures, and Changes in Fund Balance.................................................... 164
Pooled Investment Portfolio .......................................................................................................................... 165
Capital Asset Statistics..................................................................................................................... .............. 166
Demographic and Economic Statistics ......................................................................................................... 167
Principal Employers...................................................................................................................... ................. 168
Full- time and Part- time City Employs ( Full- Time Equivalents FTE's) by Department ........................ 169
Operating Indicators by Function ................................................................................................................. 170
Miscellaneous Information.................................................................................................................... ........ 171
v
December 1, 2006
Honorable Mayor, Members of City Council
and Citizens of the City of Union City
We are pleased to submit the Comprehensive Annual Financial Report ( CAFR) for the City of Union City
( City) for the fiscal year ended June 30, 2006. The report was prepared by the City’s Administrative Services
Department and the responsibility for the accuracy of the data presented in this report and the
completeness and fairness of the presentation including all disclosures, rest with the City’s management.
We believe that the data presented is accurate in all material respects; that it is presented in a manner
designed to fairly set forth the financial position and changes in financial position of the City as measured
by the financial activities of its governmental funds, business- type funds, each major fund, and the
aggregate remaining non- major funds. In addition, the report contains all disclosures necessary to enable
the reader to gain the maximum understanding of the City’s financial affairs.
In order to ensure that there is a reasonable basis for assuming responsibility for the information contained
in the financial report, management has established an internal control framework which provides
assurance that the accounting system and its underlying data are reliable. This framework provides these
essential elements: a favorable control environment; the continuing assessment of risk; the design,
implementation, and maintenance of effective control- related policies and procedures; the effective
communication of information; and an ongoing monitoring of the effectiveness of control policies and
procedures, as well as the resolution of potential problems identified by controls. Inherent limitations,
however, exist even in the best crafted internal controls. One of these is cost consideration, that is, internal
control costs should not exceed the benefits of the control. Another is that these internal controls are
potentially subject to management override. The third limitation is the risk of collusion.
The CAFR is organized into three major sections:
The Introductory Section is intended to familiarize the reader with the organizational structure of the City,
nature and scope of the services it provides and specifics of its legal operating environment. The
Introductory Section includes this transmittal letter, the City’s organizational chart, a list of principal officials
and a copy of the Certificate of Achievement for Excellence in Financial Reporting awarded by the
Governmental Finance Officers Association ( GFOA) for fiscal year ended June 30, 2005.
The Financial Section is prepared in accordance with Governmental Accounting Standards Board Statement
No. 34 ( GASB 34) which requires, among other things, the inclusion of the Management Discussion and
Analysis ( MD& A) with the independent auditor’s report, audited basic financial statements, notes to the
basic financial statements, required supplementary information, supporting statements and schedules
necessary to fairly present the financial position and the changes in financial position of the City in
conformity with accounting principles generally accepted in the United States. The audited basic financial
statements include the government- wide financial statements that present an overview of the City’s entire
financial operations; and the fund financial statements that present the financial information of each of the
City’s major funds; as well as non- major governmental, fiduciary and other funds. We invite the readers’
attention to the MD& A which provides an analytical overview of the City’s financial activities and
additional information complementary to that presented in this letter.
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The Statistical Section contains a number of tables of unaudited data depicting the financial history of the
City; information on overlapping governments; demographics and other useful information.
This year, the firm of Caporicci & Larson, certified public accountants, audited the City’s basic financial
statements. Part of this annual audit is a review of internal controls. The goal of the independent audit is to
provide users of the financial report with reasonable assurance that the financial statements of the City for
the fiscal year ended June 30, 2006, are free of material misstatements. The independent audit involved a
review of our internal controls; examining on a test basis, evidence supporting the amounts and the
disclosures in the financial statements; assessing the accounting principles used and significant estimates
made by management; and evaluating the overall financial presentation. The independent auditors
concluded that there was reasonable basis for rendering an unqualified opinion on the City’s financial
statements for the fiscal year ended June 30, 2006. The audit of the financial statements of the City included
a federally mandated Single Audit which is designed to meet the requirements of Federal grantor agencies.
The standards governing Single Audit engagements require that the independent auditors report, not only
on the fair presentation of the financial statements, but also on the audited government’s internal controls
and compliance with legal requirements, especially those involving the administration of federal grants.
This Single Audit Report is available and is issued separately by the City.
Profile of the City
In 1959, when the City was incorporated, there were approximately 6,000 people living in the area.
Currently, there are over 71,150 people occupying 18 square- mile area located between the cities of Oakland
to the north, and San Jose to the south, along the Eastern shore of San Francisco Bay. The City is a well
balanced community of residences and businesses. It is a family- oriented city where the focus is the
enriched quality of life for its citizens. The City has a Council- Manager form of government with the Mayor
and City Council forming the legislative body that represents the community. The City Council consists of
a Mayor and four City Council members who are elected at large for up to three consecutive four- year
terms. The City Council is responsible, among other things, for developing policies, passing ordinances,
adopting the budget, hiring both the City Manager and City Attorney, and approving appointment of
department heads and nominees to advisory commissions and committees. In addition, the City Council
serves as the Redevelopment Agency Board. The City Manager is appointed by the City Council and serves
as the chief executive officer of the organization. The City Manager is responsible for administration of city
services, day- to- day operations and implementation of Council policies.
The City provides the full range of municipal services normally associated with a municipality. These
include public safety ( police, fire, emergency medical services and code enforcement); construction and
maintenance of streets and parks and other infrastructures; social and recreation services; planning,
economic development and housing programs; and general administrative services. The City also operates
a transit and paratransit bus system that is coordinated with other transit providers including Bay Area
Rapid Transit ( BART) rail system and A- C Transit bus service. The City manages franchises for solid waste
disposal, cable television and energy. Other common municipal services delivered within the City
boundaries, such as water, wastewater, education, libraries, regional parks and flood control, are provided
by other agencies.
The City is a general law city which does not operate under the provisions of a voter- approved charter.
Like other general law cities, the City has limited ability to set tax rates. The State Constitution establishes a
maximum rate for property tax and limits the growth of assessed value. The property tax collected is
allocated among the jurisdictions in the City’s tax rate areas based on criteria established by the California
legislature. The rates and tax base of the City’s two other major general taxes – sales tax and vehicle in- lieu
fees – are also controlled by the state legislature.
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Increases in existing local taxes and any new taxes require voter approval. Taxes used for general purposes
are subject to approval by a simple majority of voters; while taxes levied for specific purposes require a
two- thirds majority of voters, as do property tax levies that are used to pay for debt issued to build capital
assets. Special property assessments must be approved by a two- thirds vote, with the voting rights
apportioned based on the benefit of the assessments. Fees for facilities and services are subject to
requirements that they not be set at levels that exceed the reasonable costs of providing the services. The
balance generated by the difference between fee revenue and the related expenses are retained and
designated for services and facilities that benefit the fee payers.
The financial statements included in this CAFR present the City ( the primary government), the Community
Redevelopment Agency of the City ( the Agency), the Union City Public Facilities Authority ( the Authority),
and the Community Facilities District ( the District) as its component units. The Agency was created by the
City Council in 1988. It is broadly empowered to engage in the general economic, revitalization and
redevelopment of certain areas of the City. The Authority was formed for the purpose of financing the
purchase of the Lincoln- Alvarado Industrial Park Assessment District Local Improvement District No. 25.
The Agency and the Authority, although legally separate entities, are in substance, part of the City
operations. Members of City Council serve as board members of these entities and the City Manager as
Executive Director. These component units are combined and included in the operations of the City in the
accompanying financial statements. The District was formed and established by the City pursuant to the
Mello- Roos Community Facilities Act of 1981, as amended. This followed a public hearing and a
landowner election at which over a two- thirds majority vote authorized the District to incur bonded
indebtedness and the levy of special taxes.
Subject to an appropriation limit established pursuant to state law, management prepares a biennial
operating budget together with a five- year capital improvement plan for public hearing and Council
approval. After due deliberation, Council adopts the resolution appropriating the City’s resources. A fixed
biennial budget is required for the General Fund and all Special Revenue Funds. Capital projects are
appropriated in the capital improvement plan on a project- length basis. Budgets for the proprietary funds
are also adopted by Council to serve as financial plans. The legal level of budgetary control is at fund level.
The City Manager is authorized to reallocate resources within a fund. The City’s budget is integrated in the
accounting system which provides management with timely access to financial information
Economic Condition and Outlook
Local Economy. In common with most cities in the San Francisco Bay Area, the City’s economy is largely
driven by the housing market and consumer spending. Both these factors continued to contribute to the
economic growth of the City. The residential build- out, especially that of luxury single family homes,
contributed significantly to the increase in property taxes for the year. The labor market, excepting the
construction sector and related financial activities, showed an overall increase for the calendar year 2005.
The City expects to see another increase for the calendar year 2006 in the local labor market. Management is
mindful, however, that Union City is not exempt from the softening in the housing market that the Bay
Area and most of California is experiencing. Nominal home prices in the area have stayed flat, and are
projected to remain so for the next year. For the next 2 years, less than 700 residential units are expected to
be developed in the City. To help stabilize the community’s economic base, the City, in partnership with
the Chamber of Commerce and some businesses in the area, engaged in various activities proactive to
business development; like hosting business workshops, roundtables and forums. These efforts facilitate
the retention and expansion of existing businesses, in addition to creating an environment conducive to
attracting businesses.
viii
Long- term financial planning. The City Council adopted a fiscal policy that requires, among other things, the
integration of a 5- year capital improvement plan in the City’s annual budget. Management also prepares
annually for Council deliberation; a multi- year forecast of the City’s operating expenditures and revenue to
demonstrate the likely impact on the General Fund reserves. It is the Council’s policy to maintain an
unreserved balance in the General Fund of a least 7 ½ percent of the annual operating expenditures. The
policy also authorizes the use of one- time revenue for capital projects or one- time costs; and seeks to
minimize borrowing costs and preserve access to credit. As a corollary policy, the City annually sets aside a
fixed amount in the General Fund to help build reserves for future capital projects.
Relevant financial policies. In conformity with City Council’s policy, the amount of $ 902,000 for the year, as
determined by an actuarial study, was transferred from General Fund to the Other Post Employment
Benefits ( OPEB) Fund. Required annual funding of the OPEB Fund is incorporated in the City’s operating
budget. For the year, $ 250,000 of General Fund balance is added to the reserve for future capital projects, as
required by Council’s policy.
Major initiatives. Construction of the City’s Sports Center was started during the fiscal year and is expected
to be completed in January 2007. This is a project which is high on the priority list of projects contained in
the Parks and Recreation Master Plan which was developed through surveys and community meetings.
Estimated cost of the project is $ 13.85 million. Operating cost of the Center is expected to be largely covered
by user fees and some subsidy from the General Fund.
The premier project for the City has been the development of the Intermodal Station District. The project
aims to transform over 90 acres of brownfields and underutilized land, into a productive town center and
transportation hub. The various phases of the project entail the acquisition and remediation of the sites,
street construction, and the improvement of the station and site of the existing BART commuter rail service.
Approved development plans for the District is expected to bring about the construction of approximately
1,000 residential units, and 65,000 square feet of retail/ commercial space. The completed intermodal station
will connect passenger rail to the existing BART ( Bay Area Rapid Transit) and bus service connections, with
rail service lines on the Capital Corridor, from above Sacramento to San Jose; the Altamont Commuter
Express, from Stockton to San Jose; and future Dumbarton Rail, connecting the East Bay to the Peninsula.
This will make Union City the most transit- connected city in the region.
Awards
The Government Finance Officers Association ( GFOA) awarded a Certificate of Achievement for Excellence
in Financial Reporting to the City for its comprehensive annual financial report ( CAFR) for the fiscal year
ended June 30, 2005. This is the 16th consecutive year that the City has received this prestigious award. In
order to be awarded a Certificate of Achievement, the City publishes an easily readable and efficiently
organized CAFR, the contents of which conform to program standards. The report must satisfy both
generally accepted accounting principles and applicable legal requirements.
Acknowledgments
We would like to express our appreciation for the dedicated efforts of the staff of the Administrative
Services Department which was essential in the preparation of this report. Many members of the
Department demonstrated outstanding personal commitments and dedication over a long period of time to
produce this exemplary document. We would like to give special recognition to Gloria Coronado for her
outstanding contributions to the City. Gloria has played a key role in the production of this report. This
document represents Gloria’s final CAFR before her retirement after 19 years of dedicated service. We also
want to thank the members of various City departments who assisted and contributed in the preparation of
this report; and to the audit team of Caporicci & Larson for their assistance and expertise.
ix
Finally, we want to express our sincere appreciation to the Mayor and City Council for providing policy
direction and a firm foundation of support for the pursuit of excellence in all areas of professional
endeavors, especially their role in guiding the City to a secure financial condition that assures resources are
available in providing core services to the community which they serve.
Respectfully Submitted,
Richard Digre Larry Cheeves
Director of Administrative Services City Manager
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FINANCIAL SECTION
3
MANAGEMENT’S DISCUSSION AND ANALYSIS
This section offers the reader a narrative introduction, and a readily understandable analytical overview of
the City’s financial activities and performance for the fiscal year ended June 30, 2006. Summary reports
showing comparisons of current financial information with that of the previous year are included to
enhance the clarity and usefulness of the reports. To gain a broad perspective of the City and its financial
activities, we encourage the reader to consider the information presented here in conjunction with the
information that we have provided in our letter of transmittal presented at the front of this report.
Financial Highlights
􀁸 The assets of the City of Union City exceeded its liabilities at the close of the fiscal year by
$ 177,217,738. Approximately 60 percent of this amount is invested in capital assets ( net of related
debt) and therefore not available to meet the City’s ongoing obligations to creditors and the citizens.
􀁸 At the end of the fiscal year, the City shows an increase of 17 percent ($ 25,769,086) in its total net
assets. Receipts of intergovernmental grants and the contributions from developers and property
owners accounted for more than half of this increase.
􀁸 The City’s governmental funds reported a combined ending fund balance of $ 111,228,873 as of the
close of the year. This represents an increase of $ 10,789,856 compared to the previous year.
􀁸 As of the close of the fiscal year, fund balance of the General Fund increased by $ 2,547,267 to a total
of $ 9,121,669. The unreserved, undesignated fund balance of $ 6,780,784 represents 20 percent of the
total General Fund expenditures.
􀁸 The decrease of $ 2,189,510 in the City’s long- term debts resulted from the debt service payments for
the year.
Overview of the Financial Statements
The City’s annual financial report consists of three required components: ( a) management’s discussion and
analysis; ( b) the basic financial statements; and ( c) required supplementary information.
( a) Management’s discussion and analysis. This particular section of the report.
( b) The basic financial statements are divided into three parts. The first of these are government- wide financial
statements consisting of a Statement of Net Assets and a Statement of Activities. These statements are designed
to provide readers with a broad overview of the City’s finances, in a manner similar to that of a private-sector
business.
The second part is the fund financial statements that focus on individual parts of the City’s operation in more
detail than the government- wide statements.
The third part, the notes to basic financial statement, explains some of the information in the financial
statements and provides more detailed data.
4
( c) The third component, required
supplementary infor- mation, further explains
and supports the data presented in the
financial statements.
In addition to the required elements, we have
included an optional section that provides
details about our non- major governmental and
internal service funds.
GOVERNMENT- WIDE FINANCIAL
STATEMENTS
These statements provide information about the City as a whole. The Statement of Net Assets presents
information on all the City’s assets and liabilities, with the difference between the two reported as net
assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the
financial position of the City is improving or deteriorating. To assess the overall health of the City, you
need to consider also non- financial factors, such as the changes in the City’s property tax base and
infrastructure.
The Statement of Activities presents information showing how the City’s net assets changed during the fiscal
year. All changes in net assets are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenue and expenses are reported in this
statement for some items that will result in cash flows in future fiscal periods. Examples are uncollected
taxes and earned employee compensation.
The government- wide financial statements distinguish functions of the City which are principally supported by
taxes and intergovernmental revenues ( governmental activities) from those 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 Union City include general government, public safety, highways and
streets, economic development and culture and recreation. The business- type activities include a Transit
and Paratransit operation.
The government- wide financial statements include not only the City of Union City itself ( the primary
government), but also legally separate component units: the Community Redevelopment Agency, Public
Facilities Authority, and the Community Facilities District. Financial information for these component units
is reported separately from the financial information presented for the primary government itself.
The government- wide financial statements can be found on pages 13 - 17 of this report.
FUND FINANCIAL STATEMENTS
The fund financial statements provide more detailed information about the City’s most significant funds. 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 Union City, like other local governments, uses
fund accounting to ensure and demonstrate compliance with finance- related regulations and legal
requirements. All of the funds of the City can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Management’s
Discussion and
Analysis
Government-wide
Financial
Statements
Required Components of the City of Union City’s
Comprehensive Annual Financial Reports
Basic
Financial
Statements
Required
Supplementary
Information
Notes to the
Financial
Statements
Fund
Financial
Statements
5
􀁸 Governmental funds are used to account for most of the City’s basic services reported as
governmental activities in the government- wide financial statements. The difference is that
governmental funds focus on a detailed short- term view of the inflows and outflows of spendable
resources and the balances left at the end of the fiscal year. Such information may be useful in
determining what financial resources are available in the near future to finance the City’s programs.
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 in the Statement of Activities in the government- wide financial statements. By
doing so, readers may better understand the long- term impact of the government’s near- term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City maintains several individual governmental funds organized according to their type
( special revenue, debt services, and capital projects). Information is presented separately in the
governmental funds balance sheets and in the governmental funds statements of revenues,
expenditures and changes in fund balance for General Fund; the Redevelopment Agency Special
Revenue, Debt Service and Capital Project Funds; Solid Waste Assessment Fund; and the Special
Assessment Bonds Debt Service Fund. All these funds are considered major funds. Data for the
remaining Other Governmental Funds are combined into a single, aggregated presentation.
Individual information for each of these Other Governmental Funds is provided towards the end of
the financial section.
The City adopts an annual appropriated budget for its general fund. A budgetary comparison
statement has been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 21 - 28 of this report.
􀁸 Proprietary funds are generally used to account for services for which the City charges customers –
either outside customers, or internal departmental units of the City. There are 2 types of proprietary
funds that are maintained by the City:
o Enterprise funds to report the same functions presented as business- type activities in the
government- wide financial statements. The City uses enterprise funds to account for the
Transit and Paratransit operations.
o Internal service funds are used to accumulate and allocate costs internally among the City’s
various functions. The City uses internal service funds to account for its general liability
insurance, workers’ compensation insurance, and for the City garage functions. Because
these services predominantly benefit governmental rather than business- type functions, they
have been included within governmental activities in the government- wide financial
statements. The internal service funds are combined into a single, aggregated presentation
in the proprietary fund financial statements. Individual information for each of the internal
service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 29 - 32 of this report.
􀁸 Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. The only fiduciary funds the City has are agency funds. The City is responsible for
ensuring that the assets reported in these funds are used for their intended purposes. Since the
resources of these funds are not available to support the City’s own programs, they are not reflected
in the government- wide financial statements. The accounting used for fiduciary funds is much like
that used for proprietary funds.
The basic fiduciary fund financial statements can be found on page 34 of this report.
6
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 35 - 69 of this report.
Required Supplementary Information
In addition to the basic financial statements and the accompanying notes, this report also presents certain
required supplementary information. This information includes budgetary comparison schedules for the
General Fund and the Redevelopment Agency Special Revenue Fund.
The combining and individual fund statements and schedules referred to earlier in connection with non-major
governmental funds and internal service funds are presented immediately following the required
supplementary information.
GOVERNMENT- WIDE FINANCIAL ANALYSIS
As noted previously, net assets may serve over time as a useful indicator of a government’s financial
position. In the case of the City of Union City, assets exceeded liabilities by $ 177,217,738 at the close of the
most recent fiscal year. This represents an increase of 17 percent compared to the previous year.
By far, the largest portion of the City’s net assets ( 60 percent) reflects its investment in capital assets ( e. g.,
land, buildings, machinery, and equipments), less any related debt used to acquire those assets that are still
outstanding. The City of Union City uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the City’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.
Major infrastructure construction and improvements; and land acquisition resulted in the increase in this
category.
For this fiscal year, reported Restricted net assets are limited to those that have legislative restrictions. This
narrower definition reduced the amount shown for the year compared to that of the prior year. The balance
was further reduced during year by the utilization of $ 42 million restricted for capital projects.
In addition to the un- restriction of special program revenues, the increase in the third category of net assets
reflects the increases in ongoing revenues which have outstripped similar increases in ongoing expenses.
This unrestricted net asset $ 34,058,574 ( 19 percent of total) may be used to meet the City’s ongoing
obligations to citizens and creditors
7
The following table shows the two- year comparison of the results of governmental and business- type
activities of the City.
2006 2005 2006 2005 2006 2005
Assets:
Current and other assets $ 163,295 $ 149,589 $ 2 49 $ 314 $ 1 63,544 $ 149,903
Capital assets 166,437 1 51,984 3,771 4,142 1 70,208 156,126
Total assets 329,732 3 01,573 4,020 4,456 3 33,752 306,029
Liabilities:
Current and other liabilities 13,804 1 4,421 384 415 14,188 14,836
Long- term liabilities 142,332 143,814 14 - 1 42,346 143,814
Total liabilities 156,136 1 58,235 398 415 1 56,534 158,650
Net assets:
Invested in capital assets,
net of related debt 102,126 4 9,379 3,771 4,142 1 05,897 53,521
Restricted 37,262 8 8,633 - - 3 7,262 88,633
Unrestricted 34,208 5,326 ( 149) ( 101) 3 4,059 5,225
Total net assets $ 173,596 $ 143,338 $ 3 ,622 $ 4,041 $ 1 77,218 $ 147,379
Statement of Net Assets
June 30
( in thousands of dollars)
Total
Governmental
Activities
Business- type
Activities
8
Governmental activities
The comparative report presented below summarizes major changes in both revenues and expenditures.
For the current year, groupings of revenue accounts for reporting purposes were changed under the
guidance of the City’s new independent auditors.
2006 2005 2006 2005 2006 2005
Revenues:
Program revenues:
Charges for services, $ 17,173 $ 22,429 $ 351 $ 333 $ 17,524 $ 22,762
Operating grants and
contributions 10,700 3,778 - 2,439 10,700 6,217
Capital grants and
contributions 6,635 319 - - 6,635 319
General Revenues and Transfers
Taxes:
Property taxes 34,248 27,115 - - 34,248 27,115
Transient occupancy 567 395 - - 567 395
Sales taxes 5,908 6,898 - - 5,908 6,898
Other taxes 4,966 3,961 - - 4,966 3,961
Capital contribution 5,960 - 24 - 5,984 -
Unrestricted/ Intergovernmental 465 1,652 2,803 - 3,268 1,652
Gain ( loss) on sale of assets 8 - 1 - 9 -
Investment earnings 2,325 3,608 20 8 2,345 3,616
Miscellaneous 2,242 - - - 2,242 -
Total revenues 91,197 70,155 3,199 2,780 94,396 72,935
Expenses:
General government 17,574 14,180 - - 17,574 14,180
Public Safety 27,453 25,996 - - 27,453 25,996
Housing and community
development 2,720 6,560 - - 2,720 6,560
Recreation and culture 3,323 3,010 - - 3,323 3,010
Planning and public works 6,754 8,212 - - 6,754 8,212
Interest, fiscal charges and
issue cost of long- term debt 7,242 10,204 - - 7,242 10,204
Transit operation - - 2,936 2,606 2,936 2,606
Paratransit operations - - 624 579 624 579
Total expenses 65,066 68,162 3,560 3,185 68,626 71,347
Change in Net Assets 26,131 1,993 ( 361) ( 405) 25,770 1,588
Net Assets - Beginning 143,338 133,832 3,982 4,446 147,320 138,278
Restatement ( Note 18) 4,128 - - - 4,128 -
GASB 34 Adjustment - 7,513 - - - 7,513
Net Assets - Ending $ 173,597 $ 143,338 $ 3,621 $ 4,041 $ 177,218 $ 147,379
Statement of Activities
For the Year Ended June 30
( in thousands of dollars)
Total
Governmental
Activities
Business- type
Activities
The overall increase in revenue for the year of $ 21 million resulted primarily from major residential
developments in the City. The developers’ contribution for parks development of $ 5.9 million accounted
for the increase in capital grants and contributions; the combined totals of “ Charges for services” and
“ Operating grants and contributions” accounts decreased $ 755,000 or 2% when compared to last year. The
increase of $ 7.1 million in property tax arose from this build- out of the City, especially in the
Redevelopment project area and turn over of existing property being assessed at current market rates.
9
The capital contribution of $ 5.9 million came from the reclassification of the balance of a previously held
agency fund as revenue in a special revenue fund, upon final settlement of the solid waste disposal
contract.
Total governmental expenses decreased by $ 3.1 million. Except for the increase of $ 3.3 million in salaries
and benefits required by various contracts with employee bargaining groups, overall expenses declined
during the year. This is particularly true for the decrease in expenses associated with long- term debts.
Unlike the previous year, at which time the Redevelopment Agency refunded its Tax Allocation Bonds,
there were no similar activities during the current fiscal year.
Additional and detailed analysis of the activities of the Redevelopment Agency is available from a separate
report prepared annually by the Agency.
Business- type activities
There were no material changes in the City’s transit and paratransit activities. For the current year, the City
received additional operating grant from the local transportation commission to cover the increased costs of
the transit and paratransit operation.
General Fund budgetary highlight
It is management’s practice to submit to Council quarterly reports containing budget to actual comparison.
For General Fund, a year- end projection is also prepared at mid- year based on year- to- date receipts. This
year’s second quarter report was accompanied by a request for budget amendments which reflected the
year- end projections. These were particularly true with property taxes and intergovernmental revenues.
The receipts of subdivision fees for the first quarter included original estimates for both fiscal years 2005
and 2006; which also required a budget adjustment in the Charges for services accounts. The change in the
salaries and benefits budget accounted for the higher total expenditure in final budget. The amendment
was done to reflect the changes in the MOUs ( memorandum of understanding) with various bargaining
units in the City. Original budget for this category was based on known information at the time.
Of the total favorable variance of $ 1.9 million between estimated revenue and actual receipts for the year,
$ 1.2 million is comprised of one- time revenue collections and year- end adjustments. Thus, no estimates for
these have been included in the budget process. Future fund balance however will be affected by the
transfer to establish the OPEB ( Other Post- employment Benefit) fund in the amount of $ 902,000 booked
towards the end of the year. Council’s fiscal policy requires an annual transfer to the new fund be included
in the budget process.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of the fiscal year, the City had an investment in capital assets totaling $ 170.2 million. This
amount represents a net increase ( additions minus retirements and depreciation) of 7 percent or $ 11.5
million from the previous year. Over $ 8.9 million of this increase is in construction in- progress. Payments for
the Union City Sports Center construction during the year amounted to $ 7.6 million; and $ 3.1 million was
spent for projects related to the Intermodal Station Area.
10
For government- wide financial statement presentation, all depreciable capital assets, except infrastructure,
were depreciated from acquisition date through the end of the current year. Individual fund financial
statements record capital asset acquisitions as expenditures.
Additional information about the City’s capital assets can be found in Note 5 to the financial statements.
Comparative reports of the City’s capital assets for governmental and business- type activities are presented
below to summarize the changes during the year.
2006 2005 2006 2005 2006 2005
Infrastructure $ 1 11,648 $ 107,409 $ - $ - $ 111,648 $ 107,409
Land 9 ,986 9,986 - - 9,986 9,986
Buildings and
Improvements 1 2,031 12,958 2 ,587 2,430 14,618 15,388
Machinery and
Equipment 5 ,528 5,874 1 ,184 1,712 6,712 7 ,586
Construction
in progress 27,244 18,330 - - 27,244 18,330
Total $ 1 66,437 $ 154,557 $ 3 ,771 $ 4,142 $ 170,208 $ 158,699
( net of depreciation, in thousand of dollars)
Total
Capital Assets
Governmental
Activities
Business- type
Activities
Debt administration
At the end of the current fiscal year, the City of Union City had total long- term debt outstanding of
$ 141,654,287. This balance reflects a decrease of $ 2,189,510 resulting from debt service payments during the
year. Additional information about the City’s long- term obligations can be found in Note 6, pages 55- 59 of
this report.
Economic factors and next year’s budget
Notwithstanding the City’s economic growth for the year which, aided by revenue enhancements, resulted
in a 51 percent increase in General Fund undesignated fund balance, a more modest growth is projected for
fiscal year 2007. Estimates for the next year include recurring inroads to the fund balance. Supplemental
appropriations have been approved for the debt financing of three fire apparatus vehicles and an annual
support from General Fund for the operating costs of the Union City Sports Center which is scheduled to be
finished by the middle of the current fiscal year. These are in addition to the required annual transfer to the
OPEB ( Other Post Employment Benefit) Fund; and the annual addition to the designated amount for capital
projects, both of which were approved in the City Council fiscal policy adopted in February 2006.
Request for information
This financial report is designed to provide a general overview of the City’s finances for all those with an
interest. Questions concerning any of the information provided in this report or requests for additional
information should be addressed to the Administrative Services Director, City of Union City, 34009
Alvarado- Niles Road, Union City, CA 94587.
BASIC FINANCIAL STATEMENTS
11
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12
GOVERNMENT- WIDE FINANCIAL STATEMENTS
13
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14
City of Union City
Statement of Net Assets
For the year ended June 30, 2006
Governmental Business- Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments $ 78,243,756 $ 1 35,293 $ 78,379,049
Restricted cash and investments 7,906,468 - 7,906,468
Receivables:
Tax 1,064,094 - 1,064,094
Accounts 812,746 188 812,934
Interest 721,295 112,689 833,984
Intergovernmental 2,202,118 - 2,202,118
Special assessments 5,037,000 - 5,037,000
Prepaid items and deposits 422,956 1 ,153 424,109
Deferred charges 1,922,072 - 1,922,072
Loans receivable 8,752,197 - 8,752,197
Land held for resales, net of allowance for decline in value 33,788,500 - 33,788,500
Total current assets 140,873,202 2 49,323 141,122,525
Noncurrent assets:
Net Pension Asset 22,422,203 - 22,422,203
Capital assets:
Non- depreciable 37,230,052 - 37,230,052
Depreciable, net 129,206,894 3 ,770,620 132,977,514
Total capital assets 166,436,946 3 ,770,620 170,207,566
Total noncurrent assets 188,859,149 3 ,770,620 192,629,769
Total assets 329,732,351 4,019,943 333,752,294
LIABILITIES
Current liabilities:
Accounts payable 1,396,373 1 99,297 1,595,670
Accrued payroll 1,490,343 1 7,583 1,507,926
Interest payable 1,861,038 - 1,861,038
Deposits payable 1,325,015 23,261 1,348,276
Other accrued liabilities 635,739 1 18,500 754,239
Due to other agencies 1,506,721 4 ,893 1,511,614
Unearned revenue 787,307 - 787,307
Accrued general liabilities claims - due within one year 61,812 - 61,812
Accrued workers' compensation claims - due within one year 768,686 - 768,686
Compensated absences - due within one year 1,616,519 2 0,855 1,637,374
Long- term debt - due within one year 2,354,448 - 2,354,448
Total current liabilities 13,804,001 3 84,389 14,188,390
Noncurrent liabilities:
Accrued general liabilities claims - due in more than one year 170,125 - 170,125
Accrued workers' compensation claims - due in more than one year 2,294,353 - 2,294,353
Compensated absences - due in more than one year 567,605 1 4,244 581,849
Long- term debt - due in more than one year 139,299,839 - 139,299,839
Total liabilities 156,135,923 398,633 156,534,556
NET ASSETS
Invested in capital assets, net of related debt 102,126,165 3 ,770,620 105,896,785
Restricted for:
Capital projects 11,433,098 - 11,433,098
Debt service 13,953,861 - 13,953,861
Community development 8,370,288 - 8,370,288
Specific projects and programs 3,505,132 - 3,505,132
Total restricted 37,262,379 - 37,262,379
Unrestricted 34,207,884 ( 149,310) 34,058,574
Total net assets $ 173,596,428 $ 3,621,310 $ 177,217,738
Primary Government
See accompanying Notes to Basic Financial Statements.
15
City of Union City
Statement of Activities and Changes in Net Assets
For the year ended June 30, 2006
Operating Capital
Charges for Grants and Grants and
Functions / Programs Expenses Services Contributions Contributions Total
Primary Government:
Governmental activities:
General government $ 17,574,406 $ 2,105,692 $ 956,364 $ - $ 3,062,056
Public safety 27,452,669 4,325,371 4,583,517 - 8,908,888
Housing and community development 2,720,183 4,638,327 1,467,338 - 6,105,665
Recreation and culture 3,322,569 1,640,806 - 6,007,628 7,648,434
Planning and public works 6,754,395 4,462,443 3,692,898 627,026 8,782,367
Interest on long- term debt ( unallocated) 7,242,191 - - - -
Total governmental activities 65,066,413 17,172,639 10,700,117 6,634,654 34,507,410
Business- type activities:
Transit 2,935,467 316,245 - - 316,245
Paratransit 624,208 34,984 - - 34,984
Total business- type activities 3,559,675 351,229 - - 351,229
Total primary government $ 68,626,088 $ 17,523,868 $ 10,700,117 $ 6,634,654 $ 34,858,639
General Revenues and Transfers:
Taxes:
Property taxes
Transient occupancy tax
Sales taxes
Other taxes
Total taxes
Capital contribution
Unrestricted/ Intergovernmental
Gain ( loss) on sale of assets
Investment earnings ( loss)
Miscellaneous
Total general revenues and transfers
Change in net assets
Net assets - beginning of year, as restated ( Note 18)
Net assets - end of year
See accompanying Notes to Basic Financial Statements.
Program Revenues
16
Governmental Business- Type
Activities Activities Total
$ ( 14,512,350) $ - $ ( 14,512,350)
( 18,543,781) - ( 18,543,781)
3 ,385,482 - 3,385,482
4 ,325,866 - 4,325,866
2 ,027,972 2,027,972
( 7,242,191) - ( 7,242,191)
( 30,559,003) - ( 30,559,003)
- ( 2,619,222) ( 2,619,222)
- ( 589,224) ( 589,224)
- ( 3,208,446) ( 3,208,446)
( 30,559,003) ( 3,208,446) ( 33,767,449)
3 4,247,619 - 34,247,619
5 67,354 - 567,354
5 ,908,016 - 5,908,016
4 ,965,913 - 4,965,913
4 5,688,902 - 45,688,902
5 ,960,072 23,789 5,983,861
4 64,960 2,803,111 3,268,071
8 ,278 1,319 9,597
2 ,324,804 19,503 2,344,307
2 ,241,797 - 2,241,797
5 6,688,813 2,847,722 59,536,535
2 6,129,810 ( 360,724) 25,769,086
1 47,466,618 3,982,034 151,448,652
$ 1 73,596,428 $ 3,621,310 $ 177,217,738
and Changes in Net Assets
Net ( Expense) Revenue
17
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18
FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
19
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20
GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund
General Fund is the general operating fund of the City. This fund accounts for all financial resources and
activities not required to be accounted for in other funds.
Community Redevelopment Agency Special Revenue Fund
To account for monies received and expended by the Community Redevelopment Agency for the financing of
development and rehabilitation in the City. The California Health and Safety Code required that the Agency
set aside 20% of its tax allocation for the purpose of increasing or improving housing for low- and- moderate
income households throughout the City.
Community Redevelopment Agency Debt Service Fund
To account for principal and interest requirements on the tax allocation bonds issued by the Agency to
finance various Agency projects.
Community Redevelopment Agency Capital Projects Fund
To account for the acquisition or construction of major capital facilities in the Redevelopment Project Area.
The primary source of this funds is property tax and bond proceeds.
Solid Waste Assessment Special Revenue Fund
To account for funds received from levies on properties for the collection of solid waste. Under the terms of
the franchise agreement, the major portion of this money is remitted to the solid waste collector as payment of
their services and a portion of is remitted to the City for their share of the franchise fee.
Special Assessment Bonds Debt Service Fund
To account for principal and interest requirements on the 1996 Local Improvement District 25R Bonds to
finance improvements to properties located within the Special Assessment Districts.
21
City of Union City
Balance Sheet
Governmental Funds
June 30, 2006
General Special Revenue Debt Service Capital Projects
Fund Fund Fund Fund
ASSETS
Cash and investments $ 9,234,216 $ 9,321,462 $ 3 ,041,977 $ 14,386,343
Restricted cash and investment - - 5 86,967 -
Receivables:
Taxes - 212,819 8 51,275 -
Accounts 296,998 - - -
Interest 566,489 34,174 - 120,632
Intergovernmental 1,271,148 179,636 - 25,200
Due from other funds - - - -
Loans receivable 515,959 5,555,814 - -
Special assessments receivable - - - -
Advances to other funds - - - -
Prepaid items and condemnation deposits 174,618 10 - 18,381
Property held for resale, net of allowance for
decline in value - 1,871,715 - 30,234,937
Total assets $ 12,059,428 $ 17,175,630 $ 4 ,480,219 $ 44,785,493
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 166,563$ 5,394 $ - $ 745,894
Accrued payroll 1,000,075 2,806 - 95,879
Other accrued liabilities 68,422 69,602 1 5,333 7,937
Due to other funds - - - -
Due to other agencies 9,415 1,300,000 - 150,000
Deposit payable 1,292,515 - - -
Deferred revenue 400,769 5,450,000 - -
Advances from other funds - - - -
Total liabilities 2,937,759 6,827,802 1 5,333 999,710
Fund Balances:
Reserved:
Advances to other funds - - - -
Debt service - - 4 ,464,886 -
DIPSA development - - - -
Encumbrances 92,935 101,171 - 4,672,325
Low and moderate income housing - 8,269,118 - -
Capital Project 250,000 - - -
Loans receivable 515,959 105,814 - -
Prepaid items and condemnation deposits 174,618 10 - 18,381
511 plan area - - - -
Property held for resale - 1,871,715 - 30,234,936
Recycling program - - - -
Total reserved 1,033,512 10,347,828 4 ,464,886 34,925,642
Unreserved:
Designated, Reported in:
General fund 1,307,373 - - -
Special revenue funds - - - -
Capital projects funds - - - 8,860,141
Undesignated, Reported in:
General fund 6,780,784 - - -
Special revenue funds - - - -
Debt Service - - - -
Capital projects funds - - - -
Total fund balances 9,121,669 10,347,828 4 ,464,886 43,785,783
Total liabilities and fund balances $ 12,059,428 $ 17,175,630 $ 4,480,219 $ 44,785,493
See accompanying Notes to Basic Financial Statements.
Community Redevelopment Agency
22
Solid Waste Special
Assessment Assessment Non- Major Total
Special Revenue Debt Service Governmental Governmental
Fund Fund Funds Funds
$ 6,745,060 $ 1,526,964 $ 2 6,740,573 $ 70,996,595
- - 7,319,501 7,906,468
- - - 1,064,094
- - 417,416 714,414
- - - 721,295
- - 717,894 2,193,878
- - 1,181,667 1,181,667
- - 2,680,424 8,752,197
- 5,037,000 - 5,037,000 1,181,667 ( 3,855,333)
- 121,010 - 121,010
- - 166,309 359,318
- - 1,681,848 33,788,500 # REF!
$ 6,745,060 $ 6,684,974 $ 4 0,905,632 $ 132,836,436
$ - $ - $ 409,783 $ 1,327,634
- - 373,622 1,472,382
6 9,886 - 399,930 631,110
- - 1,181,667 1,181,667
3 0,201 - 17,105 1,506,721
- - 32,500 1,325,015
- 5,037,000 3,154,255 14,042,024
- - 121,010 121,010
100,087 5,037,000 5,689,872 21,607,563
- 121,010 - 121,010
1,526,964 8,377,084 14,368,934
- - 4,914,699 4,914,699
4,990 - 2,947,339 7,818,760
- - - 8,269,118
- - - 250,000
- - - 621,773
- - 47,227 240,236
- - 4,602 4,602
- - 1,681,848 33,788,499
- - 1,185,892 1,185,892
4,990 1,647,974 1 9,158,691 71,583,523
- - - 1,307,373
- - 14,912 14,912
- - 261,431 9,121,572
- - - 6,780,784
6,639,983 - 1 4,736,291 21,376,274
- - 1,324,955 1,324,955
- - ( 280,520) ( 280,520)
6,644,973 1,647,974 3 5,215,760 111,228,873
$ 6,745,060 $ 6,684,974 $ 4 0,905,632 $ 132,836,436
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24
City of Union City
Reconciliation of the Governmental Funds Balance Sheet
to the Government- Wide Statement of Net Assets
June 30, 2006
Total Fund Balances - Total Governmental Funds $ 111,228,873
Amounts reported for governmental activities in the Statement of Net Assets were different
because:
Capital assets used in governmental activities were not current financial resources.
Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for
the internal service funds reported below, the capital assets were adjusted as follows:
Government-
Wide Statement
of Net Assets
Internal Service
Funds
- Non- depreciable $ 37,230,052 $ - 37,230,052
- Depreciable, net 129,206,894 1,002,915 128,203,979
Total capital assets $ 166,436,946 $ 1,002,915 165,434,031
Net pension asset was not current financial resources. Therefore, it was not reported in
the Governmental Funds Balance Sheet. This amount is to be amortized over the life of
the 2004 Series Pension Obligation Bond.
22,422,203
Interest payable on long- term debt did not require current financial resources.
Therefore, interest payable was not reported as a liability in Governmental Funds
Balance Sheet. ( 1,861,038)
Deferred charges on issuance of long- term debt were not current financial resources.
Therefore, they were not reported in the Governmental Funds Balance Sheet. This
amount is to be amortized over the life of the long- term debt. 1,922,072
Deferred revenue recorded in the Fund Financial statements resulting from activities in
which revenues were earned but funds were not available are reclassified as revenues in
the Government- Wide Financial Statements. 13,254,717
Internal service funds were used by management to charge the costs of certain activities,
such as insurance, to individual funds. The assets and liabilities of the Internal service
funds were included in governmental activities in the Government- Wide Statement of
Net Assets. 4,972,042
Long- term liabilities were not due and payable in the current period. Therefore, they
were not reported in the Governmental Funds Balance Sheet.
Government-
Wide Statement
of Net Assets
Internal Service
Funds
- Compensated absences - due within one year $ ( 1,603,325) $ - ( 1,603,325)
- Compensated absences - due in more than one year ( 567,605) ( 48,745) ( 518,860)
- Long- term debt - due within one year ( 2,354,448) - ( 2,354,448)
- Long- term debt - due in more than one year ( 139,299,839) - ( 139,299,839)
Total long- term liabilities $ ( 143,825,217) $ ( 48,745) ( 143,776,472)
Net Assets of Governmental Activities $ 173,596,428
See accompanying Notes to Basic Financial Statements.
25
City of Union City
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the year ended June 30, 2006
General Special Revenue Debt Service Capital Projects
Fund Fund Fund Fund
REVENUES:
Taxes and special assessments $ 26,657,116 $ 3 ,422,996 $ 1 3,878,701 $ -
Licenses, permits and fees 2,115,678 - - -
Fines and forfeitures 713,249 - - -
Intergovernmental 1 ,953,331 - - 144,286
Charges for services 3,800,000 - - -
Investment income 615,114 235,992 2 6,873 582,515
Others 6 45,788 2 3,272 - 891,446
Total revenues 36,500,276 3,682,260 1 3,905,574 1 ,618,247
EXPENDITURES:
Current:
General government 5 ,031,370 - 1,239,477 -
Public safety 2 1,760,125 - - -
Housing and community development - 4 31,453 - 1 ,255,273
Recreation and culture 1,629,627 - - -
Planning and public works 5 ,129,047 - - -
Agency pass through payments - - 9 93,710 -
Capital outlay 1 41,299 - - 8 ,011,270
Debt service:
Principal repayment - - 1,215,000 -
Interest and fiscal charges - - 5,119,966 -
Total expenditures 33,691,468 431,453 8,568,153 9 ,266,543
REVENUES OVER ( UNDER) EXPENDITURES 2,808,808 3,250,807 5,337,421 ( 7,648,296)
OTHER FINANCING SOURCES ( USES):
Contribution from Agency fund - - - -
Proceeds from sale of assets 2,323 - - -
Transfers in 883,900 - 1,343,147 2 ,790,021
Transfers out ( 1,147,764) ( 1,343,147) ( 2,790,021) -
Total other financing sources ( uses) ( 261,541) ( 1,343,147) ( 1,446,874) 2 ,790,021
Net change in fund balances 2,547,267 1,907,660 3,890,547 ( 4,858,275)
FUND BALANCES:
Beginning of year, as restated ( Note 18) 6 ,574,402 8,440,168 574,339 4 8,644,058
End of year $ 9,121,669 $ 1 0,347,828 $ 4,464,886 $ 4 3,785,783
$ 9,121,669 $ 1 0,347,828 $ 4,464,886 $ 4 3,785,783
See accompanying Notes to Basic Financial Statements. $ - $ - $ - $ -
Community Redevelopment Agency
26
Solid Waste Special
Assessment Assessment Non- Major Total
Special Revenue Debt Service Governmental Governmental
Fund Fund Funds Funds
$ - $ 651,604 $ 9,907,688 $ 5 4,518,105
- - - 2,115,678
- - - 7 13,249
8 0,000 - 3,793,588 5,971,205
- - 1 1,512,087 15,312,087
- 42,550 852,611 2,355,655
- - 2 ,493,838 4,054,344
8 0,000 694,154 2 8,559,812 85,040,323
9 9,807 379,542 4,087,281 1 0,837,477
- - 5 ,072,374 2 6,832,499
- - 902,336 2,589,062
- - 1 ,531,357 3,160,984
- - 21,519 5,150,566
- - - 9 93,710
131,228 - 1 2,617,530 20,901,327
- 267,000 707,510 2,189,510
- 369,842 2 ,065,596 7,555,404
231,035 1,016,384 2 7,005,503 80,210,539
( 151,035) ( 322,230) 1,554,309 4,829,784
5,962,836 - ( 2,764) 5,960,072
- - - 2 ,323
833,172 - 1,619,687 7,469,927 752,323
- - ( 2,191,318) ( 7,472,250)
6,796,008 - ( 574,395) 5,960,072
6,644,973 ( 322,230) 979,914 1 0,789,856
- 1,970,204 3 4,235,846 1 00,439,017
$ 6,644,973 $ 1,647,974 $ 3 5,215,760 $ 1 11,228,873
$ 6,644,973 $ 1,647,974 $ 3 5,215,760 #
$ - $ - $ - #
27
City of Union City
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in
Fund Balances to the Government- Wide Statement of Activities and Changes in Net Assets
For the year ended June 30, 2006
Net Change in Fund Balances - Total Governmental Funds $ 10,789,856
Amounts reported for governmental activities in the Statement of Activities and Changes in Net Assets were
different because:
Governmental funds reported capital outlay as expenditures. However, in the Government- Wide Statement
of Activities and Changes in Net Assets, the cost of those assets was allocated over their estimated useful
lives as depreciation expense. This was the amount of capital assets recorded in the current period. 19,192,979
Depreciation expense on capital assets was reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but they did not require the use of current financial resources. Therefore,
depreciation expense was not reported as expenditures in Governmental Funds. ( 7,341,332)
Disposal of capital assets is reported in the Governmental- Wide Statement of Activities and Changes in Net
Assets, but they do not require the use of current financial resources. Therefore, it is not reported as
expenditures in governmental funds. ( 250)
Amortization of net pension asset did not require the use of current financial resources and therefore is not
reported as an expenditure in governmental funds ( 982)
Revenues that have not met the revenue recognition criteria in the Fund Financial statements are recognized
as revenue in the Government- Wide Financial Statements. ( 112,065)
Cost of issuance was an expenditure in governmental funds, but in the Government- Wide Statement of Net
Assets, an asset, deferred charges was recorded and is being amortized over the life of the bond. This
amount is the current year amortization expense. ( 82,426)
Accrued vacation and sick leave payable was an expenditure in governmental funds, but the accrued
payable increased vacation and sick leave liabilities in the Government- Wide Statement of Net Assets. ( 415,000)
Repayment of bond principal was an expenditure in governmental funds, but the repayment reduced long-term
liabilities in the Government- Wide Statement of Net Assets. 2,189,510
Interest expense on long- term debt was reported in the Government- Wide Statement of Activities and
Changes in Net Assets, but they did not require the use of current financial resources. Therefore, interest
expense was not reported as expenditures in governmental funds. The following amount represented the
change in accrued interest from prior year. 313,213
Internal service funds were used by management to charge the costs of certain activities to individual funds.
The net revenue of the internal service funds was reported with governmental activities. 1,596,307
Change in Net Assets of Governmental Activities $ 26,129,810
See accompanying Notes to Basic Financial Statements. ( 26,129,810)
28
PROPRIETARY FUND FINANCIAL STATEMENTS
Transit Fund
To account for the operation and management of the City's bus system. This system is operated and
maintained by an independent transit management company under contract with the City.
Paratransit Fund
To account for the operation and management of the City's paratransit system. The system is also operated
and maintained by an independent transit management company under contract with the City.
29
City of Union City
Statement of Net Assets
Proprietary Funds
June 30, 2006
Governmental
Activities
Internal
Transit Paratransit Totals Service Funds
ASSETS
Current assets:
Cash and investments $ 103,534 $ 31,759 $ 135,293 $ 7,247,161
Receivables:
Accounts 188 - 188 98,332
Intergovernmental 67,703 44,986 112,689 8,240
Prepaid items 612 541 1,153 63,638
Total current assets 172,037 77,286 249,323 7,417,371
Noncurrent assets:
Capital assets:
Depreciable, net 3,733,754 36,866 3,770,620 1,002,915
Total capital assets 3,733,754 36,866 3,770,620 1,002,915
Total noncurrent assets 3,733,754 36,866 3,770,620 1,002,915
Total assets 3,905,791 114,152 4,019,943 8,420,286
LIABILITIES
Current liabilities:
Accounts payable 168,891 30,406 199,297 68,739
Accrued payroll 12,481 5,102 17,583 17,961
Compensated absences - due within one year 16,406 4,449 20,855 13,194
General liability claims - due within one year - - - 61,812
Workers' compensation claims - due within one year - - - 768,686
Other accrued liabilities 91,049 27,451 118,500 4,629
Due to other agencies - 4,893 4,893 -
Deposit payable 23,261 - 23,261 -
Total current liabilities 312,088 72,301 384,389 935,021
Noncurrent liabilities:
Compensated absences - due in more than one year 9,259 4,985 14,244 48,745
General liability claims - due in more than one year - - - 170,125
Workers' compensation claims - due in more than one year - - - 2,294,353
Total noncurrent liabilities 9,259 4,985 14,244 2,513,223
Total liabilities 321,347 77,286 398,633 3,448,244
NET ASSETS
Invested in capital assets 3,733,754 36,866 3,770,620 1,002,915
Unrestricted ( 149,310) - ( 149,310) 3,969,127
Total net assets $ 3,584,444 $ 36,866 $ 3,621,310 $ 4,972,042
See accompanying Notes to Basic Financial Statements.
Major Funds
30
City of Union City
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
For the year ended June 30, 2006
Governmental
Activities
Internal
Transit Paratransit Totals Service Funds
OPERATING REVENUES:
Charges for services $ 316,245 $ 34,984 $ 351,229 $ 5,303,830
Total operating revenues 316,245 34,984 351,229 5,303,830
OPERATING EXPENSES:
Garage operations - - - 1,571,995
Payroll and related costs 327,361 137,082 464,443 -
Purchased transportation 1,534,547 - 1,534,547 -
Paratransit contract - 353,288 353,288 -
Workers' compensation claims and premiums - - - 1,554,598
Other insurance - - - 490,927
Administrative 282,163 38,351 320,514 74,416
Depreciation 360,517 35,027 395,544 270,549
Services and supplies 430,879 60,460 491,339 -
Total operating expenses 2,935,467 624,208 3,559,675 3,962,485
OPERATING INCOME ( LOSS) ( 2,619,222) ( 589,224) ( 3,208,446) 1,341,345
NONOPERATING REVENUES ( EXPENSES):
Intergovernmental 2,089,891 713,220 2,803,111 4,000
Investment income 19,503 - 19,503 183,550
Gain on disposal of capital assets - 1,319 1,319 6,205
Total nonoperating revenues ( expenses) 2,109,394 714,539 2,823,933 193,755
INCOME ( LOSS) BEFORE TRANSFERS ( 509,828) 125,315 ( 384,513) 1,535,100
Capital contribution 20,869 2,920 23,789 -
Transfers in - - - 752,323
Transfers out - - - ( 750,000)
Change in net assets ( 488,959) 128,235 ( 360,724) 1,537,423
NET ASSETS:
Beginning of year 4,073,403 ( 91,369) 3,982,034 3,434,619
End of year $ 3,584,444 $ 36,866 $ 3,621,310 $ 4,972,042
See accompanying Notes to Basic Financial Statements.
Major Funds
31
City of Union City
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2006
Governmental
Activities
Internal
Transit Paratransit Totals Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers $ 316,216 $ 34,984 $ 351,200 $ 5,273,358
Payments to suppliers ( 1,927,917) ( 430,952) ( 2,358,869) ( 1,542,320)
Payments to employees ( 609,524) ( 175,433) ( 784,957) ( 74,415)
Claims paid - - - ( 1,824,569)
Net cash provided ( used) by operating activities ( 2,221,225) ( 571,401) ( 2,792,626) 1,832,054
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: - -
Operating grants received 2,138,783 716,240 2,855,023 45,760
Refund of excess operating grant funds and interest ( 37,240) - ( 37,240) -
Interfund receipts - - - 2,323
Interfund payments 114,399 ( 114,399) - -
Net cash provided ( used) by noncapital financing activities 2,215,942 601,841 2,817,783 48,083
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Capital grants received 20,869 2,920 23,789 -
Acquisition of capital assets - - - ( 299,267)
Proceeds from the sale of capital assets - 1,319 1,319 6,205
Net cash provided ( used) by capital and related financing activities - 1,319 1,319 ( 293,062)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income 19,503 - 19,503 183,550
Net cash provided ( used) by investing activities 19,503 - 19,503 183,550
Net increase ( decrease) in cash and cash equivalents 14,220 31,759 45,979 1,770,625
CASH AND CASH EQUIVALENTS:
Beginning of year 89,314 - 89,314 5,476,536
End of year $ 103,534 $ 31,759 $ 135,293 $ 7,247,161
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income ( loss) $ ( 2,619,222) $ ( 589,224) $ ( 3,208,446) $ 1,341,345
Adjustments to reconcile operating income ( loss) to net
cash provided ( used) by operating activities:
Depreciation 360,517 35,027 395,544 270,549
Changes in current assets and liabilities:
Accounts receivable ( 29) - ( 29) ( 30,472)
Prepaid items ( 65) ( 61) ( 126) ( 107)
Accounts payable 29,914 ( 50,922) ( 21,008) 24,270
Accrued compensated absences - - - 1
Accrued general liability claims - - - ( 154,834)
Accrued worker's compensation claims - - - 406,401
Other accrued liabilities 7,660 33,779 41,439 ( 25,099)
Total adjustments 397,997 17,823 415,820 490,709
Net cash provided ( used) by operating activities $ ( 2,221,225) $ ( 571,401) $ ( 2,792,626) $ 1,832,054
See accompanying Notes to Basic Financial Statements.
Major Funds
32
FIDUCIARY FUND FINANCIAL STATEMENTS
Agency Funds
These 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 Government- wide
financial statements, but are presented in separate Fiduciary Fund financial statements.
33
City of Union City
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2006
Agency
Funds
ASSETS
Cash and investments $ 522,209
Total assets $ 522,209
LIABILITIES
Other accrued liabilities $ 522,209
Total liabilities $ 522,209
See accompanying Notes to Basic Financial Statements.
34
City of Union City
Notes to Basic Financial Statements
For the year ended June 30, 2006
35
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Union City ( City) have been prepared in conformity with
generally accepted accounting principles ( GAAP) as applied to governmental agencies. The Governmental
Accounting Standards Board ( GASB) is the accepted standard setting body for establishing governmental
accounting and financial reporting principles. The more significant of the City’s accounting policies are
described below.
A. Reporting Entity
The City of Union City ( City) was incorporated on January 26, 1959, and operates under a Council- Manager
form of government. The City Council consists of five elected members. The following services are
provided by the City to its citizens: public safety ( fire and police), highways and streets, culture and
recreation, public improvements, planning and zoning, transit, and general administrative services.
As required by GAAP, these basic financial statements present the City and its component units, entities for
which the City is considered to be financially accountable. Blended component units, although legally
separate entities are, in substance, part of the City’s operations and data from these units are combined with
data of the City. Each blended component unit has a June 30 year- end. The City had no discretely
presented component units. The following entities are reported as blended component units:
Community Redevelopment Agency of the City of Union City ( Agency) - The Authority is a separate
government entity created in 1985 under the provisions of the Redevelopment Law ( California Health
and Safety Code) to assist in revitalizing of areas within the City which are determined to be in a
declining condition. The Agency is controlled by the City and has the same governing board as the City,
which also performs all accounting and administrative functions for the Agency. The financial activities
of the Agency have been included in these financial statements in the Community Redevelopment
Agency Special Revenue Fund, Community Redevelopment Agency Debt Service Fund, and
Community Redevelopment Agency Capital Projects Fund.
City of Union City Public Facilities Corporation ( Corporation) – The Corporation is a separate government
entity whose purpose is to assist with the financing certain public capital facilities for the City and the
Agency through the issuance of bonds or other forms of debt. The Corporation is controlled by the City
and has the same governing body as the City, which also performs all accounting and administrative
functions for the Authority. The Corporation does not report any balances or operations since the lease
transactions between the City and the Corporation are offset.
Union City Public Facilities Authority ( Authority) -- The Authority is a separate government entity. The
Authority was formed in 1996 for the purpose of financing the purchase of the Lincoln- Alvarado
Industrial Park Assessment District Local Improvement District No. 25 refunding bonds. The Authority
is controlled by the City and has the same governing body as the City, which also performs all
accounting and administrative functions for the Authority. The financial activities of the Authority have
been included in these financial statements in the Public Facilities Authority Fund.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
36
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self- balancing
accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses as
appropriate. Governmental resources are allocated to and accounted for in individual funds based upon
the purposes for which they are to be spent and the means by which spending activities are controlled.
Government- Wide Financial Statements
The City’s Government- Wide Financial Statements include a Statement of Net Assets and a Statement of
Activities and Changes in Net Assets. These statements present summaries of governmental and business-type
activities for the City accompanied by a total column. Fiduciary activities of the City are not included
in these statements.
These Government- Wide Financial Statements are presented on an “ economic resources” measurement focus
and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital
assets, as well as infrastructure assets, and long- term liabilities, are included in the accompanying
Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis
of accounting, revenues are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City in three categories:
􀁸 Charges for services
􀁸 Operating grants and contributions
􀁸 Capital grants and contributions
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, payables and receivables. All internal balances in the Statement of Net Assets have been
eliminated except those representing balances between the governmental activities and the business- type
activities, which are presented as internal balances and eliminated in the total primary government column.
In the Statement of Activities and Changes in Net Assets, internal service fund transactions have been
eliminated; however, those transactions between governmental and business- type activities have not been
eliminated. The following interfund activities have been eliminated:
􀁸 Due to/ from other funds
􀁸 Advances to/ from other funds
􀁸 Transfers in/ out
􀁸 Interfund charges
The City applies all applicable GASB pronouncements ( including all NCGA Statements and Interpretations
currently in effect) as well as the following pronouncements issued on or before November 30, 1989 to the
business type activities, unless those pronouncements conflict with or contradict GASB pronouncements:
Financial Accounting Standards Board ( FASB) Statements and Interpretations, Accounting Principles Board
( APB) Opinions, and Accounting Research Bulletins ( ARB) of the committee on Accounting Procedure. The
City applies all applicable FASB Statement and Interpretations issued after November 30, 1989 except those
that conflict with or contradict GASB pronouncements.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
37
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus, Continued
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances for all major governmental funds and non- major funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets
as presented in these statements to the net assets presented in the Government- Wide Financial Statements.
The City has presented all major funds that met the applicable criteria.
The City reports the following major governmental funds:
The General Fund – is used to accounts for all financial resources and activities not required to be
accounted for in other funds.
The Community Redevelopment Agency Special Revenue Fund – is used to account for monies received and
expended by the Agency for the financing development and rehabilitation in the City. The California
Health and Safety Code required that the Agency to set aside 20% of its tax allocations for the purpose
of increasing or improving housing for low- and- moderate income households throughout the City.
The Community Redevelopment Agency Debt Service Fund - is used to account for principal and interest
requirements on the tax allocation bonds issued by the Agency to finance various Agency Projects.
The Community Redevelopment Agency Capital Projects Fund – is used to account for the acquisition or
construction of major capital facilities in the Redevelopment Project Area. The primary source of fund is
property tax and bond proceeds.
The Solid Waste Assessment Special Revenue Fund – is used to account for funds received from levies on
properties for the collection of solid waste. Under the terms of the franchise agreement, the major
portion of this money is remitted to the solid waste collector as payment of their services and a portion
of is remitted to the City for their share of the franchise fee.
The Special Assessment Debt Services Fund – is used to account for bonds, which were issued under
various public improvement acts of the State of California and are secured by liens against properties
deemed to have been benefited by the improvements for which the bonds were issued. The City acts as
an agency in collecting the assessments for property owners, forwarding the collections to bondholders
and initiate foreclosure proceedings when necessary.
All governmental funds are accounted for on a spending or “ current financial resources” measurement focus
and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are
included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances
presents increases ( revenues and other financing sources) and decreases ( expenditures and other financing
uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the
accounting period in which they become both measurable and available to finance expenditures of the
current period.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
38
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus, Continued
Revenues are recorded when received in cash, except for that revenues subject to accrual ( generally 60 days
after year- end) are recognized when due. The primary revenue sources, which have been treated as
susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes.
Expenditures are recorded in the accounting period in which the related fund liability is incurred.
Deferred revenues arise when potential revenues do not meet both the “ measurable” and “ available”
criteria for recognition in the current period. Deferred revenues also arise when the government receives
resources before it has a legal claim to them, as when grant monies are received prior to incurring
qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when
the government has a legal claim to the resources, the deferred revenue is removed from the Combined
Balance Sheet and recognized as revenue.
The Reconciliation of the Fund Financial Statements to the Government- Wide Financial Statements is
provided to explain the differences created by the integrated approach of GASB Statement No. 34.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of Revenues,
Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary fund.
A separate column representing internal service funds is also presented in these statements. However,
internal service balances and activities have been combined with the governmental and business- type
activities in the Government- Wide Financial Statements as appropriate.
Proprietary funds are accounted for using the “ economic resources” measurement focus and the accrual basis
of accounting. Accordingly, all assets and liabilities ( whether current or noncurrent) are included on the
Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Fund Net Assets presents
increases ( revenues) and decreases ( expenses) in total net assets. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in the period
in which the liability is incurred.
The City reports the following major enterprise funds:
The Transit Fund – accounts for the operation and management of the City’s bus system. This system is
operated and maintained by an independent transit management company under contract with the
City.
The Paratransit Fund – accounts for the operation and management of the City’s paratransit system. The
system is also operated and maintained by an independent transit management company under
contract with the City.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
39
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus, Continued
Internal service fund balances and activities have been combined with governmental activities in the
government- wide financial statements, and are comprised of the following funds:
The Internal Service Funds – account for employees’ benefits, worker’s compensation, general liability
and City garage operations; all of which are provided to other departments on a cost- reimbursement
basis.
Operating revenues in the proprietary fund are those revenues that are generated from the primary
operations of the fund. All other revenues are reported as non- operating revenues. Operating expenses are
those expenses that are essential to the primary operations of the fund. All other expenses are reported as
non- operating expenses.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements consist of a Statement of Changes in Net Assets. The City’s fiduciary
funds represent agency funds and do not involve measurement of results of operations. The fiduciary
funds are accounted for using the accrual basis of accounting.
The City reports the following fiduciary fund:
The Agency Funds – accounts for assets held by the City as an agent for individuals, private
organizations and other governments. The City’s agency fund accounts for the post- retirement
healthcare benefits of the Police Officers’ Association. The financial activities of these funds are
excluded from the Government- wide financial statement, but are presented in separate Fiduciary Fund
financial statements.
C. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City’s cash and cash equivalents are
considered to be cash on hand, demand deposits, and short- term investments with original maturity of
three months or less from date of acquisition. Cash and cash equivalents are combined with investments
and displayed as Cash and Investments.
In accordance with GASB Statement No. 40, Deposit and Investment Disclosures ( Amendment of GASB
No. 3), certain disclosure requirements for Deposits and Investment Risks were made in the following
areas:
􀂃 Interest Rate Risk
􀂃 Credit Risk
􀂉 Overall
􀂉 Custodial Credit Risk
􀂉 Concentrations of Credit Risk
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
40
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
C. Cash, Cash Equivalents and Investments, Continued
In addition, other disclosures are specified including use of certain methods to present deposits and
investments, highly sensitive investments, credit quality at year- end and other disclosures.
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for
External Investment Pools, highly liquid market investments with maturities of one year or less at time of
purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used
as fair value for those securities for which market quotations are readily available.
The City participates in an investment pool managed by the State of California titled Local Agency
Investment Fund ( LAIF) which has invested a portion of the pooled funds in Structured Notes and Asset-backed
Securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of
California collateralizing these investments. In addition, these Structured Notes and Asset- backed
Securities are subject to market risk as to change in interest rates.
D. Restricted Cash and Investments
Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for
acquisition and construction of capital projects. Cash and investments are also restricted for deposits held
for others within the enterprise funds.
E. Receivables
During the course of normal operations, the City carries various receivable balances for taxes, interest,
services, utilities and special assessments. Accounts receivables are shown net of an allowance for doubtful
accounts of $ 9,950,130.
F. Notes Receivable
For the purposes of the governmental fund financial statements, expenditures related to long- term notes,
arising from subsidy programs are charges to operations upon funding and the notes are recorded with an
offset to a deferred revenue account. For the purposes of the Government- Wide Financial Statements, long-term
loans are not offset by deferred revenue accounts.
G. Interfund Transactions
Interfund transactions are reflected as either loans, services provided, reimbursements or transfers.
Activity between funds that are representative of lending/ borrowing arrangements outstanding at the end
of the fiscal year are referred to as either “ due to/ from funds” ( i. e., the current portion of interfund loans)
or “ advances to/ from other funds” ( i. e., the noncurrent portion of interfund loans). Advances between
funds, reported in the fund financial statements, are offset by a fund balance reserve account in applicable
governmental funds to indicate that they are not available for appropriation and are not expendable
available financial resources. Any residual balances outstanding between the governmental activities and
business- type activities are reported in the governmental- wide financial statements as “ internal balances.”
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
41
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
G. Interfund Transactions, Continued
Services provided, deemed to be at market or near market rates, are treated as revenues and
expenditures/ expenses. Reimbursements are when one fund incurs a cost, charges the appropriate
benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated
as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to
the Government- Wide Financial Statements presentation.
H. 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 defines capital assets as assets with an initial, individual cost of more than $ 5,000 and an estimated
useful life in excess of one year.
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 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. The City has assigned the useful lives listed below to capital
assets:
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 asset constructed, net of
interest earned on the invested proceeds over the same period.
The Governmental Accounting Standards Board ( GASB) issued Statement No. 34 requires the inclusion of
infrastructure capital assets in local governments’ basic financial statements. In accordance with Statement
No. 34, the City has included the value of all infrastructures into its Basic Financial Statements.
The City defines infrastructure as the basic physical assets that allow the City to function, which consists of
two major networks:
􀁸 Roadway
􀁸 Recreation such as major park facilities and landscaped areas, park trails and bike paths used by
the City in the conduct of its business.
Buildings and Improvements 25 years
Machinery and Equipment 3- 25 years
Infrastructure 25- 40 years
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
42
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
H. Capital Assets, Continued
The City elected to use the Basic Approach as defined by GASB Statement No. 34 for infrastructure
reporting. The City conducted a valuation of its infrastructure assets as of June 30, 2004. This valuation
determined the estimated acquisition cost using one of the following methods:
1. Use of historical records where available.
2. Standard unit costs appropriate for the construction/ acquisition date.
3. Present cost indexed by a reciprocal factor of the price increase from the
construction/ acquisition date to the current date.
The accumulated depreciation, defined as the total depreciation from the date of construction/ acquisition
to the current date on a straight line method using industry accepted life expectancies for each
infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation
from the original cost.
I. Compensated Absences
Compensated absences comprise unpaid vacation which can be accumulated to the greater of 24 times the
employees’ monthly accrual rate or 240 hours. The City’s liability for compensated absences is recorded at
the Entity- wide level in the Statement of Net Assets for Governmental Activities and in Proprietary funds
as appropriate.
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.
J. Long- Term Debt
Government- Wide Financial Statements - Long- term debt and other long- term obligations are reported as
liabilities in the appropriate activities.
Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the
bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium
or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the
related debt.
Fund Financial Statements - The governmental fund financial statements do not present long- term debt but are
shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government- Wide Statement of
Net Assets.
Bond premiums and discounts, as well as issuance costs, are recognized during the current period as other
financing sources or uses. Bond proceeds are reported as other financing sources.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
43
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
K. Special Assessments Receivables
The special assessments receivable represent unpaid assessments levied on real property to provide for the
principal payment of outstanding special assessment bonds. Special assessments not considered available
are recorded as receivable and offset by deferred revenue in the governmental funds financial statements.
L. Property Taxes
Alameda 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. Property tax
revenues are recognized by the City in the fiscal year they are assessed, provided they become available as
defined above.
Secured Property tax is due in two installments, on November 1 and March 1, and becomes a lien on those
dates. It becomes delinquent after 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 taxes levied are recorded as revenue and receivables in the fiscal year of levy, provided they are
collected within the fiscal year or within forty five days of the year end.
M. Net Assets / Fund Balance
In the government- wide financial statements, net assets are classified in the following categories:
Invested in Capital Assets, net of Related Debt – This amount consists of capital assets net of accumulated
depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or
improvement of the assets.
Restricted Net Assets – This amount is restricted by external creditors, grantors, contributors, laws or
regulations of other governments.
Unrestricted Net Assets – This amount is all net assets that do not meet the definition of “ invested in
capital assets, net of related debt” or “ restricted net assets.”
N. Fund Balances – Reserves and Designations
In the fund financial statements, governmental funds report reservations of fund balances for amounts that
are not available for appropriation or are legally restricted by outside parties for use for a specific purpose.
Designations of fund balance represent tentative management plans that are subject to change.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
44
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
O. Use of Estimates
The preparation of the basic financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities.
In addition, estimates affect the reported amount of expenses. Actual results could differ from these
estimates and assumptions.
P. Implementation of New GASB Pronouncements
In 2006, the City adopted new accounting standards in order to conform to the following Governmental
Accounting Standards Board Statement:
􀂾 GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for
Insurance Recoveries – The Statement establishes accounting and financial reporting standards for
impairment of capital assets. A capital asset is considered impaired when its service utility has
declined significantly and unexpectedly. This Statement also clarifies and establishes accounting
requirements for insurance recoveries.
􀂾 Statement No. 44, Economic Condition Reporting: The Statistical Section ( Amendment of NCGA Statement
1) – The Statement establishes the objectives of the statistical section and the five categories of
information it contains; financial trends information, revenue capacity information, debt capacity
information, demographic and economic information, and operating information.
􀂾 GASB Statement No. 46, Net Assets Restricted by Enabling Legislation – The Statement addresses
selected issues and amends GASB Statement No. 34, Basic Financial Statements and Management's
Discussion and Analysis for State and Local Governments. The Statement enhances the usefulness and
comparability of net asset information and clarifies the meaning of legal enforceability. The
Statement also specified accounting and financial reporting requirements for restricted net assets.
􀂾 GASB Statement No. 47, Accounting for Termination Benefits – The Statement provides accounting
guidance for state and local governmental employers regarding benefits ( such as early- retirement
incentives and severance benefits) provided to employees that are terminated. The Statement
requires recognition of the cost of involuntary termination benefits in the period in which a
government becomes obligated to provide benefits to terminated employees.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
45
2. CASH AND INVESTMENTS
The City maintains a cash and investment pool for all funds. Certain restricted funds which are held and
invested by independent outside custodians through contractual agreements are not pooled. These
restricted funds include cash and investment held by trustees.
A. Deposits
The carrying amount of the City’s cash deposit was a negative amount of $ 634,918 at June 30, 2006. Bank
balances before reconciling items were $ 1,893,217 at June 30, 2006, the total amount of which was insured
and/ or collateralized with securities held by the pledging financial institutions in the City’s name as
discussed below.
The California Government Code requires California banks and savings and loan associations to secure the
City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this
manner shall have the effect of perfecting a security interest in such collateral superior to those of a general
creditor. Thus, collateral for cash deposits is considered to be held in the City's name.
The market value of pledged securities must equal at least 110% of the City’s cash deposits. California law
also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value
of 150% of the City’s total cash deposits. The City may and has waived collateral requirements for cash
deposits, which are fully insured up to $ 100,000 by the Federal Deposit Insurance Corporation.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be
held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and
investments is allocated on an accounting period basis to the various funds based on the period- end cash
and investment balances. Interest income from cash and investments with fiscal agents is credited directly
to the related fund.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
46
2. CASH AND INVESTMENTS
B. Investments
Under the provisions of the City’s investment policy, and in accordance with California Government Code, the
following investments are authorized:
Maximum
Maximum Minimum Credit Percentage of
Authorized Investment Type Maturity Quality Portfolio
U. S Agency and U. S Government 5 years N/ A No Limit
State of California Obligations 5 years N/ A No Limit
CA Local Agency Obligations 5 years N/ A No Limit
Prefunded Municipal Obligations N/ A AAA No Limit
Banker Acceptances 365 days AAA No Limit
Commercial Paper 270 days AAAm No Limit
Negotiable Certificates of Desposit 365 days AAA No Limit
Repurchase Agreements 1 year AAA No Limit
Money Market Mutual Funds N/ A AAAm No Limit
Collateralized Bank Deposits 5 years None No Limit
Mortgage Pass- Through Securites 5 years AA 20%
Time Deposits 365 days AAA No Limit
Guaranteed Investment Contracts N/ A AA No Limit
California Local Agency Investment N/ A N/ A No Limit
Fund ( LAIF)
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for
External Investment Pools, investments were stated at fair value using the aggregate method in all funds and
component units, resulting in the following investment income in all funds and component units:
Interest income
Unrealized loss in changes in $ 3,000,003
fair value of investments ( 655,696)
Total investment income $ 2 ,344,307
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
47
2. CASH AND INVESTMENTS, Continued
B. Investments, Continued
The City portfolio value fluctuates in an inverse relationship to any change in interest rate. Accordingly, if
interest rates have risen, the portfolio value will have declined. If interest rates have fallen, the portfolio
value will have risen. In accordance with GASB Statement No. 31, the portfolio for year- end reporting
purposes is treated as if it were all sold. Therefore, fund balance must reflect the portfolio’s change in
value. These portfolio value changes are unrealized unless sold. The City’s policy is to buy and hold
investments until maturity dates.
The City’s investments are carried at fair value as required by generally accepted accounting principles.
The City is a voluntary participant in the Local Agency Investment Fund ( LAIF) that is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of California.
The City’s investments with LAIF at June 30, 2006, include a portion of the pool funds invested in
Structured Notes and Asset- Backed Securities. These investments include the following:
Structured Notes - are debt securities ( other than asset- backed securities) whose cash flow characteristics
( coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/ or that have
embedded forwards or options.
Asset- Backed Securities, the bulk of which are mortgage- backed securities, entitle their purchasers to
receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool
of mortgages ( such as Collateralized Mortgage Obligations) or credit card receivables.
As of June 30 2006, the City had $ 13,805,265 invested in LAIF, which had invested 2.567% of the pool
investment funds in Structured Notes and Asset- Backed Securities. Fair value of LAIF was calculated by
applying a factor of 0.998185821 to total investments held by LAIF.
C. Summary of Cash and Investments
The following is a summary of cash and investments at June 30, 2006:
Fiduciary
Funds
Governmental Business- Type Statement of
Activities Activities Net Assets Total
Cash and investments $ 78,243,756 $ 135,293 $ 522,209 $ 78,901,258
Restricted cash and investments 7,906,468 - - 7,906,468
Total $ 86,150,224 $ 135,293 $ 522,209 $ 86,807,726
Government- Wide
Statement of Net Assets
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
48
2. CASH AND INVESTMENTS, Continued
D. Risk Disclosures
Interest Risk: Interest rate risk is the market value fluctuation due to overall changes in the interest rates. It is
mitigated by limiting the average maturity of the City’s portfolio not to exceed five years. At June 30, 2006, the
City had the following investment maturities:
Investment Type Fair Value 1 year or less 1- 2 years 2- 3 years
Securities of U. S. Government:
FHLMC $ 1 5,809,652 $ 9 ,877,137 $ - $ 5 ,932,515
FNMA 5 ,446,130 5 21,524 4 ,924,606 -
FHLBN 2 4,586,430 3 ,932,964 1 8,682,042 1 ,971,424
Medium Term Notes:
Abbott Labs 999,902 999,902 - -
American General Finance 2,000,000 2,000,000 - -
Citigroup Global Markets 3,000,000 3,000,000 - -
General Electric Capital Corp. 5,000,000 5,000,000 - -
Countywide Home 1,964,146 1,964,146 - -
Pfizer Inc. 1,955,964 1,955,964 - -
Commercial Credit 3,023,007 - 3,023,007 -
HSBC Finance Corp. 1,945,680 - 1,945,680 -
Local Agency Invesments Funds 1 3,805,265 1 3,805,265 - -
Total $ 79,536,176 $ 43,056,902 $ 28,575,335 $ 7 ,903,939
Investment Maturities ( in years)
Credit Risk. Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real
or perceived change in the ability of the issuer to repay its debt. It is the City's policy to limit its investments
in these investment types to the top rating issued by nationally recognized statistical rating organizations
( NRSROs), including raters Standard & Poor's and Moody's Investor's Service. At June 30, 2006, the City's
credit risks, expressed on a percentage basis, were as follows:
Standard
Moody's & Poor's
U. S. Agencies
Federal Home Loan Bank Aaa AAA
Federal Home Loan Mortgage Corporation Aaa AAA
Federal National Mortgage Association Aaa AAA
Medium Term Notes
Abbott Labs A1 AA
American General Finance A1+ 1P1
Citigroup Global Markets A1+ 1P2
General Electric Capital Corp. A1+ 1P3
Countywide Home A3 A
Pfizer Inc. AAA AAA
Commercial Credit AA+ AA-HSBC
Finance Corp. A1 A
External Pool
State of California - Local Agency Investment Fund Not Rated Not Rated
Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the
counterparty, the City will not be able to recover the value of its investments or collateral securities that are in
the possession of an outside party. None of the City’s investments were subject to custodial credit risk.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
49
3. LOANS RECEIVABLE
The following table summarizes the notes receivable outstanding as of June 30, 2006:
Amount
Employee Home Loans $ 499,367
Mobile Home Program 105,814
Elder Care Alliance 1,300,000
CDBG Rehab Loans 879,309
HOME Loan - Eden Senior Housing Project 3,423,063
Small Business Loans 16,591
Filipino Community of Alvarado and Vicinity 124,235
Empire Hanover 652,218
MP Mission Associates 4,150,000
Less: Allowance for conditional grants 2,398,401
Total $ 8,752,197
Employee Home Loans - The City has a home loan program that allows employees to purchase a home within
the City limits as a principal residence. The loans are secured by first deeds of trust and interest is adjusted
annually based on the LAIF rate. Principal and interest is paid bi- weekly, and are secured by the employee
home loans. As of June 30, 2006 the City has outstanding employee loans in the amount of $ 499,367.
Mobile Home Program – The Agency has three loans for a program for low and moderate income individuals
to purchase mobile homes. The loans bear interest at 5% and principal and interest is paid monthly. The
loan maturities range between 10 and 30 years from the date of loans and are secured by the properties. As
of June 30, 2006 the City has outstanding mobile home program loans in the amount of $ 105,814.
Elder Care Alliance – The Agency has loaned $ 1,300,000 to Elder Care Alliance for the development of a 79-
unit/ 95- bed mixed income senior assisted living facility. As of June 30, 2006 the loan has the outstanding
balance of $ 1,300,000.
Community Development Block Grant ( CDBG) Rehab Loans – The City administers a housing rehabilitation
loan program funded with Community Development Block Grant funds. Under this program, individuals
with incomes below certain level are eligible to receive low interest loans for rehabilitation work on their
homes. These loans are secured by deeds of trust and may be amortized over the life of the loans, deferred
or a combination of both. As of June 30, 2006 the City has outstanding CDBG rehab loans in the amount of
$ 879,309.
Eden Senior Housing – HOME Loan - In May 2000, the City entered into a Disposition Development
Agreement ( DDA) with Eden Housing for Union City Senior Village Independent Living Development
( Independent Living Development). Through Home Investment Partnership Act program ( HOME funds),
the City has agreed to provide a loan of $ 2,200,000, which Eden can be drawdown as needed. The loan is
due in 40 years at 3% interest which will be repaid from residual receipts generated by the project. As of
June 30, 2006, Eden House has drawn down $ 3,423,063.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
50
3. LOANS RECEIVABLE, Continued
Small Business Loans – The City has a loan program for individuals with a small business to receive low
interest loans for working capital, inventory and improvements to their business. The loans bear interest at
6% and vary in terms from 3- 7 years. The loans are secured by the property. At June 2006, the City has one
loan outstanding. As of June 30, 2006 the City has outstanding small business loans in the amount of
$ 16,591.
Filipino Community of Alvarado and Vicinity – The Agency loaned $ 124,235 for the rehabilitation of Holly
House and to retain its use as affordable housing and a meeting center of the Filipino community of
Alvarado and the vicinity. The loan is deferred and matures in 2028. The loan bears interest at 7%, which is
also deferred. The Agency does not expect to collect the loan and therefore recorded an allowance for
conditional grants for $ 124,235.
Empire Hanover – The Agency loaned $ 652,218 for improvements for buildings within the Union Landing
area. The loan is being repaid in installments commencing in 2003 and maturing 2012. The loan bears
interest at 7.5% commencing December 31, 2001. The Agency does not expect to collect the loan and
therefore recorded an allowance for doubtful accounts for $ 652,218.
MP Mission Associates – On August, 2004, the Agency agreed to provide Mid- Peninsula Mission Associates a
loan of $ 4,150,000 to build 120 family rental units on Mission Boulevard. The loan is to be repaid in 55 years
at 3% interest from residual receipts generated by the project. As of June 30, 2006, the balance of the loan is
$ 4,150,000.
4. INTERFUND TRANSACTIONS
A. Interfund Receivables / Payables
The composition of interfund balances as of June 30, 2006, is as follows:
Due to/ from Other Funds
The General Fund provides cash flow assistance to various grant funds. As of June 30, 2006, balances of due
to/ from other funds were as follows:
Due from other
funds
Non- Major
Due to other funds Governmental Funds
Non- Major Governmental Funds $ 1 ,181,667
Total $ 1,181,667
The amounts due to and from the non- major funds represent the temporary loans to offset negative cash
balances for reporting purposes.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
51
4. INTERFUND TRANSACTIONS, Continued
A. Interfund Receivables / Payables, Continued
Advances To/ From
Transfers in/ out for the year ended June 30, 2006, were as follows:
Advances to
other funds
Special Assessent
Advances from other funds Debt Service Fund
Non- major Governmental Funds $ 121,010
Total $ 121,010
Advance from LID 25R to the Special Assessment Debt Service Fund represents the cost of issuance of the
2002 Authority Refund Bonds. Repayment is made from debt service savings recorded in the Public
Facilities Authority Debt Service fund
Transfers In/ Out
Transfers in/ out for the year ended June 30, 2006, were as follows:
Non- major
General RDA Debt RDA Capital Solid Waste Governmental Internal Service
Fund Service Fund Project Fund Assessment Fund Funds Fund Total
General Fund $ - $ - $ - $ - $ 1,145,441 $ 2,323 $ 1,147,764
RDA Special Revenue - 1,343,147 - - - - 1,343,147
RDA Debt Service - - 2,790,021 - - - 2,790,021
Non- major:
Governmental Funds 883,900 - - 833,172 474,246 - 2,191,318
Internal Service - - - - - 750,000 750,000
Total $ 883,900 $ 1,343,147 $ 2,790,021 $ 833,172 $ 1,619,687 $ 752,323 $ 8,222,250
Transfers In
Transfers Out
Major Fund
Transfer from RDA Special Revenue Fund to RDA Debt Service Fund was used to pay for low- moderate
income housing fund’s share of tax allocation bond debt service payment.
Transfer from RDA Debt Service Fund to RDA Capital Projects Fund represents the excess tax increment
revenue. Tax increment not required for debt service may be used for any other lawful purpose of the
Agency.
Transfer from Workers Compensation Fund to General Liability Insurance Fund was used to increase City’s
self- insurance reserve from $ 25 K per occurrence to $ 100K.
City of Union City
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2006
52
4. INTERFUND TRANSACTIONS, Continued
A. Interfund Receivables / Payables, Continued
Transfer from General Fund to Garage Operations Fund represents the proceeds from the sale of a vehicle.
Transfers from Clean Water Fund to General Fund, from Union Landing BPID to General Fund and
Pension Obligation Bond Fund to General Fund are in accordance with the adopted budget.
Transfer from Waste Management