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Annual Financial Report overview 2. Financial Summary 3.

Discussion/questions
1.

Budget where you want to go Financial report where youve been Intended for external users

Citizenry Governing bodies Investors and creditors

Transparency/accountability

Prepared in accordance with generally accepted accounting principals (GAAP) and


Governmental Accounting Standards Board (GASB)

Statement 34

Unaudited Year ended June 30, 2011

Financial position and

activities for the year

3 major sections:
1. 2. 3.

Management Discussion and Analysis (MD&A) Financial Statements Notes to Financial Statements
4

Summary of the entire report narrative Simplified to enhance understandability Descriptive Analytical

Government-wide (big picture)


Statement of Net Assets Statement of Activities

Fund (smaller picture one year, current resources)


Governmental (City and Redevelopment Agency)

Proprietary (water and sewer enterprises)

Budget Comparisons
Government only
6

Additional information
Fixed assets Long-term liabilities Pension and OPEB obligations

Descriptive
Discussion of the components that make up the

statements
Complete presentation
Required by GASB
7

Net assets of over $21 million


$11.5 million unrestricted

Decrease in net assets of $204,684 during the fiscal year


General fund operating surplus of $42,317 Higher revenues Cost cutting

Fund balances across City and RDA funds of $6.85 million


$4.42 million in general fund $709,612 in RDA $597,150 in RDA Low-Mod Housing Set-Aside

Water and Sewer enterprise funds reported decreases

in net assets:
Water: ($4,875) Sewer: ($233,176)

General Fund reserve of $2.39 million


58.8% of operations

10

11

Redevelopment Redevelopment General ASSETS Cash and Investments Accrued Interest Taxes Receivable Other Receivables Due From Other Funds Land Held for Resale Notes Receivable Restricted assets: Cash with Fiscal Agent Total Assets LIABILIITIES Accounts Payable Accrued Liabilities Deferred Revenue Due to Other Funds Interfund Loans Total Liabilities FUND BALANCE Nonspendable Restricted Committed Assigned Unassigned Total Fund Balance 1,895,096 133,000 2,393,537 4,421,633 709,612 709,612 379,051 379,051 76,709 96,791 51,256 224,757 1,519 14,444 473 16,436 2,468,426 2,468,426 4,646,390 726,047 2,845,303 2,847,477 $ 2,306,568 8,419 337,600 98,707 1,895,096 $ 723,494 187 2,367 $ 2,173 2 Agency Agency Debt Service

Redevelopment Agency Housing Set-Aside $ 602,795 392 3,944 607,131 $

Other Governmental Funds (66,677) 508 28,977 207,385 573,329 743,523 $

Total Governmental Funds 3,568,352 9,508 372,888 306,092 2,468,426 2,845,303 9,570,568

Fund Balance
The new fund balances (GASB 54)

124 9,857 9,981

5,047 5,047

83,399 121,093 51,256 2,468,899 2,724,647

Nonspendable Restricted Committed Assigned Unassigned

597,150 597,150

738,476 738,476

1,714,677 1,895,096 133,000 3,103,149 6,845,922

AFR, page 22

Total Liabilities and Fund Balance

4,646,390

726,048

2,847,477

607,131

743,523

9,570,569

12

General

Redevelopment Agency $ 929,131 978 23,424 953,533

Redevelopment Agency Debt Service $ 2,130 2,130

Redevelopment Agency Housing Set-Aside $ 1,075 167,131 5,293 173,499 $

Other Governmental Funds 123,043 3,049 4,919 980,606 71,698 1,183,317 $

Total Governmental Funds 3,752,789 271,243 28,977 24,790 1,406,574 477,408 465,957 6,427,737

Changes to fund balance AFR, page 26 General Fund surplus $42,317 RDA Fund surplus $139,186

REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay - Roads Debt servicePrincipal Retirement Interest Total Expenditures

2,700,615 268,194 28,977 15,687 258,836 477,408 365,542 4,115,259

732,333 245,771 962,160 1,644,841 201,218 215,111 56,641 14,867 4,072,942

896,300 6,827 50,000 272,861 1,225,988

253,217 253,217

62,041 469,598 298,301 560,436 111,698 4,350 1,506,424

794,374 245,771 1,431,758 551,519 1,456,736 1,644,841 312,916 226,288 106,641 287,728 7,058,572

RDA Debt Service deficit $(2,996,150)


RDA Housing Set-Aside surplus $353,194

Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers (Out) Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE BEGINNING FUND BALANCES Prior Period Adjustment FUND BALANCES RESTATED ENDING FUND BALANCES $

42,317

(272,455)

2,130

(79,719)

(323,107)

(630,834)

2,959,457 (19,861) 2,939,596 2,981,912 1,726,818 (62,340) 1,664,478 4,646,390 $

645,139 (233,497) 411,642 139,186 428,813 141,613 570,426 709,612 $

11,638 (3,009,919) (2,998,281) (2,996,150) 3,404,217 (29,015) 3,375,202 379,051 $

432,913 432,913 353,194 242,466 1,490 243,956 597,150 $

761,484 (1,547,354) (785,870) (1,108,977) 1,524,801 322,652 1,847,453 738,476 $

4,810,630 (4,810,631) (0) (630,835) 7,327,115 374,398 7,701,513 7,070,678

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Revenues
Governmental
Taxes Operating Grants and Contributions Capital Grants and Contributions Charges for Service Other Revenue Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Totals 3,752,789 815,911 590,663 477,408 465,957 271,243 28,977 24,100 6,427,047

14

Taxes

Taxes by Source - Governmental Two-Year Comparison Fiscal Year Ended PROPERTY TAXES-CURRENT SECURED PROPERTY TAXES-CURR UNSECURED PROPERTY TAXES-813 SUPPLEMENT PROPERTY TRANSFER TAX LOCAL SALES TAX PROP 172 SALES TX (PUB SAFETY) TRANSIENT OCCUPANCY TAX PROPERTY TAXES-PRIOR UNSECURED PROPERTY TAXES-PRIOR SECURED TRANSACTION USE TAX (MEASURE I) PROPERTY IN-LIEU VLF PROP TAXES IN-LIEU SALES TAX PROPOSITION 1A TAX INCREMENT TAX INCREMENT PASS-THROUGH HUTA GAS TAXES June 30, 2010 $ 378,111 12,544 4,269 13,234 914,377 20,493 88,966 6,920 2,806 545,605 399,062 268,307 (42,166) 931,669 26,548 73,463
$ 3,644,208

Increase (Decrease) $ (25,179) (1,435) (4,430) (1,650) (31,335) 8,771 (20,139) (12,659) 603 89,547 3,777 9,478 46,997 (2,538) (806) 49,580
$ 108,581

June 30, 2011 $ 352,932 11,109 (161) 11,584 883,042 29,264 68,827 (5,739) 3,409 635,152 402,839 277,785 4,831 929,131 25,742 123,043
$ 3,752,789

15

Expenditures
Governmental
Expenses GOVERNMENTAL ACTIVITIES Public Safety Engineering and Public Works - Roads General Government Redevelopment/Economic Development Housing and Support Programs Parks, Buildings, and Grounds Intersest on long-term debt Community Development Total government activities 1,788,710 1,313,419 1,046,283 931,069 549,570 312,916 287,728 276,570 6,506,265 Net Expenses after Program Income 1,547,140 681,620 674,349 916,319 7,245 312,916 287,728 194,967 4,622,284

16

General Fund Activity Compared Over Time

17

Enterprise Operations
Water and Sewer
OPERATING REVENUE OPERATING EXPENSES Operating Income (Loss) $ Water 1,387,670 1,242,980 144,690 (149,564) (4,875) Business-Type Activities Other Proprietary Funds $ 19,722 30,933 (11,212) 150,849 (27,743) 111,895 Total Enterprise Funds $ 3,305,091 3,332,995 (27,904) (98,252) (126,156)

Sewer 1,897,699 2,059,082 (161,382) (99,536) 27,743 (233,176)

NONOPERATING REVENUE (EXPENSES) TRANSFERS CHANGE IN NET ASSETS $

18

Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay - Roads Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ 2,750,694 228,986 25,660 9,189 180,219 494,435 208,958 3,898,141 $ Final 2,750,694 228,986 25,660 9,189 180,219 494,435 288,488 3,977,671 $ Actual Amounts 2,700,615 268,194 28,977 15,687 258,836 477,408 365,542 4,115,259

Variance with Final Budget Positive (Negative) $ (50,079) 39,208 3,317 6,498 78,617 (17,027) 77,054 137,588

General Fund

AFR, page 30

708,974 297,439 1,052,764 1,761,473 222,308 525,796 56,641 14,867 4,640,262

708,974 297,439 1,046,989 1,766,473 228,083 525,796 56,641 14,867 4,645,262

732,333 245,771 962,160 1,644,841 201,218 215,111 56,641 14,867 4,072,942

(23,359) 51,668 84,829 121,631 26,865 310,685 0 0 572,320

(742,121)

(667,591)

42,316

709,907

924,280 924,280 182,159 $

938,893 938,893 271,302 $

2,959,457 (19,861) 2,939,596 2,981,912 $

2,020,564 (19,861) 2,000,703 2,710,610

19

Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ 914,255 914,255 $ Final 914,255 914,255 $ Actual Amounts 929,131 978 23,424 953,533

Variance with Final Budget Positive (Negative) $ 14,876 978 23,424 39,278

Redevelopment Agency Fund AFR, page 31

1,050,160 2,500 50,000 274,456 1,377,116

1,050,160 2,500 50,000 274,456 1,377,116

896,300 6,827 50,000 272,861 1,225,988

153,860 (4,327) 1,595 151,128

(462,861)

(462,861)

(272,455)

190,406

575,910 575,910 113,049 $

575,910 575,910 113,049 $

645,139 (233,497) 411,642 139,186 $

69,229 (233,497) (164,268) 26,137

20

Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ $ Final $ Actual Amounts 2,130 2,130

Variance with Final Budget Positive (Negative) $ 2,130 2,130

Redevelopment Debt Service AFR, page 32

2,130

2,130

(3,071,522) (3,071,522) (3,071,522) $

(3,071,522) (3,071,522) (3,071,522) $

11,638 (3,009,919) (2,998,281) (2,996,150) $

11,638 61,603 73,241 75,372

21

Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ 105 5,000 5,105 $ Final 105 5,000 5,105 $ Actual Amounts 1,075 167,131 5,293 173,499

Variance with Final Budget Positive (Negative) $ 970 167,131 293 168,394

RDA Low-Mod Housing Set-Aside AFR, page 33

468,211 5,105 473,316

468,211 468,211

253,217 253,217

214,994 214,994

(468,211)

(463,106)

(79,719)

383,387

574,973 574,973 106,762 $

574,973 574,973 111,867 $

432,913 432,913 353,194 $

(142,060) (142,060) 241,327

22

Sales and property taxes were down, but total general

revenues were up slightly from a year ago Expenditures under budget General Fund reported a surplus of $42,314 Strong reserves - 58.8% of operations Redevelopment is able to meet state ransom payments Water and sewer enterprise funds continue to face financial difficulties Uncertain economic times ahead
23

JJACPA, Pleasanton 9 firms submitted proposals


1 local firm

4 were interviewed
Priced competitively Best matched the Citys needs and situation

Audit scheduled to begin in early December


Will present audited financial statements to Council

in early January, 2012


24

Questions?

25

Special thanks to:


Finance Department staff Kelley Donaldson, Accountant Karen Moreno, Account Clerk Martha Huerta, Accounting Technician Todd Heppen, Accounting Assistant (temporary)

City Manager and the Management Team


26

ANNUAL FINANCIAL REPORT

DRAFT (UNAUDITED)

CITY OF LAKEPORT, CALIFORNIA FISCAL YEAR ENDED JUNE 30, 2011

THIS PAGE INTENTIONALLY LEFT BLANK

ANNUAL FINANCIAL REPORT


(DRAFT) CITY OF LAKEPORT
YEAR ENDED JUNE 30, 2011

PREPARED BY FINANCE DEPARTMENT

THIS PAGE INTENTIONALLY LEFT BLANK

TABLE OF CONTENTS
Transmittal Letter ............................................................................................................................................................ i Elected Officials and Management Staff .................................................................................................................... ii City Organizational Chart .............................................................................................................................................. iii Independent Auditors Report ........................................................................................................................................1 Management Discussion and Analysis (MD&A) .............................................................................................................1 Government-Wide Financial Statements .....................................................................................................................17 Statement of Net Assets ..........................................................................................................................................18 Statement of Activities .............................................................................................................................................19 Governmental Fund Financial Statements ...................................................................................................................21 Balance Sheet .........................................................................................................................................................22 Reconciliation of the Governmental Funds Balance Sheet......................................................................................24 Statement of Revenue, Expenditures, and Change in Fund Balances ....................................................................26 Reconciliation of the Statement of Revenue, Expenditures, and Change in Fund Balances...................................28 Governmental Fund Budget Comparisons ...................................................................................................................29 General Fund...........................................................................................................................................................30 Redevelopment Agency Fund .................................................................................................................................31 Redevelopment Debt Service (Bond Proceeds) Fund .............................................................................................32 Redevelopment Low Moderate Housing Set-Aside Fund ........................................................................................33 Proprietary Fund Financial Statements ........................................................................................................................34 Statement of Net Assets ..........................................................................................................................................35 Statement of Revenue, Expenses and Change in Net Assets .................................................................................36 Statement of Cash Flows.........................................................................................................................................37 Statement of Fiduciary Assets and Liabilities ..........................................................................................................38 Notes to the Financial Statements ...............................................................................................................................39 Note 1 - Defining the Reporting Entity .................................................................................................................40 Note 2 - Summary of Significant Accounting Policies..........................................................................................40 Note 3 - Stewardship, Compliance, and Accountability .......................................................................................45 Note 4 - Cash and Investments ...........................................................................................................................47 Note 5 - Interfund Transactions ...........................................................................................................................50 Note 6 - Capital Assets........................................................................................................................................51 Note 7 - Long-term Obligations ...........................................................................................................................53

Note 8 - Defined Benefit Pension Plan ................................................................................................................55 Note 9 - Post-Retirement Health Care Benefits...................................................................................................56 Note 10 Risk Management ...............................................................................................................................57 Note 11 - Commitments and Contingencies ........................................................................................................57 Note 12 - New Pronouncements .........................................................................................................................57 Note 13 - Subsequent Events .............................................................................................................................58 Required Supplementary Information ..........................................................................................................................60 Schedule of Funding Progress (CalPERS Cost Sharing Pool) ................................................................................61 Other Supplementary Information ................................................................................................................................62 Combining Balance Sheet .......................................................................................................................................63 Combining Statement of Net Assets ........................................................................................................................78

Transmittal Letter

[INSERT LETTER HERE FOLLOWING AUDIT]

City of Lakeport Annual Financial Report Year Ended June 30, 2011

City of Lakeport Elected Officials and Management Staff June 30, 2011 CITY COUNCIL LAKEPORT REDEVELOPMENT AGENCY BOARD OF DIRECTORS CITY OF LAKEPORT MUNICIPAL SEWER DISTRICT BOARD OF DIRECTORS Suzanne Lyons Stacey Mattina Robert Rumfelt Thomas Engstrom Roy Parmentier Mayor Mayor Pro Tem Council Member Council Member Council Member

MANAGEMENT TEAM Margaret Silveira Steven Brookes Janel Chapman Brad Rasmussen Daniel Buffalo Richard Knoll Kelly Buendia Scott Harter Mark Brannigan Douglas Grider City Manager City Attorney City Clerk Chief of Police Finance Director Community Development/Redevelopment Director Administrative Services Director City Engineer Utilities Director Public Works Director

City of Lakeport Annual Financial Report Year Ended June 30, 2011

City Organizational Chart


Citizens of Lakeport

City Council Redevelopment Agency Board City of Lakeport Municipal Sewer District Board

City Attorney

City Clerk

City Manager

Risk Management

City Council Admin Assistance

Community Development Redevelopment

Engineering

Finance

Administrative Services - HR

Police

Public Works

Utilities

City Manager Admin Assistance

Community Development

Redevelopment

Construction Contracts

Accounts Payable

Benefits Administration

Investigations

Maintenance

Parks/Pool

Water/Sewer M&O

Contracts Management

Building

Housing

Public Works Reviews

Accounts Receivable

Deputy Clerk

Parking Enforcement

Community Service

Building Maintenance

Underground Construction

Planning

Special Projects

Planning Reviews

Budget Development

Records

Patrol

Construction

Construction

Electrical

Housing

Economic Development

Quality Assurance

Financial Reporting

Labor Relations

Property/ Evidence

Emergency Services

Parks Maintenance

Mechanical

Economic Development

Grant Funding

Intergovernmental Relations

Classification/Compens ation

Records/Support Services

Storm Drains

Special Events

Operations

CDBG/Home Grants

DEB Program

Paryoll

Staffing

Animal Control

Streets

Pool Maintenance & Operations

Regulatory Compliance

Utility Billing

Procurement

City of Lakeport Annual Financial Report Year Ended June 30, 2011

Independent Auditors Report


[INSERT HERE]

Management Discussion and Analysis (MD&A)


The following discussion provides readers of the City of Lakeports financial statements a narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here in conjunction with the Independent Auditors Report (to be included), the financial statements, and the accompanying notes.

FINANCIAL HIGHLIGHTS City assets exceeded its liabilities by $21 million (net assets) as of June 30, 2011. Of this amount, nearly $11.5 million (unrestricted net assets) may be used to meet the governments ongoing obligations to its citizens and creditors. City net assets in total decreased by $204,684 during the fiscal year, compared to a decrease of $1.06 million in fiscal year 2009/2010. This was the result of higher than anticipated revenues for the year as well as significant cost-cutting measures put in place by city management. The end result, though still a decrease in total assets, was much improved compared to just a year ago. Fund balances for City governmental funds (i.e., the general fund and its reserve, redevelopment funds, and special revenue funds) are reported to be $6.85 million, as of year-end close, June 30, 2011. Of the $6.85 million in total governmental fund balance, $3.1 million is classified as unassigned and available at the Citys discretion.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Citys basic financial statements. These statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains supplementary information in addition to that found in the basic statements. The City of Lakeport is presented as the primary government and reporting entity. The City of Lakeport Redevelopment Agency and the City of Lakeport Municipal Sewer District (CLMSD) are legally separate entities, but are for reporting purposes considered component units of the City. All three entities (the City and the component units) are reported on a blended basis, as opposed to a discrete presentation. The government-wide financial statements provide an overview of the Citys activities and are comprised of the Statement of Net Assets and the Statement of Activities. The Statement of Net Assets provides information about the financial position of the City as a whole, including all of its capital assets and long-term liabilities on the full-accrual basis, similar to that used by private sector entities. The Statement of Activities provides information about all of the Citys revenues and all of its expenses, also on the full-accrual basis, with the emphasis on measuring net revenues or expenses of each the Citys major functions, which have been categorized as follows: General Government (e.g., administration, finance and accounting, human resources, legal, city clerk, etc.) Community Development (planning, building, storm water management)

City of Lakeport Annual Financial Report Year Ended June 30, 2011

Page |1

Engineering and Public Works Roads (city engineer, public works, Westshore Pool) Housing and Support Programs Redevelopment/Economic Development Public Safety (i.e. police) Parks, Buildings, and Grounds Interest on Long-Term Debt

The Statement of Activities explains in detail the change in Net Assets for the year. All of the Citys activities are grouped into either governmental activities or business-type activities, as explained below. The amounts in the Statement of Net Assets and the Statement of Activities are separated into governmental activities and business-type activities in order to provide a clear summary of these two activities for the City. The fund financial statements report the Citys operations in more detail than the entity-wide statements and focus primarily on the short-term activities of the Citys general fund and other major funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt and other long-term amounts. Because the focus of fund statements is narrower than that of the government-wide, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impacts of the Citys near-term financing decisions. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Major funds account for the major financial activities of the City and are presented individually, while the activities of non-major funds are presented in summary, with subordinate schedules presenting the detail for each. Major funds are explained below. The fiduciary statement provides financial information about the activities of special deposits, such as police asset forfeitures and holdings, and for certain other entities, for which the City acts solely as an agent. The fiduciary statement provides information about the cash balances and activities of these funds. These statements are separate, and their balances are excluded, from the Citys basic financial statements.

The Government-wide Financial Statements Government-wide financial statements, prepared on the accrual basis, measure the flow of all economic resources of the City. There are two basic statements presented here: the Statement of Net Assets and the Statement of Activities. The Statement of Net Assets and the Statement of Activities present information about the following: Governmental Activitiesall of the Citys basic services are considered to be governmental activities. These services are supported by general city revenues, such as taxes, and by specific program revenues such as user fees and charges.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

Page |2

The Citys governmental activities also include the activities of the Lakeport Redevelopment Agency, a separate legal entity for which the City is financially responsible. Business-type ActivitiesThe Citys enterprise activities of water and wastewater are reported in this area. Unlike governmental activities, these services are supported by charges paid by users based on the amount of the service they use.

Fund Financial Statements The fund financial statements provide detailed information about each of the Citys most significant funds, termed major funds. The concept of major funds, and the determination of which are major, was established by GASB Statement 34 and replaces the concept of combining like funds and presenting them in total. Instead, each major fund is presented individually, with all non-major funds summarized and presented only in a single column. Subordinate schedules (Other Supplementary Information, page 62) present the detail of these non-major funds. Major funds present the major activities of the City for the year, and may change from year to year as a result of changes in the pattern of Citys activities. GASB provides a methodology in determining major funds, which is illustrated in the following table. The general fund is always presented as a major fund. In the Citys case, the Redevelopment Agency and most of its associated funds are the only other major funds presented. Though not determined a major fund using this criteria, management has elected to present the RDA Low-Mod Housing Set-Aside fund as a major fund due to its activity and substantial impact to City-wide housing goals. Both of the Citys enterprise funds (water and sewer) are reported as major funds; however, Fund 301 (CLMSD District 91-1), though identified as a major fund in the chart above, is presented by management in this Report in the combined statements due to its function as a debt service fund for the CLMSD only. The following table illustrates the methodology used to determine major funds.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

Page |3

DETERMINING MAJOR FUNDS June 30, 2011 Exceeds Assets 5,077,915 726,047 292,751 132,857 (137,024) 62,182 607,131 (12,504) 220,719 44,967 3,431 73,511 3,644 5,404 241 84,291 115,579 61,248 17,121 8,823 807,062 2,847,477 40,000 11,082,875 1,108,288 Liabilities 2,119,853 42,419 227,593 90,710 983 9,981 187,963 72,428 3,644 241 83,983 115,157 61,039 386,522 17,108 4,060,418 2,468,426 9,948,467 994,847 Revenues 5,173,009 1,598,672 13,358 130,411 16,678 26,095 3 (114,176) 6,542 38,672 606,411 (89,334) 34,781 38 218,121 35 2,966 3,795 255,053 8,750 15,400 21,577 308 423 209 134 142 346 13 17 32 7 17,503 (181,956) 111,698 349,050 13,768 600,436 8,878,986 887,899 Expenditures/ Expenses 4,072,942 1,447,847 62,041 18,661 29,392 2,003 (86) 36,343 253,217 12,950 38,192 41,318 397,947 3,682 696 107,682 253,851 8,750 10,000 21,577 105,773 156,597 386,868 22,161 15,454 (189,305) 111,698 209,039 3,009,919 560,436 11,207,645 1,120,764 X X 10% X X 5% X X Qualifies as a Major Fund Yes Yes No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No Yes Yes No

General (110 and 120) Redevelopment Agency Fund (212) Special Revenue Funds Parkland (202) Gas Tax Fund (203) HUTA (204) - closed HUTA (205) - closed HUTA (206) - closed TDA (208) - to be closed Lakeport Housing(209) Ecn Relief (210) RDA Low-Mod Housing Set-Aside (219) Traffic Congestion Relief (220) - closed RLA (228) FEMA 1646 (230) - Storm Damage HOME 2007 Grant (231) - closed EHAF (232) MRLA (233) Business Stabilization (234) Home 2009 (235) P/TA (236) Bus Loan RLF (237) CDBG (238) HOME Program Income (239) 10th Street (401) Lkpt Blvd (402) South Main (403) Indian Gaming Funds (404) Prop 1B (405) Regional State Transportation Fund (406) Parkside Traffic Mitigation Fund (407) Bevins Street Maintenance (408) Forbes Creek Trail Fund (409) Lakeshore Storm Damage (410) Safe Routes to School (411) Forbes Street Overlay (412) Prop 40 Per Capita Grant (413) Debt Service Funds 91-1 Sewer Service District (301) RDA Debt Service Fund (217) Capital Project Funds RDA Capital Projects Fund (213) Total Government Funds 10% Total Government Funds Enterprise Funds Water Operations and Maintenance (501) Water Expansion Fund (502) Sewer Operations and Maintenance (601) Sewer Expansion Fund (602) SWRCB Grant Fund (621) - closed Total Enterprise Funds 10% Total Enterprise Funds Total Government and Enterprise Funds 5% Total Government and Enterprise Funds

X X X

4,487,944 316,555 14,331,382 467,040 19,602,920 1,960,292 30,685,796 1,534,290

3,302,953 9,918 3,117,388 6,430,258 643,026 16,378,726 818,936

1,273,516 27,465 1,810,150 (14,420) 0 3,096,712 309,671 11,975,697 598,785

1,543,671 23,394 2,244,178 27,743 3,838,985 383,899 15,046,630 752,332

X X

X X

Yes No Yes No No

City of Lakeport Annual Financial Report Year Ended June 30, 2011

Page |4

Fund Financial Statements include governmental and proprietary funds. Governmental fund financial statements are prepared on the modified accrual basis. This means they measure only current (generally one year) financial resources and uses. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the governmental fund financial statements. Enterprise and internal service fund financial statements are prepared on the full-accrual basis, and include all of their assets and liabilities, current and long-term. The City does not employ an internal service fund as of June 30, 2011; however, a fund is planned for the succeeding year to manage costs associated with retiree health. Since that fund will provide goods and services only to the Citys governmental and business-type activities, its activities will be reported only in total at the fund level. Internal service funds may not be major funds because their revenues are derived from other city funds. These revenues are eliminated in the government-wide financial statements and any related profits or losses are returned to the activities which created them, along with any residual net assets of the internal service fund. The City adopts an annual appropriated budget for all governmental and proprietary funds. Budgetary comparison statements for the general fund and all major governmental funds are presented and included in the basic financial statements, as required by GASB 34. Proprietary budget comparison statements are not required or presented. Fiduciary Statements The Citys fiduciary activities are reported in the separate Statement of Fiduciary Assets and Liabilities. These activities are excluded from the Citys other financial statements because the City cannot use these assets to finance its own operations. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the government-wide and fund financial statements. Other Supplementary Information In addition to the basic financial statements and the accompanying notes, this report also presents combined statements, which illustrate the condition and activities of all non-major funds.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets may serve over time as a useful indicator of a governments financial position. The following table reflects the condensed net assets for both governmental and business-type activities.
Net Assets Comparison June 30, 2011 and 2010 Governmental Activities 2011 2010 $ 3,568,352 $ 2,980,367 3,156,914 813,497 2,404,022 1,878,708 407,964 407,964 729,346 827,102 6,150,115 5,044,768 268,000 290,215 2,845,303 3,404,217 19,530,014 15,646,838 Business-type Activities 2011 2010 $ 2,626,211 $ 2,449,154 251,171 220,984 60,898 97,854 1,825,403 1,775,403 15,787,701 16,541,958 188,448 188,448 20,739,832 21,273,801 Total Government 2011 2010 $ 6,194,562 $ 5,429,521 3,408,084 1,034,481 60,898 97,854 2,404,022 1,878,708 407,964 407,964 2,554,749 2,602,505 21,937,816 21,586,726 456,448 478,663 2,845,303 3,404,217 40,269,846 36,920,639

ASSETS Cash and Investments Receivables Prepaid Expenses Notes Receivable Land Held for Resale Capital Assets Not Being Depreciated Capital Assets, Net of Depreciation Deferred Charges Restricted Cash with Fiscal Agent Total Assets LIABILITIES Accounts Payable Accrued Liabilities Interest Payable Deposits Payable Deferred Revenue Noncurrent Liabilities: Due Within One Year Due in More Than One Year Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Prior Period Adjustments Total Net Assets

2,552,298 121,093 121,524 51,256 116,040 5,777,196 8,739,406

181,302 132,924 102,406 26,833 181,641 5,907,458 6,532,564

4,009,450 43,249 257,504 29,880 122,023 6,058,450 10,520,556

99,647 38,611 99,280 205,700 219,075 10,099,227 10,761,540

2,584,871 164,342 379,028 29,880 51,256 238,063 15,812,523 19,259,963

280,949 171,535 201,686 205,700 26,833 400,716 16,006,685 17,294,104

948,518 1,714,677 8,127,413 $ 10,790,608

(308,329) 9,422,603 1,359,754 $ 10,474,028

8,608,639 1,610,636 $ 10,219,276

8,215,696 2,296,565 (166,829) $ 10,345,432

9,557,157 1,714,677 9,738,049 $ 21,009,883

7,907,367 11,719,168 1,239,970 $ 20,866,505

In essence, the Citys net worth, or value, as of June 30, 2011 was over $21 million. This includes all assets of the City, the Redevelopment Agency, and the water and sewer enterprises. Capital assets of $9.56 million include land, buildings and related improvements, utility plants (water and sewer), machinery, equipment, vehicles, and infrastructure (roads and public rights-of-way, water and sewer lines, etc.). The City uses these assets to provide services to its citizens; they are not available for future spending. Although the Citys investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay debt associated with these assets must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Unrestricted assets of $9.7 million include cash and cash equivalents and may be used to meet the Citys ongoing obligations to citizens, creditors, and City-imposed designations (e.g. reserves, pending litigations, contingencies, capital projects, special grant and revenue programs and projects, etc.). During the process of closing the accounting records for the fiscal year, several adjustments and corrections were made to the previous fiscal year that resulted in a change in net assets. These are noted on the above chart as Prior Period Adjustment. They are also presented in the Statement of Activities. These changes were needed to bring the accounting records current and rectify several irregularities and oversights that accrued over the last several years. The Statement of Activities demonstrates how the Citys net assets changed during the fiscal year 2010/11 as compared to 2009/10. As was stated earlier, the Citys net assets decreased by $204,684, resulting primarily from costs associated with depreciation and other non-budgeted items that may not have an effect on cash or current financial resources but do affect net assets. The statement presents expenses first categorized by function or activity. This is done so that a direct connection can be made to the cost of providing that service or function for the entire year. The statement then presents how that activity was financed using funds other than those that can be used for any purpose (i.e. taxes, fines, investment earning, etc.). This is an attempt to demonstrate how selfsufficient that activity was during the year. The remainder is the net expense covered by general revenues.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Governmental Activities The most significant expenses incurred by the City are providing public safety (28%). From highest to lowest, costs directly associated with governmental activities were as follows:

Expenses GOVERNMENTAL ACTIVITIES Public Safety Engineering and Public Works - Roads General Government Redevelopment/Economic Development Housing and Support Programs Parks, Buildings, and Grounds Intersest on long-term debt Community Development Total government activities 1,788,710 1,313,419 1,046,283 931,069 549,570 312,916 287,728 276,570 6,506,265

Net Expenses after Program Income 1,547,140 681,620 674,349 916,319 7,245 312,916 287,728 194,967 4,622,284

EXPENSES BY FUNCTION FISCAL YEAR ENDED JUNE 30, 2011


Engineering and Public Works - Roads 20% General Government 16% Redevelopment/Economic Development 14% Public Safety 28%

Community Development 4%

Intersest on long-term debt 4%

Housing and Support Programs 9% Parks, Buildings, and Grounds 5%

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Significant revenues for the City come from taxes (58%), which included property taxes, sales taxes (Bradley-Burns and Measure I transactions and use taxes), franchise fees, transient occupancy taxes, and tax increment. Revenues overall were higher than estimated. From highest to lowest, revenues directly associated with governmental collections were as follows:

Revenues by Source - Governmental For Fiscal Year Ended June 30, 2011 GENERAL REVENUE Taxes Operating Grants and Contributions Capital Grants and Contributions Charges for Service Other Revenue Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Totals

3,752,789 815,911 590,663 477,408 465,957 271,243 28,977 24,100 6,427,047

Though governmental revenues in total came in higher than estimated, revenue from taxes of $3.75 million was down slightly (under one percent) from estimates. However, tax revenue was up from the previous year, mostly due to increases in the transaction and use tax, Prop 1A, and property taxes in lieu of VLF (Vehicle License Fees). REVENUES BY SOURCE - GOVERNMENTAL FISCAL YEAR ENDED JUNE 30, 2011
Operating Grants and Contributions 13% Capital Grants and Contributions 9% Taxes 58% Charges for Service 8%

Use of Money and Property 0% City of Lakeport Annual Financial Report Year Ended June 30, 2011

Other Revenue 7% Licenses, Permits, and Fines , Forfeitures, Franchises 4% and Penalties 1%

Page |9

Taxes by Source - Governmental Two-Year Comparison Fiscal Year Ended June 30, 2010 June 30, 2011 PROPERTY TAXES-CURRENT SECURED $ 378,111 $ 352,932 PROPERTY TAXES-CURR UNSECURED 12,544 11,109 PROPERTY TAXES-813 SUPPLEMENT 4,269 (161) PROPERTY TRANSFER TAX 13,234 11,584 LOCAL SALES TAX 914,377 883,042 PROP 172 SALES TX (PUB SAFETY) 20,493 29,264 TRANSIENT OCCUPANCY TAX 88,966 68,827 PROPERTY TAXES-PRIOR UNSECURED 6,920 (5,739) PROPERTY TAXES-PRIOR SECURED 2,806 3,409 TRANSACTION USE TAX (MEASURE I) 545,605 635,152 PROPERTY IN-LIEU VLF 399,062 402,839 PROP TAXES IN-LIEU SALES TAX 268,307 277,785 PROPOSITION 1A (42,166) 4,831 TAX INCREMENT 931,669 929,131 TAX INCREMENT PASS-THROUGH 26,548 25,742 HUTA GAS TAXES 73,463 123,043 $ 3,644,208
Business-type Activities

Increase (Decrease) $ (25,179) (1,435) (4,430) (1,650) (31,335) 8,771 (20,139) (12,659) 603 89,547 3,777 9,478 46,997 (2,538) (806) 49,580 $ 108,581

$ 3,752,789

In the fiscal year ended June 30, 2011, business-type activities decreased the Citys net assets by $126,156. This was the result primarily of non-cash expenses, such as depreciation and debt expense amortization but nonetheless negatively affect the fiscal condition of both enterprises. Revenues from rates, fees, and charges for water and sewer services were up from the previous fiscal year by two percent, representing a combination of decreased usage and a scheduled increase in the consumer price index (CPIu). However, expenses continued to outpace these revenues, contributing to an operating deficit of $802,750, or 21%. Other revenues from interest and investment income, parcel taxes, assessments, and miscellaneous sources made up the difference.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Operating Condition of Enterprise Activities Two-Year Comparison Expenses for the Year Ended June 30, 2010 June 30, 2011 $ 1,356,420 $ 1,421,483 2,475,742 2,398,216 $ 3,832,162 $ 3,819,700 Charges for Service June 30, 2010 June 30, 2011 $ 1,241,526 $ 1,280,037 1,716,116 1,736,912 $ 2,957,642 $ 3,016,950 $ (874,520) -22.82% $ (802,750) -21.02% Increase (Decrease) $ 65,063 $ (77,526) $ (12,462) Increase (Decrease) $ 38,511 $ 20,796 $ 59,308 $ 71,770

Water Sewer

4.80% -3.13% -0.33%

Water Sewer

3.10% 1.21% 2.01% 8.21%

Surplus (Deficit) Deficiency %

EXPENSES AND CHARGES FOR SERVICE BUSINESS-TYPE ACTIVITIES FISCAL YEAR ENDED JUNE 30, 2011
3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 Water Sewer Charges for Service Expenses

Capital Assets and Debt Administration Capital Assets The Citys investment in capital assets for its governmental and business-type activities at June 30, 2011 amounted to $24,520,729 (net of accumulated depreciation). The investment in capital assets includes land, buildings and improvements, equipment, vehicles, infrastructure, and construction in progress. Depreciation expense for the year, government-wide, totaled $991,720.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Governmental Activities 2011 2010 Land Construction in Progress Buildings Improvements - Non Buildings Vehicles Total Capital Assets, Net $ 807,510 1,086,886 2,619,229 3,378,472 1,532,597 9,424,694 $ 399,546 427,556 2,619,229 3,138,049 1,532,597 7,289,875 $

Business-type Activities 2011 2010 1,775,403 15,500 1,839,904 26,133,566 537,459 $ 30,301,832 $ 1,775,403 1,839,904 26,133,566 537,459 $ 30,286,332

Additional information on the Citys capital assets can be found in Notes 6 in the notes to the basic financial statements. Long-term Liabilities The Citys outstanding long-term liabilities, including bonds, loans payable, and compensated absences totaled $16,027,336, as of June 30, 2011. This amount does not include the outstanding liability for other post-employment benefits (OPEB), which consist of retiree health costs. The City has procured an actuary to calculate this liability, and it will be reported next annual report for June 30, 2012.
Governmental Activities 2011 2010 Capital Lease - Police Cars $ 2004 Series A Bonds 2004 Series B Bonds 2008 Series Bonds Water Revenue Bonds, 2002 Refunding Loan Agreement Water Revenue Bonds, Series 2000 COPS Sewer District Improvement Bonds, 1993-1 2007 Series A Bond Compensated Absences $ 191,143 1,050,000 960,000 3,400,000 292,093 5,893,236 $ 247,784 1,050,000 1,000,000 3,410,000 381,315 6,089,099 $ Business-type Activities 2011 2010 478,957 2,648,000 4,010,000 2,955,000 102,767 $ 10,194,724 $ 507,113 2,693,000 4,080,000 3,010,000 28,189 $ 10,318,302

Additional information on the Citys outstanding long-term obligations can be found in Note 7 in the notes to the basic financial statements.

FUND FINANCIAL ANALYSIS


Governmental Funds The City employs fund accounting to ensure and demonstrate compliance with finance-related legal requirements. As was mentioned earlier, fund financial statements present information based on current financial resources and expenditures. Essentially they are snapshots of the condition of major funds in the near-term; whereas, the
City of Lakeport Annual Financial Report Year Ended June 30, 2011

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government-wide statements present the entire picture of the reporting entity. The focus of the Citys governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Citys financing requirements. For comparison purposes, fund statements correlate well to the Citys adopted budget. As of June 30, 2011, the Citys governmental fund balance was $6,845,922. GASB 45 established five new criteria for categorizing that balance based on its restricted and unrestricted use. The five categories are the following: Nonspendable fund balance Restricted fund balance Committed fund balance Assigned fund balance Unassigned fund balance.

A more detailed discussion of these new fund balance categories is presented in Note 12. Major governmental funds reported a net surplus at June 30, 2011 of $478,142, which was comprised of the following: General Fund Redevelopment Agency Fund RDA Debt Service RDA Housing Set-Aside $2,981,912 $139,186 ($2,996,150) $353,194

Other governmental funds reported a net deficit of $1,108,977, primarily the result of transfers out of funds meant to reimburse the general fund and Redevelopment Agency fund for activities from prior years. Other activities in special revenue funds comprised the difference using available fund balances per the requirements of their restricted uses. Governmental funds did not report any nonspendable fund balance in fiscal year 2010/11. Special revenue funds comprise the balance of $1,714,677 in restricted fund balance, as those financial resources can be spent on specific activities only. The committed fund balance of $1,895,096 is comprised of redevelopment bond proceeds transferred to the City for the completion of capital projects in the redevelopment project area. Assigned fund balance of $133,000 consists of financing allotted to road projects that were under contract but not yet completed as of the end of the fiscal year. The remaining amount of $3,103,149 of unassigned fund balance consists of available spendable resources in the general fund and the Redevelopment Agency fund, the bulk of which, $2,393,537, is considered reserve for the general fund. The general fund reserve, though separately presented in the Citys budget and accounted for independently in its internal account system, is part of the general fund as a whole. There is no official City policy in place to dictate it purpose or use, but generally it is meant to serve as a rainy day fund and source of financing for capital improvements. Though use of reserves was budgeted in fiscal year 2010/11, the general fund reported a budget surplus at year end and did not require its use. As a point of measure, the total unassigned fund balance (reserve) for the general fund stood at 58.8% of operational expenditures as of June 30, 2011.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Proprietary Funds Water Fund Net assets of the water fund decreased by $4,875 in fiscal year 2010/11. Operating revenue exceeded operating expenses by $144,690; however, non-operating expenses (property taxes and interest of water loans and bonds) were reported at $149,564. The water enterprise also maintains a separate special revenue fund for water service expansion. This fund was relatively inactive; however, it is the primary source of City funding for the new water main construction to the new Mendo Lake College campus. Ending net assets at June 30, 2011 for the water fund were $1,359,923, of which $250,912 was unrestricted and available for future use. Sewer Net assets of the sewer fund decreased by $233,176 in fiscal year 2010/11. Operating revenue was insufficient to cover operating expenses, resulting in a net loss of $161,382. Non-operating expenses (property taxes and bond interest) enhanced the negative impact to net assets by $99,536. The sewer enterprise also maintains two separate governmental funds: a sewer expansion fund and a debt service fund for the CLMSD 91-1 assessment district. Net assets of those funds are restricted for expansion projects and the repayment of a sewer bond, which was issued for the construction of the CLMSD sewer facility on Linda Lane. Ending net assets at June 30, 2011 for the sewer fund were $11,339,032, of which $586,048 was unrestricted and available for future use.

Budgetary Comparison A comparison of budget to actual for major governmental funds is presented in the fund financial statements. These statements are audited as additional assurance that appropriations are being spent as authorized by Council. In total, the general fund, the Redevelopment Agency fund, and the RDA Low-Mod Housing Set-Aside fund reported a surplus revenues exceeded expenditures.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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General Fund REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Saftey Parks, Buildings, and Grounds Capital Outlay - Roads Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ (50,079) 39,208 3,317 6,498 78,617 (17,027) 77,054 137,588

Final Budget to Actual Variance June 30, 2011 Redevelopment RDA Agency Debt Service $ 14,876 978 23,424 39,278 $ 2,130 2,130

RDA Housing Set-Aside $ 970 167,131 293 168,394

(23,359) 51,668 84,829 121,631 26,865 310,685 572,320

153,860 (4,327) 1,595 151,128

214,994 214,994

709,907

190,406

2,130

383,387

2,020,564 (19,861) 2,000,703 2,710,610

69,229 (233,497) (164,268) 26,137

11,638 61,603 73,241 75,372

(142,060) (142,060) 241,327

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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General Fund Revenues in the general fund were reported $137,588 higher than was budgeted, while actual expenditures were reported $572,320 less than was appropriated. The bulk of this was due to road projects that were not completed before year-end. Frugal departmental spending provided the remaining cost savings. The combined effect (before transfers are considered) was a surplus of $42,316, a difference of $709,907 from budgeted estimates. After transfers are considered (including the RDA bond proceed transfer of $1,895,096 million), the total surplus increased to $2,981,912, a positive difference of $2,710,610. Redevelopment Agency Fund Revenues in the RDA fund were reported $39,278 higher than was budgeted, while actual expenditures were reported $151,128 less than was appropriated. Cost savings largely were due to reductions in personnel being charged to the RDA and other administrative activities. Though the Redevelopment Agency fund realized an operating deficit, it reported an overall surplus of $139,186 after transfers were considered, $26,137 higher than was expected. Redevelopment Debt Service Fund This fund was established to account for the proceeds of the 2004 Series A, B and 2008 Series bonds for the RDA. It was presented as a major fund based on the criteria discussed earlier, but its primary role was to provide funds to capital projects for the RDA and, with the transfer of $1.9 million to the City, the completion of downtown main street improvements. Most of the funds available were transferred to the RDA and City by year end. The remaining funds are restricted for use as bond reserves and are unavailable for spending. RDA Low-Moderate Housing Set-Aside Fund The primary source of revenue for this fund is the statutorily required transfer of 20% of collected tax increment from the Redevelopment Agency; however, this fund was used in conjunction with activities under the 2007 HOME grant and was reimbursed for expenditures that occurred over the last two years. These reimbursements were the primary component of the revenue collected by the fund, prior to the consideration of transfers. As a result, revenues were $173,499 higher than was budgeted, while expenditures were $253,217 lower that what was appropriated. The fund reported a net surplus of $353,194 at year end, $241,327 higher than was expected. Budgets to actual were not presented for proprietary funds (water and sewer enterprise) as it is not a reporting requirement under GASB 45. Such information can be provided upon request. Requests for Information This Annual Financial Report is intended to provide citizens, taxpayers, investors, and creditors with a general overview of the Citys finances. Questions regarding this report, or request for additional information, should be made to the Finance Director, City of Lakeport, CA, 95453.

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Government-Wide Financial Statements1

The accompanying notes are an integral part of these financial statements.

CITY OF LAKEPORT Statement of Net Assets Government-wide Financial Statements Year Ended June 30, 2011
Primary Government Governmental ASSETS Cash and Investments Receivables Prepaid Expenses Notes Receivable Land Held for Resale Capital Assets Not Being Depreciated Capital Assets, Net of Depreciation Deferred Charges Restricted Cash with Fiscal Agent Total Assets LIABILITIES Accounts Payable Accrued Liabilities Interest Payable Deposits Payable Deferred Revenue Noncurrent Liabilities: Due Within One Year Due in More Than One Year Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Net Assets $ 948,518 1,714,677 8,127,413 10,790,608 $ 8,608,639 1,610,636 10,219,275 $ 9,557,157 1,714,677 9,738,049 21,009,883 116,040 5,777,196 8,739,406 122,023 10,035,327 10,520,556 238,063 15,812,523 19,259,963 2,552,298 121,093 121,524 51,256 32,573 43,249 257,504 29,880 2,584,871 164,342 379,028 29,880 51,256 $ Activities 3,568,352 3,156,914 2,404,022 407,964 729,346 6,150,115 268,000 2,845,303 19,530,014 $ Business-type Activities 2,626,211 251,171 60,898 1,825,403 15,787,701 188,448 20,739,832 $ Total 6,194,562 3,408,084 60,898 2,404,022 407,964 2,554,749 21,937,816 456,448 2,845,303 40,269,846

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Statement of Activities Government-wide Financial Statements Year Ended June 30, 2011

FUNCTION/PROGRAMS Expenses GOVERNMENTAL ACTIVITIES General Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Interest on long-term debt Total government activities BUSINESS ACTIVITIES Water utility Sewer utility Total business-type activities Total primary government $ $ 1,046,283 276,570 1,313,419 549,570 931,069 1,788,710 312,916 287,728 6,506,265

Charges for Services $ 316,967 81,603 41,137 37,701 477,408

Program Revenue Operating Capital Grants and Grants and Contributions Contributions $ 54,968 542,325 14,750 203,868 815,911 $ 590,663 590,663

Net (Expenses) Revenue and Change in Net Assets Primary Government Governmental Business-type Activities Activities Total $ (674,349) (194,967) (681,620) (7,245) (916,319) (1,547,140) (312,916) (287,728) (4,622,284) $ (674,349) (194,967) (681,620) (7,245) (916,319) (1,547,140) (312,916) (287,728) (4,622,284)

1,421,483 2,398,216 3,819,700 10,325,965

1,280,037 1,736,912 3,016,950 $ 3,494,357

$ 815,911

$ 590,663 (4,622,284) $

(141,446) (661,304) (802,750) (802,750) $

(141,446) (661,304) (802,750) (5,425,034)

GENERAL REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Other Revenue Totals CHANGES IN NET ASSETS NET ASSETS Beginning Prior Period Adjustments Beginning, As Restated End of Year

3,752,789 271,243 28,977 24,790 465,957 4,543,756 (78,528)

352,838 39,403 284,353 676,594 (126,156)

4,105,627 271,243 28,977 64,193 750,310 5,220,350 (204,684)

9,114,274 1,754,862 10,869,136 $ 10,790,608

10,512,261 (166,829) 10,345,432 $ 10,219,275

19,626,535 1,588,032 21,214,567 21,009,883

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Governmental Fund Financial Statements2

The accompanying notes are an integral part of the these financial statements.

CITY OF LAKEPORT Balance Sheet Major Governmental Funds Year Ended June 30, 2011
Redevelopment Redevelopment General ASSETS Cash and Investments Accrued Interest Taxes Receivable Other Receivables Due From Other Funds Land Held for Resale Notes Receivable Resticted assets: Cash with Fiscal Agent Total Assets LIABILIITIES Accounts Payable Accrued Liabilities Deferred Revenue Due to Other Funds Interfund Loans Total Liabilities FUND BALANCE Nonspendable Restricted Committed Assigned Unassigned Total Fund Balance 1,895,096 133,000 2,393,537 4,421,633 709,612 709,612 379,051 379,051 597,150 597,150 76,709 96,791 51,256 224,757 1,519 14,444 473 16,436 2,468,426 2,468,426 124 9,857 9,981 4,646,390 726,047 2,845,303 2,847,477 607,131 $ 2,306,568 8,419 337,600 98,707 1,895,096 $ 723,494 187 2,367 $ 2,173 2 $ 602,795 392 3,944 Agency Agency Debt Service Redevelopment Agency Housing Set-Aside

Total Liabilities and Fund Balance

4,646,390

726,048

2,847,477

607,131

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Other Governmental Funds $ (66,677) 508 28,977 207,385 573,329 743,523 $

Total Governmental Funds 3,568,352 9,508 372,888 306,092 2,468,426 2,845,303 9,570,568

5,047 5,047

83,399 121,093 51,256 2,468,899 2,724,647

738,476 738,476

1,714,677 1,895,096 133,000 3,103,149 6,845,922

743,523

9,570,569

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CITY OF LAKEPORT Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Year Ended June 30, 2011
TOTAL FUND BALANCES - GOVERNMENTAL FUNDS Amounts reported in the governmental activites column in the statement of net assets are different because of the following: DEFERRED EXPENSES Deferred charges represent costs associated with the issuance of long-term debt which are deferred and amortized over the period during which the debt is outstanding. The costs are reported as expenditures of current financial resources in governmental funds. RDA Series Bonds CAPITAL ASSETS Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds balance sheet: Land Held for Resale - will not be liquidated in the current period Capital assets not being depreciated Governmental capital assets Accumulated depreciation INTEREST EXPENSE In governmental funds, interest on long-term debt is not recognized untill the period in which it matures and is paid. In the government-wide statement of activities, it is recognized in ther period that it is incurred. Matured Interest - Police Vehicles Matured Interest - RDA Series Bonds NOTES RECEIVABLE In governmental funds, other on long-term assets are not available to pay for current-period expenditures and, therefore, are offset by deferred revenue. Lakeport Housing Program Fund Economic Revolving Loan/Re-Use Fund Redevelopment Agency Fund RDA Low/Moderate Set-Aside Fund Housing Revolving Loan Fund Business Loan Stabilization Program Fund Home Program Income Fund LONG-TERM OBLIGATIONS Long-term liabilities, including notes payable, are not due and payable in the current period and therefore are not reported in the funds balance sheet: Due within one year - compensated absences Due within one year - Police auto lease payment Due within one year - tax increment bonds Accrued compensated absences Lease payable Bonds Payable NET ASSETS - GOVERNMENTAL ACTIVITIES $ (7,646) (113,878) 268,000 $ 6,845,922

407,964 729,346 8,617,184 (2,467,070)

97,252 495,534 25,983 503,049 187,923 72,288 1,021,992

(6,000) (60,040) (50,000) (286,093) (131,103) (5,360,000) 10,790,608

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Statement of Revenue, Expenditures, and Change in Fund Balances Major Governmental Funds Year Ended June 30, 2011
Redevelopment Agency $ 929,131 978 23,424 953,533 Redevelopment Agency Debt Service $ 2,130 2,130 Redevelopment Agency Housing Set-Aside $ 1,075 167,131 5,293 173,499

General REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay - Roads Debt servicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers (Out) Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE BEGINNING FUND BALANCES Prior Period Adjustment FUND BALANCES RESTATED ENDING FUND BALANCES $ $ 2,700,615 268,194 28,977 15,687 258,836 477,408 365,542 4,115,259

732,333 245,771 962,160 1,644,841 201,218 215,111 56,641 14,867 4,072,942

896,300 6,827 50,000 272,861 1,225,988

253,217 253,217

42,317

(272,455)

2,130

(79,719)

2,959,457 (19,861) 2,939,596 2,981,912 1,726,818 (62,340) 1,664,478 4,646,390 $

645,139 (233,497) 411,642 139,186 428,813 141,613 570,426 709,612 $

11,638 (3,009,919) (2,998,281) (2,996,150) 3,404,217 (29,015) 3,375,202 379,051 $

432,913 432,913 353,194 242,466 1,490 243,956 597,150

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Other Governmental Funds $ 123,043 3,049 4,919 980,606 71,698 1,183,317 $

Total Governmental Funds 3,752,789 271,243 28,977 24,790 1,406,574 477,408 465,957 6,427,737

62,041 469,598 298,301 560,436 111,698 4,350 1,506,424

794,374 245,771 1,431,758 551,519 1,456,736 1,644,841 312,916 226,288 106,641 287,728 7,058,572

(323,107)

(630,834)

761,484 (1,547,354) (785,870) (1,108,977) 1,524,801 322,652 1,847,453 $ 738,476 $

4,810,630 (4,810,631) (0) (630,835) 7,327,115 374,398 7,701,513 7,070,678

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Reconciliation of the Statement of Revenue, Expenditures, and Change in Fund Balances of Governmental Funds to Statement of Activities Year Ended June 30, 2011
CHANGE IN FUND BALANCE - GOVERNMENTAL FUNDS Amounts reported for governmental activities in the Statement of Net Assets are different because of the following: NOTES RECEIVABLE Repayment of long-term receivables are treated as revenue in the govrernmental funds, but the repayment reduces ong-term receivables in the Statement of Net Assets. Issuance of long-term receivables are treated as expenditures in the governmental funds, but the issuance increases long-term receivables in the Statement of Net Assets. Net Change of Notes - Housing and Support Programs Net Change of Notes - Redevelopment/Economic Development CAPITAL ASSETS Governmental funds report capital outlays as expenditures in the governmental funds, but the repayment reducs long-term receivables in the Statement of Net Assets. Similarly, issuance of long-term receivables are treated as expenditures in the governmental funds, but the issuance increases long-term receivables in the Statement of Net Assets. Capital outlay expenditures added back to fund balances - Public Works - Streets: Capital outlay expenditures added back to fund balances - Redevelopment/Economic Development: Depreciation expense - General Government: LONG-TERM OBLIGATIONS The amounts below included in the Statement of Activities do not provide or require the use of current financial resources and, therefore, are not reported as revenue or expenditures in the governmental funds. Interest Payable Interest Payable Compensated Absences Compensated Absences Compensated Absences Compensated Absences Compensated Absences Compensated Absences Compensated Absences Public Saftey Redevelopment/Economic Development General Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Saftey Parks, Buildings, and Grounds (3,823) (22,776) (29,946) (30,799) (44,549) (285) (37,270) (140,046) 389,176 510,577 (221,963) $ (630,835)

2,234 75,136

Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Assets. Costs associated with the issuance of long-term debt are reported as expenditures in the governmental funds but deferred and amortized throughout the period in which the related debt is outstanding in the Statement of Net Assets. Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Assets the repayment reducs long-term liabilities. Repayment of Debt Principal - Police Vehicle Lease Repayment of Debt Principal - RDA 2004 Series A Bond Repayment of Debt Principal - RDA 2004 Series B Bond Repayment of Debt Principal - RDA 2008 Series Bond CHANGE IN NET ASSETS - GOVERNMENTAL ACTIVITIES Public Safety Redevelopment/Economic Development Redevelopment/Economic Development Redevelopment/Economic Development $ 56,641 40,000 10,000 (78,528)

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Governmental Fund Budget Comparisons

CITY OF LAKEPORT General Fund Statement of Revenue, Expenditures, and Change in Fund Balances Budget and Actual For the Year Ended June 30, 2011
Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay - Roads Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ 2,750,694 228,986 25,660 9,189 180,219 494,435 208,958 3,898,141 $ Final 2,750,694 228,986 25,660 9,189 180,219 494,435 288,488 3,977,671 $ Actual Amounts 2,700,615 268,194 28,977 15,687 258,836 477,408 365,542 4,115,259 Variance with Final Budget Positive (Negative) $ (50,079) 39,208 3,317 6,498 78,617 (17,027) 77,054 137,588

708,974 297,439 1,052,764 1,761,473 222,308 525,796 56,641 14,867 4,640,262

708,974 297,439 1,046,989 1,766,473 228,083 525,796 56,641 14,867 4,645,262

732,333 245,771 962,160 1,644,841 201,218 215,111 56,641 14,867 4,072,942

(23,359) 51,668 84,829 121,631 26,865 310,685 0 0 572,320

(742,121)

(667,591)

42,316

709,907

924,280 924,280 182,159 $

938,893 938,893 271,302 $

2,959,457 (19,861) 2,939,596 2,981,912 $

2,020,564 (19,861) 2,000,703 2,710,610

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Redevelopment Agency Fund Statement of Revenue, Expenditures, and Change in Fund Balances Budget and Actual For the Year Ended June 30, 2011
Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ 914,255 914,255 $ Final 914,255 914,255 $ Actual Amounts 929,131 978 23,424 953,533 Variance with Final Budget Positive (Negative) $ 14,876 978 23,424 39,278

1,050,160 2,500 50,000 274,456 1,377,116

1,050,160 2,500 50,000 274,456 1,377,116

896,300 6,827 50,000 272,861 1,225,988

153,860 (4,327) 1,595 151,128

(462,861)

(462,861)

(272,455)

190,406

575,910 575,910 113,049 $

575,910 575,910 113,049 $

645,139 (233,497) 411,642 139,186 $

69,229 (233,497) (164,268) 26,137

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Redevelopment Debt Service (Bond Proceeds) Fund Statement of Revenue, Expenditures, and Change in Fund Balances Budget and Actual For the Year Ended June 30, 2011
Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ $ Final $ Actual Amounts 2,130 2,130 Variance with Final Budget Positive (Negative) $ 2,130 2,130

2,130

2,130

(3,071,522) (3,071,522) (3,071,522) $

(3,071,522) (3,071,522) (3,071,522) $

11,638 (3,009,919) (2,998,281) (2,996,150) $

11,638 61,603 73,241 75,372

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Redevelopment Low Moderate Housing Set-Aside Fund Statement of Revenue, Expenditures, and Change in Fund Balances Budget and Actual For the Year Ended June 30, 2011
Budgeted Amounts Original REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Safety Parks, Buildings, and Grounds Capital Outlay Debt ServicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total other NET CHANGE IN FUND BALANCE $ $ 105 5,000 5,105 $ Final 105 5,000 5,105 $ Actual Amounts 1,075 167,131 5,293 173,499 Variance with Final Budget Positive (Negative) $ 970 167,131 293 168,394

468,211 5,105 473,316

468,211 468,211

253,217 253,217

214,994 214,994

(468,211)

(463,106)

(79,719)

383,387

574,973 574,973 106,762 $

574,973 574,973 111,867 $

432,913 432,913 353,194 $

(142,060) (142,060) 241,327

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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Proprietary Fund Financial Statements3

The accompanying notes are an integral part of these financial statements.

CITY OF LAKEPORT Statement of Net Assets Major Proprietary Funds Year Ended June 30, 2011
Business-Type Activities Other Proprietary Funds $ 1,566,685 23,971 1,590,656 $ Total Enterprise Funds 2,626,211 251,171 60,898 2,938,280

ASSETS Current Assets: Cash and Investments Receivables Prepaid Expenses Total Current Assets Noncurrent Assets: Capital Assets Not Being Depreciated Capital Assets, Net of Depreciation Deferred Charges Total Noncurrent Assets Total Assets LIABILITIES Current Liabilities Accounts Payable Accrued Payroll and Benefits Interest Payable Customer Deposits Compensated Absences, Current Revenue Bonds, Current Tax assessment Bonds, Current Total Current Liabilities Noncurrent Liabilities: Compensated Absences Revenue Bonds, Net Tax Assessment Bonds, Net Total Noncurrent Liabilities Total Liabilities NET ASSETS Investment in Capital Assets, Net of Related Debt Unrestricted Total Net Assets

Water $ 392,027 106,895 30,449 529,371 $

Sewer 667,498 120,305 30,449 818,252

90,170 4,058,275 4,148,445 4,677,816

1,735,233 11,729,426 188,448 13,653,108 14,471,360

1,590,656

1,825,403 15,787,701 188,448 17,801,552 20,739,832

9,282 20,891 123,952 14,940 2,500 60,023 231,589

13,374 22,357 50,010 14,940 4,500 55,000 160,181

9,918 83,542 93,459

32,573 43,249 257,504 29,880 7,000 115,023 485,230

46,871 3,039,434 3,086,304 3,317,893

48,896 2,923,250 2,972,146 3,132,328

3,976,876 3,976,876 4,070,336

95,767 5,962,684 3,976,876 10,035,327 10,520,556

1,109,011 250,912 $ 1,359,923 $

10,752,985 586,048 11,339,032 $

(3,253,356) 773,677 (2,479,679) $

8,608,639 1,610,636 10,219,276

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Statement of Revenue, Expenses and Change in Net Assets Major Proprietary Funds Year Ended June 30, 2011
Business-Type Activities Other Proprietary Funds $ 1,257 18,465 19,722 $ Total Enterprise Funds 3,020,739 284,353 3,305,091

Water OPERATING REVENUE Charge for Services Other Income Total Operating Revenue OPERATING EXPENSES Salaries and Benefits Utility Costs Materials, Supplies and Service Costs Travel and Training Other Amortization Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUE (EXPENSES) Property Tax Assessments Use of Money and Property Interest Expense Total Nonoperating Revenue (expense) TRANSFERS Transfers In Transfers (Out) Net Trasnfers $ 1,267,799 119,871 1,387,670 $

Sewer 1,751,682 146,017 1,897,699

676,241 91,521 326,675 5,337 143,205 1,242,980 144,690

771,313 202,075 332,801 5,095 114,394 6,853 626,552 2,059,082 (161,382)

30,933 30,933 (11,212)

1,447,554 293,596 690,409 10,432 114,394 6,853 769,757 3,332,995 (27,904)

(627) 5,544 (154,482) (149,564)

(2,490) 30,559 (127,605) (99,536)

349,050 3,300 (201,500) 150,849

345,933 39,403 (483,588) (98,252)

27,743 27,743

(27,743) (27,743)

27,743 (27,743) -

CHANGE IN NET ASSETS BEGINNING NET ASSETS Prior Period Adjustments BEGINNING NET ASSETS RESTATED ENDING NET ASSETS $

(4,875) 1,788,021 (423,224) 1,364,797 1,359,923 $

(233,176) 8,724,240 2,847,968 11,572,208 11,339,032 $

111,895 (2,645,243) 53,669 (2,591,574) (2,479,679) $

(126,156) 7,867,018 2,478,414 10,345,432 10,219,275

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Statement of Cash Flows Proprietary Funds Year Ended June 30, 2011
Business-type Activities CASH FLOWS PROVIDED BY (USED FOR) Water OPERATING ACTIVITIES Cash received from customers Cash paid to suppliers of goods and services Cash paid for employee compensation Net cash provided (used) NONCAPITAL & RELATED FINANCING ACTIVITIES Property tax assessments CAPTIAL & RELATED FINANCING ACTIVITIES Purchase of capital assets Principal payments on capital debt Interest paid on capital debt Net cash provided (used) INVESTING ACTIVITIES Collection of investment earnings NET INCREASE (DECREASE) IN CASH Cash and cash equivalents-beginning Cash and cash equivalents-end of year $ 1,482,775 (467,509) (671,521) 343,745 $ Sewer 1,929,930 (650,426) (771,395) 508,110 $ Total Enterprise Funds 3,412,706 (1,117,935) (1,442,916) 851,855

35,066

35,066

(51,795) (100,656) (154,482) (306,933)

(99) (55,000) (134,458) (189,557)

(51,894) (155,656) (288,941) (496,491)

5,544 42,357 349,670 392,027

559 354,178 313,321 667,498

6,104 396,534 662,991 1,059,525

OPERATING ACTIVITIES ANALYSIS Operating Income (Loss) Reconciliation adjustments: Depreciation, a noncash expense Amorization, a noncash expense (Increase) decrease in trade receivables (Increase) decrease in prepaid expenses Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in compensated absences Increase (decrease) in customer deposits Net cash provided (used)

144,690 143,205 (10,958) 18,478 (62,452) 4,720 40,851 65,213 343,745

(161,382) 626,552 6,853 (16,435) 18,478 (14,540) (82) 33,726 14,940 508,109

(16,693) 769,757 6,853 (27,394) 36,956 (76,992) 4,638 74,578 80,153 851,855

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT Statement of Fiduciary Assets and Liabilities Fiduciary Funds Year Ended June 30, 2011

Agency Funds (Special Deposits) ASSETS Cash and Investments Total Assets LIABILITIES Refundable Deposits and Trust Liabilities Total Liabilities $ $ 191,917 191,917

$ $

191,917 191,917

City of Lakeport Annual Financial Report Year Ended June 30, 2011

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CITY OF LAKEPORT

Notes to the Financial Statements


June 30, 2011
The notes to the financial statements include a summary of significant accounting policies and other notes considered essential to fully disclose and fairly present the transactions and financial position of the City as follows:

Note 1 - Defining the Reporting Entity Note 2 - Summary of Significant Accounting Policies Note 3 - Stewardship, Compliance, and Accountability Note 4 - Cash and Investments Note 5 - Interfund Transactions Note 6 - Capital Assets Note 7 - Long-term Obligations Note 8 - Defined Benefit Pension Plan Note 9 - Post-Retirement Health Care Benefits Note 10 Risk Management Note 11 - Commitments and Contingencies Note 12 - New Pronouncements Note 13 - Subsequent Events

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Note 1 - Defining the Reporting Entity The City of Lakeport (the City) was incorporated in 1888 under the laws of the State of California. Lakeport operates under a Council-Manager form of government. The City Manager serves as the chief executive for day-to-day operations and long-term planning, including executing the policies and directives of the City Council. Department heads report directly to the City Manager and serve at his or her pleasure. The City provides a full range of municipal services to its citizens including public safety, public works, planning and building regulation, recreation and parks, water and sewer services. These financial statements present the financial status of the City and its components units. The component units discussed in the following paragraph are included in the Citys financial statements because the City is financially accountable for their operations. The Redevelopment Agency of the City of Lakeport (the Agency) was established by the City as a separate legal entity in accordance with state law. The purpose of the Agency is to encourage new investment and reinvestment within legally designated redevelopment areas in partnership with property owners. The Municipal Sewer District No. 1 (CLMSD) was established as a separate legal entity to obtain funding to construct a new sewage treatment plant and pumping stations in 1965. In later years and assessment district was formed for the purpose of financing needed improvements and expansion of the wastewater systems. Although the component units are legally separate from the City, they are reported on a blended basis as part of the primary government because their boards consist of members of the City Council. The component units financial statements may be obtained from the City.

Note 2 - Summary of Significant Accounting Policies The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applied to government agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below: A. Government-wide and Fund Financial Statement The government-wide financial statements report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activates, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grant and contributors that are restricted to meeting the operational or capital requirements of a particular function. Taxes, and other items not properly included among program revenues are reported instead as general revenues. The accounts of the City are organized on the basis of funds. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue, and expenditures or
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expenses, as appropriate. Government resources are allocated to, and accounted for, in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. In the fund financial statement in the report, the various funds are grouped into generic funds within three broad fund types. They are as follows: Governmental Funds The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trust of major capital projects) that are legally restricted to expenditures for specific purposes. Capital Project Funds are used to account for revenue and expenditures restricted to the acquisition or major capital facilities (other than those financed by proprietary or trust funds). Debt Service Funds are used to account for the accumulation of resources for, and the payment to, governmental long-term debt, both principal and interest. Proprietary Fund Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprise the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis, be financed or recovered primarily through user charges. The City accounts for the operation of its water and sewer utility fund on this basis. Internal Service funds are used to account for operations similar to enterprise funds. The difference between the two is that internal service funds provide goods and services to departments and agencies under the primary government. Fiduciary Funds Agency Funds are used to account for assets administered by the City in a trustee capacity or as an agent for other governments and other funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Trust Funds are used to account for assets held by the government in a trustee capacity. B. Basis of Accounting and Measurement focus Basis of accounting refers to when revenue and expenditures (or expenses) are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of measurements made, regardless of the measurement focus applied. Measurement focus is the determination of (1) which assets and which liabilities are included on a government's balance sheet and where they are reported, and (2) whether an operating statement presents information on the flow of financial resources (revenues and expenditures) or information on the flow of economic resources (revenues and expenses).

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The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statement. Revenue is recorded when earned and expenses are recorded when liabilities are incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. In the fund financial statements, all government funds and agency funds are accounted for using the modified accrual basis of accounting. Revenue is recognized when they become both measurable and available to finance the expenditures of the current period (susceptible to accrual). Major revenue sources susceptible to accrual include substantially all property taxes, taxpayer-assessed taxes (such as sales and use, utility users, business license, transient occupancy, franchise fees and gas taxes), interest, special assessments levied, state and federal grants and charges for current services. Revenue from licenses, permits, fines and forfeits is recorded as received. Expenditures are recorded when the related fund liability is incurred. Fiduciary fund revenue and expenditures (as appropriate) are recognized on the basis consistent with the funds accounting measurement objective. All governmental funds are accounted for using a current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of available spendable resources. Governmental fund operating statements present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they present a summary of sources and uses of available spendable resources during a period. The government-wide financial statements, as well as the proprietary funds financial statements, are accounted for on a flow of economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund operating statements present increases (revenues) in net total assets. Private sector standards of accounting and financial reporting, issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statement to the extent that those standards do not conflict with or contradict guidance from GASB. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance C. Use of Estimates Financial statement preparation in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures/expenses during the reporting period. Actual results could differ from those estimates D. Cash and Investments Cash and investments held in the Citys investment pool are reported as cash and investments since funds can spend cash at any time without prior notice or penalty. All investments with fiscal agents are also considered cash equivalents if they are liquid. Investments are stated at fair value.

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E. Receivable and Payables Balances Representing lending/borrowing transactions between funds outstanding at the end of the fiscal year are reported as either due to/due from other funds (amounts due within one year), advances to/from other funds (noncurrent portions of interfund lending/borrowing transactions), or loans to/from other funds (long-term lending/borrowing transactions as evidenced by loan agreements). Advances and loans to other funds are offset by a fund balance reserve in applicable governmental funds to indicate they are not available for appropriation, and are not expendable available financial resources. Property, sales, use, and utility user taxes related to the current fiscal year are accrued as revenue and accounts receivable and considered available if received within 60 days of year end. Federal and state grants are considered receivable and accrued as revenue when reimbursable costs are incurred under the accrual basis of accounting in the government-wide statement of net assets. The amount recognized as revenue under the modified accrual basis of accounting is limited to the amount that is deemed measureable and available. The City considers these taxes available if they are received during the period when settlement of prior fiscal year accounts payable and payroll charges normally occur. Grants, entitlements or shared revenue is recorded as receivables and revenue in the general, special revenue and capital project funds when they are received or susceptible to accrual. Notes receivables represent individual loans, secured by property liens in favor of the City and the Redevelopment Agency, made through various sources, including the Community Development Block Grant (CDBG) and federal HOME housing programs. When repaid, theses amounts are designated for purposes allowed under the aforementioned reuse guidelines. F. Allowance for Doubtful Accounts Management has elected to record bad debts using the allowance method. G. Prepaid Expenses The prepaid expenses consist of expendables supplies held for consumption and are recorded as expenses when consumed. Materials and supplies used by governmental funds are recorded as expenditures at the time they are purchases or obtained. H. Capital Assets Capital assets are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets are stated at historical cost, when available and at estimated replacement cost when original cost was not available. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets, which range from five to fifty years. Donated assets are stated at estimated market value at the date of donation. Capital leases are recorded at present value of future minimum lease payments. Related assets are classified as capital assets and depreciated. I. Compensated Absences

Compensated absences represent the vested portion of accumulate vacation and sick leave. In governmental funds, the cost of vacation and sick leave benefits is recognized when payments are made to employees. Upon separation, 100% of accrued vacation leave is paid and, depending on longevity, sick leave is paid out up to 50% of the accrued amount. In proprietary funds, a long-term liability for such benefits has been recorded.

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J. Deferred Revenue Deferred revenue in governmental funds primarily represents business license taxes collected, pool revenues collected for the next fiscal year, and funds to be collected under the Citys housing rehabilitation and business assistance programs. These programs consist of long-term deferred payment loans of grant funds received from the state, which were reported as grant revenue in the year received, and expenditures in the year the loans were made. Principal payments, which are receivables at June 30, are offset by an equal amount of deferred revenue. Principal and interest payments will be recognized as revenue when received. K. Long-term Obligations In both the governmental-wide financial statements and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable statement of net assets. Bond premiums, issuance costs and discounts are deferred and amortized over the life of the bond. In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. L. Net Assets The Citys net assets are classified as follows: Invested in capital assets - represents the Citys total investment in capital assets, net of any related debt. Restricted net assets include resources that the City is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties. Unrestricted net assets represent resources derived from sources without spending restrictions. These resources are used for transactions relating the general operations for the City, and may be used at the discretion of the governing board to meet current expense for any purpose. M. Property Taxes Property taxes in the State of California are administered for all local agencies at the county level and consist of secured, unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes: Property Valuations are established by the Lake County Assessor for the secured and unsecured property tax rolls; the utility property tax roll is valued by the State Board of Equalization. Under the provision of Article XIII-A of the State Constitution (Proposition 13, adopted by the voters on June 6, 1978), properties are assessed at 100% of full value. From this base assessment, subsequent annual increases in valuation are limited to a maximum of two percent. However, an increase to full value is allowed for property improvements or upon change in ownership. Personal property is excluded from these limitations and is subject to annual reappraisal. Tax Levies are limited to one percent of full assessed value which results in a tax rate of one percent assessed valuation under the provisions of Proposition 13. Tax rates for voter-approved indebtedness are excluded from this limitation. Tax Levy Dates are attached annually on January 1, preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and
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unsecured personal property as it exists at that time. Liens against real estate, as well as the tax on personal property are not relieved by subsequent renewal or change in ownership. Tax Collections are the responsibility of the Lake County Treasurer-Tax Collector. Taxes and assessments on secured and utility rolls, which constitute a lien against the property, may be paid in two installments. The First is due on November 1 of the fiscal year and is delinquent if not paid by December 10; The second is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not constitute a lien against property unless the taxes become delinquent. Payments must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the county for late payments. The City has elected to receive the Citys portion of the property taxes from the county under the county Teeter Bill program. Under this program, the City receives 100% of the Citys share of the levied property taxes in periodic payments with the county assuming the responsibility for the delinquencies. Property Tax Administration Fees the state of California FY 90-91 Budget Act authorized counties to collect an administrative fee for collection and distribution of property taxes. Tax Levy Apportionments due to the nature of the City-wide maximum levy, it is not possible to identify general-purpose tax rates for specific entities. Under State legislation adopted subsequent to the passage of Proposition 13, apportionments to local agencies are made by the countys auditor-controller based primarily on the ratio that each agency represented of the total City-wide levy for the three fiscal years prior to fiscal year 1979. Note 3 - Stewardship, Compliance, and Accountability Budgetary Information The City follows these procedures annually in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed draft budget for the fiscal year commencing July 1 of the next fiscal year. The budget includes proposed expenditures and the means of financing them. 2. The City Council reviews the proposed budget at special scheduled sessions which are open to the public. The Council also conducts a public hearing on the proposed budget to obtain comments from interested persons. 3. Prior to July 1, the budget is to be adopted by resolution of the City Council. In this fiscal year, a final adopted budget was not approved by the City Council and component unit governing boards until January, 2011, due to personnel issues and a transition period in the Finance Department. 4. From the effective date of the budget, which is adopted and controlled at the department level, the amounts stated therein as proposed expenditures become appropriations to the various City departments. The City Council may amend the budget by minute action during the fiscal year. The City Manager may authorize transfers from one object or purpose to another within the same department, and between departments within the General Fund. All appropriations lapse at year end unless encumbered and carried forward upon the approval of the City Manager.

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5. Budgets for the governmental fund types and proprietary fund types are adopted on a basis consistent with generally accepted accounting principles. Budgeted amounts presented are as originally adopted and as further amended by the City Council.

Deficit Fund Equity At June 30, 2011, certain funds had deficit fund equity balances as follows: Fund Name Parkland Dedication Fund Fund Number 202 Deficit Amount Discussion/Explanation

(37,049) Deficit resulted from a large payment to the Witt loan in June. Financing for that payment has yet to be determined. ($227,734) This fund was used to acquire certain properties for the City over the last decade. Management has elected to keep this fund in a negative balance as income to the fund will reduce it. Financing to reduce it to zero has yet to be determined. ($3,253,356) This is a debt service fund and is appropriate to maintain a negative equity balance.

Lakeport Housing Program

209

Sewer Assessment Bond District

301

Revenue Limitations Imposed by California Propositions 218 and 26 Proposition 218, approved by the voters in November 1996, regulates the Citys ability to impose, increase, and extend taxes, assessments, and fees. It was enhanced further by the passage of Proposition 26 in 2010, which revised to the definitions of taxes and fees. Any new, increased, or extended taxes, assessments, and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees be subject to the voter initiative process and may be rescinded in future years by the voters.

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Note 4 - Cash and Investments The City follows the practice of pooling cash and investments of all funds except for the restricted funds required to be held by outside custodians, fiscal agents or trustees under the provisions of bond indentures. Cash and investments as of June 30, 2011 are classified in the accompanying financial statements as follows:
Statement of Net Assets Cash and Investments Cash and Investments w Fiscal Agent Statement of Fiduciary Assets and Liabilities Cash and Investments Cash and Investments Consist of the Following: Local Agency Investment Fund (LAIF) Money Market Mutual Funds Demand Deposits (checking) U.S. Government Securities $ 6,433,021 2,875,302 171,385 $ 9,479,709 $ 8,997,986 371,603 110,120 $ 9,479,709

Collateral and Categorization Requirements At the fiscal year end, the Citys carrying amount of demand deposits was $83,437 and the bank account balance was $371,603. The difference of $288,166 represented outstanding checks and deposits in transit. Of the total deposit balance, $250,000 was insured by Federal Depository Insurance Corporation (FDIC), and any amount over that would be collateralized in accordance with California Government Code Section 53600-53609. Investment Policy The table bellow identifies the investment types that are authorized under provisions of the Citys investment policy adopted August 16, 2005 (subsequently updated July 6, 2010), and in accordance with Section 53601 of the California Government Code. The table also identifies certain provisions of the investment policy that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maturity 5 Years 5 Years 270 Days 5 Years 5 Years 30 Days 31 to 180 Days 5 Years None N/A Maximum Percentage of Portfolio None None 30% 30% 30% None 15-30% 30% 15% None Maximum Investment in One Issuer None None None None None None None None None None Minimum Rating None None None None None None A1/P1 A Two/three None

Authorized Investment Type U.S. Treasury Securities U.S. Government Securities Bankers Acceptances Certificates of Deposit Negotiable Certificates of Deposit Repurchase Agreements Commercial Paper Corporate Medium-term Notes Mutual Funds Passbook Savings

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Local Agency Investment Fund (LAIF)

N/A

$10m

None

None

Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that City of Lakeport manages its exposure to interest rate risk is by investing in LAIF, whose underlying securities have staggered maturities and are generally due on demand, which provides cash flow and liquidity needed for operations. Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by nationally recognized statistical rating organization. The Citys investment policy limits credit risk by requiring compliance with the California Government Code for investment of public funds, as described in detail above. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any single issuer beyond that stipulated by the California government code, Investments in any one issuer that represent 5% or more of total investments at June 30, 2011 are as follows: Investment Type Local Agency Investment Fund (LAIF) Money Market Mutual Funds Demand Deposits (checking) U.S. Government Securities Total Funds Fair Value $ 8,997,986 371,603 110,120 $ 9,479,709 Weighted Yield Custodial Credit Risk The credit risk for deposits is the risk that, in the event of failure of a depository financial institution, a government will not be able recover its deposits or will not be able to recover collateral securities that are in the possession on an outside party. The California government code and the Citys investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California government code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in Yield 0.48% 0.01% 0.00% 0.00% 0.12% 0.46% Concentration 94.92% 0.00% 3.92% 1.16% 100.00%

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the collateral pool must be equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2011, the City had $121,603 in financial institutions that were not covered by the FDIC but were covered by collateralized securities of the financial institutions where the deposits were maintained. The credit risk for investments is the risk that, in the event of the failure of counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of another party. The California government code and the Citys investment policy do not contain legal or policy requirements that would limit the exposure to custodial risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local governments indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF). Participation in an External Investment Pool The City is a voluntary participant in the California Local Agency Investment Fund (LAIF), which is regulated by California Government Code Section under the oversight of the Local Investment Advisory Board (Board). The Board consists of five members as designated by state statue, and is chaired by the State Treasurer who is responsible for the day to day administration of LAIF. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis, which is different from the fair value of the Citys position in the LAIF pool. The State Treasurer determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available. As of June 30, 2011, the Citys investment in LAIF was $8,997,986. The total amount invested by all public agencies at that date was $23.98 billion. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2011 has a balance of $67.01 billion. Financial Statements of LAIF and PMIA may be obtained from the California Treasurers web site at www.treasureer.ca.gov.

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Note 5 - Interfund Transactions With City Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to reimburse a fund which has made expenditure on behalf of another fund. Transfers between funds during the fiscal year ended June 30, 2011 were as follows:
Interfund Transfers Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: Fund: 110 - GENERAL FUND 120 - GENERAL FUND RESERVE 203 - 2105 GAS TAX FUND 204 - 2106 GAS TAX FUND 205 - 2107 GAS TAX FUND 206 - 2107.5 GAS TAX FUND 208 - T D A NON-TRANSIT FUND 210 - ECON RLF RE-USE FUND 212 - REDEVELOPMENT AGENCY FUND 213 - RDA CAPITAL PROJECTS FUND 217 - RDA BOND REDEMPTION FUND 219 - RDA LOW/MODERATE HOUSING FUND 220 - TRAFFIC CONGESTION RELIEF FUND 228 - HOUSING REVOLVING LOAN (RLA) 230 - FEMA-1646 STORM DAMAGE 2006 231 - 2007 HOME GRANT 234 - BUS LOAN STABLIZ PROG FUND 235 - 2009 HOME GRANT 236 - PTA Grant #09-PTAG-6504 237 - BUSINESS LOAN RLF 238 - CDBG HOUSING GRANT 2010 404 - INDIAN GAMING FUNDS 405 - PROP 1B LOCAL STREET/ROAD IMPR 406 - REG STATE TRANSPORTATION FUND 408 - BEVINS STREET MAINTENANCE FUND 409 - FORBES CREEK TRAIL FUND 412 - FORBES ST ESPL5076 (007) 601 - CLMSD UTILITY M & O FUND 621 - SWRCB GRANT Grand Total Net Effect: Transferred In $ 2,940,376 850,000 50,059 645,139 600,436 11,638 247,560 9,400 19,842 11 5 3 0 27,743 $ 5,402,211 Transferred Out $ 869,861 18,661 29,392 2,003 114,303 20,000 48,144 3,009,919 89,858 10,000 41,316 282,563 103,404 24,896 8,750 10,000 20,000 105,773 156,597 386,868 22,161 27,743 $ 5,402,211

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Note 6 - Capital Assets Governmental-type capital asset activity for the year was as follows:

Description Non-Depreciable Land CIP Depreciable Assets Buildings Improvements - Non Buildings Vehicles

Beginning Balance

Additions/ Completions

Retirements/ Adjustments

Ending Balance

399,546 427,556 827,102 2,619,229 3,138,049 1,532,597 7,289,875 (2,245,107)

407,964 899,753 1,307,717

$ 240,423 240,423

807,510 1,086,886 1,894,396 2,619,229 3,378,472 1,532,597 7,530,298 (2,467,070)

240,423 240,423 (221,963) $ 1,326,178 $ 240,423 $ -

Accumulated Depreciation Total Capital Assets, Net $

5,871,870

6,957,625

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Business-type capital asset activity for the year was as follows:

Description Non-Depreciable Land - Water Land - Sewer CIP - Sewer

Beginning Balance

Additions/ Completions

Retirements/ Adjustments

Ending Balance

40,170 1,735,233 1,775,403

$ 15,500 15,500

40,170 1,735,233 15,500 1,790,903

Depreciable Assets Buildings - Water Buildings - Sewer Improvements - Water Improvements - Sewer Vehicles - Water Vehicles - Sewer

1,707,846 132,058 4,559,322 21,574,244 219,898 317,561 28,510,929

1,707,846 132,058 4,559,322 21,574,244 219,898 317,561 28,510,929

Accumulated Depreciation Accumulated Depreciation - Water Accumulated Depreciation - Sewer Accumulated Depreciation, Net Total Capital Assets, Net $

(2,285,586) (9,683,385) (11,968,971) 18,317,361 $

(143,205) (626,552) (769,757) (754,257) $

(2,428,791) (10,309,937) (12,738,728) 17,563,104

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Note 7 - Long-term Obligations Water Revenue Bonds 2002 Refunding Loan Agreement with West America Bank of the 1993 Water Revenue Bonds, total refunding issues $873,577. Semi-annual principal and interest payments of approximately $41,000, at an annual interest rate of 5.1%, are due May 1 and November 1 each year. Payments are secured by water fund revenue. The obligation matures in the year 2017. Balance due $ 478,957 Water Revenue Bonds Series 2000 COPS bond with USDA Rural Development. Total issue $3,050,000. Annual principal and interest payments of approximately $105,000, at an interest rate of 4.75%, are due February 1 and August 1 each year. Payments are secured by water fund revenue. The obligation matures in the year 2039. Balance due $ 2,648,000 Sewer District Improvement Bonds Series 1993-1 bond with USDA Rural Development. Total issue $5,196,270. Annual principal and interest payments of approximately $115,000, at an interest rate of 5%, are due March 1 and September 1 each year, secured by Municipal Sewer District No.1 revenue from the South Assessment District 91-1 area. The total obligation matures in the year 2032. Balance due $ 4,010,000 2007 Series A Bonds 2007 Series A, total issue $3,060,000. Annual principal is due on September 1 and interest payments at 5.31% are due September 1 and March 1 each year, which are secured by wastewater fund revenue. The total obligation matures in the year 2037. Balance due $ 2,955,000 2004 Series A Bonds 2004 Series A bond, total issue $1,070,000. Annual principal is due on September 1 and interest payments are due semi-annually, at an interest rate of 5.25%, September 1 and March 1 each year. Payments are secured by redevelopment tax increment revenue, maturing in year 2035. Balance due $ 1,050,000 2004 Series B Bonds 2004 Series B bond, total issue $1,170,000. Annual principal is due on September 1 and interest payments are due semi-annually, at an annual interest rate of 5.31%, September 1 and March 1 each year. Payments are secured by redevelopment tax increment revenue, maturing in year 2035. Balance due $ 960,000 2008 Series Bonds 2008 Series bond, total issue $3,425,000. Annual principal is due on September 1 and interest payments are due semi-annually, at an interest rate of 5.31%, September 1 and March 1 each year. Payments are secured by redevelopment tax increment revenue, maturing in year 2038. Balance due $ 3,400,000 Capital Lease The City entered into a lease-purchase agreement with Auto Leasing Specialists, LLC in 2009 for the acquisition of ten police vehicles. Future minimum lease payments of $71,509 are due each November with a present value of the minimum lease payments at June 30 2011 as follows. The total obligation of the lease ends in 2013. Balance due $ 191,142

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Changes in long-term obligations compromise the following:

Beginning Balance Governmental Activities Capital Lease - Police Cars 2004 Series A Bonds 2004 Series B Bonds 2008 Series Bonds Compensated Absences Total Business-Type Activities Water Revenue Bonds, 2002 Refunding Loan Agreement Water Revenue Bonds, Series 2000 COPS Sewer District Improvement Bonds, 1993-1 2007 Series A Bond Compensated Absences Total $ 247,784 1,050,000 1,000,000 3,410,000 381,315 6,089,099 $

Additions -

Reductions $ 56,641 40,000 10,000 95,222 $ 201,863

Ending Balance $ 191,143 1,050,000 960,000 3,400,000 286,093 5,887,236

Due within One Year $ 60,040 40,000 10,000 6,000 $ 116,040

534,613 2,693,000 4,113,124 3,010,000 28,189 $ 10,378,926

69,578 69,578

55,656 45,000 103,124 55,000 $ 258,780

478,957 2,648,000 4,010,000 2,955,000 97,767 10,189,724

60,023 45,000 105,000 55,000 7,000 $ 272,023

Issuance costs for 2004 Series A & B bonds and the 2008 RDA bonds in the amount of $342,065 are being amortized over the life of the related debt in the amount of $15,682 per year. Accumulated amortization at June 30, 2011 was $74,065. Issuance costs for the 2007 Series A bonds and in the amount are being amortized over the life of the related debt in the amount of $6,853 per year. Accumulated amortization at June 30, 2011 was $23,128. Various bond indentures contain limitations and restrictions, with which, in the opinion of management, the City is in compliance.

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Future debt service requirements on long-term debt (not including capital leases) are as follows: Year Ending June 30 2011 2012 2013 2014 2015-2019 2020-2024 2025-2029 2030-2034 2035-2039 Total $ Governmental Activities Principal 50,000 55,000 60,000 60,000 355,000 820,000 1,165,000 1,535,000 1,310,000 $ 5,410,000 Interest $ 272,145 269,732 267,086 264,288 1,271,709 1,127,981 881,428 535,946 131,442 $ 5,021,757 $ Business-Type Activities Principal 265,023 280,124 290,884 306,314 1,570,193 1,685,000 2,149,000 2,098,000 1,433,500 $ 10,078,038 Interest $ 477,681 464,721 451,144 436,941 1,934,558 1,601,877 1,116,814 560,386 159,065 $ 7,203,187

Deferred Debt Issuance Costs Bond issuance costs are capitalized and amortized over the terms of the respective bonds using a method that approximates the effective interest method. Note 8 - Defined Benefit Pension Plan Plan Description The City contributes to the California Public Employees Retirement System (CalPERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statue and city ordinance. Copies of PERS annual financial report may be obtained from the Executive Office, 400 P Street, Sacramento, California 95814. Funding Status and Progress Non-public safety participants are required to contribute seven percent of their annual covered salary, while public safety employees are required to contribute nine percent of their annual covered salary. The city makes the contributions required of city employees on their behalf and their account. The City is required to contribute at an actuarially determined rate; the 2010-2011 rate was 16.562% for non-safety employees (miscellaneous plan) and 28.011% for public safety employees (safety plan), of annual covered payroll. Due to substantial unfunded liabilities in both plans, resulting from the economic downturn and recession of 2008, these contribution rates are scheduled to increase to 20.863% and 34.562% respectively in fiscal year 2011/2012 and 21.4% and 35.4% respectively in fiscal year 2012/2013, a total increase of 29.42%. If these changes do not return both funds to full funded status, it is possible that CalPERS will schedule additional increases to compensate. As always, the contribution requirements of plan members and the City established and may be amended by PERS.

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Annual Pension Cost The Citys annual pension cost of $507,334 was equal to the Citys required and actual contributions. The required contribution was determined as part of the June 30, 2009, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included: An 11.0% investment rate of return (net of administrative expenses) Projected annual salary increases of 3.25% to 14.45% depending on age, service, and type of employment An inflation rate of 3% A payroll growth rate of 3.25% Individual salary growth- a merit scale varying by duration of employment coupled with an assumed annual inflation growth rate of 3% and an annual production growth of 0.25%

The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a three-year period (smooth market value). The Schedule of Funding Progress on [INSERT HERE] shows that both plans were underfunded as of June 30, 2009. The contribution rate for normal cost is determined using the entry-age normal actuarial cost method, a projected benefit cost method. It takes into account those benefits that are expected to be earned in the future as well as those already accrued. Significant actuarial assumptions used in the 2009 and 2010 valuations to compute the actuarially determined contribution requirement are the same as those used to compute the pension benefit obligation as described above. Historical Trend Information Three-year trend information give an indication of the progress made in accumulating sufficient assets to pay benefits when due. Three-Year Trend Information for PERS Fiscal Year 2008-09 2009-10 2010-11 Annual Pension Cost (APC) $ $ $ 507,320 507,886 507,334 Percentage of APC Contributed 100% 100% 100% Net Pension Obligation $ $ $ -

Note 9 - Post-Retirement Health Care Benefits Plan Description The city provides certain health care benefits to qualified retired employees until they become eligible for Medicare benefits. Employees of the City may become eligible for these benefits when they reach normal retirement age while working for the City based upon years of service.

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Funding Policy The City recognizes the cost of providing these benefits by expensing their month insurance premiums. Other postemployment benefits paid by the City for the year totaled $379,725. Funded Status and Funding Progress The City had not obtained an actuarial valuation report nor determined the unfunded actuarial accrued liability in fiscal year 2010/2011; however, the City will procure an actuary in fiscal year 2011/2012 to complete a valuation report to determine the unfunded accrued liability. Note 10 Risk Management The City is exposed to various risks and losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. In 1978, the City joined together with other cities to form the Redwood Empire Municipal Insurance Fund (REMIF), a public City risk pool currently operating as a common risk management and insurance program for 16 member cities. The City pays an annual premium to REMIF for its workers compensation, general liability and property coverage. The coverage pays up to $10,000 for property losses, $10,000 for liability losses, and $5,000 for workers compensation losses. The City has excess insurance purchased by REMIF, except liability, which is pooled with the California Joint Powers Insurance Authority (a self funded risk sharing pool). The Excess insurance limits are $10,000 to $295 million for property losses (except auto physical with is a maximum of $1,000,000); $10,000 to $15 million for all liability losses; and $5,000 to $300,000 for workers compensation losses. At June 30, 2010 the City determined that it needed not accrue liability or revenues for purpose of funding the Citys potential future claim liabilities. REMIF issues a separate comprehensive annual financial report. Copies of that report may be obtained from REMIF at Post Office Box 885, Sonoma, California 95476. Note 11 - Commitments and Contingencies The City receives funding from a number of federal, state and local grant programs, principally Community Development Block Grants (CDBG). These programs are subject to financial and compliance review by grantors. Accordingly, the Citys compliance with applicable grant requirements will be determined at some future date. Expenditures, if any, which may be disallowed by the granting agencies, cannot be determined at this time. The City does not expect the undeterminable amounts of disallowed expenditures, if any, to materially affect the financial statements. Receipt of these federal, state and local grant revenues is not assured in the future. Note 12 - New Pronouncements In March 2009, the GASB issued Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. This statement initially distinguishes fund balance between amounts that are considered nonspendable, such as fund balance associated with long-term notes receivable or inventory, and other amounts that are classified as spendable based on the relative strength of the constraints that control the purpose for which specific amounts can be spent. Beginning with the most binding constraints, fund balance amounts will be reported in the following classifications: Restricted - amounts that can be spend only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
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Committed amounts that can be used only for the specific purposes determined by a formal action of the governments higher level of decision-making authority. Assigned amounts intended to be used by the government for specific purposes but do meet the criteria to be classified as restricted or committed. Unassigned the residual classification for the governments general fund and includes all spendable amounts not contained in the other classifications. The new standard also clarifies the definitions of individual governmental fund types. It also specifies how economic stabilization or rainy day amounts should be reported. Because of the specific nature of these accounts, the statement considers stabilization amount as specific purposes. Stabilization amounts should be reported in the general fund as restricted or committed if they meet the appropriate criteria. Only if the resources in the stabilization arrangement derive from a restricted or committed revenue source could a stabilization fund be reported as a special revenue fund. The definition of a governmental fund, including the general fund, special revenue fund type, capital projects fund type, debt service fund type, and permanent fund type are clarified by this statement. The capital projects fund type was clarified for better alignment with the needs of financial statements users and prepares. Definitions are as follows: General fund account for and report all financial resources and uses not accounted for and reported in another fund. Special revenue funds account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Capital projects funds account for and report financial resources that are restricted, committed, or assigned to the expenditure for capital outlays, including the acquisition of construction of capital facilities and other capital assets. Debt service funds- account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest. Permanent funds- account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting governments programs, that is, for the benefit of government or its citizenry. The requirements of this statement were effective for fiscal periods beginning after June 15, 2010 with earlier implementation encouraged. The statements presented herein conform and comply with GASB No. 45. Note 13 - Subsequent Events The Finance Department of the City has reviewed the results of operations for the period from its year end June 30, 2011 through [INSERT DATE HERE], the date the financial statements were available to be issued, and have determined that no adjustments are necessary to the amounts reported in the accompanying financial statements nor have any subsequent events occurred, the nature of which would require disclosure. Redevelopment Agencies In July 2009, the California Legislature passed ABX4-26 as part of the States budget package which required redevelopment agencies to remit approximately $2.05 billion in redevelopment revenues back to the State. Under ABX4-26, each redevelopment agency must contribute a proportionate share of revenue to the newly created
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Supplemental Educational Revenue Augmentation Fund (SERAF). The bill authorizes redevelopment agencies, from July 1, 2010, to June 30, 2011, to suspend all or part of its required 20% allocation to its Low and Moderate Income Housing Fund in order to make the required payments. The Housing Fund must be repaid by June 30, 2015. If the agency fails to repay the Housing Fund, the required allocation of tax increment to the Housing Fund is increased to 25% for most agencies as long as the project area continues to receive tax increment. This will result in the delay or elimination of many affordable housing projects where redevelopment funding is a key funding component. In October 2009, the California Redevelopment Association and two of its members filed a lawsuit to challenge the constitutionality of the bill. A ruling was not in favor for California redevelopment agencies and the Lakeport RDA was forced to pay the State $64,442 in fiscal year 2010-11. In June of 2011, Governor Jerry Brown signed legislative bills AB1X 26 and 27, effectively eliminating redevelopment agencies in the State of California unless a remittance was offered by each agency so that it may continue operating. The California Redevelopment Association (CRA) soon thereafter filed suit against the state to repeal the legislation, citing multiple state constitutional violations, including a deliberate attempt to circumvent the recently passed voter initiative, Proposition 22, which barred the state from laying claim to local revenues for state purposes. Under AB1X 27, each redevelopment agency is required to make two payments to the state. The Lakeport RDAs remittance amounts were determined by the California State Department of Finance to be $311,534, due January 15, 2012. The Citys Finance Department estimates the second payment to be $73,302, due the following May. The California State Supreme Court shall issue a ruling on CRAs challenge by January 15, 2012, deciding whether the RDAs must execute the remittance or not.

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Required Supplementary Information


(UNAUDITED)

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City of Lakeport Schedule of Funding Progress (CalPERS Cost Sharing Pool) Defined Benefit Pension Plan Year Ended June 30, 2011 Pooled Report Format Since the City has less than 100 active members in each plan, it is required by CalPERS to participate in a risk pool. The following actuarial valuation reports the activity of the risk pool as a whole and not the specific activity of individual members such as the City of Lakeport. GASB Statement No. 27 states that the employer must disclose this information for the most recent actuarial valuation, which was completed for the period ending June 30, 2009, and the two preceding valuations. The Finance Department shall include the valuation for the period ending June 20, 2010 in the audited financial statements when it becomes available at the end of October, 2011. Actuarial Valuation Date - Year Ended Miscellaneous Plan - 2.5% at 55 Risk Pool Actuarial Liabilities (AL) Actuarial Value of Assets (AVA) Unfunded Liabilities (UL) Funded Ratio (AVA/AL) Annual Covered Payroll UL as a % of Payroll Safety Plan - 2% at 50 Risk Pool Actuarial Liabilities (AL) Actuarial Value of Assets (AVA) Unfunded Liabilities (UL) Funded Ratio (AVA/AL) Annual Covered Payroll UL as a % of Payroll $ 462,354,459 $ 403,484,775 $ 58,869,684 87.3% $ 72,308,836 81.4% $ 504,295,839 $ 438,674,996 $ 65,620,743 87.0% $ 77,903,428 84.2% $ 440,333,381 $ 368,645,673 $ 71,687,708 83.7% $ 60,158,108 119.2% June 30, 2007 $1,315,454,361 $1,149,247,298 $ 166,207,063 87.4% $ 289,090,187 57.5% June 30, 2008 $1,537,909,933 $1,337,707,835 $ 200,202,098 87.0% $ 333,307,600 60.1% June 30, 2009 $1,840,961,558 $1,588,231,847 $ 252,729,711 86.3% $ 325,449,207 77.7%

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Other Supplementary Information

CITY OF LAKEPORT Combining Balance Sheet Non-Major Governmental Funds Year Ended June 30, 2011
Parkland Dedication Fund ASSETS Cash and Investments Accrued Interest Taxes Receivable Other Receivables Due From Other Funds Land Held for Resale Notes Receivable Resticted assets: Cash with Fiscal Agent Total Assets LIABILIITIES Accounts Payable Accrued Liabilities Deferred Revenue Due to Other Funds Interfund Loans Total Liabilities FUND BALANCE Nonspendable Restricted Committed Assigned Unassigned Total Fund Balance $ (37,068) 19 (37,049) $ 2105 Gasoline Tax 103,880 0 28,977 132,857 $ 2106 Gasoline Tax $ 2107 Gasoline Tax -

(37,049) (37,049)

132,857 132,857

Total Liabilities and Fund Balance

(37,049)

132,857

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2107.5 Gasoline Tax $ $

TDA NonTransit $

Lakeport Housing Program (227,734) $

Economic RLF Re-use 62,017 165 -

Redevelopment Agency Capital Projects $ (533,329) 573,329 40,000 $

Traffic Congestion Relief -

(227,734)

62,182

983 983

(227,734) (227,734)

61,200 61,200

40,000 40,000

(227,734)

62,182

40,000

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Housing Revolving Loan $ 32,787 9 $

FEMA-1646

2007 Home Grant $ $

Emergency Housing Assistance 44,966 0 44,967 $

Economic RLF Reuse 3,431 3,431 $

Business Loan Stabilization Program 1,222 -

32,796

1,222

40 40

140 140

32,756 32,756

44,967 44,967

3,431 3,431

1,083 1,083

32,796

44,967

3,431

1,223

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2009 Home Grant $ (110,311) 113,955 3,644

PTA Grant #09-PTAG-6504 Fund $ (8,750) 8,750 $

Business Loan RLF 5,404 5,404 $

CDBG Housing Grant 2010 (1,493) 1,734 241 $

HOME Program Income $

Tenth Street Drainage 84,228 63 84,291

3,644 3,644

241 241

5,404 5,404

84,291 84,291

3,644

5,404

241

84,291

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Lakeport Blvd. Improvement $ 115,493 87 115,579 $

South Main Improvement 61,206 42 61,248 $

Indian Gaming Fund (11) 11 0 $

Prop 1B Fund (5) 5 0 $

State Transportation Fund (4) 4 (0) $

Parkside Traffic Mitigation 17,121 0 17,121

115,579 115,579

61,248 61,248

17,121 17,121

115,579

61,248

17,121

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Bevins Street Maintenance $ $

Forbes Creek Trail (49,398) 0 49,398 $

Lakeshore Storm Damage 8,823 0 8,823 $

Safe Routes to Schools (17,503) 17,503 $

Forbes St. Project $

Prop 40 Per Capital Grant (16,044) 16,044 -

8,823 8,823

8,823

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Storm Drainage Fund $ 394,396 102 394,498 $

Other Governmental Funds (66,677) 508 28,977 207,385 573,329 743,523 ASSETS Cash and Investments Accrued Interest Taxes Receivable Other Receivables Due From Other Funds Land Held for Resale Notes Receivable Resticted assets: Cash with Fiscal Agent Total Assets LIABILIITIES Accounts Payable Accrued Liabilities Deferred Revenue Due to Other Funds Interfund Loans Total Liabilities FUND BALANCE Nonspendable Restricted Committed Assigned Unassigned Total Fund Balance

5,047 5,047

394,498 394,498

738,476 738,476

394,498

743,523

Total Liabilities and Fund Balance

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CITY OF LAKEPORT Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Non-Major Governmental Funds Year Ended June 30, 2011
Parkland Dedication Fund REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Saftey Parks, Buildings, and Grounds Capital Outlay - Roads Debt servicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers (Out) Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE BEGINNING FUND BALANCES Prior Period Adjustments FUND BALANCES RESTATED ENDING FUND BALANCES $ $ 843 (14,201) (13,358) $ 2105 Gasoline Tax 80,310 42 80,352 $ 2106 Gasoline Tax 16,663 15 16,678 $ 2107 Gasoline Tax 26,070 24 26,095

62,041 62,041

(75,399)

80,352

16,678

26,095

(75,399) 38,350 38,350 (37,049) $

50,059 50,059 130,411 2,446 2,446 132,857 $

(18,661) (18,661) (1,983) 1,983 1,983 $

(29,392) (29,392) (3,297) 3,297 3,297 -

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2107.5 Gasoline Tax $ 3 3 $

TDA NonTransit 212 212 $

Lakeport Housing Program 6,542 6,542 $

Economic RLF Re-use 1,107 37,565 38,672

Redevelopment Agency Capital Projects $ $

Traffic Congestion Relief -

16,343 16,343

560,436 560,436

212

6,542

22,329

(560,436)

(2,003) (2,003) (2,000) 2,000 2,000 $ $

(114,303) (114,303) (114,090) 114,090 114,090 $

6,542 (234,276) (234,276) (227,734) $

(20,000) (20,000) 2,329 57,888 983 58,871 61,200 $

600,436 600,436 40,000 40,000 $

(89,858) (89,858) (89,858) 89,780 78 89,858 -

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Housing Revolving Loan $ 157 34,624 34,781 $

FEMA-1646

2007 Home Grant 37 37 $ 218,121 218,121 $

Emergency Housing Assistance 35 35 $

Economic RLF Reuse 3 2,964 2,966 $

Business Loan Stabilization Program 135 3,660 3,795

28,192 28,192

14,575 14,575

3,682 3,682

696 696

4,278 4,278

6,589

37

203,546

(3,647)

2,271

(483)

(10,000) (10,000) (3,411) 10,766 25,401 36,167 $ 32,756 $

(41,316) (41,316) (41,279) 41,280 (1) 41,279 $

(383,372) (383,372) (179,826) (99,992) 279,818 179,826 $

(3,647) 48,614 48,614 44,967 $

2,271 1,160 1,160 3,431 $

(103,404) (103,404) (103,887) 104,969 1 104,970 1,083

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2009 Home Grant $ 155,338 544 155,883

PTA Grant #09-PTAG-6504 Fund $ 8,750 8,750 $

Business Loan RLF 4 6,000 6,004 $

CDBG Housing Grant 2010 1,734 1,734 $

HOME Program Income $

Tenth Street Drainage 308 308

228,955 228,955

4 4

1,577 1,577

(73,072)

8,750

6,000

158

308

(24,896) (24,896) (97,968) (104) 98,072 97,968 $ $

(8,750) (8,750) $

9,400 (10,000) (600) 5,400 4 4 5,404 $

19,842 (20,000) (158) 0 $

308 83,983 83,983 84,291

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Lakeport Blvd. Improvement $ 423 423 $

South Main Improvement 209 209 $

Indian Gaming Fund 123 123 $

Prop 1B Fund 137 137 $

State Transportation Fund 343 343 $

Parkside Traffic Mitigation 13 13

423

209

123

137

343

13

423 115,157 115,157 $ 115,579 $

209 61,039 61,039 61,248 $

11 (105,773) (105,762) (105,639) 105,639 105,639 $

5 (156,597) (156,592) (156,455) 156,455 156,455 $

3 (386,868) (386,865) (386,522) 386,499 23 386,522 $

13 17,108 17,108 17,121

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Bevins Street Maintenance $ 17 17 $

Forbes Creek Trail 32 (32) $

Lakeshore Storm Damage 7 7 $

Safe Routes to Schools 0 17,503 17,503 $

Forbes St. Project 461,493 461,493 $

Prop 40 Per Capital Grant 111,698 111,698

15,454 15,454

454,144 454,144

111,698 111,698

17

2,050

7,349

(22,161) (22,161) (22,144) 22,144 22,144 $ $

7 8,816 8,816 8,823 $

2,050 (2,050) (2,050) $

7,349 (7,349) (7,349) $

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Storm Drainage Fund $ 3,049 690 3,739 $

Total Other Governmental Funds 123,043 3,049 4,919 980,606 71,698 1,183,317 REVENUE Taxes Licenses, Permits, and Franchises Fines , Forfeitures, and Penalties Use of Money and Property Intergovernmental Revenue Charges for Service Other Revenue Total Revenue EXPENDITURES CurrentGeneral Government Community Development Engineering and Public Works - Roads Housing and Support Programs Redevelopment/Economic Development Public Saftey Parks, Buildings, and Grounds Capital Outlay - Roads Debt servicePrincipal Retirement Interest Total Expenditures Excess of Revenue over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers (Out) Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE BEGINNING FUND BALANCES Prior period adjustment (INSERT NOTE HERE) FUND BALANCES RESTATED ENDING FUND BALANCES

4,350 4,350

62,041 469,598 298,301 560,436 111,698 4,350 1,506,424

(611)

(323,107)

(611) 395,109 395,109 $ 394,498 $

679,755 (1,547,354) (867,599) (1,190,706) 1,524,801 404,379 1,929,182 738,476

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CITY OF LAKEPORT Combining Statement of Net Assets Non-Major Proprietary Funds Year Ended June 30, 2011
91-1 Sewer Assessment Bond ASSETS Current Assets: Cash and Investments Receivables Prepaid Expenses Total Current Assets Noncurrent Assets: Capital Assets Not Being Depreciated Capital Assets, Net of Depreciation Deferred Charges Total Noncurrent Assets Total Assets LIABILITIES Current Liabilities Accounts Payable Accrued Payroll and Benefits Interest Payable Customer Deposits Compensated Absences, Current Revenue Bonds, Current Tax assessment Bonds, Current Total Current Liabilities Noncurrent Liabilities: Compensated Absences Revenue Bonds, Net Tax Assessment Bonds, Net Total Noncurrent Liabilities Total Liabilities NET ASSETS Investment in Capital Assets, Net of Related Debt Unrestricted Total Net Assets

Water Expansion Fund

Sewer Expansion Fund

796,958 10,104 807,062

302,688 13,867 316,555

467,039 0 467,040

807,062

316,555

467,040

83,542 83,542

9,918 9,918

3,976,876 3,976,876 4,060,418

9,918

(3,253,356) (3,253,356)

306,637 306,637

467,040 467,040

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SWRCB Feasibility Grant

Total Other Proprietary Funds

1,566,685 23,971 1,590,656

1,590,656

9,918 83,542 93,459

3,976,876 3,976,876 4,070,336

(3,253,356) 773,677 (2,479,679)

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CITY OF LAKEPORT Combining Statement of Revenues, Expenditures, and Changes in Net Assets Non-Major Proprietary Funds Year Ended June 30, 2011
91-1 Sewer Assessment Bond OPERATING REVENUE Charge for services Other Income Total Operating Revenue OPERATING EXPENSES Salaries and Benefits Utility Costs Materials, Supplies and Service Costs Travel and Training Other Amortization Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUE (EXPENSES) Property Tax Assessments Use of Money and Property Interest Expense Total Nonoperating Revenue (expense) TRANSFERS Transfers In Transfers (Out) Net Trasnfers $ 3,789 4,988 8,777 $ Water Expansion Fund 12,238 13,477 25,715 $ Sewer Expansion Fund (14,770) (14,770)

7,539 7,539 1,238

23,394 23,394 2,320

(14,770)

349,050 1,199 (201,500) 148,749

1,750 1,750

350 350

CHANGE IN NET ASSETS BEGINNING NET ASSETS Prior Period Adjustments BEGINNING NET ASSETS RESTATED ENDING NET ASSETS $

149,987 (3,457,013) 53,669 (3,403,343) (3,253,356) $

4,071 302,567 302,567 306,637 $

(14,420) 481,460 481,460 467,040

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SWRCB Feasibility Grant $ $

Total Other Proprietary Funds 1,257 18,465 19,722

30,933 30,933 (11,212)

0 0

349,050 3,300 (201,500) 150,849

(27,743) (27,743)

(27,743) (27,743)

(27,743) 27,743 27,743 $ $

111,895 (2,645,243) 53,669 (2,591,574) (2,479,679)

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